Blog

​"Things have changed” are the words that spring to mind when trying to summarise 2015 and talk about the year ahead… certainly the last 6 months of 2015 anyway. For the last 4-5 years, all we have heard about at SAP conferences are HANA, Big Data and Cloud and now I can confidently say…. IT’S HERE! And it’s already changed, and changed and changed some more, just when you think you have your head around something, it’s different!

SAP wouldn’t be SAP if this didn’t happen but this time it feels different. I feel like there has been a fundamental shift in technology and indeed how business views technology. We are in an age where children learn their way around mobile phone apps before they learn how to speak – it is a self-service and agile age, where clunky, slow and difficult to use technology will no longer cut it, and neither will clunky, slow and inflexible business models.

So SAP has responded; their answer? S/4HANA.

How did this translate to the actual Australian SAP market last year?

Interestingly enough we saw an increase in standard SAP modules, in particular SAP FICO. 2015 started off not too dissimilar to the previous year, all industries were pretty busy but it was the second half of the year where all the excitement happened. SAP SimpleFinance seemed to be the first big push by SAP in to the S/4HANA world and boy did they do some pushing!! And not all successfully I may add, but there is no denying that it did have a positive impact for all the SAP FICO guys out there. Whether they sold the product or not it did push companies to re-assess their Finance processes and systems creating work in this previously quieter area.

How will it translate to the year ahead?

In order to look at what is ahead and the impact of this significant change, we must first understand what S/4HANA actually is and from what I can tell, most people aren’t entirely sure!

When asked “What is HANA?” I hear the most common answer “an in memory database – it just makes things faster!” Maybe some people dumb it down for the “none technical” me, but when speaking with my contractors (the ones who aren’t SAP mentors) and my clients (across business and IT) it really does dawn on me that most people are not truly clear on what is about to hit them.

While people are correct when they say HANA is an in-memory database and it does indeed speed things up, that’s not entirely what S/4HANA is. From my understanding, S/4HANA is SAP’s first major shift in 25 – 30 years; they are changing the whole foundations of their software.

Businesses nowadays want access to real time information whereby they can predict and instantly react. They are changing their software so that it remains relevant for the next 25 years to come. And while it is something that needs to happen, it is also something that I believe will cause an awful lot of issues in the coming years.

S/4HANA incorporates 4 main parts. According to SAP;

• HANA as the underlying Platform, allowing single source for analytics and transactions – that’s 1 single data set! Or should be!!!!

• Real time and Simplified – the memory capability of HANA allows the data structures /index’s to be simplified. Eg look at the FICO module in ECC compared to S/4HANA; in S/4HANA the fields and index’s are significantly reduced, the duplication of data is eliminated and according to SAP has been seen to reduce the data size to a factor of 10. Software simplified – less programming required, again SAP use an example of a classical MRP run using 1300 lines of code, reprogrammed in HANA it uses only 90 lines of code.

• Fiori – New user interface which brings the benefits to the end user, often reducing the time it takes for day to day transactions.

• Native for the Cloud – Whether you are ready for the Cloud yet or not, your system will be waiting until you decide…..the inevitable?

On the face of it, it sounds pretty good hey? Once given the SAP sell where do you sign?!!

I have been to a few sessions on it now and I truly believe it is something that SAP needed to do in order to continue to be a force in this ever changing world. While it is true that SAP has fundamentally been the same for the last 25/30 years and now they are looking to the next, I cannot help but feel for the guys who only moved to SAP in the last 5 years. It was not a cheap exercise and from what I can tell, it will not be a cheap exercise to move forward.

So where will the impact be? My first thoughts? Data!!!!

At every presentation I have been to, for some reason, nobody seems to mention the data, unless it is to say how simplified and reduced it is. That’s great! But I am pretty sure we all know that most SAP organisations have anything but tidy, simple and all completely useful and governed data.

Most companies still cannot get the business to actually take ownership over it, so how will that impact the move to this new and simplified 1 data source model? How will people know what data is needed, useful and required? Whether it is duplicated?

If I was about to make the move to a system that charged me on data usage and whose main “sell” was the simplified and real time data then I would want to be doing a pretty important data governance project first! Look like good news for SAP Data Analysts, Data Governance and Master Data experts!

Training and Change!

Whether you chose to make the move via upgrade or re-implementation, it’s fair to say the User impact is significant. The screens look nicer, they are certainly simpler to use and the amount of screen swapping is minimalised but let’s not forget where we came from! The teams who are used to doing their job by swapping between multiple screens, typing in numerous fields and making many clicks now need to learn how to use a yes, more user friendly system but very different system nether the less!

Integration

It would seem that SAP will take care of your integration if you are fully in the Cloud. It is looked after in HCI. That’s great, but what if you decide that you do not want everything in the Cloud? What if you decide you want a mix of on premise and Cloud products!?

These are just my initial observations from what I know about S/4HANA and IT (which is pretty limited). I do think 2016 will see a major change in Australian technology and the new projects starting up will be leading the charge, I also believe it to be a truly exciting time to be in SAP.

My concern is that companies do not know what they are getting and SAP seems too “Sales” focused” at the moment – which is short sighted. If they are not careful they will do more damage than good in the next 18 months, especially when pushing customers to change the way they do things; moving to S/4HANA and the Cloud are big moves and it wouldn’t be crazy to assume that if they are not getting the service and true advice they need from SAP then they will probably start evaluating other products as well – Salesforce seem to be doing particularly well at the moment!

There does seem to be a slight trend of Projects going on hold and “replanning” – Toll, Honda, Orica and possibly WesTrac being the next one.

It is not all negative though because where there is significant change there is also significant opportunity. Companies need help and they have money to spend. There are many large projects in the pipeline and rumour has it the Department of Defence has spent $80 million in SAP licences alone!! That will suck up a huge amount of SAP skills from the rest of Australia – good news for contractors and partners alike!