What Is SAP S/4HANA?
If your business must flourish and remain competitive in the current digital age, then you need to have a very good understanding of the cutting-edge technologies that are being used currently to optimize operations. One of these technologies is the SAP S/4HANA which is short for SAP suite for HANA.
But what exactly is SAP S/4HANA, and why do businesses need to use it in their day-to-day operations?
The first thing you must know about this system is that it is not just like any other software suite. It is built with exceptional features that make it a game-changer and gives it the potential to totally revolutionize the way businesses and organizations operate.
This enterprise resource planning (ERP) system is built to help businesses streamline their operations and processes, make better and more data-driven decisions, as well as do more in a little time. And it comes as no surprise that big companies around the world have started adopting it to streamline their operations. Hence, it is in the best interest of you as a SAP professional and business owner to have a proper understanding of the SAP S/4HANA system, how it works, and how you can possibly integrate it into your operations.
And that is why we have taken the time to write this comprehensive article on what SAP S/4HANA is, the unique features it possesses, the benefits you stand to gain if you implement it into your day-to-day business operations, and what the future holds for it. So, make sure you read this article to the end to gain adequate knowledge about this software suite.
Now, let’s take an in-depth look into what SAP S/4HANA is, and how SAP Systems have evolved over the years that led to the development of this amazing software system.
What is SAP S/4HANA?
SAP S/4HANA is an enterprise resource planning (ERP) software system that is designed by SAP to bring together a business’s overall core processes and important data into one single system to help them manage their operations, and resources properly.
It is also built to give its users a proper and real-time view of what their businesses’ data looks like and how they are operating and helps them streamline their operations. With accurate insights into their data, this system also helps organizations to make better and more informed decisions.
To ensure that it serves diverse organizations across different industries, this software system is built in a scalable and flexible that allows it to adapt to any organization’s specific needs, and thanks to its customizable design, businesses can be able to add or remove SAP modules they feel they might or might not need to carry out their operations.
This ERP package was officially launched in 2015 as the fourth product in the SAP product line and came as a predecessor to the R3 and ECC systems that were previously used by SAP.
SAP launched its first commercial product in 1973 and also completed its first financial accounting system. This period was tagged SAP R/1. The company went on to launch SAP R/2 which saw the expansion of its system’s capabilities into diverse areas, and an introduction of its redesigned product into the market.
In 1992, the company launched SAP R/3 which was later succeeded in 2004 by SAP ERP Central Component (ECC) 5.0. However, an advanced version of the SAP ECC — SAP ECC 6.0, was released in 2006. This particular version has been updated from time to time by the company using enhancement packages.
Fast forward to 2015 and SAP launched SAP S/4HANA which it described as an intelligent enterprise and a representation of a transformational shift.
The creation of this system came after the company recognized the need for a simpler, faster, and more data-driven ERP solution that can use the power of in-memory computing to combine and process large amounts of data at the speed of light, streamline operations, and enable businesses to respond to customer and market demands at a faster rate.
SAP S/4HANA was deployed in two major versions — the On-Premise edition and the Cloud edition, which are both built with great functionalities and are available in diverse languages and country versions which you can choose from.
And so, having discussed what SAP S/4HANA is and the evolution that led to its creation, let’s now look at the exceptional features that it has that make it stand out from other SAP products.
The Unique Features of SAP S/4HANA
The features that distinguish SAP S/4HANA from other tools include:
• Real-Time Analytics
SAP S/4HANA is built to provide businesses with real-time analytics which ensures the instant processing of data, unlike other traditional systems that require you to wait for hours or even days to get a sales report.
For example, if you are a retailer that tracks sales, this system can provide you with up-to-date insights that will help you know where you are and where you need to go.
And with the prompt insights provided by SAP S/4HANA, businesses can be able to quickly make informed decisions, react to market changes, and make the most of the opportunities they present themselves.
• Simplified Data Model
Another remarkable feature of SAP S/4HANA is that it organizes business data in a way that makes it simple to manage. In traditional systems, data is spread across many tables and this makes it difficult to manage but with this SAP system, data is organized into very few tables making it easy to find and manage.
Have you ever had a single drawer where you put all your important documents? If yes, then you will know how much time and stress is saved when you need to find and use a document, unlike when they are scattered all over the place. That is what the SAP S/4HANA provides you.
And in case the reporting items initially offered in the solution aren’t enough, the process of adding more reporting categories is as easy as ABC. All you have to do is go to the configuration section and check the boxes you need and the reporting categories will be added to your data model automatically and become master data without the replication of data.
With this feature, the performance of the system is enhanced, data redundancy is reduced, and businesses can easily and effectively understand and use their data.
• Live Collection Of Data
The simplicity in the operation of SAP S/4HANA applies to the way it collects data as well. It provides different uploading methods which you can choose from and collect data.
One of the options is to read from the Universal Document. By allowing the integration of the Universal document, the system enables a consolidation unit to also add its local currency into the report of its financial data.
• Cloud and On-premise Availability
To make this system flexible, it was delivered in two different deployment options — the Cloud And On-premise options so that users could choose which one works best for them and use it. The aim of providing different deployment options is to enable the system to fit the specific needs and preferences of different organizations.
So, users who prefer to save their data in the cloud can host their system in the cloud which will reduce infrastructure costs, enhance scalability, and enable them to access their data from anywhere they are in the world. On the other hand, users who prefer to keep their data on-site can opt for the On-premise option.
• User Experience with Fiori
SAP S/4HANA is built with a modern, role-based user experience (UX) called SAP Fiori to give users a more user-friendly, personalized, responsive, and simplified experience which also enables them to interact more effectively with SAP.
This UX makes it easy for the employees in an organization to access the information they need and all thanks to its visually appealing and beautiful interface across different devices, it provides users with a smooth and enjoyable experience.
Now, let’s look at the benefits businesses stand to gain when they implement SAP S/4HANA
The Benefits of SAP S/4HANA
The advantages of using SAP S/4Hana include:
• Increased Efficiency
With SAP S/4HANA, one of the benefits your business will enjoy is improved efficiency. The software automates routine tasks, streamlines business processes, and reduces manual data entry, enabling you to carry out many tasks efficiently and at a faster rate.
SAP S/4HANA serves as an extra employee that makes the work for other employees. And due to how it automates tasks, employees can have enough free time to focus on working on other important tasks, instead of carrying out administrative tasks all day.
In addition, it helps businesses to avoid human errors such as duplication of work that can lead to unwanted and costly delays.
• Improved Financial Management
One of the exceptional attributes that SAP S/4HANA is built with is the ability to enable businesses to properly manage their finances. It gives them a comprehensive view of their financial health and access to their real-time financial data which helps them to know the next step they need to take to boost their finances and the areas they need to allocate their resources.
Plus, it breaks down complex financial processes, such as budgeting, forecasting, and compliance, to their simplest and most accurate form hence reducing the risk of businesses making financial errors that can cost them dearly.
• Better Customer Service
Another thing that SAP S/4HANA helps you to do is to improve how well you satisfy your customers. With this software, you can combine customer data such as purchase history, and preferences into one place which will help you to have better conversations with your customers, and know the area your company needs to improve on to satisfy them better. And due to the software’s ability to automatically carry out ticketing and routing, customer inquiries can be addressed immediately after they are made. By doing this, you will be able to keep your customers happy. And remember, happy customers are loyal customers.
• Enhanced Inventory Management
Proper data management is a proven ability that the SAP S/4HANA possesses and you can use it to effectively manage your inventory.
The software makes it possible for you to see stock levels, demands, and supply chain operations in real-time, and with that visibility, you can be able to avoid either stockouts or overstock situations which can both be costly. You can also use it to enhance demand forecasting which will help you properly plan on how to provide the right amount of materials without having excesses.
With the help of this software, you will always have the right resources in the right place at the right time which will not only help you cut down costs but will also help you keep making your customers happy and satisfied at all times.
• Robust CyberSecurity
Due to the cloud deployment option available on SAP S/4HANA, it is also built with very strong security capabilities that ensure that all customer and business data is protected and kept confidential at all times.
Real-World Application: SAP S/4Hana Use Cases
According to Statistica, InfoClutch, and Enlyt, by 2022, an average of around 11, 000 and 20,000 users and companies had subscribed to the SAP S/4HANA software to use it and optimize and streamline their operations. These companies are of different sizes and are scattered across different industries.
However, some of the renowned and big companies that use this software solution include PayPal, Cisco, Apple Inc., Walmart, and Amazon, amongst others. These companies are well-known and each has earned billions of dollars worth of revenue. And since most of the top companies mentioned here are based in the United States, it comes as no surprise that the highest percent of the software’s users (34%) are based there.
Meanwhile, according to the report by Enlyt, companies in the Information Technology and Services industry make up the highest users of the product (23%), followed by the Computer Software industry (6%). The wide adoption of this software by this high number of companies shows how efficient and trustworthy it is.
So, let’s now discuss what makes the SAP A/4HANA software solution different from SAP ECC.
Key Differences Between SAP S/4HANA and SAP ECC
- Database Structure: One of the major differences between SAP S/4HANA and SAP ECC is the database that they run on. SAP S/4HANA runs on only the HANA database while SAP ECC can run on third-party databases that aren’t from SAP, such as Oracle, Informix, and many others. However, because the HANA database is a modern and in-memory database, SAP S/4HANA doesn’t read data from the hard disk, instead it reads data directly from the main memory which enables it to process data at a way faster speed and more efficiently than SAP ECC does.
- Data Model: To boost business efficiency, SAP S/4HANA provides a simple data model that brings together many different data modules into a single table called ACDOCA (the Universal Journal), to reduce data redundancy and make the data easier to manage, while SAP ECC has a more complex data model that has many aggregate and index tables.
- User Experience: SAP S/4HANA uses the Fiori UX, which is a modern, intuitive, and user-friendly user experience with gives users a very smooth, personalized, and enjoyable experience while SAP ECC, on the other hand, uses a more traditional user experience which is less intuitive and user-friendly as compared to Fiori.
- Real-Time Analytics: SAP S/4HANA provides businesses with real-time analytics that enable them to access insights quickly and make faster decisions meanwhile SAP ECC needs to process data in batches and reconcile so it makes it difficult for it to provide businesses with real-time analytics.
- Deployment Options: SAP ECC can only be deployed on-premise but SAP S/4HANA offers both on-premise and cloud deployment options which businesses can choose from based on their preferences.
- Cost: Because SAP S/4HANA is new and in demand and requires shifting to a HANA database, the cost of implementing it is higher than that of implementing SAP ECC.
Here is a tabular representation of the key differences between these software solutions:
|SAP S/4HANA||SAP ECC|
|It runs on just the HANA database.||It can run on different third-party databases from different providers such as Oracle, Db2, and Informix amongst others.|
|It has a simplified data model.||It has a more complex data model.|
|It uses Fiori UX, a very intuitive and user-friendly interface.||It uses a traditional user experience that isn’t as intuitive and user-friendly as Fiori.|
|It provides on-premise and cloud deployment options.||It provides only an on-premise |
|It has an in-memory database which enables it to process data at a quicker rate and also react quickly.||It doesn’t have an in-memory database so its data processing and reaction speed is slower.|
|It features Global Trade Services (GTS).||It uses traditional foreign trade functions.|
|It has combined OLAP and OLTP functions, which enables it to carry out complex analyses.||It has separated OLAP and OLTP functions.|
|Its integration with other SAP solutions such as SAP Ariba, SuccessFactors, and Concur is more streamlined.||Its integration with other SAP solutions such as SAP SuccessFactors, Ariba, and Concur is less streamlined and will require the introduction of additional customization and middleware.|
|It has a higher cost of Implementation.||It has a lower cost of Implementation.|
Advantages of Migrating to SAP S/4HANA
Here are the advantages businesses stand to enjoy when they migrate to SAP S/4HANA:
• Improved Efficiency
An SAP S/4HANA migration benchmark report carried out by RedHat website in 2021 shows that over 72% of businesses that migrated into the use of software enjoyed improved efficiency.
From the automation of routine tasks and processes to the lightning-speed processing of data, the software helps businesses streamline their operations in different ways, be more productive, and do more in less time.
• Real-Time Decision-Making
By migrating to S/4HANA, businesses can have access to real-time analytics that enable them to quickly make intelligent and data-driven decisions which will help them gain a competitive edge over their competitors in a rapidly changing market.
• Simplified Data Model
S/4HANA has a streamlined and simplified data model which reduces the complexity of handling data for businesses and enables them to easily manage their data while reducing their maintenance costs and providing a more efficient IT environment.
• Enhanced User Experience
The Fiori’s intuitive interface used on the S/4HANA software is easy to use and understand and when migrating to the software, organizations can be assured that their employees will require less training time to adapt to the system and that the user-friendly nature of the UX will enable them to be more productive and experience little to no user errors.
• Seamless Integration
By migrating with S/4HANA, businesses can integrate it properly with other SAP products for improved efficiency. And aside from streamlined integration with SAP products, S/4HANA also facilitates integration with emerging technologies like AI and IoT, which can enable businesses to stay at the forefront of innovation
• Scalability and Flexibility
S/4HANA is built with a Cloud deployment option that businesses can choose to implement to enable them to enjoy seamless operations, while also enjoying scalability and flexibility.
SAP S/4HANA Implementation Guide
How To Prepare for SAP S/4HANA Implementation
Here are the steps you need to take in preparation for the implementation of SAP S/4HANA:
• Understand Your Business Needs
SAP S/4HANA is a very transformational software that also requires significant time and money to implement, so before implementing it you need to, first of all, be sure what problems you are trying to solve by implementing it, the processes and operations you hope to streamline or with it, and what you hope to achieve with it within a specific time. It could be improved efficiency, better customer service, amongst others.
• Choose The Method You Want To Use
Two major methods can be used to implement the SAP S/4 HANA. The first method is the brownfield implementation method which involves a company taking the SAP landscape it is using currently and transferring it largely wholesale to S/4HANA. This method is usually more orderly and takes less time but the disadvantage is that the company might not enjoy all the transformational benefits of migrating to S/4HANA.
The second method is the greenfield implementation method which involves the installation and configuration of S/4HANA in a totally new environment. To carry out this method, companies need to completely redesign their whole processes and this makes it more costly, disruptive, and time-consuming. However, the advantage is when it is completed the company will enjoy all the benefits of S/4HANA’s full capabilities.
Nevertheless, before choosing a method, make sure you also confirm the cost involved in both approaches of implementing the software and be sure it is an amount your business or organization can afford. If you are working in an organization, make the price involved known to the stakeholders and leaders so that they can give their consent for the release of funds and execution of the implementation.
• Choose A Deployment Option and Assess Your Systems
After figuring out your business needs, and the role the software can play in solving them, you need to determine which deployment option will fit your business perfectly, whether it is on-premises or in the cloud. While choosing a deployment option, you need to also ensure you choose one that your infrastructure and hardware can meet the system requirements.
• Carry Out Proper Data Inspection and Cleanup
When you are sure that you have ticked the first two boxes then ensure you carry out a proper inspection of your data and then clean up the ones you need to because you will need to migrate the data during the configuration process.
Make sure your data is clean and accurate. Identify and rectify the areas of the data that are duplicated, and have errors or inconsistencies so that you can migrate it smoothly when the time arrives.
After you have done all these, then you are good to proceed with the integration of the SAP S/4HANA software.
Step-by-step SAP S/4HANA Implementation Process
The steps involved in implementing the SAP S/4HANA software can differ based on the method that you choose to use but here are the basic steps you need to follow to implement the suite:
• Carry Out Business Readiness and Requirement Checks
The first thing you need to do is to generate readiness and requirement reports which will give you clarity on the changes that need to be made, the kind of environment that the system can be configured in, and the right method you need to use to implement the software. After carrying out these checks you must ensure your system fits the requirements before moving forward with the implementation process.
• Verify the ABAP Code
After carrying out both business readiness and requirement checks, you must check the ABAP code and ensure that it is accurate and fits into the programming standards that are needed to implement SAP S/4HANA.
• Build The Environment Architecture
The data obtained through the readiness and requirement checks carried out earlier in the process will then be used by BASIS advisors to check the accessible framework components and then recommend a design that is best suited for SAP S/4HANA applications. This design will also come in handy when a client is planning with an Equipment Service Provider on how to build an actual environment architecture for the implementation of the software system.
• Migrate The Data
Now, after you have chosen a design for the system and set up your preferred deployment model, it is time to transfer your data from the system you have been using before to SAP S/4HANA. But before doing so, make sure you have cleaned and validated your data beforehand to ensure data integrity.
• Configure The Software
It’s now time to configure S/4HANA and customize it to align with your business processes. The configuration and customization process involves defining workflows, authorizing certain roles, and other settings that are very specific to each business.
• Test The Software Properly and Go-Live
When you are done with the configuration and installation of the system, it is time to test the SAP S/4HANA software. What you will do at this point is to test it properly so that can identify any errors or issues that might arise. The testing process also involves making sure data has been properly migrated, and all areas of the system are running smoothly.
Make sure you use adequate time to test the software to ensure there are no issues that can obstruct your operations when you finally go live.
After the specific time you have assigned for the testing process elapses then you can go live fully with the software and begin using it normally for your everyday business operations and processes. However, despite going live fully with the software, make sure you are still observant and on the lookout for any issues that might arise over time so that you can resolve them quickly.
• Train Your Employees
One of the major aims of implementing the SAP S/4HANA software is to boost an organization’s efficiency and productivity but this can not be possible if the workers in the organization can’t use it properly.
So, after implementing the SAP S/4HANA software, you need to focus on training your employees extensively on how to use it properly. The best thing to do in this case is to hire a trainer who is very knowledgeable about how to use the software or send your employees to institutions like Clarion College to carry out certified courses offered by the software provider.
• Provide Post-implementation Support
One thing must also not forget to do after integrating the SAP S/4HANA software into your operations is to provide post-implementation support which will be around to address any issues that might come after the implementation of the software. By doing so, you will ensure the system remains stable and issues are quickly attended to.
How To Overcome Common Challenges While Implementing SAP S/4HANA
Implementing SAP S/4HANA usually comes with certain challenges, so here is how you can overcome the challenges that might arise:
• Get Go-ahead From Stakeholders
Implementing S/4HANA usually requires significant finances but if you don’t properly communicate the benefits of the software to stakeholders, you might be unable to get their approval on the release of funds for the project and this will play a significant role in delaying the implementation process.
• Check Your Data Quality
Make sure you invest time into cleaning your data and ensuring it is accurate before moving it into the SAP S/4HANA software system so that you can prevent any data-related issues that might arise later.
• Proper Integration and Customization
While integrating the software with other systems and applications within your organization, make sure it is properly done to avoid bottlenecks. Also, ensure that you don’t make too many customizations that will lead to complications during system updates. Just follow the best and basic practices and make use of standard SAP functionalities where necessary.
• Train Your Employees
The employees are the ones who will be using the software the most so ensure they are properly trained on how to use different aspects of the software to automate tasks, enhance their efficiency, and boost their productivity.
• Performance Optimization
After the software has gone live and is in use, make sure you monitor its performance and address any bottlenecks you notice as soon as you do so.
Ensure you also update and fine-tune the system from time to time to maintain its top performance.
The Future of SAP S/4HANA
The future of SAP S/4 HANA is a very promising and exciting one. The software is leveraging the latest technology to transform the way businesses manage their data and operations hence cementing its place as one of the most efficient and successful enterprise resource planning (ERP) solutions on the market.
Due to SAP’s track record, more advanced technologies will very likely be added to boost the software’s efficiency in different sectors as time goes on.
SAP S/4 HANA currently has a cloud deployment which allows businesses to make their operations flexible and scalable and the software is being integrated with cutting-edge technologies like artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) to help businesses to harness data-driven insights and automate processes for greater efficiency. These exceptional features are complemented by the Fiori User Experience which has intuitive and user-friendly interfaces to boost a business’s productivity and user satisfaction.
Based on the announcement made by SAP, the ECC business suite will cease to be in operation in 2027 so SAP S/4HANA will become the SAP software system in use from then until at least 2040. So, if you are currently using the ECC software, you need to start working towards migrating to it, and if you want to implement a SAP suite into your business operations it will be wise to directly implement the SAP S/4HANA instead of going for the ECC software first and needing to migrate in few years.
SAP S/4HANA is an ERP system that is built with the features and functionalities to help your business meet up with the ever-changing needs of this digital era. From its one-of-a-kind user interface to its simplified data model and real-time analytical ability, this software is the ERP software you need to boost your organization’s efficiency and productivity.
And with the ERP landscape continuously evolving, you can trust SAP S/4HANA to keep your company ahead of your competition by providing you with more innovation, cloud expansion, and integration with emerging technologies as time goes on.
So, let this article serve as the go-ahead you need to start working on integrating SAP S/4HANA software into your business operations. And if you need a certified and qualified training provider to teach your employees all they need to know about the SAP S/4HANA software and how to use it to carry out business operations, we are ONE CLICK away.
• What Industries Can Benefit Most From SAP S/4HANA?
The industries that can benefit the most from SAP S/4HANA include:
- Finance and
- Engineering, amongst others.
• What Is The Estimated Cost Of Implementing SAP S/4HANA?
The cost of implementing SAP S/4HANA varies depending on factors such as the size of your organization, the method of implementation, the deployment model (cloud or on-premises), and the level of customization that is to be made. So, you need to decide on your preferences and then contact a certified SAP partner to get the cost estimate for your preferred choices.
• Can SAP S/4HANA Integrate With Non-SAP Systems?
Yes, SAP S/4HANA can integrate with non-SAP systems. The software has different integration options such as APIs, connectors, and middleware that allow smooth communication and integration with applications and systems that aren’t from SAP.
• How Long Does It Typically Take To Fully Implement SAP S/4HANA?
The time it takes to fully implement SAP S/4HANA varies depending on factors such as the size of the organization and the method to be used. Generally, the implementation project takes between six months to two years but in smaller organizations that have less complex requirements the implementation process can take between six months and a year.
• How Does SAP S/4HANA Contribute To Digital Transformation?
SAP S/4HANA contributes to digital transformation by providing access to real-time data access, visibility, advanced analytics, and an intuitive user interface. It also empowers organizations to optimize their processes, automate their tasks, and make data-driven decisions that boost their efficiency and productivity.
• How Does SAP S/4HANA Improve Decision-making Processes?
SAP S/4HANA provides businesses with access to accurate data and real-time analytics and insights that help them quickly make intelligent, informed, and data-driven decisions that will lead to the growth of the business and its efficiency.
• What Are The System Requirements For SAP S/4HANA?
The system requirements recommended by SAP for the SAP S/4HANA software are dependent on the deployment model and specific needs. However, since the software uses an in-memory database it will need between 128 GB and 256 GB RAM to implement it and use it modestly. Depending on the deployment level, it might also be able to run on a system with 64 GB RAM as well.
• What Training Is Required For Employees To Use SAP S/4HANA Efficiently?
The training required for employees to learn how to use SAP S/4HANA efficiently is a certification training program that will teach them all they need about navigating around the software and using it to carry out their respective roles.