The Benefits of the Business Suite on HANA

Hasso Plattner

Posted by Hasso Plattner on August 29, 2014

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It is amazing to me how little the benefits of the Suite on HANA are understood or even known in general and by the members of the Americas’ SAP Users’ Group specifically. The sERP system with reincorporated components like CRM, SRM and SCM is in my mind a bigger step forward than the introduction of R/3 22 years ago. Why is it so difficult to communicate the benefits? Let me try to find an explanation and reiterate the long list of benefits.

First, the HANA database is attacking the established leaders in the database market: Oracle, Microsoft, IBM and Teradata. That is a pretty bold move and a lot of people might fear to bet on the newcomer. The fact that all of them are following SAP with in-memory database features themselves should give you comfort and verify that SAP HANA points in the right direction.

Second, speed doesn’t seem to be a value in itself but this is not true. No customer of a SAP ERP, CRM, SCM, etc system would accept if performance degrades after a maintenance cycle by as little as 10%. So, an increase of a factor two in OLTP and a factor 10 to 100 in OLAP shouldn’t be more than welcome?!? Speed is the number one reason for business processes to be supported by information technology. Just to name a few:

  • earlier period closing
  • better forecasting
  • simulation of results or organizational changes,
  • better insights into customer behaviour,
  • real time sales and costs analysis in any fashion,
  • flexibility to simulate organizational structures within the system,
  • better service level in the customer facing applications

The speed allows us to simplify not only how we run the applications but how we use them.

Third, SAP was the trusted advisor to their customers. Now, as an innovator, this should not work any more?!?

The changes in sERP are so radical and against the grain of most business and technology publications of the past that only a few of the incumbents have managed to change their views. R/3 was similarly radical, but a worldwide movement towards client-server paved the way. Today many say, you can do without these changes and be happy. I hope I can demonstrate that staying put is missing a huge opportunity. You have to understand the architectural changes in the applications and the impact on the business, which are now possible with an in-memory platform.

Fourth, are you afraid of too much concentration in one system?

To unify ERP, CRM, SCM, SRM, PLM and connect them with the new network applications for purchasing, workforce management, transportation, travel, etc or generic on-demand applications like office, sales support, recruiting, etc leads to a massive simplification in both IT and business. The unified system is much less complicated, no aggregates updated transactionally, no redundant data to be managed, no unnecessary data transfers between applications, a much smaller data footprint allows for an unbelievable TCO reduction and a never before experienced integration of vital business functions.

Fifth, was everything wrong in the past?

No, most was necessary to achieve a decent performance, but now we can radically simplify the architecture of the systems and get as a free benefit a new flexibility to change and extend the functionality of the enterprise applications nearly on the fly. We remove a large part of the code and reduce the maintenance efforts for the customer. The early adopters will have the advantage to move ahead of the competition.

Sixth, nobody believed that SAP can reprogram large parts of the systems without disrupting the business.

Not unlike R/3, where we kept the R/2 functionality intact, sERP keeps the current functionality, the data, and the configuration largely unchanged. Most of the applications are completely read-only and therefore we can have new functionality in parallel without any risk of impacting the data integrity. The current users of SAP Business systems needed a clear path into the future and a disruptive approach wasn’t the option. The transition of the BW to BW-on-HANA is an excellent example for this strategy. Unfortunately, the name HANA was interpreted as “High-Performance Analytic Appliance” by SAP. This is simply wrong because HANA is platform for applications including an in-memory database with tools and a set of application libraries. This platform allows for a superior OLTP and OLAP system, especially if they run together in one instant.

Seventh, for capacity reasons we introduced redundant systems like SAP BW. What’s the strategy now?

With read-only replications of all data in memory, we can provide this capacity on the original transactional data without any delay. Large parts of a data warehouse can now move back to the transactional system or its copy. Again this is a simplification without increasing the data footprint and only possible with HANA. This doesn’t make the idea of data warehouses obsolete.

Eighth, users complain about the complexity of SAP applications.

Only with HANA, SAP found a way to really simplify the architecture dramatically. The fundamental requirements for on-demand software in the cloud where helpful to create the energy-level necessary to start the massive rebuild. Some aspects of the new architecture are also applicable to non-HANA based on premise systems.

Ninth, this all doesn’t address the main problem of a complicated and outdated user interface.

The dramatically improved response times help instantly. More importantly, the speed allows us to redesign most of the transactions and reports using new UI technologies like SAP FIORI for screens and Lumira for visualizations. The new user interface comes completely in parallel to avoid instant retraining of thousands of users. Everything new comes for the mobile phone, the tablet, the laptop, and the desktop simultaneously.

Tenth, this sounds well, but the cost are too high and there is not enough know how available.

The real cost savings are in the cloud, where hardware and operational costs can be managed much more efficiently, but even on premise, managed by SAP, with the right hardware configuration, costs will be much lower than in current systems. Just take the data storage costs or the time for backups, or to manage the integration of separate system, the costs to optimize the infrastructure including the database and the efforts to maintain the system. They all will come down due to reduction in volume and complexity. Since the current functionality will be carried forward and all new functionality comes in parallel, the risk can be minimized. Any database administrator can be trained on HANA in a very short time. Most of the education is now available as Massive Open Online Courses (MOOCs). The current consulting partners have already retrained large numbers of their people and will continue to do so.

Eleventh, there are no new must have applications.

Only now breakthrough applications like predictive maintenance, applications using sensor data and unstructured text, are possible. We can build a comprehensive simulator for corporate performance or analyze the human genome & proteome for enabling personalized medicine. Actually a whole new division in SAP, the Co-Innovation group, is focussing on completely new applications developed together with our valued customers.

Twelfth, some companies claim that they can’t see the business case for HANA.

First you have to understand the potential of a HANA-based system, then you have to trust that the benefits are true. You have to identify the pain points, which could be resolved and see the new opportunities to improve the relationship with the customer. Look for the value of simplification, a prerequisite for the adoption of innovation in the future or revisit some of the great ideas, which failed in the past. Both might be possible now.

I could continue on and on. A new book, coming out soon, will hopefully give you some insights, answer most of the questions and portray a future of enterprise computing. One thing I am sure about is, the bold ones, adopting the new world early, will benefit tremendously. And it’s not about a “good car” versus a “super car”, it’s about replacing ocean liners by jets crossing the atlantic.

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