Preface

Beginning with the introduction of PCs and the rise of the Internet, the digitalization of private households and companies continues to grow every day. The possibilities for companies to enhance their products or to build new business models are rising exponentially. Alongside those possibilities, we find customer expectations for better levels of customer service and customer centricity. This change needs to be reflected in your IT environment to support the flexibility and scalability required in this increasingly digital world.

As the leading global packaged application provider, SAP supports the changing demand of its customer base to provide a solution that can support the digitalization trends. With the introduction of the SAP HANA database in 2010, SAP provided the capability to use in-memory capabilities to accelerate its business application and to integrate transaction and reporting capabilities into a single database. With this first step, SAP provided the baseline technology for future architecture and decided in 2013 to use SAP HANA as the platform for all of its business applications. In addition to the changes on the platform level, there was a significant move toward the consumption of “as-a-service” models. This allowed companies to reduce their implementation and maintenance cost and increase productivity with cloud-based deployment options.

SAP’s acquisition of other companies, for example, SuccessFactors and Hybris, has added the needed capabilities to build an end-to-end digital platform. To simplify the processes and to address the demand of a more user-centric solution, SAP introduced SAP Fiori as part of the overall platform. The combination of those changes and capabilities led to a renovation of SAP ERP toward a new product line called SAP S/4HANA Enterprise Management in 2015 and a new way of implementing SAP products: SAP Activate.

Why Read This Book?

With all the changes introduced in the past years and the innovations that are coming alongside those changes, there is a need for more detailed information on and experience with SAP S/4HANA. We know that there is detailed information available on certain aspects of SAP S/4HANA, but we believe that it only covers a subset of the overall information and that it only addresses a specific audience. With this book, we provide a comprehensive overview of the different aspects of SAP S/4HANA from industry, business, and technical perspectives.

We also share the experiences we’ve gathered in different client situations as well as the challenges and how to solve those with concrete examples. In addition, we’ve identified a need to prepare customers for the digital transformation and to provide them with the right setup from the strategic, organizational level down to the technical and operational level. With that, we aim to close the gap at the strategic level by discussing concrete best practices and how to apply them.

This overview should help new SAP clients as well as experienced SAP customers understand the different aspects and changes to their environment.

Audience

This book is geared toward CxOs, business owners, enterprise architects, and project managers who want to get a consolidated overview of the value from SAP S/4HANA and the related products supporting the digital transformation. We cover the industry perspective and the implications as well as the strategic imperative results of the industry transformation. Because of this scope, we believe the book is relevant for all SAP interested readers across all industries.

We also address all aspects and possibilities to help business teams understand the SAP S/4HANA functional capabilities (e.g., finance and logistics) as well as how the value scenarios improve day-to-day work.

On the other side, we look at the technical platform, and the migration, upgrading, and deployment options that are useful for enterprise architects and project managers.

We want to encourage the readers of the book to take a closer look at the concepts we introduce and consider them in your future transformation and implementation projects.

Structure of the Book

This reference book on SAP S/4HANA provides you with both a complete overview and important details on each topic. The structure guides you from a strategical level to a practical level and covers all relevant aspects in each topic. This book also serves as a compendium so that you can pick up at a specific chapter and read through this chapter to get detailed information on a selected topic, as each chapter is complete in itself. However, we recommend that you start from the beginning and work through the book as some chapters refer to a previous chapter and build on each other.

In Chapter 1 provides an overview of the digital transformation and introduces its main drivers from business and technical perspectives. Based on this, we set this information into the context of selected industries to provide you concrete examples on the impact and the changes that need to happen. We also provide an overview of the technical megatrends and a pace layer model for your application architecture.

Chapter 2 guides you through the history and evolution of SAP software. It also provides you with the fundamentals of SAP S/4HANA, including the different editions and deployment options. We provide you with an overview of business value scenarios and how they support the digital transformation. Within the value scenarios, you’ll see concrete optimization and savings potential. Everything is rounded up with a high-level overview of the SAP S/4HANA architecture and the principles behind SAP S/4HANA.

In Chapter 3, we introduce you to the pain points of a chief financial officer (CFO) based on IBM’s CFO study. We introduce the key functionalities of SAP S/4HANA Finance and how they address the pain points identified previously. We provide a maturity assessment of the finance capabilities and a business case that is underpinned by best practices. Finally, this chapter provides you with an outlook on future capabilities that will be available with further releases.

We continue on the functional capabilities of SAP S/4HANA in Chapter 4 and extend it toward the logistics (Materials Management and Operations) functions. Similar to Chapter 3, we provide you with an overview of the major pain points of the chief supply chain/operations officer (CSCO) study and how SAP S/4HANA addresses those pain points. We also discuss the key capabilities for logistics and the business case for when and where to use SAP S/4HANA. In addition, we cover a future outlook and upcoming innovations for Material Management and Operations functionality in SAP S/4HANA.

After we introduce you to SAP S/4HANA and its functional capabilities, we broaden your view in Chapter 5 by introducing the extended functionality provided by the line of business (LoB) solutions outside the digital core (e.g., SAP SuccessFactors, SAP Ariba, and SAP Hybris) and how they integrate with SAP S/4HANA. Therefore, we provide you with a high-level overview of their functional capabilities and how these products complement each other.

In Chapter 6, we explain the details and the concept behind the SAP HANA platform and how it addresses the typical issues of an IT department and serves as the database for SAP S/4HANA. We get into the principles of the SAP HANA database concepts, scalability, virtualization, and operations. These features are being extended by security and user experience (UX) to complete the architecture.

Based on fundamentals of the SAP HANA architecture, Chapter 7 describes the extension possibilities of future SAP solutions and how SAP S/4HANA can be extended via in-app and side-by-side extensions. We also introduce you to the SAP HANA Cloud Platform and possibilities for Internet of Things (IoT) and cognitive computing as fundamental pieces of the digital value chain.

To complete the picture, Chapter 8 presents the different deployment options from on-premise to cloud and possible hybrid scenarios. As the requirements for hybrid scenarios are increasing, we provide you with an overview of possible integration scenarios and capabilities.

Next, Chapter 9 helps you get prepared from a technical perspective for a move to SAP S/4HANA and provides you with the relevant prerequisites. We discuss the different implementation options and approaches as well as the recommended housekeeping activities and relevant tools.

An essential part of a successful SAP S/4HANA implementation project is having the right approach and method. In Chapter 10, we explain the principles of the SAP Activate framework on the context of SAP S/4HANA and provide an overview of the available tools.

After we explain SAP S/4HANA and its benefits, architecture, principles, method, and tools, we leverage Chapter 11 to demonstrate how you can build your own transformation roadmap. We also discuss what method and tools should be used to make the right decision.

In Chapter 12, we finally illustrate and prove the value of SAP S/4HANA with concrete cases that show what benefits can be achieved.

The conclusion in Chapter 13 summarizes the lessons learned in this book and provides you with ideas on how to start your roadmap to SAP S/4HANA.

Acknowledgments

As this book was a lot of work, you can imagine that it could not be accomplished by a small group. We the authors want to say “thank you” to all of the supporters who helped us complete this book successfully.

First, we want to thank our families for helping us find the time and the peace to write this book. However, we also want to thank our friends and colleagues who helped us get this done. Therefore, we want to express our gratitude to Carsten Steck, who kept everything together and provided significant support to the author team, and to Devraj Bardhan, who made significant contributions to this book. We also want to thank Frank Mebus, Thomas Weinhardt, and Dr. Anup K. Ghosh for reviewing this book and providing valuable feedback. In addition, we want to say thank you to the following contributors, who brought their valuable expertise to discussions and the completion of some chapters: Mike Beer, Bijoy Bhattacharya, Dr. Anup K. Ghosh, Jayanta Ghosh, Alfonso Martinez Gonzalez, Janusz Jarzemski, Tomas Krojzl, Nitsa Kukreja, Anton Kusters, Frank Mebus, K. J. Min, Shah Abdul Odud, Soumen Saha, Pradeep Santara, Andreas Scholl, Shivesh Sharma, and Dipanshu Roy.

We also want to say thank you to all of those who aren’t mentioned by name but supported us in the book project.

And, last but not least, we really want to say thank you to Meagan White and Emily Nicholls from SAP PRESS, who had patience with our team and provided encouraging support.

Axel Baumgartl, Dmitry Chaadaev, Nga-Sze Choi, Mark Dudgeon, Asidhara Lahiri, Bert Meijerink, and Andrew Worsley-Tonks