SAP S/4HANA Cloud: Revolutionizing the Next Generation of Cloud ERP

Sven Denecken

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Co-innovation S/4HANA

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SAP S/4HANA – the next generation business suite for digital businesses

In a digital world, information can be measured and made available across the globe instantaneously. Sailing on the backwind of new technologies, this is a key enabler for redefining business processes. Fundamentally, it means that a digital business needs to deliver on the ubiquitous promise to truly serve a segment of one: The end consumer. The whole value chain becomes a highly flexible organism to be run in real time – it becomes a LIVE Business. 

Since the launch of SAP S/4HANA two years ago, it has firmly established itself as the next generation business suite to support digital businesses. It has the ability to unite enterprise-wide processes into a synergistic digital core. At the core of the innovation with S/4HANA is the revolutionary in-memory capabilities of SAP HANA that allows both transactional and analytical data to reside in one system, which in turn provides our customers with the ability to analyze, report, simulate and predict in real time, to make smarter and quicker business decisions. In addition, with SAP Fiori we offer a role based user experience that looks great and really delivers intelligence to the user in an intuitive.

Clearly, this has resonated well with the market and S/4HANA now boasts over 5400 customers, making it the fastest growing product SAP has launched.

SAP S/4HANA Cloud – the next generation, intelligent ERP in the cloud

This brings me to SAP S/4HANA Cloud, the Intelligent Cloud ERP offering from SAP and the announcement on Feb 9th at the SAP Capital Markets Day. At this event customers, partners and SAP executives showcased the new S/4HANA Cloud solution from the trusted global leader in ERP. S/4HANA Cloud is our ERP cloud offering that benefits from the same game changing innovations we delivered with S/4HANA, but now via a SaaS delivery model, all managed and delivered by SAP.  SAP S/4HANA Cloud is the cloud ERP solutions best suited for organizations with more than 1,500 employees, and for subsidiaries and operational units of larger enterprises.

Why ERP Cloud and Why now?

Moving a company’s core to the Cloud enables a fast deployment and decreases time to value. Additionally, it fosters rapid innovation cycles and reduces TCO and TCI, matching a Fit to standard and enabling agility in consumption. The end to end experience is at the heart of it. But for customers and partners there are new rules of the game to adapt and digitally transform as well. Technology induced innovation to change the Corporate fundamentally goes along with business changing capabilities for each Line of Business. Enterprise customers expect SAP to re-define, renovate and innovate its core asset – ERP, and deliver it as a SaaS deployment model.

We have seen for some time clear indicators that the market is shifting to consume ERP in the cloud and that this is set to grow rapidly in the coming years. There is a significant amount of evidence out there that points to the growth of the cloud, but for me there are a number of leading indicators from the analyst firms that show how fast things are moving. Most analyst firms predict up to 20% growth rates in the next 24 months for the Cloud ERP market. According to the analysts, Finance is leading the charge as the next LOB already shifting to a SaaS approach, especially for more service centric companies.

We are confident that, using our heritage, knowledge and expertise built up as the ERP market leader over decades, and our leadership with S/4HANA supporting our customers managing their digital transitions, we can support our customer’s journey to Cloud ERP.

What is different with S/4HANA Cloud, a closer look…

It’s easy to imagine that a Cloud ERP solution is simply a watered down version of a full blown ERP on premise system, compromised in technology or ability in some way. With S/4HANA Cloud, this is not the case. With end to end processes supporting finance, plan to product, and order to cash and procure to pay we offer enterprise-ready functionality for digital businesses.

However, more importantly S/4HANA Cloud shares the same in-memory architecture as S/4HANA and so offers the same benefits.  With analytical and transactional data together in the same system, you have the performance to run a truly “live” business, run on the fly aggregations to slice and dice data to provide immediate insights based on real time data. This provides the trusted information it needs to make fast decisions across the business.

S/4HANA Cloud consists of a modular set of Editions that provide a flexible, extensible ERP platform that will scale up and down according to business needs. New capabilities and users can be added as you need them, quickly and easily.

A key design principle that has driven the direction of S/4HANA Cloud is the need for an easy to use, responsive and consistent consumer-grade ‘business user’ experience. Through SAP FIORI 2.0 and embedded analytics we have realized this requirement and helped to release the intelligence and data within the system to the user in a meaningful way that drives productivity and smarter decision-making regardless of device. Key innovations such as Enterprise search, Overview pages and the Fiori Launchpad help to navigate and push key information to the users, which in turn changes the way software is traditionally used and drive changes in the way business is done in a digital world. Differentiating is also the inclusion of an digital assistant, leveraging machine learning capabilities to make decisions more intuitively and based on all available internal and external data – learning as you go. More about this later.

Innovations with S/4HANA Cloud are delivered quarterly allowing our customers to consume them rapidly. With a rolling 4-quarter roadmap publically available, we provide the transparency to our customers and ecosystem to ensure planning consistency. We constantly co-innovate with customers and partners on new innovations and are vetting our plans to ensure the value creation is in the driver seat. This is especially important as in the cloud one of the key KPI´s is TTV – total time to value.

Some key innovations being delivered with S/4HANA Cloud include SAP Co-Pilot, our new Digital Assistant. While Digital Assistants have been around in the consumer IT space for some time already, the potential of digital assistants in Enterprise Software is not to be underestimated. The initial focus will be to reduce manual efforts, increase collaboration and reduce associated operational costs. With SAP Co-Pilot being aware of the user’s business context, it can offer relevant insights just when you need them based on your role, context and current business situation. That means that digital assistance has the potential to go far beyond simple scenarios such as leave requests. Imagine one of your contracts is about to expire. SAP Co-Pilot could, for example, not only notify you, but also recommend actions that are appropriate based on internal and external data.

This mostly is based on concepts of machine learning, which is another area of innovations being delivered with S/4HANA Cloud. Using the in-memory architecture foundation and the openness of the PaaS platform (SAP Cloud platform with SAP Clea) we have rapid access to data, the heart of Machine learning. We make that intelligence available to line-of-business business users at the point of consumption, right in the business app where they need it. First examples of machine learning are in the area of Finance, via matching incoming payments to accounts receivable. Learning from accountants’ past actions, the system can automatically process future payments on their behalf. Another example is the important connect between Finance and Human Resources, where especially in budgeting times you would want intelligent services that not only connect you as a business leader with Controlling and your HR  partner, but also propose actions based on data that is available for budgets, headcount, career levels, regional aspects and much more.

SAP S/4HANA Cloud has been developed to co-exist in a heterogeneous system landscape with native integrations to other SAP solutions and open interfaces for further integrations and extensions via the SAP Cloud Platform to anything out there.

And one more – With a shared data and semantic model with S/4HANA on premise and S/4HANA Cloud, we are offering a naturally  best in class two-tier ERP landscape (2Tier). This is a huge advantage and reduction of error prone and heavy effort consolidations and integrations between headquarters and subsidiaries, during set-up and even more important during the lifecycle of your operations and the changes you want to apply.

Finally, S/4HANA Cloud uses SAP Activate proven best practices content and methodologies to enable customers to deploy and go live with an ERP cloud solution within weeks. We have done it, TTV at its best.

This is just the start…

With SAP S/4HANA Cloud, this is just the beginning to the new era and 2017 is the year SAP doubles-down on superior cloud innovation for customers of all sizes. This announcement is the first in a series of innovation updates customers can expect to see from SAP. SAP will continue to provide updates on new innovations and customer momentum throughout the year.

So, stay tuned…

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