Recently, we’ve been hearing customers ask “What are SAP S/4HANA modules?” They are the individual components of S/4HANA that provide functionality in various business segments. SAP has rebuilt ECC 6.0 applications from the ground up for S/4HANA to improve performance, standardize deployments, and add new functionality. S/4HANA modules are not copies of ECC applications, and SAP releases a Simplification List with every new version of S/4 to help companies transform their Suite on HANA landscapes in accordance with HANA best practices.
Expert Insight: Curtis Gaska, Solution Architect
In the more than 45 years since SAP’s founding, ERP has transformed over and over again. SAP has harnessed increasing computing power and understanding to create new, more powerful tools for businesses. However, there hasn’t been a generalized solution to running ERP in general. Companies have had to create their own customized landscapes, choosing, configuring, and customizing SAP and third party applications to meet their particular workflows and needs.
Over time, this has led to a proliferation of idiosyncratic systems. Even among SAP users in a particular industry, everyone has a different technology stack with different versions of applications, different databases, operating systems and configurations. That makes transformation complex, slow, and costly, since every system is one of a kind
SAP S/4HANA modules are designed to harness the full power of HANA, while simplifying and standardizing the technology stack. The goal is to make upgrades quick and painless, so companies can harness new functionality as soon as SAP releases it, or even plug in third party applications without the complexity of current digital transformation. Eventually, SAP would like everyone to fit into a standard SaaS deployment like SAP Public Cloud, where businesses don’t even need to worry about managing their technology at all.
At the moment, the vast majority of SAP users are nowhere near that point. Organizations upgrading to S/4HANA modules still need to ask the same sorts of questions they’ve always asked about new technology: How will this help me? What are the costs? How can I minimize disruption? And most importantly, what skills and partners do I need to create a sustainable approach to SAP ERP?
What is SAP HANA?
HANA is SAP’s in-memory, columnar database. SAP HANA has a number of design innovations over previous generations of databases. Previous generations handled real-time tasks like processing orders in an Online Transaction Processing (OLTP) system. More complex tasks were handled in a different Online Analytic Processing (OLAP) system.
By merging OLTP and OLAP, HANA has shrunk the data footprint, and enabled businesses to access data real-time, since HANA runs reporting on the same structure that is processing transactions. Before HANA, SAP didn’t have its own database. Users would run SAP ECC — the previous generation of applications — on a third-party database, such as Oracle or SQL Server.
SAP S/4HANA Modules vs. Suite on HANA
Unless you’re creating a greenfield implementation (i.e. rebuilding your landscape from scratch), you can’t move to S/4HANA without passing through Suite. Suite on HANA is just a fancy term for ECC running on a HANA database, but it comes with major benefits: a massive speed boost, improved reporting, and a much better workflow through Fiori UX.
Suite does require some changes — you’ll probably have to upgrade your software, and may need to sanitize your data or perform a unicode conversion — but basically, you’re running the same applications on a new, faster database. That makes it a great first step to show ROI without having to make major strategic decisions.
Implementing the S/4HANA modules is more complex, because you’re replacing your ECC applications with different programs. For some companies it makes sense to undergo a complete S/4HANA transformation, while others may want to divide the project into multiple steps.
There are a lot of reasons to do this. For example, a company might wish to attain certain Suite or S/4HANA functionality as quickly as possible to support a new project (see our New England Biolabs case study). Alternately, they may want to control costs, minimize disruption, or use up existing investments.
What Are the Benefits of SAP S/4HANA Modules?
The S/4HANA modules introduce a range of very specific benefits. These improvements center around harnessing the increased power of the database to meet various complex industry use cases.
One example is variant configuration, a new tool for manufacturers in S/4HANA 1709. Manufacturers are increasingly required to support configurability, allowing customers to choose the variation that suits their needs. This is a complex process. Each product is made out of smaller parts, which need to be assembled in the right combination and shipped to the right customer. Additionally, manufacturers need to be able to introduce new options quickly to stay competitive. S/4HANA 1709 natively supports variant configuration through the entire supply chain, so that customers can create their own customizations at the point of sale.
SAP S/4HANA modules also have powerful applications for increased efficiency. For example, SAP Transportation Management provides visibility throughout the whole transportation infrastructure. Companies can automate planning and execution, react in real time to alleviate bottlenecks and meet service level expectations.
What Is the SAP Simplification Strategy?
To some degree, “simplification” has become a marketing buzzword used by SAP. The company has worked hard to modernize its image to meet user demands like sleeker interfaces, clearer communication, and simpler technological management.
But the changes aren’t just skin deep. Fiori was revolutionary, catapulting SAP users from the baroque menu-dragging of the old SAP GUI to a user-friendly, consumer-grade interface. SAP’s simplification strategy is even more ambitious. The company wants to eliminate the need for customization, reduce the resources required to customize landscapes, and enable a dramatic increase in flexibility.
What Is the S/4HANA Simplification List?
SAP releases a technical document called the Simplification List for each version of S/4HANA, to guide companies in reengineering their landscapes. Because each version of S/4HANA has significant changes over the previous version, upgrading from ECC to the current version is a complex, iterative process involving extensive technical and strategic changes. Here’s the Simplification List for S/4HANA 1709 as an example. Caution — it’s over 900 pages long.
The Right Partner for an SAP S/4HANA Implementation
SAP’s simplification strategy shows vision, but it isn’t all-encompassing. Not all use cases fit into SAP’s standard structure, and the pace of innovation is accelerating. As the needs of businesses continue to change, and companies carve out new niches and profit models, it’s hard to say whether the type of standardization SAP wants will ever be fully realized.
For the time being, there’s really no “safe” strategy. Businesses face complex technological choices not just in the way they adapt S/4HANA modules, but in hosting, support, security, compliance, and other areas as well. To make the right choice, you’ll need to carefully evaluate a huge range of factors, including your investments, competencies, budget, timeline, industry trends, and even corporate culture. You need a partner who can help you crunch the numbers, find the most cost-effective and competitive option, and execute a successful migration to S/4HANA.