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What is SAP S/4HANA? We explain the basics!

SAP S/4HANA takes companies’ business processes into the digital future. There are many questions to be answered before it is set up, however, for example regarding deployment options, functions, migration scenarios, and benefits. Learn more about SAP S/4HANA, the ERP software for intelligent businesses.

Inhaltsverzeichnis

What functions does SAP S/4HANA feature?

SAP S/4HANA is the fourth generation of SAP’s Business Suite and the direct follow-up to SAP ECC. Users of SAP S/4HANA benefit from many new and intelligent functions based among other things on a simplified data model, an innovative, role-based user interface, and a focus on processes rather than modules. Real-time analyses and forecasts are made possible by the SAP HANA database’s in-memory technology. Business-relevant decisions are therefore founded on an unprecedentedly broad data pool.

The new functions are based on industry-specific best practices. The strategy adopted is to draw on standards which are tried and tested and which are tailored to specific sectors. Further customization is possible depending on the intended deployment, although industry-standard processes should be used in the first step.

SAP S/4HANA revolves around a platform approach, with ERP becoming the starting point for many other digitalization projects.

What advantages does SAP S/4HANA offer?

  • Embedded analytics: thanks to innovative analyses, forecasts, and reports, the ERP solution offers entirely new insights – especially in the age of big data. Additional data space can be easily integrated.
  • Thanks to automation, SAP S/4HANA results in greater efficiency and creates more scope for employees to focus on their core tasks like situation handling and workflows.
  • A simplified data model and the SAP HANA in-memory database serve as the basis for unprecedented speed and for working in real time.
  • SAP S/4HANA can be run on various licensing models. Both on-premise and cloud versions are an option, allowing the client to choose from among various financing options (capex, opex).
  • Processes and functions are based on best practices and therefore on tried and tested as well as successful industry-specific models.
  • SAP S/4HANA is the kick-starter for further digitalization projects. ERP software becomes the starting point for a standardized data pool and software landscape – with no data silos and no stand-alone solutions.
  • Intuitive and role-based user interfaces are available thanks to SAP Fiori.
  • The cloud version of SAP S/4HANA can be accessed when on the go, meaning the new ERP software can be used irrespective of location.

What is the setup of SAP S/4HANA?

In contrast to its predecessor models, SAP S/4HANA focuses on a simple architecture, both in terms of the data model and regarding user navigation, which has been significantly improved by SAP Fiori. The SAP HANA database results in higher speed and makes working in real time possible.

The innovative and simplified architecture means processes are bundled within a single system; additional solutions, in particular SAP-based solutions, can be ideally integrated. This makes stand-alone solutions a thing of the past. What’s more, device independence and mobility make the ERP software accessible from anywhere.

What licensing models are available for SAP S/4HANA?

SAP S/4HANA can be made available on the basis of all kinds of different licensing models. In the long term, the various cloud solutions are likely to dominate.

  • The conventional version is On-Premises here, SAP S/4HANA is managed entirely at the company’s premises. With on-premise SAP S/4HANA, everything – the software, systems, databases, servers, and other hardware – is local. The principle that applies here is Bring-your-own-licence (BYOL). With this version, companies incur one-off investment costs. With an on-premise solution, the users benefit from full rights of control over SAP S/4HANA and can modify or even expand the ERP software at their own discretion anytime. In this case, the company will have to perform updates itself.
  • When it comes to cloud solutions, there are multiple options. A distinction is made between public and private clouds run on hyperscalers. These different SAP S/4HANA deployment options vary on a number of details. They are, however, all basically cloud solutions and are made available as software as a service (SaaS). RISE with SAP is a new offer. RISE is the systematic continuation of the cloud-first strategy. This approach helps clients to focus on the business aspects and added value of transformation.

What’s the situation with SAP S/4HANA upgrades?

The aim of SAP S/4HANA as ERP software is to offer companies the best possible support with rising to the challenges of the digital age. This entails the software keeping pace with the immense speed of transformation.

Upgrades are therefore published and automatically installed in the public cloud at regular three-month intervals. There is no need for the user to do anything. With on-premise SAP S/4HANA, the client has to perform and install updates themselves.

What does SAP S/4HANA cost?

This very much depends on the degree of customization. In all cases, SAP S/4HANA involves a new licensing agreement, new hardware, and a transformation project which is tailored precisely to the company in question. The result is maximum success and future viability.

How do I move my ERP to SAP S/4HANA?

Migration to SAP S/4HANA is always very specific to the client, but there are certain approaches which are already sketched out.

  • With the greenfield approach, you start from scratch and SAP S/4HANA is set up as entirely new ERP software. This makes sense in particular if the existing ERP software has grown over the years and has become very complex in the process. If SAP S/4HANA is newly implemented, unnecessary costs relating to historical complexity can be drastically reduced. The new installation is based on best-practice processes; existing data and extensions can be incorporated.
  • With the brownfield approach, all the existing settings, data, and configurations are maintained and the existing ERP software is converted. As such, this is more of a very extensive upgrade, rather than a new installation. This version requires fewer resources and is less cost-intensive. Here, the Nagarro ES approach intentionally begins with a technical conversion in which the system is transformed to SAP S/4HANA. In a second step, the immense innovation potential of SAP S/4HANA is then leveraged.
  • There are also other approaches which were developed for specific situations and are somewhere between brownfield and greenfield. The shell approach, for example, is similar to the brownfield approach, with parts of the existing ERP software being reused, with the addition of a number of adjustments. With the mix-and-match approach, meanwhile, much of the ERP software is implemented with new adjustments, with only a small proportion of the existing ERP software being incorporated.
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Michael Brecht, SAP Enterprise Architect

“The transformation process is in full swing. This affects IT as a whole, as well as the SAP universe. The challenge is to combine the two in such a way that added value is generated – something you have to see as a long-distance run. Let's get down to work together!”

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