SAP S/4HANA Unraveled: How Logistics Evolved into the Digital Core

SAP S/4HANA Enterprise Management

In November 2015, the next-generation business suite reached a pivotal moment in its development. The release of SAP S/4HANA Enterprise Management brings new logistics functionality to the table and aims at complete simplification of ERP landscapes.

In the final post of this blog series, we will explore what SAP S/4HANA Enterprise Management actually offers and whether it can give businesses the competitive edge in the digital age.

Tap the Full Potential of SAP S/4HANA

SAP S/4HANA Enterprise Management is built as the digital core for digital business and encompasses essential functionality for all lines of business. It covers all areas of logistics and material requirements planning (MRP), from inventory and warehouse management to material valuation and production planning. This new release brings us another large step towards a business suite entirely based on the SAP HANA in-memory platform. But what does this mean for enterprises?

In March, we witnessed the rollout of SAP S/4HANA Finance, which promises to take finance management to the next level and features virtually all of the familiar functions of SAP Business Suite. With the introduction of SAP S/4HANA Enterprise Management, on the other hand, these functions will be gradually replaced by new ones in order to more fully take advantage of the capabilities of SAP S/4HANA.

A New Direction? Rethinking the Business Suite

Our initial evaluation has revealed that pricing functionality and output determination have been completely redesigned, and database tables have been simplified and integrated. Moreover, SAP is eliminating redundant system design. As an example, customer and vendor master data objects are replaced by the familiar concept of business partners (e.g. in CRM, SRM or GTS). This means that, increasingly, functions are being simplified and harmonized, unlocking the potential to deliver new functionality. Powered by the strength of the SAP HANA database, the integration of analytical and transactional data (OLAP and OLTP) will enable predictive analytics for materials planning, for example. What’s more, the new simplified table design and the elimination of aggregates and indexes increase user-friendliness and provide a considerable boost to performance. We predict that this development will continue through 2016 and gather pace in the coming years.

But new customers are not the only ones who can look forward to new functions and processes. Enterprises already using SAP ERP can also benefit from this new approach and the realization of a simple, but powerful, integrated business suite. Businesses should first carry out feasibility studies to ensure that upcoming process changes and new programs can be migrated to SAP S/4HANA Enterprise Management, and whether the new asset accounting or the business partner functions can be introduced, for example.

The Road Ahead

At itelligence, we are currently evaluating the new release to gather valuable insights into how it can be implemented. And after just two months experience, we can already see that it will significantly simplify MRP and inventory management processes. The next few years are going to be exciting for customers, consultants, and developers as we witness how implementation projects unfold.

The journey to the digital future continues. We are looking forward to supporting you along the way.

About the authors

As Head of Financials and Controlling at itelligence, Dr. Axel Sieker is heavily involved with all new developments concerning SAP S/4HANA. Having previously worked as an accounting consultant, he has 18 years of experience with SAP solutions.

Reimund Lips has been working as a consultant and project manager in multiple SAP ERP implementation and rollout projects all over the world for more than 25 years now. Focussing on the supply chain, manufacturing, sales and procurement processes, he is now evaluating the new design and functionalities  of SAP S/4HANA Enterprise Management.

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