What is SAP S4/HANA?

SAP S/4HANA was developed by SAP SE, a German corporation known for developing among the most popular ERP systems in the world. Clients typically use SAP S/4HANA to unify and oversee complex business processes as they increasingly manage vast troves of data.

SAP platforms are developed to access a “single source of truth” across divisions and data sources. The platforms unify departments such as sales, finance, manufacturing and human resources under a single database and operating system. Using technologies like machine learning and artificial intelligence (AI), SAP S/4HANA can analyze large amounts of data and automate routine business tasks.

SAP S/4HANA’s modular and highly customizable software packages offer specific line-of-business solutions tailored to discrete industries such as financial services, the public sector and energy firms. The software is often utilized to assist a business in completing a digital transformation and can be deployed either on-premises, in the cloud, or using a hybrid solution.

A successor to the previous core SAP ERP platform, SAP ECC, SAP S/4HANA is considered one of the first major innovations in the company’s core offerings since the introduction of the R/3 system in 1992.¹ Previous iterations of SAP solutions, like R/3 and ECC, provided real-time insights into the core functions of a business. These platforms used a variety of modular software packages and a vast network of partners.

SAP S/4HANA is an abbreviation of SAP Business Suite 4 SAP HANA. It is the first iteration of the platform designed to run on the SAP HANA in-memory database platform. The platform uses the processing power to offer real-time data processing and analytics.

SAP S/4HANA is also the first SAP product to use the new SAP Fiori user interface². This interface features a series of user-friendly tiled applications rather than the graphical user interface (GUI) deployed in previous versions.

In 2010, SAP launched SAP HANA, a multi-model database capable of responding to queries in an instant. This server is 3,600 times faster than traditional databases^3. and supports database management, application development and advanced analytics.

SAP S/4HANA was originally announced in 2014 as a next-generation financial tool under the name SAP Simple Finance.⁴ Later that year SAP expanded that solution, indicating the new platform would be the core of its new intelligent ERP. Over the next years, the company would add several logistics-specific functions to SAP S/4HANA along with machine learning capabilities and predictive accounting functions.

Today, SAP S/4HANA and S/4HANA Cloud feature additional capacities related to artificial intelligence and the Internet of Things (IoT) as well as specific solutions for industry use cases (for example, customer service or sustainability).

Given SAP S/4HANA’s array of industry-specific add-ons and customizable software packages, there are nearly as many SAP solutions as there are individual business models.

Industry-specific solutions cater to the unique needs of specific fields such as healthcare, manufacturing and retail. Flexible modules allow an enterprise to pick and choose which functions best suit their business cases. Some of the key benefits of implementing SAP S/4HANA include:

As organizations increasingly handle large amounts of information, the ability to quickly access their data means that SAP users can adapt to changes in market conditions and pivot more effectively. With precise forecasting and predictive analytics, organizations can grow more sustainable, remain nimble and address unforeseen conditions at a rapid pace. Regular updates ensure SAP S/4HANA users have access to the latest tools as new business needs and technological innovations arise.

SAP S/4HANA’s solutions can be used individually or in concert to cover every aspect of an organization’s business, from financial reporting to tracking customers and shipments.

Given the advanced capacity of the HANA platform, many of the suite’s functions facilitate predictive insights or automated processes. This capability allows organizations to discover new insights and create highly accurate roadmaps to success.

In addition to the core lines of business covered, SAP offers custom solutions like SAP APIs⁵ to manage apps for employees and the SAP Business Technology Platform⁶, a cloud-based platform for application development, automation and integration. Core use cases for SAP S/4HANA and the SAP Business Suite include:

SAP’s asset management line-of-business ensures every piece of equipment or business asset is running at peak performance. The platform tracks and manages machinery, equipment and infrastructure to optimize performance and reduce downtime. Key features include predictive maintenance to prevent equipment failure and work-order management. The modules integrate with other SAP S/4HANA functions such as finance and procurement, providing a unified view of the financial impact of a business’ assets and bringing down maintenance costs.

Organizations use SAP S/4HANA’s financial management platforms to streamline their processes and perform advanced analytics, gaining a holistic view of their organization’s fiscal health. The platform offers a variety of functions including cash management, centralized payments management and tools for compliance and reporting. Running on the SAP HANA database, these financial modules help allow for better decision-making. These modules provide real-time insights into company finances and complete extensive forecasting.

SAP’s human resources platforms unify nearly every aspect of human capital management (HCR), from recruiting to daily HR tasks. The software organizes core functions such as time and attendance and payroll while supporting self-service protocols to reduce administrative workloads. Using software integrations such as SAP SuccessFactors, SAP S/4HANA enables customized workforce planning and can provide data-driven insights into how to best attract and retain talent. And using process automation, it can streamline recruitment or onboarding.

SAP’s HANA database, and its increased computing power, has allowed SAP S/4HANA’s manufacturing modules to integrate with IoT technologies. This means heavy manufacturing industries can track equipment and materials in real-time to prevent production issues. Using SAP S/4HANA’s material requirements planning (MRP) tools, organizations can ensure that materials are always available when needed. The modules also support shop floor integrations⁷ and production planning, keeping the manufacturing process running smoothly and on time.

The SAP S/4HANA R&D and engineering line-of-business focuses on product lifecycles. In addition to helping organizations stay compliant with health and safety regulations, the modules can effectively manage product changes and generate bills of materials. Document management systems and cross-company collaborative tools ensure that a project will stay organized, reducing time-to-market.

SAP S/4HANA’s solutions span the entire ecosystem of sales, from direct sales management to customer analytics. Organizations use SAP’s sales functions to manage orders, track shipping and invoice for goods or services. Its SAP customer relationship management (SAP CRM) features can assist in lead generation and tracking consumer satisfaction. Advanced reporting tools provide insights into performance and track emerging trends.

SAP S/4HANA offers several solutions for sourcing and procurement, including SAP Ariba for contracts and SAP Fieldglass for vendor management. These modules manage processes like obtaining raw materials, supplier and contract management and operational purchasing. This platform allows all procurement activities to be managed in one place.

Using the platform, organizations can control spending by instantly comparing bids and awards. And using S/4HANA’s visibility into performance and procurement, organizations can source materials more strategically, making more informed decisions about vendors and suppliers.

Using SAP S/4HANA’s supply chain management tools, organizations can tightly integrate their processes with IoT technology, allowing them to continuously monitor assets and equipment. These solutions include tools to supervise pre-planning production, warehousing, inventory and transportation management.

By continuously monitoring inventory levels and the flow of products from suppliers to customers, organizations using SAP S/4HANA supply chain can optimize inventory more effectively. And leveraging the software’s advanced analytic functions, they can predict future demand to reduce excess inventory.

When considering SAP S/4HANA implementation, it’s important to carefully plan the process and articulate the project’s business case, considering an organization’s specific and clearly defined objectives. Accurate data migration and data mapping are crucial for the project’s success. There are several SAP S/4HANA deployment options, each bringing with them specific advantages and disadvantages.

Cloud deployment: SAP’s S/4HANA edition is a Software-as-a-Service (SaaS) product, meaning its infrastructure and maintenance are handled by SAP and the latest upgrades will be delivered automatically. It is available in both private and public editions. The private cloud offers the entire SAP S/4HANA functionality, maintained on a private network behind a firewall. The public cloud offers efficiency and affordability, often through a service provider.

On-premises deployment: SAP S/4HANA on-premises is available through a traditional licensing model. Deployment and maintenance are managed by a business’ IT staff, and it is the customer’s responsibility to routinely upgrade the system. It is highly compatible with an individual business’ requirements for data storage and management.

Hybrid cloud deployment: Using a hybrid cloud model, an SAP customer can use both on-premises and cloud solutions. For instance, a business deploying a hybrid model might store core applications and data on a customer’s hardware while taking advantage of select cloud-enabled SAP solutions.

Greenfield approach: The Greenfield approach to implementation is an opportunity to make a fresh start. Organizations taking this approach have either never used an SAP ERC or are willing to completely re-engineer their data practices and workflows. This approach is relatively simple, though pricing can sometimes be higher as it involves a complete redesign of a company’s process.

Brownfield approach: A Brownfield approach, or a system conversion, upgrades an existing SAP ecosystem to SAP S/4HANA. It’s most appealing to organizations interested in taking advantage of some of SAP S/4HANA’s new capabilities, but less eager to completely revamp their workflows or data practices.