What is SAP S/4HANA?

With the release of its new enterprise resource planning (ERP) solution, SAP S/4HANA, SAP is preparing to sunset its previous ERP system – SAP ECC. Customers can expect maintenance and occasional updates of core applications through 2027 and some extended maintenance with extra cost for another three years.

Technically, SAP S/4HANA is shorthand for SAP Business Suite 4 SAP HANA. But in order to understand that we really need to first explain HANA.

Launched in 2010, SAP HANA (an acronym for high-performance analytic appliance) is a unique multi-model database with a unique in-memory architecture. That is, it stores data in its memory instead of keeping it in the hard drive like other databases, which allows your system to access the information you need much faster. The data SAP HANA collects can be seamlessly drawn from internal and external sources and integrated with other databases or ERP software.

But defining SAP HANA solely from an architectural point of view – as a database server, storing and retrieving data requested by applications – is missing the bigger story. Its column-oriented design makes it possible to process massive amounts of structured and unstructured data for high-speed transactions with near-zero latency and to run advanced real-time analytics. Combining online analytical processing (OLAP) and online transactional processing (OLTP), as well as machine learning, SAP HANA has become a multifaceted platform recognized by many customers as the foundation of an intelligent enterprise. The services of the SAP HANA platform allow you to develop and run custom applications and manage the lifecycles of all your applications, including interaction with the internet of things (IoT), which opens the door to ongoing development of new functionalities and enhanced capabilities.

SAP ECC – the legacy business suite that’s sunsetting over the next few years – is a platform for managing transactional and analytical business processes. Integrated with SAP HANA’s in-memory computing architecture, the ERP gained access to real-time business stats and analytics, and combined existing SAP transactional and analytical systems into one.

So, What is SAP S/4HANA?

SAP S/4HANA, released in 2015, is a complete, modular cloud ERP system and application suite powered by SAP HANA, with even more sophisticated AI and analytics capabilities. It may be the most significant advance in SAP’s core offerings since 1992, incorporating a relational database management system (RDBMS), Universal Object Interaction, Big Data, and authorization and security layers adapted for maximum scalability.

Designed for the digital economy, SAP S/4HANA provides a single source of truth for real-time management of business processes, dynamic planning and analysis. The user experience is more straightforward, with a simpler user interface and a less complex data model, as well as seamless connections to business networks and internal collaboration networks.

The SAP S/4HANA suite includes:

  • SAP S/4HANA Enterprise Management – extensive functionality and customizability.
  • SAP S/4HANA Compatibility Packs
  • SAP S/4HANA Industry-Specific LoB Functions – enhancements to core functionality tailored to your line of business (LoB). As of 2023, the current or planned LoBs supported are: 

Finance – focusing on accounting, controlling, treasury and risk management, financial planning, closing, and consolidation, as well as transactions, analytics and enterprise compliance. The solution helps identify sales and debts, and calculate TCO, savings and costs.

SAP S/4HANA Sales – contract management, orders and ensuring consistent sales data.

SAP S/4HANA R&D/Engineering – a complete overview of the enterprise portfolio, project management, product design, quality management, manufacturing insights, compliance and the product lifecycle.

SAP S/4HANA Human Resources

SAP S/4HANA Logistics – supplier relationship management and supply chain management (combined to consolidate functionality for similar business processes), from sourcing, procurement, purchase order processing and stock transport orders, to managing invoices, contracts, suppliers, warehouses and inventory.

SAP S/4HANA Features

Throughout the suite and across its LoB-specific enhancements, SAP S/4HANA features provide simplicity, agility, and scalability for handling massive volumes of data. Some of the key features of the SAP HANA infrastructure contributing to the success of SAP S/4HANA are:

  • Seamless integration with your system.
  • High availability and disaster recovery (HA/DR) for protecting your most critical applications with multi-target system replication, advanced data protection, and anonymization.
  • Integration, modeling, and multi-tier storage for data from multiple sources, inside or outside SAP HANA systems.
  • Machine learning and predictive analytics applied to text, graphical images, and increased productivity among your data science team.
  • Functions for several programming languages to enhance application server performance, simplify development tools, and expand use cases. For instance, the SQL Plan Stability option enables you to avoid performance regression and reduce the time needed for complex queries.
  • Asset management for seamlessly coordinating maintenance planning, scheduling and execution, and maximizing operational time.
  • Service master agreement and data management for service parts, subscription orders, shared services, and service operations, ensuring profitable service outcomes.

SAP S/4HANA Innovations

SAP S/4HANA takes the SAP HANA platform on which it operates to new heights, with many innovations over the preceding SAP ERP system. With the development of a brand-new code base and leveraging SAP HANA’s in-memory computing architecture, SAP S/4HANA provides business users access to dynamic analysis and guidance in real time, based on streamlined information gathered from various platforms.

  • New functionalities – The convergence of transactional and analytical systems allows users to access a single source of truth for both financial and accounting management documents, facilitating better reporting and greater insight into operations and business KPIs than was available from existing T-codes.
  • Intelligent technologies – Machine learning and process automation for enhanced business processes, such as predictive accounting.
  • Simplifications – Areas of the existing SAP ERP suite were simplified and improved. The process of streamlining and improvement is ongoing, with these enhancements and others to previous versions of SAP S/4HANA appearing in each release’s lengthy “simplification list”.
  • Deployment options – SAP S/4HANA can be deployed in several ways:

On-premises: A traditional in-house IT infrastructure model, with physical hosting on your property.

In the SAP S/4HANA cloud: Your instance of the solution is hosted on a partitioned server alongside those of other customers,
providing SAP S/4HANA functionality without technical maintenance or upgrading expenses.

In a private cloud: Hosted on your own cloud, when you have some cloud experience and the needed infrastructure.

Hybrid: A combination of both on-premise and cloud deployments, which may be a useful option if you want an on-premise
deployment at headquarters and cloud-based instances elsewhere for more centralized management.

Transition to SAP S/4HANA on-premises: You can choose a full system conversion (brownfield), migrating an existing SAP
environment to SAP S/4HANA; a fresh (greenfield) implementation, which migrates existing business data into a brand-new SAP
S/4HANA system; or selective data transition, which uses shell conversion to reuse existing ERP processes in the new system.

The Challenges of Moving to SAP S/4HANA

You may already feel the time has come to undertake the migration to SAP S/4HANA. And truthfully it has. However, there are several things you’ll need to consider beforehand for a successful transition.

First and foremost, S/4HANA only runs on a HANA database. If you are not currently using HANA, then you’ll have to migrate your entire database in order to maintain business continuity. Secondly, S/4HANA offers many optional features and configurations. So, you’ll need to define the scope of your conversion based on your specific business objectives.

After handling those basics, you’ll need to prepare for different challenges, here are some of the challenges which companies encounter in the preparation phase:

  • Business case creation: Many organizations fail to accurately identify the pain points of their current database infrastructure and, as a result, miscalculate the scope of the project. This can lead to wasted effort and resources. Without a solid project plan and accurate project cost estimation, you will not have a proper roadmap to digital transformation, which can negatively impact your ROI. A related potential pain point is stakeholder buy-in, which may require you to overcome objections and highlight the key arguments for immediate migration.
  • Code conversion: SAP HANA only supports the Unicode system. If your existing ERP system still uses a non-Unicode language, then the prerequisite move to HANA as part of a transition to SAP S/4HANA can be an unexpectedly significant undertaking. Similarly, your legacy system may have code customizations that are extremely difficult to adapt or unnecessary for the new SAP S/4HANA framework, as well as code corruption and other validation issues that need to be identified ahead of the migration.
  • Testing: As in any migration project, it all starts with an initial period of testing in the sandbox. Only afterward does the migration proceed to development and quality assurance teams before finally moving into production. At that stage, the primary concern is downtime since users cannot access the system during this process. If you don’t pre-test the new database system, there is a more considerable risk of system failures during the production stage, leading to greater downtime. Worse yet, if failures are detected too late and impact the system when the migration goes fully live, the result is even lengthier, costlier outages.

How Panaya Secures All Phases of Your SAP S/4HANA Journey

You don’t need to be deterred by any of the challenges we’ve discussed. A fast, accurate, and efficient journey to SAP S/4HANA is definitely possible with the right tools and expertise.

That is where the SAP experts at Panaya and our unique technology come in, ensuring zero-risk migration and go-live with minimal business disruption. Panaya’s 360 solution is the only tool that provides complete control over every step of your journey. It provides visibility into the project’s scope, effort, risks and common pitfalls by addressing all four key phases in the transition to SAP S/4HANA – assessment, preparation, migration, and acceleration:

Assessment – Panaya helps understand the scope of the project and build the business case, with the costs and benefits of the project. It provides a complete picture, covering how much effort – such as time, testing, and planned correction activities – is required to complete the project. Panaya’s rich dashboard displays information on effort, progress, defects, risk, and best practices, with drill-down into the code for each suggested change. Panaya can also provide analysis to help you decide whether to deploy on-premises or in the cloud, to go with a greenfield or brownfield implementation, and other deployment options.

Preparation – Panaya provides a toolbox that helps reduce the risk in the SAP migration process by supporting pre-conversion activities, such as moving to the HANA database and code cleaning and going back to standard. It enables you to design new business processes suitable for SAP S/4HANA based on your existing ERP system configurations and customizations.

Migration – Panaya covers end-to-end project execution, ensuring you understand and control the full scope of the project. This includes managing all workstreams, corrections and testing activities, some of which are completed automatically (such as through intelligent code remediation; ICR). Panaya’s built-in recording functionality tracks compliance and the use of e-signatures, in order to lock in approvals, while Panaya’s testing assets are added to a test library for reuse in future projects.

Acceleration – Panaya provides end-to-end project execution when doing business driven changes and when upgrading from an existing SAP S/4HANA implementation to a new version of S/4HANA. This enables improved functionality and can help businesses upgrade efficiently and rapidly.

For a more detailed migration checklist, see https://www.panaya.com/wp-content/uploads/2022/10/Tech-Target-CheckList-ReDesign-V3-with-UTM-1.pdf

Frequently Asked Questions

What is the difference between SAP HANA, SAP ERP, and SAP S/4HANA?

SAP HANA (an acronym for high-performance analytic appliance) is a unique multi-model database with a unique in-memory architecture. It is the core technology underpinning SAP S/4HANA, but it does not execute any business processes. However, its column-oriented design makes it possible to process massive amounts of structured and unstructured data for high-speed transactions with near-zero latency and to run advanced real-time analytics.
 
SAP ERP is an enterprise resource planning suite that includes modules such as logistics, warehousing, human resources, and finance. Designed for the digital economy, SAP S/4HANA provides a single source of truth for real-time management of business processes, dynamic planning, and analysis, as well as authorization and security layers adapted for maximum scalability.

How will moving to a new database platform impact my ERP strategy?

SAP S/4HANA can seamlessly draw data from internal and external sources and integrate it with other databases and ERP software. Note that S/4HANA only runs on a HANA database. So if you are not currently using HANA, then you’ll have to migrate your entire database in order to maintain business continuity. The transition does not inherently require revising your ERP strategy or business processes; however, Panaya can help you discover inefficiencies or bottlenecks that you may want to eliminate when you transition to SAP S/4HANA.
 

What is in-memory architecture?

Unlike other databases that store data on the hard drive, SAP HANA stores it in memory. This makes it easier to access, so the system can respond faster when you need the information stored in the database. This makes high-speed transactions possible and handling larger amounts of data easier. SAP HANA’s column-oriented in-memory database design (and a combination of online analytical and transactional processing) also facilitates advanced analytics and instant query responses with near-zero latency.