Earlier this year, SAP announced RISE with SAP, a subscription-based bundled offering with the express purpose of helping customers migrate to SAP S/4HANA Cloud. ASUG recently sat down with Sven Denecken, COO and head of Product Success for SAP S/4HANA to discuss the newest version of SAP S/4HANA Cloud, 2102, and how it ties into this newest SAP offering.
ASUG: Can you tell us a little bit about your current role at SAP?
Sven: I'm the COO of SAP S/4HANA. I help to manage the business and support Jan Gilg, president of SAP S/4HANA. In addition to that, I'm the head of S/4HANA product success, so I am very involved with our clients, their success, and ensuring that we have an adequate net promoter score.
ASUG: Let's dive into SAP S/4HANA Cloud 2102. I'd love for you to give me a broad overview of some of the top-line innovations included in this version of SAP S/4HANA Cloud.
Sven: We're talking about the first release this year. I'm very proud of what the team put together for this public cloud solution release. But also let's connect it to what we recently discussed with RISE with SAP, where SAP S/4HANA Cloud is, of course, part of that destination. What we did in this release, was touch every single line of business. There are too many to mention in a short overview, but I would nevertheless like to share some highlights.
Before I come to that, as in every release, there are two ingredients that are equally important to mention in a SaaS (software-as-a-service) solution. First of all, the methodology to get there. How do you do fit-to-standard in the public cloud? That's why our methodology, which comes with the solution, SAP Activate, is always updated to the latest and greatest of the new release. The community (which is close to 40,000 people), SAP partners, and customers are giving us a lot of feedback to prioritize each release and what they want to see us to focus on. It is always a customer-led release. We have enhanced that methodology also for remote fit-to-standard and for remote go-live, which I think in times like this is important. The second overarching theme is how to automate, how to put intelligent technologies in the solution—be they process, robotic process automation, ML, and AI. These are always implemented into business processes. The first step of RISE with SAP is to analyze business processes. The purpose of SAP S/4HANA Cloud is always to automate them to the maximum.
From a feature function perspective, guess who is the most important person in the boardroom? It's the CFO. Next to the boss, sits the CFO. Let me start by discussing the finance capabilities. I’ll start with the simulation cockpit for integrated financial planning. This feature has been released now with a “what if?” analysis that can be done not only by the finance experts but also by everyone in management. Users can simulate the impact of changes in factors like increases in sales quantity, changes in personal expenses, and shifts in purchasing. This simulation integrated financial planning cockpit is a very important tool that we've added. We are giving it not only to the finance people but to all business decision leaders.
It is sometimes overlooked that many companies have the burden of following different accounting principles in their ledgers, be it International Financial Reporting Standards (IFRS) or local standards, like HGB in Germany. Today we see that companies need to run multiple ledgers in one system. We've put a configuration in SAP S/4HANA Cloud 2102 to configure the system on the fly and flexibly assign those counting rules based on requirements. It could be regional, for where your business grows, how you act in certain markets and not only in the ledger, but all the way to treasury and revenue recognition. With this new configuration, you can adapt to those new accounting principles. That's extremely powerful in an ERP era.
Let me go from finance to one other topic, which I think in the market it's just beginning to be one of the core areas: subscription business that companies run. What I mean by this is that the contractual situation with your clients is more and more based on subscription. We’ve been talking recently about RISE with SAP being the business transformation as a service. It’s a subscription. I think that many companies will be challenged to have a subscription-based consumption approach where subscription for services or products—either in single orders or physical goods together with recurring services—can be put into one solution order. Usually, they're on separate systems or they're running so differently that you need to reconsolidate on an extra sheet. That's why this solution order management function we put into SAP S/4HANA Cloud version 2102 allows customers to bring together one-time recurrent and consumption-based services on a single order. It’s very powerful.
The last topic I want to address is manufacturing. You know that when it comes to public cloud and SaaS, usually service-based businesses are at the forefront of adoption, from an industry perspective and even across the globe. But more and more manufacturers moving to the SAP S/4HANA Cloud release, see the benefit of a standardized approach to certain business processes. And one of them is material and resource planning. We've invested a lot in predictive automation. With this newest release, we have put in the ability to create and maintain flexible constraints for multiple materials on production lines. For example, if the quality in a certain production line goes down, what would that mean for your material resource planning? What would that mean for your contract? All those constraints, which during this pandemic have been at the forefront of a lot of people’s minds, now can be handled with that application part of SAP S/4HANA Cloud to handle those constraints, analyze, and take action.
ASUG: We are still living in an unprecedented business climate. What are some of the innovations in S/4HANA Cloud version 2102 that help customers as they navigate this current business climate?
Sven: I would highlight the last feature I mentioned. It's for flexible constraints to help in times like these, with orders that get canceled in short term. Even in times like these, where we want to secure the engagement with the client, I would argue that subscription for consumption-based business is more important than just having order management that, on the one hand, sets your product and then later a technician or a service. Bringing those things together is important. That's the underlying idea: that we automate as much as we can. But thanks to the power of the SAP HANA in memory database underneath SAP S/4HANA Cloud, users can get all the data at their fingertips which helps you make business decisions. This is not only analysis but also execution. As with every release of SAP S/4HANA Cloud, in this one as well, we brought in those underlying navigation helpers, which are RPA and machine learning-based. Those are really helpful assets when you navigate uncertain times.
ASUG: SAP has long been trying to advance the notion of the intelligent enterprise. I'd love to know what are some of the innovations in this release that further the idea of the intelligent enterprise?
Sven: With this release, it's the pre-configuration of very clear, best practice business processes. When you think about RISE with SAP, you analyze with business process intelligence. Now you can map them against best practices in the public cloud because you know your destination. We can then work with you on how to get there, also leveraging the Business Process intelligent capabilities in the RISE offering With those best practices, we of course show what “good” looks like, based on all the knowledge we have gained. This is ingrained into the business process definition and also the configuration. You can see that in each line of business. Second, one of the most important things to our customers is cash logistics, which has been at the forefront of this release. I mentioned the integrated financial planning earlier. That flexibility, along with the configuration, helps customers to react much more intelligently to changes and opportunities.
ASUG: SAP recently announced RISE with SAP and SAP S/4HANA Cloud is a key component of the offering. Will 2102 be the version that RISE with SAP customers get access to for the time being?
Sven: The SAP S/4HANA Cloud 2102 release we just launched is a SaaS multi-tenant version, which means the moment this version is there, the old release no longer exists. That's the rule in the cloud. And that's why the answer is pretty simple. Since we released version 2102 of SAP S/4HANA Cloud, customers can access this new solution and we have the existing customers who are now going to go through their update. That's the beauty: all this innovation is right away available at your fingertips. Now, of course, there will be customers who are going to run in a more private cloud environment. That's why we said that the cloud solutions will be either public or private cloud with RISE with SAP. In the public cloud, you’re always on the latest version, in the private cloud you can decide to stay longer on a certain version. For example, you can take a little bit longer to upgrade and in regulated industries, assuming you are in an FDA or GXP environment, you maybe don't want to update every quarter.
ASUG: How, if at all, do you anticipate RISE with SAP to impact the development of future versions of S/4HANA Cloud?
Sven: First of all, it will impact the development very significantly because we're going to get much more customers and we can accompany the customer from the analysis towards the consumption of the SAP S/4HANA Cloud solution. That gives us so much insight and so much opportunity to define the best practices, have a longer-term engagement, and influence how the next releases should look like. Where should we set our focus? RISE with SAP as a business transformation as a service will give us just much more opportunity to do a better cloud release every quarter.
ASUG: What do you want ASUG members specifically to know about S/4HANA Cloud version 2102?
Sven: First of all, it's here. But on a serious note, I want them to take a deep look to see if they are up for a digital transformation and if they want to connect to the intelligent enterprise. If they are ready, I encourage them to take a look at what the public cloud already can deliver. We all understand that going to a public cloud SaaS version needs some change management. That's why many ERP customers so far didn't look at the public cloud as the solution. I want ASUG members to have a look at what we have with the SAP S/4HANA Cloud release 2102, and how the roadmap looks. With that in mind, I hope they look to see if this best practice solution could be an option for either their entire business or specific parts of their business.
ASUG: Can you give us a glimpse as to what your team is planning for the next SAP S/4HANA Cloud update?
Sven: Interestingly enough, we are one of the few vendors in the cloud who also publishes roadmaps a couple of quarters out. But I think that one of the most important parts that I would like to mention is that specifically in manufacturing we are working on the interesting concept of also connected manufacturing. I think the integration to business networks, which we even have packaged into RISE with SAP now, is a growth area because logistical networks and their connectivity with your manufacturing solution are very important. Second, we will double down on any intelligent technology that we can leverage from the platform, which comes with the solution. And last but not least, I think with the growing number of subscribers of SAP S/4HANA Cloud, we of course have a growth in the community. We just relaunched the SAP S/4HANA Cloud community because there we get the best input currently about where to set a focus.
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