Ear­li­er this sum­mer, SAP released SAP S/4HANA Cloud 2008. With this lat­est quar­ter­ly release, the ERP plat­form deliv­ers inno­va­tions and new capa­bil­i­ties as orga­ni­za­tions work to adapt to the chal­leng­ing busi­ness con­di­tions of 2020. Broad­ly speak­ing, the 2008 release tack­les process­es crit­i­cal to busi­ness­es oper­at­ing remote­ly. It also brings new tools to work­ers in the finance, sourc­ing and pro­cure­ment, and sup­ply chain lines of busi­ness. The 2008 release fol­lowed SAP’s first vir­tu­al SAP­PHIRE NOW event, where the com­pa­ny laid out some excit­ing new devel­op­ments and reaf­firmed its com­mit­ment to its con­cept of the Intel­li­gent Enter­prise. This new release fits in firm­ly with those initiatives. 

ASUG spoke with Jan Gilg, pres­i­dent of SAP S/4HANA. He laid out some of the biggest changes includ­ed in the 2008 release, along with the new inno­va­tions that excite him the most. Gilg also spoke about the SAP Move­ment pro­gram and how this new release is address­ing prob­lems com­pa­nies are fac­ing dur­ing the COVID-19 pandemic. 

Jim: Tell us about the SAP S/4HANA 2008 release and what’s in this new update.

Jan: This is a spe­cial release because it was com­plete­ly built dur­ing the COVID-19 out­break. Like every­one else, we’ve had to adjust to this new sit­u­a­tion where we are all work­ing from home. It was a unique situation. 

As you know, SAP S/4HANA Cloud is a pret­ty com­pre­hen­sive ERP solu­tion that cov­ers a lot of capa­bil­i­ties across var­i­ous lines of busi­ness. There have been some note­wor­thy updates includ­ed in the SAP S/4HANA Cloud 2008 update. First is finance, where we now have event-based rev­enue recog­ni­tion capa­bil­i­ties for projects. We do have a pret­ty sophis­ti­cat­ed rev­enue recog­ni­tion mod­ule, which is event-based. It’s been expand­ed for project-based sales. At SAP, we always talk about effi­cien­cies. We’re reduc­ing the man­u­al effort for finance employ­ees. There are now real-time rev­enue recog­ni­tion post­ings for the projects being sold. The plat­form already has a real-time mar­gin analy­sis sys­tem. Now, we can com­bine that with ana­lyt­i­cal and trans­ac­tion­al aspects to pro­vide real-time match­ing of rev­enue and cost with no sep­a­rate set­tle­ment required in between. That takes away a lot of man­u­al work while also cre­at­ing trans­paren­cy and key audit trails. 

On the sup­ply chain side of things, we’re see­ing a lot of demand in that area. We tried to improve the inven­to­ry sit­u­a­tion. As you can imag­ine, cus­tomers are look­ing very close­ly now at their inven­to­ries and turnovers and try­ing to opti­mize them both. We’ve added more intel­li­gence to the inven­to­ry mon­i­tor­ing, specif­i­cal­ly fig­ur­ing out whether a restock­ing or recount of inven­to­ry has to take place or if the dif­fer­ences in inven­to­ry that are accept­able or not. This is called a sit­u­a­tion frame­work. We have an SAP S/4HANA frame­work that reacts to sit­u­a­tions and busi­ness events. Users can sub­scribe to many sit­u­a­tions — such as cre­at­ing an order when an inven­to­ry reach­es a cer­tain thresh­old. Then we take those trig­ger points and com­bine them with some log­ic and some intel­li­gence to help noti­fy the end user to either take an action or the sys­tem takes an action itself. 

On the pro­fes­sion­al ser­vices side, we cre­at­ed a new project billing cock­pit that helps cus­tomers pre­pare their bills and turns the prin­ci­pal from push ver­sus pull when com­par­ing billing data. This will help back and front office employ­ees. Billing can be quite com­plex for var­i­ous con­tracts and agreements. 

Final­ly, I want to dis­cuss sourc­ing and pro­cure­ment. SAP has added com­mod­i­ty pric­ing. Com­mod­i­ty pric­ing fluc­tu­ates a lot, and it can be dif­fi­cult to find the right prices and pric­ing for­mu­las. They depend on vari­ables like the com­mod­i­ty weight and the pric­ing con­di­tions. Now, in the cen­tral pro­cure­ment mod­ule, you can auto­mat­i­cal­ly cal­cu­late com­mod­i­ty pric­ing. This results in more accu­ra­cy in dis­trib­uted con­tracts and saves pro­cure­ment costs. 

Jim: How many cus­tomers are live on SAP S/4HANA?

Jan: We have over 14,600 cus­tomers now on SAP S/4HANA as of Q2/2020. Of that, more than 7,400 are live. When it comes to cus­tomers using SAP S/4HANA Cloud, we are see­ing more and more peo­ple com­ing to the solu­tion every quarter. 

Jim: Do you think SAP will see more cus­tomers choos­ing to migrate to SAP S/4HANA Cloud giv­en the events of the last few months? Why or why not?

Jan: Yes. I think we’ve seen two big things over the last few months. First is the cus­tomers’ desire to get away from cap­i­tal expens­es and move toward oper­a­tional expens­es. So, they’re very inter­est­ed in get­ting our solu­tions via a sub­scrip­tion. That’s why we have seen a lot of demand in the pri­vate cloud. SAP has also seen a lot of demand for the pub­lic cloud solu­tion because of the low­er time to imple­ment and high­er stan­dard­iza­tion. We are see­ing a lot of net-new demand for the cloud solution. 

Jim: One of the main focus­es of SAP S/4HANA Cloud 2005 is inte­gra­tions. How will SAP S/4HANA 2008 con­tin­ue to make inte­gra­tions more stream­lined for SAP cus­tomers?

Jan: Inte­gra­tion remains a key top­ic. Through our Intel­li­gent Enter­prise pro­gram, we have been deliv­er­ing a lot of inte­gra­tions in the cloud, start­ing with SAP S/4HANA Cloud 1911. They’ve got­ten bet­ter with each release. One high­light for SAP S/4HANA Cloud 2008 is cer­tain­ly the inte­gra­tion between SAP Con­cur and pre­dic­tive account­ing. This helps cus­tomers pre­dict costs and pro­vide trans­paren­cy on their trav­el bud­gets. While this might not be rel­e­vant now, busi­ness trav­el will bounce back eventually. 

SAP con­tin­ues down the path of inte­grat­ing busi­ness process­es between SAP S/4HANA and our acquired Line of Busi­ness solu­tions. We’ve also done a lot of work inte­grat­ing SAP Suc­cess­Fac­tors and SAP Ari­ba in the hybrid world because a lot of our cus­tomers want more stan­dard inte­gra­tion between SAP S/4HANA on-premise or on the pri­vate cloud and some of the SAP cloud-based solutions. 

Jim: What are some of the new capa­bil­i­ties includ­ed in SAP S/4HANA Cloud 2008 that will explic­it­ly assist cus­tomers as they con­tin­ue con­duct­ing busi­ness dur­ing the pan­dem­ic?

Jan: In addi­tion to some of the things I men­tioned ear­li­er, we’ve done work in finance, giv­ing cus­tomers trans­paren­cy on cash flow and accounts receiv­ables. That’s an exam­ple of us try­ing to help cus­tomers get ahead using ana­lyt­ics capabilities. 

Jim: What are some inno­va­tions that SAP cus­tomers are look­ing for right now?

Jan: The plan­ning piece is some­thing cus­tomers are specif­i­cal­ly very inter­est­ed in. Also, mak­ing the com­bi­na­tion of net­work plan­ning to exe­cu­tion very seam­less — it’s what we call con­cur­rent plan­ning. We also see a lot of inter­est in the net­work and some of the capa­bil­i­ties avail­able. This is because the net­work is a means to get vis­i­bil­i­ty and col­lab­o­rate with train­ing part­ners. We have the SAP Ari­ba Net­work and SAP S/4HANA is native­ly inte­grat­ed into that net­work. You can run your pro­cure­ment process­es through the net­work with your trad­ing part­ners. We are invest­ing heav­i­ly in the logis­tics net­work, as well. SAP is in the process of bring­ing those togeth­er to make one uni­fied SAP net­work and have every cus­tomer be part of the net­work just by virtue of being an SAP cus­tomer, giv­ing them vis­i­bil­i­ty and col­lab­o­ra­tion capabilities. 

Jim: What are the updates to SAP S/4HANA Cloud 2008 that excit­ed you the most?

Jan: I’m excit­ed about the pro­cure­ment com­modi­ties pric­ing fea­ture because I’m not sure there is any­thing like that in the cloud cur­rent­ly. Anoth­er new fea­ture that I like a lot is in the ser­vice and sales area, where we con­tin­ue to build out the pos­si­bil­i­ty of bundling dif­fer­ent types of orders such as sub­scrip­tions, hard­ware, prod­ucts, or ser­vices. We bring this into one order and can even­tu­al­ly issue one invoice. This sup­ports the busi­ness mod­el trans­for­ma­tions of our cus­tomers as they are start­ing to sell more ser­vices and com­bi­na­tions of prod­ucts and services. 

SAP also has made progress on the sus­tain­abil­i­ty front, under the umbrel­la of Cli­mate 21. We built the Car­bon Foot­print Ana­lyt­ics tool to give insight into the trac­ing of car­bon emis­sions. It is based on SAP Ana­lyt­ics Cloud, togeth­er with SAP S/4HANA. This is some­thing that sees a lot of trac­tion in the market. 

Jim: With every­thing that’s been hap­pen­ing over the last few months, has any­thing changed with the SAP Move­ment pro­gram?

Jan: No. We are extreme­ly inter­est­ed in get­ting more of our SAP ECC cus­tomers onto SAP S/4HANA. I think we’ve seen pret­ty good suc­cess so far. The ques­tion now is how can we also get cus­tomers pri­mar­i­ly into the cloud? We are look­ing into adding a strong angle to the SAP Move­ment pro­gram that brings cus­tomers from SAP ECC direct­ly into SAP S/4HANA Cloud. This is some­thing we haven’t pushed much in the past. It is cer­tain­ly some­thing we are cur­rent­ly work­ing on and fig­ur­ing out how we can offer attrac­tive pack­ages and paths to do so. 

If any­thing, I think the SAP Move­ment pro­gram has become more rel­e­vant. We are expand­ing on that because today we have been very focused on mov­ing cus­tomers from SAP ECC to SAP S/4HANA. The real­i­ty is that a migra­tion usu­al­ly involves more than that. Often cus­tomers also have a cus­tomer rela­tion­ship man­age­ment (CRM) or sup­pli­er rela­tion­ship man­age­ment plat­form. They want us to help them move that to the strate­gic tar­get and basi­cal­ly make efforts to move cus­tomers to the Intel­li­gent Enter­prise. I think that’s going to be the next evo­lu­tion, if you will, of the SAP Move­ment program. 

Jim: What would you like ASUG mem­bers to know about SAP S/4HANA 2008?

Jan: We are con­tin­u­ing down the path of SAP S/4HANA Cloud as our strate­gic prod­uct. We are mak­ing great progress with every quar­ter. We are see­ing more and more things come togeth­er with the Intel­li­gent Enter­prise. We also acknowl­edge that the world is hybrid and we will con­tin­ue to devel­op with that in mind. We are start­ing to see some of the results in the hybrid sce­nar­ios. I think that is extreme­ly rel­e­vant for our cus­tomers who are ASUG members. 

Reg­is­ter for the ASUG Express: Achiev­ing Suc­cess with SAP S/4HANA Vir­tu­al Boot Camp series, begin­ning on Oct. 27, 2020, to learn about strat­e­gy and vision, build­ing a busi­ness case, project plan­ning and prepa­ra­tion, suc­cess­ful­ly exe­cut­ing, change man­age­ment, and how to exe­cute a 100% remote project.