SAP recently announced the 2023 release of SAP S/4HANA and a “premium plus” package for RISE with SAP that embeds generative AI capabilities, among other new offerings aimed at driving its customers’ organizations toward the cloud.
For organizations still running legacy on-premises ERP landscapes, the announcements continue SAP’s current focus on cloud migration and further emphasize its RISE with SAP program as the company's recommended pathway for digital transformation.
Eric van Rossum, Chief Marketing and Solutions Officer for SAP Cloud ERP, spoke to ASUG about the announcements, made Oct. 11, to help place them in context for our North American user-base audience.
Inside SAP S/4HANA 2023
The 2023 release of SAP S/4HANA is now generally available. As in past years, the new release is available as SAP S/4HANA Cloud, private edition (as part of RISE with SAP) and also SAP S/4HANA for on-premises deployment. “It’s a major release,” van Rossum said, “in terms of the scope versus SAP ERP Central Component (SAP ECC), as well as all the innovations which we deliver.”
As part of RISE with SAP, the private edition of SAP S/4HANA Cloud will now follow a two-year release cycle, delivering additional innovations via enhancement packs approximately every six months; on this accelerated timeline, the next release of SAP S/4HANA will be in 2025. Mainstream maintenance for each release will also increase from five to seven years. “With this release, it will be easier to consume innovations at a more regular pace, with less disruption,” van Rossum said.
According to van Rossum, SAP S/4HANA 2023 not only features the full capability scope of SAP ECC but also leverages the newest architecture available, with the express purpose of bringing finance, manufacturing, operations, and suppliers into a single cloud platform with line-of-business applications.
- Within finance, SAP S/4HANA 2023 has added predictive scenarios for payment that identify when there is a risk of late payment; this feature utilizes machine learning for behavioral insights to identify potential late payers, so they can be targeted with personalized collection strategies.
- A new procurement overview will present the most relevant information and tasks to help procurement managers prioritize actions in their workloads.
- Visualization of master data governance processes in a cloud-ready mode will allow users to display past and current process steps and workflow tasks in graphical views with processing time and workflow recipient details.
- Utilities clarification cases in business process exception management (BPEM) can be newly analyzed and managed with new SAP Fiori apps and launchpad content, in addition to a new CDS cube and query focused on BPEM.
- Suspension of product valuations initiated by refunds in the customer returns process will provide added flexibility and convenience for sales organizations.
- To ensure product compliance, SAP has added support for continuous provisioning of listed substances through a regulatory content service.
- Inventory management has been improved, with more support for barcodes within several SAP Fiori applications and enablement for Kanban within decentralized SAP Extended Warehouse Management.
- New SAP Fiori apps have been added to enable or augment capacity evaluation in manufacturing, production supply area management, change requests to update freight order charges in transportation management, cost distribution in defense and security industries, and creation and editing of credit memo requests in sales.
- New sustainability features enable requests for carbon footprint data from suppliers, as well as improved health and safety incident management.
Inside the Premium Plus Package for RISE with SAP
SAP also announced a “premium plus” package for RISE with SAP, which aims to attract customers by incorporating generative AI capabilities (such as Joule, the company’s recently announced AI copilot) and further premium office-of-CFO functionalities. like SAP Analytics Cloud Planning.
In addition to SAP Supplier Portal and functionalities for cash management and group reporting, the premium plus package will feature SAP Sustainability Footprint Management and SAP Sustainability Control Tower, making the package a recommended starting point for customers planning to embrace SAP’s forthcoming green ledger.
Sustainability insights will focus on calculating and sharing carbon data across the value chain and continually enhancing offerings to address evolving environmental, social, and governance (ESG) reporting standards. “We are the company that invented the system of record of finance, and we’re excited to build upon that credibility and knowledge to do the same for sustainability and ESG reporting,” he said.
Finance innovations will focus on streamlining planning operations, improving forecast accuracy with financial and non-financial business unit data, and enhancing invoice management and cash collection processes. In addition, the premium package will include a supplier portal to simplify spend compliance for networked ERPs.
“With RISE, we take S/4HANA Cloud as a foundational pillar and predominantly add SAP Business Technology Platform and SAP Signavio around it to gain extensibility and standardize processes, helping customers keep the core clean,” van Rossum said. “With the premium plus package, that remains the main message, but we’re adding more of the functional components we see customers buying.”
On the note of generative AI, van Rossum added that he’s seeing “demonstrable value change in reduction of costs and human efficiencies” through SAP’s existing AI tools, such as 10-15% reduction of days sales outstanding (DSO), 50% less overdue items, overall time spent reduced by 20%, and additional value drivers that reduce direct labor costs.
Still, RISE customers do not need to select the Premium Plus offering to benefit from generative AI and sustainability insights; it’s possible for RISE customers to buy these as standalone components, though van Rossum assesses the premium package as driven primarily by the economic value it can provided as a bundled offering for customers.
Inside the Conversion and Modernization Program
SAP also announced a new conversion and modernization program for RISE with SAP customers, featuring a RISE with SAP adoption framework to plan conversions and the SAP Signavio Process Insights solution to assist with building business cases.
For on-premises SAP S/4HANA customers, SAP will offer customer-centric conversation support plans. With the SAP Customer Evolution kit, described by van Rossum as “a new, free service that offers 1:1 sessions with dedicated SAP experts to evaluate how to best convert to SAP S/4HANA Cloud,” SAP hopes to assist customers in quickly tailoring transformation plans to their own organizational starting points in an actionable manner.
“We’ll be working with our installed-base customers through this free service, where we look at their situation, at where they are, and do a readiness check of their environment, so that we can tailor-make an offer to them and explain what the roadmap would look for them to move,” van Rossum said. “We’ll be further investing in tools for them as well, such as AI, to reduce the cost and time of the migration through test automation or document creation.”
The conversion and management program, van Rossum added, is intended to answer legacy ERP and on-premises SAP S/4HANA customers’ questions about how they can make the move to RISE and benefit from cloud-only innovations.
“Everyone starts from a different starting point with different strategies,” van Rossum said. “RISE was set up exactly for the installed base to deal with that, because everyone has got to have their own pace, their own journey, and we need to have flexibility and choice around that. With these services, we’re starting the dialogue where customers are today, understanding what their systems look like, and being able to map that journey forward of where they’re going.”
The announcements were first made through an Oct 11. blog post, credited to van Rossum.
“This year's events are, yet again, a reminder that companies that can digitally transform the fastest have the highest odds of long-term success,” added Geoff Scott, ASUG CEO & Chief Community Champion, in an official statement. “SAP’s latest announcements and innovations are in lockstep with digital transformation necessities, giving customers a clear path to achieve more value from their enterprise technology investments in progressively shorter time frames.”