SAP S/4HANA: A new generation of artificial intelligence for businesses

S/4HANA

The SAP S/4 HANA Cloud is the new generation of SAP ERP. Originally released in 2016, SAP S/4HANA has had a positive impact in over 2000 companies by simplifying their processes, giving real-time tailored information, and increasing efficiency across different areas of the business.

In contrast with the trend of customising systems, SAP S/4HANA does exactly the opposite. It is a system designed for those companies who need a balance between transformation and development. It is a standardised system which can be configured but not customised and whose updates and improvements are released on a quarterly basis. The benefit of this life cycle is that there is no longer a need for large scale software upgrades which can be expensive, risky and disruptive to a business.

The value of SAP S/4HANA

The SAP S/4HANA Cloud is designed to assist in different areas within an organisation, whether it is finance, distribution, project management, procurement and more through data collection and the use of artificial intelligence.

Some of the value S/4HANA delivers are the reduction of accounts payable error, manufacturing cycle time, order management costs and losses due to fraud, as well as the improvement in supply chain productivity and compliance.

By adding machine learning, SAP S/4HANA is able to understand the needs, preferences and activities performed by the employees and produce anticipated information. The software takes care of tasks that are usually time consuming and require planning and calculations, leaving time for the users to concentrate on more important tasks. This means for example, if you have a meeting in a few days’ time, the suite will provide you with KPI results ahead of your meeting or if you usually need to compare a number of spreadsheets of financial data located in different systems within your organisation, S/4HANA can standardize and unify the process.

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Case Study

Topcon is a worldwide corporation that provides innovative solutions for construction, mapping and agriculture. Before they first implemented SAP S/4HANA they had a mixture of systems including SAP, Oracle, NetSuite and Sage. Having inventory in nine countries it was almost impossible to manage; it was difficult to prove they were audit compliant as the information was in different systems and so were the accounting practices.

Their need to expand to international business and also to link the manufacturing and distribution with finance and other support functions led them to implement SAP S/4HANA. They have standardised processes and unified subsidiaries in other countries, rolling out business practices quickly to become more efficient.  They were in the need of more visibility; there was a need to have an insight within the business and have available data with meaning; they now have everything visible and audible and the amount of time required to get to this result has reduced.

SAP S/4HANA Cloud 1808

The most recent quarterly release, SAP S/4HANA Cloud 1808 was launched in August 2018. Some of the new functionality released this quarter includes:

  • Smart Alerts in SAP Financial Statement Insights – It detects unusual business situations in revenue and cost accounts and provides explanations.
  • Capacity Evaluation and Adjustment for Manufacturing – It analyses overload or backlog situations and provide solutions to use the manufacturing centre to its best capacity according to the shifts, days or weeks.
  • Tracking of sales orders using natural language for sales – Allows sales documents to be easily located.

What are the challenges of SAP S/4HANA?

SAP S/4HANA is not necessary for all businesses; whether it would be of benefit depends on the technical setup of a business and its objectives.

Some things to consider are:

  • It is standardised, it can be configured but not customised.
  • Training will be required for the users. The good news is, if you already use SAP, there will be no need to completely retrain your staff, as the terminology and how the system operates is aligned with existing SAP applications.
  • The user should be knowledgeable in the particular area of the business managed through S/4HANA to be able to understand and implement the solutions and data provided by the software, particularly on the financial aspects.
  • S/4HANA replaces legacy systems. During implementations, there might be significant work required to understand how previous systems were set up by employees that have long since departed.
  • SAP can now make changes and take advantage of new innovations at a pace which makes sense for them as a business without taking into account every customer need.

The future of SAP S/4HANA

During the Sapphire Now annual conference, Franck Cohen, President of the SAP Digital Core and Industry Solutions shared the objectives for the SAP S/4HANA Cloud:

  • To be the world’s first hands-free ERP in the market with all functions available to be managed with voice recognition.
  • To continue to automate functions and reduce time spent on actions.
  • To build the next generation of best practices by redesigning the processes we currently have in different industries and change them to more “intelligent” processes.

SAP started the project by stating the implementation of the program would take 6 to 9 months, however, 5% of their customers have confirmed they had a much better experience in which the implementation took only around 4 or 5 months.

Being a system dependant on the quarterly releases, we expect stronger business relationships worldwide and innovative artificial intelligence solutions in the near future. SAP forecasts 35% of mid-market businesses moving to a public cloud by 2020.

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