There is a question about the roadmap of S/4HANA. Its simple: first it covers the functionality of ECC 6.

0,
including the industry specifics, and secondly new application components will be added in cooperation with the
customers and the user groups.
It is sad to still hear the same arguments after all the sales success, the implementations in record time and
happy productive customers. We have written books, where we describe dozens of new or improved application
scenarios, specific events are taking place throughout the world and we have many success stories on our
website. A Chinese fashion manufacturer who installed S/4HANA and reports a game changing improvement of
the MRP2 run from more than 24 hours to under two hours. My advice for the smaller and midsize SAP Business
Suite customers is to carefully watch the early adopters, soon approaching 2000, especially in related industries.
When you ask long-time SAP customers what they want from their ERP system in the future, they will tell you:
lower cost of operation, a better user interface, easier maintenance, better integration with other applications,
mainly services in the cloud, faster MRP2 runs, new business processes for customer interaction and customer
service and most importantly, simplification wherever possible. All of the above has been achieved in S/4HANA,
but there is much more. The Q3/15 results clearly show how S/4HANA has taken off and it is a pity that, after all
the positive feedback, there is still some uncertainty among our customers.
Once again Ill try to summarize the key advantages of S/4HANA over the current business suite on any db and
the ERP systems by other vendors.

S/4HANA is an alternative to the existing SAP Business

Suite
The SAP Business Suite ECC X.X will see continued development and maintenance for the next ten years. It is
the backbone of many enterprise systems around the world and with the introduction of the HANA database the
suite became even better in some critical areas. New solutions developed for S/4HANA will be checked, whether
they could also be deployed in the suite as well. A good example are the FIORI self- service scenarios. It is
perfectly fine to stay on the business suite for the foreseeable future.
But that doesnt mean no other system should exist next to it. The in-memory database HANA allows for a
radically different application architecture and a new philosophy with regards to the data model simplicity. While
most of the business functionality of the business suite will be carried over to S/4HANA, new workflows, larger
transaction volumes, real time analytics on transactional data, unmatched flexibility when changing reporting
structures and even real time simulation of business scenarios are possible. And all this comes with a completely
new UI and a new framework for modifications and extensions. S/4HANA will continue to be developed at a
different speed in order to match the new requirements of the digital age.
With BYD SAP first tried a hybrid approach for data management, transactional processing on a traditional disk
based relational database and reporting with a redundant copy of the data in-memory using a columnar store.
Despite some attractive results it also demonstrated that the future has to be a system where all data is
completely in memory, using only one copy of the data in a columnar store and the transactional processing is
drastically simplified.

How complete is S/4HANA

One of the reasons why companies have more long term plans for S/4HANA is the completeness of the product.
To recreate the wealth of functionality of the business suite is quite a challenge, but now financials, sales and
logistics are available and most of the industry specific solutions will follow soon. SAP wants to achieve a better
separation between the industries in order to reduce potential conflicts between them. Every transition case from
ECC 6.0 to S/4HANA has to be evaluated individually but most of the installed base should be covered by now.
For some time there will always be a constellation, where the suite is the more complete solution for a specific
client. That shouldnt be interpreted as a weakness of S/4HANA but a compliment to the suite. Many clients
choose to become familiar with HANA by moving the business warehouse onto S/4HANA or start with completely
new projects in product research or service including internet of things scenarios.

S/4HANA only runs on HANA

Yes, SAP HANA is the only database S/4HANA runs on. The rapid growth of cloud based applications did clearly
show that the underlying technology stack has to be simplified. Actually our largest competitors concentrate their
offerings on one database only: Oracle, Salesforce, Workday, Netsuite and Microsoft. The enormous potential of
an in-memory database needs to be fully exploited to reshape the way we design enterprise applications and
cannot be compromised by finding the lowest common denominator, while using multiple databases. As a result
we can see a dramatic simplification of the application code. The HANA database family offers radically new
ways of solving todays and tomorrows challenges in enterprise applications and this gives the S/4HANA system
a substantial advantage over the competition. It supports in addition to S/4HANA many other application
scenarios from analytics of big data or scientific research to new iot applications. Through data federation HANA
can seamlessly integrate with other databases.
Hardware costs for S/HANA
Some smaller customers say that the hardware costs are prohibitive. I vigorously dispute that notion. S/4HANA
strictly runs on standard Intel x86 servers or now on IBM POWER servers as well. The data footprint reduction
can reach a factor 10+, where the columnar store is responsible for a factor 5 and the removal of aggregates and
the reorganization of transient data tables add at least another factor 2. We recommend a split of transactional
data into actual and historical partitions. The extent for how long you keep data in the historical partition online
depends on the type of business. Older historical data can easily be archived on HADOOP and still be accessed
by HANA in order to further reduce the online footprint. This means a 10 terabyte ERP system becomes a 1
terabyte system or less. This reduces the time for backup and restore by a factor 10x and more (only the actual
data) and allows to use a single CPU board with high speed data access from all cores. Even the largest
customers wont need a scale out configuration for their actual data partitions.
For development and test systems a copy of the actual data is sufficient. I recommend to always test with real
data sets. With the split into actual and historical data partition the archiving task for transactional data has been
solved in the most elegant way. Older partitions can just be dropped on HADOOP according to legal
requirements.

Why does the database speed matter?

The biggest business advantage of S/4HANA is the simplicity of the data base layout. This allows for higher data
entry speed, unbelievable improvements in reporting and most importantly a complete flexibility in reporting using
external hierarchies. These hierarchies can be changed any time (restructuring, acquisitions, etc) without
changes to the database. The new UI isnt just cleaner, easier to understand and use, but completely new
processes are possible because of the speed of HANA. The fact that any field in a table can be used as an index
adds to the simplicity and no database administrator has to be involved. This system is ready to grow again in
functionality and become the backbone for the new digital world. That management meetings can now use live
data to illustrate the current situation of their companys business, that predictive analytics and simulations help
to open up a window into the future in real time, is only possible because of the extreme database speed. The
digital boardroom will become fully interactive on current data. All bottlenecks like back flush of material after an
assembly process finished or mass data entry are gone, batch programs become transactions, reports run in
seconds and the period end closing is now completely streamlined.

Deployment in the cloud or on premise?

There are many advantages to deploy the system in the cloud, but if regional preferences call for an
implementation on premise no problem, it might be just a different cost factor. It has to be understood that the
deployment in the cloud has a principal advantage when it comes to the implementation of new functionality. Just
take the new online sales scenarios with different revenue creation and recognition practices. Most companies
will be in need of these features pretty soon and only with S/4HANA SAP can really accelerate the adoption. SAP
offers a test migration of ECC 6.0 systems in the cloud and the customer can later decide where to run the
production system.

How disruptive is S/4HANA?

All master and transactional data will be migrated, all the business processes are still available, the new UI is
easy to comprehend and most importantly the application configuration can also be carried forward. Many long
term SAP customers are contributing in the design efforts of the new user interaction. By applying the principles
of design thinking, end users, consultants, domain experts and developers interact till the most comprehensive
solution is found. All predefined aggregate data (totals, info cubes) have been eliminated and the system offers
now the highest flexibility in reporting and analysing business data.
The first step in a S/4HANA project should be the evaluation of the system without the company specific
modifications and extensions but using the customer production data set. Many new features are added and may
make modifications obsolete. Dont extrapolate the amount of work and training from previous experience with
ERP release changes. Once the data is carried over to S/4HANA everything will be much faster. In case of an on
premise or hosted deployment, the previous UI will still be available in order to ease the transition phase.

S/4HANA only for larger companies?

It is interesting to see regional differences in the speed of adoption. It is similar to the introduction R/3 in 1992/3.
The R/3 system was meant to be for smaller companies and who jumped on it first? the large and super large
ones. I am absolutely convinced that smaller and midsize companies will now benefit even more, since they
might be able to drop most of their modifications, as a consequence reduce the TCO, and have significantly more
productive users, who will gain business insights like never before.

The reduction of complexity

For years our customers complained about the complexity of the business suite and asked for simplification. Now
some fear they have to relearn a lot and that will cost time and money. The simplification of the UI is real and will
save time with the first day of productive use. The business functionality of the transactions is still the same but
comes in a much more efficient form.
The dramatic simplification of the data model, the fact that any field can be used as an index for selecting data
and the unprecedented short response times are allowing for much faster development cycles of new
applications. The deployment of extensions in the HANA Cloud Platform (HCP) is an elegant way to enhance
S/4HANA systems or to build completely new applications. S/4HANA combines the proven set of core business
functionality, in many languages and for nearly all countries, with the ability to venture into completely new
dimensions of applications. This capability is key when business processes are developing at an ever increasing
speed and core enterprise systems cannot just be complemented by point solutions but have to also
accommodate these changes. This reduction in complexity also lowers the threshold for smaller companies to
switch to S/4HANA.

New concepts for sales, customer support and product

development
After the simplification of the main application in sales, logistics and finance, the development of new functionality
has started and will be rolled out in short release cycles. It is paramount that SAP and its community learns how
to efficiently deal with shorter release cycles, without introducing any kind of instability. The reduced complexity
of the data model and the removal of transactional data aggregation clearly improves robustness. The focus on
the HANA platform allows for better applications, because the technical advantages of HANA can now be
exploited without consideration for compliancy with other platforms. This is a formidable advantage and as
mentioned before a strategy taken by all other providers of cloud services.
SAP still believes in running the new system in the cloud and on premise, but it will be only S/4HANA with which
we can achieve this in one software version going forward. This will reduce the TCO and speed up the so much
needed step into the future. Every single application area like data entry, standard reporting, analytics and
predictions, the digital boardroom or the multi-channel customer interaction, to name a few, becomes a world
class component in its own right. This alone is a reason to consider an earlier migration to S/4HANA.
HANA allows the access of other databases e.g. HANA VORA or HADOOP, which helps to integrate with IOT
scenarios or e.g. data for weather, geography, statistical information, without copying the data into the erp
system. SAP just announced a host of innovations for S/4HANA in Barcelona, including the new logistics
components, business planning and the reintegration of some sales management functions.

Transition to S/4HANA
A first step can always be the implementation of the suite ECC 6.0 on HANA. SAP offers the option to help
convert an existing ERP 6.0 system in the cloud to a S/4HANA system. All data will be carried forward, the
database stripped of unnecessary indices and aggregate tables, the remaining object clusters dissolved into
regular tables, all tables converted to columnar store with the exception of transient data like EDI protocols.
Customer data extensions will be included. The new S/4HANA applications should work instantly with the
exception of the customer extension or modifications, these have to be reevaluated and if necessary
reimplemented, using the new extension framework. The interfaces with other customer applications have to be
checked and in many cases optimized. SAP will help to minimize the data footprint with data tiering including
archiving, e.g. using HADOOP. The standard S/4HANA system should be thoroughly tested before considering
any modifications. Despite S/4HANA offers a new UI (FIORI based), the customer can choose to have the old UI
still available to assist the users in the transition.

Summary
S/4HANA is by far the best ERP system SAP has ever offered to the market. In combination with the new
customer facing applications like hybris, the SaaS applications Success Factors, Ariba, Fieldglass, Concur and
the Internet of Things projects with HANA VORA SAP offers a unique suite of products, which can be installed
and activated quickly. The HANA Cloud Platform allows for easy implementations of extensions to integrate other
software products or bespoke applications. As a result the new product offers a clear competitive advantage for
relatively low costs. SAP saw a dramatic increase in S/4HANA projects in the 3rd quarter and it would be a
shame, if lack of information or an overly conservative attitude hinders companies, which could otherwise benefit
a lot in these days of massive changes, to make the move to S/4HANA.