SAP's Plattner: How S/4Hana Simplifies ERP - InformationWeek

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2/4/2015
03:27 PM
Doug Henschen
Doug Henschen
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SAP's Plattner: How S/4Hana Simplifies ERP

SAP chairman Hasso Plattner explains what's possible with S/4Hana. Analysts and customers comment on the evolutionary vs. revolutionary debate.

statement is the reality, that's good news, since it means SAP will rationalize overlapping functionality that has crept into the portfolio as SAP has moved into the cloud.

Customers might question whether they really need this or that process to be 3X faster or 7X faster, but Plattner said that flexibility is as important as performance gains.

"When you introduce aggregated data, that has to follow rules," he explained. "If you want to change the rules -- how you build the reporting structure and hierarchies in a company -- it's a massive job for IT. If you have 50 reporting cubes in a BI system and management says, 'We want to do things differently,' it's a huge IT project -- particularly when you want to carry the history forward."

[ Want more on cloud ERP options? Read Oracle, NetSuite Report Cloud ERP Progress. ]

Because there are no spinning plates to keep in sync with S/4Hana, companies will be able to change profit-and-loss and reporting structures on the fly because they are virtual views, calculated in memory. Want to consider the financial ramifications of divesting of a business unit? No problem, according to Plattner. Want to change your P&L structure, the sales structure, or the org structure in the middle of the year? You can make the change or just analyze the differences in seconds, he said.

SAP customer Swiss Re confirms that these performance and flexibility gains are compelling. In August 2014, the global reinsurance company started piloting SAP Simple Finance -- the app that has formed the core of S/4Hana. Swiss Re CIO Markus Schmid told InformationWeek at Tuesday's launch event that he expects the company to deploy S/4Hana within a year.

Swiss Re piloted three use-cases for Simple Finance. One test validated whether the company could use a single Simple Finance system to report financials both in US GAAP (generally accepted accounting principles) and in an internal "Economic" view similar to IFRS (international financial reporting standards). Today, that requires two separate SAP Business Suite systems running on conventional databases. The pilot proved that one Simple Finance system could deliver both views.

"It's fulfilling the promises of simplifying the architecture and giving us quicker response times," said Schmid, a member of Swiss Re's global management board. Schmid said he expects S/4Hana will enable Swiss Re to collapse its quarterly financial close process from six weeks down to as little as one week.


SAP chairman and co-founder Hasso Plattner.

SAP chairman and co-founder Hasso Plattner.

Swiss Re's two other pilot projects looked at very common accounting requirements. In one use-case, Swiss Re tested whether Simple Finance could handle integrated cost-accounting processes used in services-based cost management. Like most big companies, Swiss Re has many cost centers and lines of business. The cost-accounting process allocates what share of taxes or the cost of capital, for example, gets assigned to which entity. Similarly, in the third pilot, Swiss Re tested whether Simple Finance could handle complex end-to-end reporting requirements across business units, product lines, and legal entities.

The pilots proved that "we can reproduce reports for all these different perspectives all on the same [S/4Hana] platform," whereas this previously required multiple reporting processes with many interim reporting steps, Schmid said.

Swiss Re's take is on the performance and flexibility benefits of putting financial management on S/4Hana. Yet to come are reports on what customers can do once HR, supply chain, logistics, project lifecycle management, and other aspects of ERP are available in simplified form.

Customer adoption of SAP's next-gen apps will depend on exactly what apps will be made available, to what degree they fit industries and companies, and, most importantly, what they will cost. But nobody seems to be questioning whether speed and flexibility -- both of which are enabled by in-memory simplification -- are benefits worth considering.

More than 500 respondents weighed in on their plans for DevOps, Agile, APIs, automation, and more. While traditional languages slide, newer options are filling the gaps. Meanwhile, everything from project management to automated deployment is happening more in the cloud. It's an exciting time -- but could we be moving too fast? Get the 2015 App Dev Priorities Survey report today. (Free registration required.)

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio
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soozyg
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soozyg,
User Rank: Ninja
3/5/2015 | 8:11:59 PM
Re: Run your enterprise on a cell phone?
And if you want to get into dashboard-viewing metrics, the dashboard software would have to be responsive design to view it on a phone. Which they might be, I don't know all the technology behind dashboards. But I would think that would cause serious eye strain!
AS71
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AS71,
User Rank: Apprentice
3/5/2015 | 7:46:25 PM
Re: Run your enterprise on a cell phone?
It still doesn't make a lot of sense though. If you are running order management, for instance, on SAP and you are taking in hundreds or thousands of orders a day, what company is going to want to let all of that data sit in-memory? If the server crashes or the data corrupts or whatever, that data is lost forever if you have not written it to disk or Flash... some persistent media. No large company is going to want to take the risk that they may lose a month or a week or a day of "hot" data. SAP could say, "so write it to disk out of HANA", but then you are only moving as fast as the underlying storage system... which was the entire reason you implemented HANA in the first place.
AS71
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AS71,
User Rank: Apprentice
2/8/2015 | 7:12:55 PM
Re: Run your enterprise on a cell phone?
Unrelated to the HANA piece. Did anyone discuss what is happening with their acquired cloud apps, like SuccessFactors, Ariba, Concur? I saw a bubble chart where they had core business suite and then a ring outside that which was HANA and then a ring outside of that which is cloud apps. Does that means that all of those cloud apps are going to remain standalone? Meaning they will have SAP HR as part of the core suite and then a somewhat competitive, or at least unconnected, SuccessFactors out there by itself. They haven't been very clear on what is going on with these acquired companies. Are they part of S/4?
AS71
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AS71,
User Rank: Apprentice
2/8/2015 | 6:55:38 PM
Re: Run your enterprise on a cell phone?
Getting rid of indexes and aggregates to reduce the data capacity has been part of the DW provider story, Netezza, Teradata, etc, for a long time. Makes sense for OLAP to run columnar but traditionally there has been a query performance penalty on large OLTP DBs. That's why IBM has Netezza for OLAP and DB2 for OLTP. It is possible that they have solved all of this, but I don't see where. Even if they did, the large bite in cost isn't in the data capacities, it is in the need to relicense on HANA when you already have Oracle or DB2 licenses.
D. Henschen
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D. Henschen,
User Rank: Author
2/8/2015 | 4:10:41 PM
Re: Run your enterprise on a cell phone?
SAP/Plattner was not seriously suggesting running the enterprise on the phone. He was making the point that when you get rid of of the redundant copies of data -- aggregates, indexes, etc. -- and no longer need to have copies upon copies along with a complicated data model with much to keep in sync, the total footprint of the system is dramatically reduced such that it's comparatively easy to manage it as well to back it up and have it maintained in a highly available state. A financial system that required nearly 600 GB using Business Suite and a conventional data was was reduced to 42 GB using S/4Hana on in-memory technology, according to SAP. The dynamic data -- open orders and current-year data -- amounted to 8 GB. That's small enough, technically, to run on a phone -- the point being that the in-memory server required need not be all that big or expensive. 
AS71
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50%
AS71,
User Rank: Apprentice
2/8/2015 | 3:58:00 PM
Re: Run your enterprise on a cell phone?
SAP made a big marketing splash with the 'entirely in memory' database message, but then walked it back when asked specific questions. How do you ensure that data isn't lost forever when a server crashes? Well, we write it to persistent state storage at a very short interval... so, then, you're still only moving as fast as the storage system..... Isn't it going to be really expensive to store all of the legacy data, which is most of the DB, in memory? Well, you can archive to disk.... again, maybe not a problem, but not really in memory. What you get when you dig into it is that you will be storing read only in memory, which is not new. On the 'run your enterprise from your phone' message. Why would a CFO want to dig through the transactional GL data on their phone? They just need the dashboard view.
D. Henschen
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D. Henschen,
User Rank: Author
2/5/2015 | 3:29:12 PM
Run your enterprise on a cell phone?
That 8.4 GB figure in the diagram above represents the dynamic data in the enterprise -- open orders, current-year transactions and anything related to current-fiscal-year results. That amount is small enough to run on a smartphone, Plattner pointed out. It's not that you actually would do that, but the idea is that you don't need much of a server and storage footprint, with in-memory technology, as compared to conventional apps, with their many copies of data.


That's the theory anyway, but it's notable what SAP last year added a store-to-disk option for "warm" and archival data, as opposed to the hot data that's managed in memory.
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