What you should know about SAP Transformations

SAP transformation 101

A modern ERP is key in managing an organization’s data and driving business. But how to migrate from your old, already existing SAP ERP to next-generation S/4HANA solution with the least friction possible?

How to succeed in you SAP ERP Transformation

Enterprise Resource Planning systems, ERPs, have helped businesses for years to better manage their data streams and operational processes. But with rapid advances in ERP development, old ways of managing data are becoming outdated.

By 2027, all SAP ERPs will have to migrate to a new generation SAP ERP, SAP S4/HANA, when their support expires. How to prepare for the big transformation ahead?

An SAP transformation is a business-critical challenge, but at the same time a massive opportunity. While an SAP migration can feel tough and even scary, it also offers great momentum for taking your business to the next level.

It is no news to us that ERP transformation projects can be experienced as difficult and time-consuming. We get it – defining your business needs and objectives as well as finding the right partner and roll-out is no easy feat.

In our view, though, the benefits of migrating to S/4HANA are undisputed. Using a next generation platform with predefined processes and best practices enables business development in the digital era. When done right, an SAP migration process is an opportunity to leverage the competitive advantage of your business through digital transformation.

But where to start? Let’s break down the basics of an SAP transformation

What is SAP ERP?

The abbreviation ERP stands for Enterprise Resource Planning. Essentially, an ERP is a platform that integrates the core activities of running a modern-day enterprise under one roof.

An ERP system enables more effective and successful business by centralising data management. It combines processes in finance, human resources, manufacturing, supply chain, procurement and others into one system through automation and integration. Having a single view on the data of many business functions makes managing processes easier and reduces silos.

Basically, you can think of an ERP as a bit like a central nervous system that connects all the necessary operations and processes of a business together and helps the day-to-day run smoother.

The ERP market is rapidly growing, so there and many ERP service providers out there today. Choosing a reliable provider is essential to harnessing the benefits of an ERP integration.

When it comes to helping our customers transform their resource planning, our go-to ERP provider is SAP. Founded in 1972 in Germany, they are today’s global market leader and known for some of the world’s most widely used ERP solutions.

SAP ERP is a catch-all term for SAP’s various ERP products, like SAP S/4HANA and SAP EEC (for medium and large-sized companies), SAP Business One and SAP Business ByDesign (for small and midsize companies).

On this page, we will be focusing mostly on S/4HANA, the latest version of SAP ERP for large enterprises. It is a new generation SAP ERP that all SAP ERP users will eventually migrate to – the older SAP systems will retire by the end of 2027 when their support expires and by then, all SAP users must undergo the transition to SAP S/4HANA.

What is SAP S/4HANA?

SAP S/4HANA, introduced in 2015, is the latest version of SAPs ERP software for large enterprises. It is a new generation ERP that utilises in-memory computing, AI and machine learning to process data in a never-before-seen speed.

In our view, SAP S4/HANA is one of the best ERP systems out there. It is not only the latest ERP solution but an advanced platform that unlocks the value of having an ERP system in the first place: agile business development in a rapidly changing world. S/4HANA truly revolutionizes ERP systems and is considered the most groundbreaking SAP innovation since the conception of SAP 3 in 1992.

The S/4 in the name signifies that S/4HANA is a fourth generation SAP ERP, and HANA refers to the in-memory database technology, High-Performance Analytic Appliance, it uses. HANA is a relational database management system designed to handle large volumes of data in real time. It stores and processes data in-memory in column-based tables and is significantly faster than other, traditionally disk-based database management systems on the market.

Because SAP S/4HANA utilises the HANA technology, it can process massive amounts of data in an instant and is truly data driven. SAP S/4HANA has the capability to revolutionize all critical enterprise functions, spanning finance, supply chain, customer service, and marketing. It allows your business to conduct transactions, analyze data, and make predictions in real time. S4/HANA is a comprehensive platform for overseeing data, processes, workflows, and ecosystem integrations. It seamlessly blends simplicity in solution landscape with profound visibility in data insights, facilitating timely decision-making for both business leaders and analysts.

The benefits of SAP S4/HANA

S4/HANA is much more than a simple version update. It’s an advanced enterprise platform that enables a whole new way of leading, developing and growing your business.

With S4/HANA, your get all the benefits of a cloud platform:

World-leading technology developed with the muscles of a global giant.
An integrated, intelligent and data driven engine for a fast-paced operational model.
Updates are easy to implement.
You can make changes without a league of coders.

How to make sure you get the benefits from your SAP S4/HANA? The most important benefits are:

There are two concise examples highlighting the key benefits of Advanced In Memory Computing in SAP S/4HANA:

Real-Time Financial Analysis:

SAP S/4HANA enables instant processing and analysis of financial data. For example, a company can perform real-time profit and loss analysis across different segments, allowing for immediate financial insights and faster strategic decision-making.

Accelerated Sales and Distribution Processes:

The in-memory computing of SAP S/4HANA allows for the real-time processing of sales orders and availability checks. This results in a quicker order-to-cash cycle, improving customer service and efficiency in sales operations.

Here are a couple of examples:

Consolidation of Financial Tables:

In traditional SAP ERP systems, finance data is often spread across multiple tables like BKPF (Accounting Document Header) and BSEG (Accounting Document Segment).
With S/4HANA, these are consolidated into the “Universal Journal” table (ACDOCA), which stores all financial transactions. This single source of truth eliminates the need for data reconciliation between different tables and reduces the overall data footprint.
Example Benefit: This consolidation simplifies financial reporting and analysis. For instance, generating a financial statement or balance sheet is more straightforward and faster due to the reduced number of tables and data points to query.

Streamlined Material Ledger:

Previously, material valuation across various dimensions (like legal, profit center, or segment) required separate tables, which led to complex data models and intensive data management.
In S/4HANA, the material ledger is integrated into the Universal Journal, simplifying the data structure and allowing real-time valuation of materials in all dimensions within a single table.
Example Benefit: This integration simplifies inventory management and cost calculations. Companies can now easily track and evaluate material costs in real-time, leading to more accurate and timely financial insights.

SAP Fiori’s modern and intuitive interface in SAP S/4HANA significantly improves user experience, catering to specific user needs and facilitating efficient, on-the-go business operations.

Examples:

Instantaneous Financial Closing:

With SAP S/4HANA’s real-time analytics, financial closing processes become significantly faster. Financial records are updated instantly as transactions occur, enabling real-time financial reporting and analysis. This efficiency reduces the time for month-end and year-end closings, enhances cash flow management, and allows financial teams to focus more on strategic analysis rather than data consolidation.

Real-Time Inventory Management:

SAP S/4HANA updates inventory levels instantly with each transaction, drastically improving inventory accuracy. This real-time visibility helps businesses avoid stockouts and overstocking, leading to more efficient order fulfillment and inventory control. It enables quicker response to demand changes, enhances order accuracy, and supports more effective demand planning.

Other benefits include:

Cloud-Native Design: SAP S/4HANA is designed for the cloud, providing flexibility, scalability, and the benefits of cloud computing, such as reduced infrastructure costs and maintenance.

Enhanced Modules and Functionalities: Specific modules and functionalities, such as finance, logistics, and procurement, have been enhanced in S/4HANA for greater efficiency and better performance.

Streamlined Processes: Many business processes are streamlined and automated in S/4HANA, leading to increased efficiency and reduced manual errors.

AI and Machine Learning Integration: S/4HANA incorporates AI and machine learning capabilities, which can automate routine tasks and provide predictive analytics, enhancing decision-making and operational efficiency.

Flexibility in Deployment: S/4HANA offers options for on-premise, cloud, or hybrid deployment, giving businesses the flexibility to choose the model that best fits their needs.

Extended Ecosystem: The platform supports a broad ecosystem of solutions, including IoT, blockchain, and other emerging technologies, allowing businesses to easily expand and innovate.

Enhanced Security Features: With robust security features and compliance tools, SAP S/4HANA ensures that business data is protected and regulatory requirements are met.

Improved Integration Capabilities: S/4HANA offers enhanced integration with other SAP and non-SAP applications, facilitating smoother business processes and data flow across different systems.

SAP Integrations

The SAP Integration Suite, with its comprehensive set of tools and features like ready-built APIs, customizable integration processes, and event-driven integration capabilities, plays a crucial role in seamlessly integrating SAP S/4HANA into a diverse and complex digital ecosystem. This integration fosters more cohesive and agile business operations.

When focusing on the SAP Integration Suite, particularly for integrating SAP S/4HANA, the key methods and features to consider are:

SAP Integration Suite:

The SAP Integration Suite, formerly known as SAP Cloud Platform Integration (CPI), is a versatile, cloud-based integration platform that enables the seamless connection of applications, data, and processes. It’s particularly effective for integrating SAP S/4HANA with a wide array of SAP and non-SAP applications.

Ready-Built APIs and Connectors:

SAP S/4HANA comes with a wealth of pre-built APIs and connectors available in the SAP API Business Hub. These ready-made APIs facilitate the integration of SAP S/4HANA with various external systems and services, simplifying the development process and reducing the time to deployment.

These APIs cover a broad range of business processes and scenarios, allowing for easy access to S/4HANA functionalities and data from other applications.

Integration Flows and Processes:

Within the SAP Integration Suite, you can design, customize, and manage integration flows that connect different systems. These flows can handle data transformations, routing, and various other integration tasks.

This capability is essential for creating tailored integration processes that align with specific business requirements and workflows.

Event-Driven Integrations via Events:

SAP S/4HANA supports event-driven integrations, where certain events in S/4HANA can trigger specific integration flows in the SAP Integration Suite.

This approach is highly efficient for real-time integrations, as it allows systems to react immediately to changes or updates in SAP S/4HANA, such as changes in order status or inventory levels.

Enhancements in Public SAP S/4HANA:

The public edition of SAP S/4HANA continually receives enhancements and updates, including new and improved APIs, better integration capabilities, and more robust event-handling features.

These enhancements ensure that the integration capabilities remain up-to-date with the latest technological advancements and business needs, facilitating more seamless and efficient integrations.

Models of SAP ERP

There are different alternatives to deploying an SAP ERP. You can choose either an on-premise ERP or a cloud ERP – which can be either private or public. All deployment options have different advantages to cater to the needs of different organizations. The choice of option depends on your organization’s preferences and needs all the way from business goals to IT strategy to topics like regulation, data security and scalability.

Let’s take a look the different deployment models.

What is the difference between On-Premise and Cloud SAP ERP?

On premise

On-Premise deployment means that the SAP ERP software purchased from the provider is installed and run on the organization’s own servers and data centers and everything from implementation to use is done internally.

On one hand, this gives the organization full ownership and control over the ERP environment. This allows for customization and flexibility as well as potentially more powerful performance.

On the other hand, in this deployment model data security, maintenance and updates are the organization’s own responsibility without any third-party assistance. It might also require additional investment in database software or servers and doesn’t allow for as much scalability as respective cloud solutions.

As on-premise solution calls for strong ownership, it might be the most suitable choice for large, well-established enterprises that have well-proven business processes, sufficient IT resources in-house and a specific need for control and customization.

Cloud

Cloud deployment means that the entire ERP is hosted and managed in the cloud by SAP or other service provider. Cloud deployment is a software-as-a-service (SaaS) solution, where the ERP can be accessed over the internet.

The advantages of cloud deployment are that it is cost-effective, scalable and flexible. Automatic updates and support are available from the provider.

Disadvantages have to do with lesser data security, control and customization possibilities compared to on-premise deployment as well as dependence on internet connectivity.

Hence, cloud is a good fit for organizations that require agility and scalability and don’t have specific security or control requirements.

Hybrid

SAP ERP can be also deployed as a hybrid model, combining elements of both cloud and on-premise solutions.

This allows for organizations to “mix and match” based on their individual needs: they can choose to host specific modules or functionalities in the cloud while keeping others, like sensitive data, on-premise.

What is the difference between private and public Cloud SAP ERP?

If your deployment method of choice is cloud, you still need to make another choice: whether to go public or private.

Public

SAP S/4HANA Cloud, public edition is a ready-to-run cloud ERP. Public edition means that it is hosted on shared infrastructure of a third-party provider and multiple organizations may use the same infrastructure. It is a more standardized, less customizable version of cloud ERP that is quicker to get started with compared to the more tailored private version. It takes advantage of industry best practices, is automatically updated and scalable. It can be described as a “lighter” and more agile option when choosing cloud ERP.

Private

SAP S/4HANA Cloud, private edition is a tailored-to-fit cloud ERP that adapts to each organization’s individual transformation. It is hosted on dedicated infrastructure that is either managed by the organization or a third-party provider – but as opposed to the public edition, the infrastructure is not shared but used only by the organization in question. Private cloud deployment combines many of the benefits of on-premise, like possibilities for customization, control and higher data security, with the modernity of cloud.

Choosing the best solutions for your business

Choosing the right model of SAP ERP – whether on-premise, private cloud, or public cloud – depends on various factors specific to your company. Here’s a general guide to help you decide:

On-Premise:

Best for: Companies that require extensive customization and control over their ERP environment. Suitable for businesses with complex, industry-specific needs or those operating in regions with strict data residency regulations.

Considerations: This option involves higher upfront costs for hardware and infrastructure, ongoing maintenance, and a need for in-house IT expertise. It offers the highest level of control and customization.

Challenges: On-premise solutions require significant upfront investment in hardware, infrastructure, and licensing fees. Companies are responsible for maintaining and upgrading the system, which requires dedicated IT staff and resources. Scaling up the system can be slow and costly, as it often requires additional hardware and infrastructure. There’s a risk of technology becoming outdated if regular updates and upgrades are not implemented. SAP is focused more on Cloud based ERP models.

Private Cloud:

Best for: Organizations that want the benefits of cloud (like scalability and reduced infrastructure management) but also need more control over their data and systems than what’s typically available in a public cloud. Ideal for businesses with stringent security, compliance, or data privacy requirements.

Considerations: Offers a balance between control and convenience. While more expensive than public cloud, it provides more customization and security. Operational management is typically easier than on-premise but requires a reliable cloud service provider.

Challenges: While private cloud models reduce some infrastructure costs, they can still be more expensive than public cloud due to dedicated resources. Companies might become reliant on the cloud service provider for maintenance, support, and security, which can limit flexibility. Ensuring seamless integration with other systems and achieving the desired level of customization can be challenging. Although more controlled than public cloud, ensuring compliance and security in a private cloud setup still requires significant effort.

Public Cloud:

Best for: Businesses seeking maximum agility, scalability, and lower upfront costs. Well-suited for small to medium-sized businesses or those with more standardized processes that can adapt to the best practices embedded in public cloud solutions.

Considerations: While it’s the most cost-effective and scalable, it offers less customization and control. Data is stored off-site, which can be a concern for highly regulated industries. However, it’s ideal for businesses looking to benefit from regular updates and innovations without the need for extensive IT resources.

Challenges: Public cloud offerings typically offer less flexibility in terms of customization when compared to on-premise or private cloud solutions. Storing sensitive data off-premises raises concerns about data security, privacy, and compliance with regulatory standards. Dependency on the internet connection and the service provider’s infrastructure might impact system performance and reliability. There’s a potential risk of vendor lock-in, making it challenging to migrate to another system or back to an on-premise solution in the future.

To make an informed decision, consider the following factors:

Customization Needs: How much do you need to customize the ERP to fit your specific business processes?
Cost Considerations: What is your budget for upfront costs vs. ongoing operational expenses?
IT Resources and Expertise: Do you have the in-house capability to manage an ERP system, or would you prefer to outsource this management?
Compliance and Security: Are there industry-specific compliance and data security requirements that you need to adhere to?
Scalability and Flexibility: How quickly do you need to be able to scale up or down based on business needs?

By evaluating these aspects in the context of your business requirements, you can determine which SAP ERP model – on-premise, private cloud, or public cloud – is the best fit for your company.

Drivers of SAP transformation

In addition to the fact that the migration to S/4HANA will be inevitable for all SAP ERP users by 2027, there are other factors that should motivate you to seriously start preparing for an SAP transformation.

Switching to S4/HANA enables you to become truly digital, and the sooner you deploy SAP A/4HANA, the faster you get its benefits. Hopping on the digital transformation bandwagon before your competitors will secure you real competitive advantages.

An ERP modernization project is not an overnight change – it takes time and planning. That’s why it is smart to start early. The longer you keep using your old ERP, the more data layers there are to migrate and the more complex the project can get. Last-minute planning can result in hasty decisions and added costs.

In our opinion, you need three things for a successful SAP transformation: business leaders and experienced professionals to design a human-centred business transformation, an inspired team driving the change, and an integrated technology delivery framework that helps align roles, methodology and timelines.

Our approach to SAP transformations empowers business leaders to actively steer the change process. By adopting an agile and human-centered methodology, we achieve more streamlined, efficient, and sustainable projects that prioritize the well-being and support of individuals. Our approach is centred around co-creativity, minimum viable governance and agility.

Preparing for SAP transformation

You should start preparing for your SAP transformation journey by asking the following questions:

What is the purpose of our ERP?
What are the goals of this SAP transformation?
How can we ensure that our organisation is prepared?

Switching to S4/HANA will require a change in your way of thinking. Instead of looking for tailor-made solutions and modifying the software to fit your established practices, you should examine your operating model and reflect how real business transformation can be achieved.

Introducing new digital capabilities and a changed user experience can disrupt fixed conventions, which requires effective change management. It is the responsibility of business leaders to steer business design and data leadership. Legacy thinking should be fought against through co-creativity and practical design methods.

How to ensure your S/4 HANA conversion rolls smoothly from start to finish?

An SAP transformation is an all-encompassing project that should be taken one step at a time. We recommend the following route:

Design your business transformation:

A business-led approach is essential when developing business capabilities. Our SAP development path is based on our Business Technology Design concept to ensure a visual, quick and understandable process.

Design your SAP transformation:

What will your SAP look like in practice? We advise you not to tailor the core of your SAP but instead keep it standardised to enable regular, cost-effective updates and continuous development.

Lead and manage the transformation project in a human-centric way:

Adopting a new system and operating model require change management. You should design the system to serve its users, plan the change and communicate it effectively – and offer training on how to use the system.

Deploy SAP S4/HANA and do it quickly:

Invest in deployment and set ambitious business goals. Making the technical changes quickly allows you to start production promptly.

Continue development after deployment:

New features and services are continuously introduced to SAP systems. Stay on top of them to ensure your SAP runs smoothly – and make sure you have support in case an unexpected hiccup occurs.

Migration from SAP ECC to SAP S/4HANA

Even though an SAP transformation is an extensive change project that requires planning, management and communication, in its essence the SAP S/4 HANA conversion is still a technical transition.

For most of the companies, the transition from their current platform to S/4HANA can’t be taken in one big leap. Intermediate steps to prepare the existing SAP ERP landscape for HANA need to be taken. Additionally, all other SAP systems the organization might be using should be made compliant for HANA or the used databases should be harmonized to minimize costs.

Summary of the key technical knowledge required for migrating from SAP ECC to SAP S/4HANA:

SAP HANA Database Proficiency: Understanding the architecture and data modeling of the SAP HANA in-memory database.
SAP S/4HANA Functional Knowledge: Familiarity with the new functionalities and interface changes in S/4HANA compared to ECC.
Data Migration Skills: Expertise in data cleansing, mapping, and using migration tools for transitioning data to S/4HANA.
Custom Code Adaptation: Ability to analyze and modify existing ECC custom code for compatibility with S/4HANA.
Integration Expertise: Knowledge of integrating S/4HANA with other systems, both SAP and non-SAP.
Testing and Quality Assurance: Conducting comprehensive testing to ensure functionality and performance post-migration.
SAP Activation Methodology: Familiarity with the phases and best practices of the SAP Activate framework for S/4HANA implementation.
System Landscape Management: Understanding the system landscape, including deployment options and managing the transition.
Change Management: Skills in managing the organizational change, including training users for the new system.
Compliance and Security Awareness: Ensuring the new system adheres to relevant regulations and security best practices.

These areas encompass the essential technical competencies needed for a smooth and effective migration from SAP ECC to SAP S/4HANA.

The key source of information for technically preparing for SAP S/4 HANA conversion is a cryptically named SAP Note 2631152 Database Migration Option (DMO) of SUM 2.0 SP03. It lists the technical requirements and limitations of different platform options – you can read more about them here.

Ultimately, the approach to the technical transition is individual: where you are now determines what kind of path you should take. The EarlyWatch Alert Reports (EWA Reports) from your existing SAP systems provide useful information on where you are currently standing. Those should be shared with your partner as a basis for planning. Combined with your own plans and wishes, this information allows your partner to create a schedule and task list that guides the functional transformation. It is possible, for example, to determine whether you want to do only the technical conversion with minimal mandatory application side changes or include implementation of new functionality along the conversion project.

You should also consider the approach to the migration of your SAP authorization concept. The SAP authorization concept is a documented set of rules and guidelines defining how user access (roles and user assignments) is handled in an SAP System

The authorization concept can be migrated via two different strategies: the “Greenfield approach” or the “Brownfield approach”. There are pros and cons to both options, and the choice depends on the needs of your project and your company.

This approach is time and resource consuming, and for some parts it can feel a bit like reinventing the wheel. On the other hand, it provides a great opportunity to create a fresh, up to date concept that allows for easier maintenance and better security in the future. The Greenfield approach takes up resources but is worth the investment if it’s due time to review your roles and security processes.

This is a less extensive and can be carried out in a more technical manner. If much of your existing concept is solid and your security processes get an ok from the IT audit, the Brownfield approach might be suitable for you.

KPIs in the SAP landscape

Thanks to new HANA capabilities, SAP S4/HANA provides you with enhanced features that allow you to make better decisions and optimize your business functions faster than before.

Well how do you get the most out of your SAP then?

In SAP S/4HANA and SAP Analytics, Key Performance Indicators (KPIs) are not always inherently pre-built within the system but are supported through various tools and functionalities that allow for their creation, monitoring, and analysis.

While SAP S/4HANA itself may not have all KPIs pre-built, it allows for the customization and creation of KPIs relevant to your business processes. The system’s in-memory computing capability ensures that KPIs are updated in real-time, providing accurate and timely insights.

SAP Fiori, which is an integral part of S/4HANA, offers role-based dashboards and analytical apps that can be used to display and interact with KPIs, enhancing the user experience and accessibility of key metrics.

It offers extensive capabilities for defining, visualizing, and analyzing KPIs.In SAP Analytics Cloud, you can create customized KPIs and interactive dashboards that pull data directly from S/4HANA and other sources. This tool is more focused on in-depth analysis and visualization of KPIs.

While it doesn’t come with a standard set of pre-built KPIs (as KPIs tend to be industry and business-specific), it provides a flexible and powerful platform to create and monitor any KPIs that are critical for your business.

In summary, while SAP S/4HANA and SAP Analytics Cloud may not come with a universal set of pre-built KPIs, they provide the necessary tools and capabilities to create, customize, and analyze KPIs according to specific business needs and industry standards. This flexibility allows businesses to focus on the metrics that are most relevant and impactful to their operations and strategic goals.

To get KPIs in SAP S/4HANA, follow these simplified steps:

Define KPIs: Use the KPI Modeling framework in SAP S/4HANA to define and create your KPIs, specifying data sources and calculation logic.
Configure Data Sources: Ensure the necessary data for your KPIs is accessible in SAP S/4HANA, typically involving setup in relevant modules like Financial Accounting.
Utilize SAP Fiori Apps: Leverage SAP Fiori apps for user-friendly visualization of KPIs. Customize existing Fiori analytical apps or the Smart Business Cockpit to display real-time KPI data.
Optional Integration with SAP Analytics Cloud: For advanced analytics, integrate with SAP Analytics Cloud for more complex reporting and visualization.
Regular Monitoring: Continuously monitor these KPIs through Fiori dashboards or SAP Analytics Cloud to stay informed and make data-driven decisions.
Review and Update: Periodically review and adjust KPI definitions and data sources to align with evolving business strategies and operations.

This streamlined approach allows for effective tracking and analysis of KPIs in SAP S/4HANA, utilizing its powerful data processing and visualization tools.

How to measure the performance of your SAP

In the complex landscape of enterprise resource planning, monitoring the performance of an SAP system is a critical undertaking. Whether deployed on-premise or hosted in the cloud, an SAP system’s performance directly impacts business processes, user satisfaction, and overall operational efficiency.

For on-premise SAP systems, performance measurement revolves around several core metrics. System response time, for instance, is a primary indicator, revealing how quickly the system processes transactions. Resource utilization, encompassing CPU, memory, and disk usage, also provides critical insights. These metrics indicate whether the system is optimally resourced or if adjustments are needed to handle the workload efficiently.

Database performance is another crucial area, especially for systems powered by SAP HANA. Here, metrics such as query response times and database growth rates are monitored to ensure data is processed and stored efficiently. Similarly, application performance, particularly for key SAP modules, needs regular monitoring. This includes assessing long-running applications and error rates, which can signal underlying issues needing resolution.

In a cloud-based SAP environment, the focus shifts slightly. While hardware-specific metrics like CPU and memory usage are managed by the cloud provider, application performance remains a key concern. Metrics such as service availability, transaction throughput, and response times become the focal point. Additionally, compliance with Service Level Agreements (SLAs) gains prominence, ensuring the cloud provider meets guaranteed performance benchmarks.

Irrespective of the deployment model, monitoring tools play a vital role. SAP offers various tools for this purpose, including SAP Solution Manager for on-premise systems and integrated monitoring solutions in cloud-based SAP offerings. These tools provide comprehensive dashboards and reporting functionalities, enabling real-time tracking of key performance indicators.

Furthermore, network performance and batch job efficiency are vital in both cloud and on-premise environments.

Network latency and throughput need consistent monitoring, especially for systems accessed remotely or in hybrid setups. Batch jobs, integral to SAP operations, require efficient scheduling and performance tracking to ensure they don’t become bottlenecks.

Lastly, an often-overlooked but essential aspect of performance measurement is user experience. User satisfaction surveys and behavior analytics provide invaluable feedback, highlighting areas where the system may need refinement or optimization.

In conclusion, measuring the performance of an SAP system is a multifaceted process, encompassing technical metrics, application efficiency, and user experience. Regular monitoring, coupled with proactive management, ensures the SAP system remains a robust, efficient tool, driving business processes and supporting organizational goals. Whether in the cloud or on-premise, a well-performing SAP system is a linchpin of modern enterprise success.

SAP supplier selection and multi-vendor SAP projects

An SAP transformation is a high-stakes project. Transforming the core systems, solutions and ways of working of a business is complex. So complex, in fact, that an entire industry of transformation consultants has been created around it. Companies need specialized experts to survive the migration.

If you are the person in your company responsible for delivering successful change and keeping expenses from soaring, giving control to outsiders can seem daunting. It is true: choosing a partner wisely can make or break your transformation. Let’s talk a little about why your SAP strategic partner matters.

Why your SAP strategic partner matters

A company’s choice of partner is essential when strategic assets are being developed.

Especially for a company going through its first ERP transformation, an experienced partner is crucial. Your partner should have a clear vision of the common project and the ability to recommend the right solutions for you. Professional project management, the use of best practices and focusing on what matters are also factors of risk management. Collaboration runs smoothly when your partner organisation is the right size and its culture similar enough to yours.

Some questions to ask when looking for the right partner for you:

Are they reliable? Experience speaks volumes – ask for references on similar projects.
Do they offer holistic support in the process? The right partner helps you not just with technical implementation but also with organizational change and training.
Do they have a vision for YOU? An ERP migration is not a one-size-fits-all process, and your partner should find the best solution for your business specifically.
Are they local or global? Language and culture play a vital role in implementing change.
How do they handle project management? Sticking to the agreed schedule, budget and scope is essential.
Are they quick enough? We believe in the 80/20 approach, which allows speedy deployment by implementing 80% of the requirements at the first stage while the rest can follow.
Do they stick to industry best practices? It showcases in depth know-how of the industry and its solutions.

However, what is most important is that you take ownership of your business development – technology is just a tool. In choosing a partner, make sure you stay in the driver seat, and that empowering your organisation to make the most out of SAP is on the agenda.

Sofigate is SAP’s preferred partner in S4/HANA transformations because of a human-centric method for carrying out SAP transformations. Our approach to SAP transformations promotes value creation through value stream mapping strategies, a co-creative way of working, AI-powered agility everywhere, and minimum viable governance.

How to develop your SAP with partners

The scarcity of skilled SAP Transformation professionals sometimes leads into rigid prime vendor contracts that lock in the customer to pay for billed-by-the-hour modifications instead of best solutions.

We want to disrupt that model by offering multi-vendor strategic alliances that are based on trust and collaboration. In a strategic alliance, we gather an experienced dream team of best talents from across the industry to design and manage the project.

As your partner, we will be involved in every step of the way from planning the migration to after deployment, helping the customer in empowering its organisation in the process. Respectively, the customer is expected to participate actively by driving the project and engaging their organization in the change.

The beginning of the project is a critical time for laying the foundation for a transformation. But what follows is as important. Technical deployment is just the first step in unlocking the potential of your SAP transformation. You should not stop developing after the software is up and running. Whether you move onto the more traditional On Premise or the Cloud version of S/4HANA, the solution keeps evolving. SAP is constantly developing the software, bringing in new innovations and increasing efficiency. Taking advantage of new features helps you get maximum benefits from your ERP. Sometimes securing those gains means asking some help from transformation experts.

Our SAP services

Generative AI in SAP development

By now, we all know that generative AI is here to stay. Generative AI has the potential to boost productivity, automate repetitive tasks, and provide valuable insights. This leaves time for professionals to concentrate on what’s important and impactful. But how to leverage the potential of generative AI when it’s developing at a staggering speed? What should businesses, SAP users and SAP developers know when it comes to generative AI?

How generative AI can speed up SAP development?

The accelerating speed of Generative AI development will, without a doubt, disrupt the world of ERPs. Generative AI is already now being increasingly integrated into SAP development to further enhance different aspects of ERP systems. Large-language-models that can produce code in the blink of an eye will decrease time to market and cost to fractions of the current industry standard. This will mean a real productivity leap in ERP development.

Generative AI makes writing code quicker and more experimental. This leads to faster deployment and more iterative development.

For example, with the help of AI, natural language workflow descriptions can be turned into automated workflows.

The required skillset is changing: to harness the benefits of generative AI, it’s not necessary for you to know how to code. Understanding problems and breaking them down into smaller components, however, is crucial.

As change accelerates, reaction times become shorter. For example, software updates will become lighter but will be happening more frequently. The go-to-market cycle from idea to production will turn into weeks instead of the years we are used to.

What does generative AI mean for businesses and SAP users?

The speed of generative AI development puts pressure on companies to adopt the technology as soon as possible. Getting started with trial and error sooner than later is better than falling behind by taking it slow and safe.

In theory, this is clear as day. But how to harness the power of artificial intelligence for your company in practice? We believe you need two things to leverage the potential of generative AI: a set of guidelines and the ready-made solutions from the industry leaders.

You should think of AI as just another tool that should be deployed as any other technology. Some guidelines to do so:

Everyone should be given the opportunity to use AI with the appropriate tools.
Peer-to-peer learning with shared knowledge will get people excited.
Confidentiality and data security should be always considered carefully, and data anonymised when needed.
Don’t forget to create metrics for AI use for your organization.
The beginning will be messy, but getting started and being speedy is key.

Using the ready-made capabilities offered by world-leading business platforms will be great starting point. Generative AI can be divided into two categories:

Tools like ChatGPT and MS CoPilot that assist your people and boost daily operations. Examples include ChatGPT and MS CoPilot.
Tools embedded into ERP technologies that help you develop your business by collecting and analysing data from your process.

The examples provided were hypothetical scenarios to illustrate how Generative AI might be applied in the context of SAP development. In reality, the use of Generative AI in SAP is still an emerging field, with potential applications being explored and developed. Here are more realistic and grounded examples, considering the current state of technology:

AI-Enhanced Business Process Automation

In practical terms, companies are beginning to use AI within their SAP systems to automate and optimize routine business processes. For example, automating invoice matching and accounts payable processes, where AI algorithms can learn to match invoices with purchase orders and receipts, reducing manual effort and increasing accuracy.

Predictive Analytics for Demand Forecasting

Generative AI is being used to enhance predictive analytics capabilities within SAP. Businesses in sectors like retail or manufacturing use AI models to analyze historical sales data and market trends to forecast future demand more accurately, leading to better inventory management and supply chain optimization.

Chatbots and Virtual Assistants

AI-driven chatbots and virtual assistants are being integrated into SAP systems to enhance user experience and efficiency. These AI tools can assist users in navigating the system, provide quick answers to common queries, and automate simple tasks.

Custom Code Review and Optimization

While fully automated code generation may be a future goal, currently, AI tools are being used to assist in reviewing and optimizing custom code within SAP environments. These tools can analyze code for performance issues, suggest optimizations, and identify potential errors.

Data Quality Management

Generative AI algorithms are employed to improve data quality management within SAP systems. They can identify anomalies, inconsistencies, or duplicates in large datasets, ensuring high data quality and reliability for business decision-making.

These examples reflect more realistic and current applications of Generative AI in SAP development, focusing on enhancing existing processes and capabilities rather than completely overhauling them. As AI technology continues to evolve, its integration into SAP systems is expected to deepen, bringing more advanced and innovative applications.

What does generative AI mean for SAP developers and consultants?

As mentioned above, the acceleration of AI development will be truly disruptive in SAP development and will bring about massive change in the tech job market.

Low-code and no-code software platforms decrease the need for professional coders. AI will soon make it possible for software platforms to develop themselves independently.

Furthermore, advanced analytics will transform the way ERP consultants generate expert insights for customers. Business leaders will be able to take control of their data more effectively than ever before, as new solutions are highly transparent and allow for on-time decision-making. This shift has the potential to make many business analysts redundant, as the role of business leaders is redefined. It’s no longer needed to wait for the IT department to put the business vision to practice, as business leaders themselves can drive the adoption of new technologies.

What does this all mean for us working with SAP? What we know is that the change will continue to accelerate. On one hand, we experts must react faster and utilise technology and automation to do so – for example by using large language models like ChatGPT for making roadmaps, process descriptions or blueprints. On the other hand, we should become more human- and business-centric than ever: instead of focusing on the nitty-gritty of technology, the consultant’s role will focus more and more on business design and defining the value streams that contribute to the client’s success. Emotional intelligence will become central in managing change and transformation.

All in all, there is massive potential for an SAP consultant’s job to become more inspiring because of generative AI. By embracing the change, we get an opportunity to rethink our ways of working and focus on what truly matters.

The future of business with S4/HANA

As organizations increasingly seek to leverage digital transformation to stay competitive, the role of S/4HANA is not just as a facilitator but as a catalyst for redefining business models, operational processes, and customer experiences. Here’s a look into specific areas where S/4HANA is set to drive significant change:

Enhanced Efficiency and Reduced Costs

Streamlined Processes: S/4HANA simplifies and automates business processes across the organization—from finance and procurement to manufacturing and supply chain—reducing manual effort and the potential for errors.
Real-Time Data Processing: With its in-memory computing capability, S/4HANA processes data in real-time, enabling faster decision-making and reporting, which can significantly reduce cycle times for critical business operations.

Improved Decision Making

Integrated Analytics: S/4HANA integrates analytics and transactional capabilities on a single platform, providing businesses with real-time insights into their operations. This allows for better-informed decision-making and forecasting.
Advanced AI and Machine Learning: By leveraging AI and machine learning, S/4HANA offers predictive analytics and automated recommendations, helping businesses anticipate market changes and respond proactively.

Increased Flexibility and Scalability

Cloud Deployment Options: With options for cloud, on-premise, or hybrid deployments, businesses can choose the model that best fits their needs, ensuring scalability and flexibility as they grow and their needs change.
Modular Design: S/4HANA’s modular structure allows businesses to implement the functionalities they need without the overhead of unnecessary features, making it easier to adapt the ERP system as the business evolves.

Enhanced User Experience

SAP Fiori UI: The SAP Fiori user interface provides a responsive, role-based, and intuitive user experience across devices. This improves user satisfaction and productivity by making it easier to access and interact with the system.

Streamlined Integration

Ecosystem Connectivity: S/4HANA offers robust integration capabilities with both SAP and non-SAP applications, facilitating seamless data exchange and process integration across the business ecosystem.
IoT and Advanced Technologies: Support for IoT and other advanced technologies enables businesses to harness real-time data from various sources, enhancing operational visibility and enabling new business models.

Support for Digital Transformation

Digital Core: As the digital core of the enterprise, S/4HANA supports digital transformation initiatives, helping businesses to innovate and adapt to digital business models and processes.
Agility in Volatile Markets: The ability to process and analyze data in real-time helps businesses remain agile, allowing them to swiftly adjust to market volatility and changes in customer demand.

Compliance and Security

Enhanced Security Features: S/4HANA includes robust security features to protect sensitive data and ensure business continuity, including advanced encryption and access controls.
Regulatory Compliance: The system is designed to help businesses comply with local and global regulations, reducing the risk of financial penalties and reputational damage.

Sustainability Management

Sustainability Tracking: S/4HANA provides tools for monitoring and managing a company’s environmental impact, supporting sustainability initiatives, and ensuring compliance with environmental regulations and standards.

In the future, businesses using SAP S/4HANA will not only enjoy enhanced efficiency and agility but will also be well-positioned to lead in innovation, customer experience, and sustainable growth. The continuous evolution of S/4HANA will ensure that enterprises can meet the challenges of the digital age while seizing new opportunities for transformation and value creation

The future of business with SAP RISE

The future of business with SAP RISE is intricately linked to how enterprises are evolving in the digital age, with a strong emphasis on agility, innovation, and sustainability. More exploration of how SAP RISE is shaping this future:

1. Comprehensive Cloud Migration and Transformation

SAP RISE simplifies the journey to the cloud by bundling necessary services, tools, and support into a single offering. This not only streamlines the migration process but also ensures that businesses can transform their operational models to be more efficient and scalable. The service includes:

S/4HANA Cloud: Access to SAP’s flagship ERP system in a cloud environment, ensuring businesses can leverage the latest in SAP’s enterprise resource planning technology without the need for on-premise infrastructure.
Business Process Intelligence: Tools to analyze and improve business processes are integral, enabling companies to identify inefficiencies and optimize workflows for better performance and customer satisfaction.

2. Cost Management and Optimization

Transitioning to a subscription-based model, SAP RISE helps businesses manage their costs more predictably. This approach reduces the need for large upfront investments in IT infrastructure and licenses, allowing for better cash flow management and the allocation of resources to strategic initiatives. Additionally, the operational costs can be significantly lower due to the economies of scale offered by cloud services.

3. Sustainability and Responsibility

SAP RISE is designed with a focus on enabling businesses to achieve their sustainability goals. Through advanced analytics and reporting tools, companies can monitor and manage their environmental impact more effectively. This includes tracking carbon emissions, waste reduction efforts, and ensuring sustainable supply chain practices, which are becoming increasingly important to stakeholders.

4. Security, Compliance, and Trust

Migrating to the cloud raises concerns about data security and regulatory compliance. SAP RISE addresses these by incorporating the latest security technologies and adherence to global compliance standards. This ensures that businesses can protect their data and operations from cyber threats while meeting legal and regulatory requirements, building trust with customers and partners.

5. Innovation and Competitive Edge

By providing access to SAP’s Business Technology Platform, SAP RISE enables businesses to leverage emerging technologies like AI, ML, IoT, and analytics to drive innovation. This access facilitates the development of new products and services, helping businesses to differentiate themselves in the market. Moreover, the ability to analyze data in real-time and gain insights can lead to more informed decision-making and a proactive approach to market changes.

6. Flexibility and Customization

SAP RISE offers the flexibility to tailor the cloud journey based on the unique needs and timelines of businesses. Whether a company is looking for a phased migration or a full-scale transformation, SAP RISE can accommodate different strategies, providing a bespoke approach to digital transformation.

7. Ecosystem and Partnership

The value of SAP RISE is amplified by SAP’s global network of partners. This ecosystem offers additional expertise, solutions, and support, enabling businesses to benefit from a wide range of perspectives and capabilities. Partners can assist with everything from initial assessments and planning to implementation and ongoing optimization, ensuring businesses can fully leverage the benefits of SAP RISE.

In essence, the future of business with SAP RISE is not just about migrating to the cloud; it’s about transforming in a way that aligns with the demands of the digital economy. Businesses can expect to become more agile, innovative, and sustainable, all while managing costs effectively and ensuring their operations are secure and compliant. As digital transformation continues to be s a strategic investment in future-proofing business operations.

Your next steps

With the right partner, you don’t need to know it all yourself. Our way of looking at SAP transformations is a little different: we help you take the driver’s seat while we’re reading the map for you. That way you ensure your business is gaining the benefits from the transformation and you involve your people – without people, even the best technology is worthless.

Want to know more? Download our guide to SAP transformations or contact us – let’s talk!

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