“That’s what you should expect,” says Joshua Greenbaum of Enterprise Applications Consulting. “At the beginning of the cycle of uptake you would want to have an absolute rock-solid assurance that you can make a 20-year investment in your technology.”
SAP co-CEO Christian Klein says enterprises are keen to move to S/4HANA, but some of the larger ones are telling him they won’t be ready by 2025, the deadline SAP had previously set to end support for its legacy software. For those companies, “It’s not so much about the technology, it’s really about adapting long-standing business processes, adapting to the needs of the customers in the digital world,” Klein says.
There’s also been some concern that an SAP skills shortage could leave some customers without the help they need to migrate their systems.
“The demand is high, but the partners now are ramping up as we speak,” Klein says. “I just talked to the three largest systems integrators and they are very confident that we overcome this shortage of skilled SAP resources really near term.”
The 2 percent solution
Extended maintenance will cost an additional 2 percent of the annual license fee, on top of the 20 percent fee for mainstream maintenance.
The new cut-off date will affect users of SAP’s core enterprise software component, ERP 6.0, and the core applications of SAP Business Suite 7, including Customer Relationship Management, Supply Chain Management and Supplier Relationship Management.
Procrastinators hoping that SAP will relent and offer another extension in future are out of luck: “For extended maintenance for the Business Suite 7 core applications, the end of 2030 is really the final date,” Klein says.
Even 2027 will be too soon for some, says EAC’s Greenbaum, noting that there are companies still running instances of R/2, a version of SAP’s ERP system that was superseded in the early 1990s.
The extension will remove a key commercial argument for SAP competitors such as Oracle, who have been playing on the uncertainty of what will happen after 2025 to tempt customers to switch, says Greenbaum.
The introduction of S/4 Hana is a major game-changer for SAP, as it offers a solution that’s designed to meet the challenges and requirements of the digital economy. And as 2025 marks the deadline to switch from ECC to S/4 Hana, it’s no surprise that large numbers of SAP customers are now preparing to migrate.
One of the biggest but often overlooked considerations within moving to the S/4 platform is the issue of security. This is largely due to the introduction of SAP Fiori – a key aspect of S/4, which emphasises the role of mobile.
The result will be greater productivity and efficiency – as all users will have better and more flexible access to relevant systems and information, wherever they are. Yet this improved mobility also has its drawbacks when it comes to security, as it opens up many potential routes into core business systems and data.
How to navigate the security risks
Set up an external gateway. This is a gateway that resides outside the organisation’s own network and requires users to log in using a set protocol. This adds an additional layer of security to the login process that protects the network.
Ensure encryption is enabled. Encrypting files and making them unreadable without the correct encryption key significantly enhances security. Even if someone does manage to gain access to these files, they won’t be able to do anything with them. Enabling end-to-end encryption ensures that communications between SAP and users cannot be intercepted, even if they are using public Wi-Fi hotspots.
Develop strong and effective mobile device management. Controlling device access to company networks and data keeps the enterprise on top of who is doing what with which devices, so it can feel confident that mobile users are working within company policies. This requires a robust approach to the management of mobile devices, which will ensure knowing where devices are and keeping them up-to-date and patched. Usage should also be monitored to make sure that password standards, and other configurations, are being enforced.
Introduce certification protocols. The system can be secured, and unauthorised users kept out, through the introdution of certification protocols, so that each user has to be certified before accessing an organisation’s system.
Improve intrusion detection and prevention through network traffic monitoring. Traffic across the network should be automatically monitored and analysed to check for any suspicious usage patterns. This protects the system from network-based threats.
Conclusion
The introduction of S/4 Hana offers an incredible opportunity. Thanks to the ground-breaking introduction of Fiori, it dramatically modernises the user experience and speeds up planning, execution and collaboration.
However, the potential security risks that come with the new platform cannot be ignored, making it a careful balancing act. Overly restrictive controls would be counter-productive to the huge benefits offered by S/4 and Fiori as they would take away the increased mobility offered by the platform and potentially harm the business case.
AI has enormous potential for almost every company. SAP customers are therefore faced with the question of which technologies SAP offers them to upgrade and enhance their existing system landscapes.
For the longest time, artificial intelligence (AI) was nothing more than exciting material for science fiction novels and movies. In 1982, Harrison Ford was hunting down replicants in ‘Blade Runners’; in 2001, Steven Spielberg wove an intricate tale of a relationship between human and machine in ‘A. I.’
Technologies that emulate or surpass human skills and characteristics are fascinating – not only on the big screen. For decades, scientists have dedicated time and money to the topic of artificial intelligence. The workshop ‘Dartmouth Summer Research Project on Artificial Intelligence’, held in 1956 at Dartmouth College in New Hampshire, USA, is seen as the starting point of AI as academic subject.
Progress in the field of AI wasn’t exactly on the curriculum during that workshop at Dartmouth. However, over the past few years, the futuristic visions of scientists and Hollywood directors alike have become more realistic as the power of computers continues to increase, more digital, connected products are flooding the market, and our society and economy are producing enormous amounts of digital data.
What AI can and can’t do
What we are missing is a valid common definition of AI or, more generally, what counts as intelligence. What we can say without the shadow of a doubt is this: To some degree, machines are capable of autonomously making decisions and acting on them. They are capable of recognizing and analyzing patterns in data, language or images. In most of these cases, machines do significantly better than humans, as their analysis is usually faster, more comprehensive, and more accurate. Technology-based methods – like machine learning – are a requirement for these processes to work seamlessly.
AI: Potential value of €430 bil.
Since ‘strong AI’ is still a distant vision of the future, today’s focus is more on ‘weak AI’, meaning manageable, ethical software and solutions for practical use cases. According to consulting firm PwC, (weak) AI alone will generate value of €430 billion in Germany until 2030. In another study, PwC studied the most common use cases of artificial intelligence. A majority of respondents indicated that they used AI for automating existing business process and analyzing data. AI is the most useful when dealing with one individual, complex task involving an enormous amount of data.
Automation through ML and AI
Instead, SAP is now focusing on business processes and company-specific requirements by integrating innovations and individual solutions. SAP offers customers different ways to join the world of artificial intelligence, each of which is tailored to different target groups while still complementing the others.
In its new ERP system S/4 Hana, SAP has embedded some AI functionalities which are supposed to make individual S/4 applications intelligent. The goal is the automation of routine tasks to relieve employees of monotonous work, shifting their focus to more complex scenarios. There is more than one approach to reach this goal.
SAP Data Intelligence
Running on SAP Cloud Platform (SCP), SAP Data Intelligence is by far the most elaborate AI solution in SAP’s portfolio. While it is the most likely ‘successor’ of Leonardo, the focus has shifted to business. SAP Data Intelligence combines a more conservative business world with open source, making it more open to different solutions and applications, like Jupyter Notebooks (Project Jupyter), Python and Python-based frameworks for machine learning like pandas, scikit-learn or TensorFlow.
Focused AI strategy
With SAP Data Intelligence, the created data models can be transferred to a company’s SAP landscape for further development, testing, and performance monitoring. And, most importantly, AI scenarios can be audited, complying with regulatory guidelines.
SAP has recognized that AI is an important – if not the most important – technology topic and is enthusiastically adding to its existing portfolio without losing sight of business requirements. Actively researching AI is not SAP’s forte, however. Companies like Facebook, Google or Microsoft as well as open source initiatives are and will continue to be the driving force in AI innovation.
The seemingly easy to glue together and operate suite of software that is meant to ease the day to day process of an organization, ERP is a lot more difficult to strategize and implement than its functioning lets by.
The engineering of an easy flowing frontend is powered by a much complex backend architecture – something that comes with attached ERP development cost. A cost estimate that is arrived at on the basis of features that are to present in the making of a good ERP system and the market that the system has made for itself.
In this article, we are going to help you understand the different factors that are entailed in the ERP software development cost. But before we move on to that stage, let us first look into the advantages of Enterprise Resource Planning system that have contributed into the positive outlook of it in the industry.
Streamlined Processes
The modern ERP systems are designed to bring all the data together, which ultimately improves the prevalent bottlenecks in the business process, something that single-handedly answers the question – is ERP good for small business?
Better Tracing and Control
If your business deals in digital or physical products, the ERP systems can offer an easy approach to track your products. Here’s how the system make it possible –
Visualizing the Service and Product Movement
One of the primal ERP benefits is seeing how services and products are moving in the pipeline. There are multiple ERP software vendors who offer tools that come with the efficiency of order tracking, revenue tracking, inventory, tracking, and raw material management.
Advanced Customer Service
One of the reasons why companies invest in custom ERP development is the change that the software brings to their customer service domain offering.
Here are the two ways your customer service domain is made more efficient through the ERP system.
Better Aligned Suppliers and Customers
ERP software is known to improve both backend and frontend relation of business i.e. a relation that the company has with both their vendors and customers. An effect of which is streamlined shipping time and better customer experience.
Support and Evaluation of the ERP System
Once the ERP system is made live in the business, the whole process of evaluation and maintenance starts. This ongoing process looks into and takes care of the system to the T, ensuring that it is performing exactly as it was intended to.
This whole implementation process takes different time according to the different business sizes it is going to be deployed in. Usually, this is what the timeframe looks like
One of the most discussed software architectures are microservices. In other words, the request to split the monolithic applications of the past into small, autonomous services. However, there are some issues with microservices: They are expensive – as they are required for unlimited scaling – and only work if the underlying culture is embraced in its entirety.
This raises multiple questions. For us in the ERP world, is unlimited scaling a requirement? Also, our applications are expensive enough and a complete shift of the whole application towards a different architecture is often impractical. Nevertheless, SAP has a couple of offerings built on microservices, and we can learn from these examples.
Microservices are autonomous
At its core, the microservice architecture requires each service to be fully autonomous. It has a well-defined network API to get data in and out, no other methods allowed. The decision of which technologies to use to implement the service is up to the responsible team. Sounds simple enough, but the decision has consequences.
A sales order should reference existing customers and material master data, but these are other services and hence not part of our database’s tables. But if they are not part of this database, all features that a database provides for free, including transactions, enforcing foreign key constraints, fast joins and the like, need to be re-implemented on service level.
The obvious solution would be to make the database with its tables one service, and the business logic where sales orders are maintained would be another microservice. Something like a 3-layer service architecture with the UI layer, the application layer and the database layer. The application layer exposes function modules for the various operations and …. Did we just re-invent the R/3 architecture?
Eventing and eventual consistency
The software industry’s answer to that problem is to use events as the information backbone. Every service broadcasts all changes made to the data and the interested parties can listen and persist the required data in their own database.
In the example of the sales order database, it would have tables with material master data and business partner records for reference, except that these extra tables cannot be modified. When the material service broadcasts the event, effectively saying, “There is a new material with the following data”, it is modifying the local reference table.
SAP Cloud Platform’s microservices architecture
Each service deployed is an isolated entity, publishes its APIs in a central registry – the API Hub – and multiple instances can be started to increase throughput.
The CAPM supports even eventing of services but ignores out of the box support of distributing change data across the database instances. SCP does not need that, as the database is used as a service as in a client server model and is not an intrinsic part of the service itself.
One way to look at it is that it combines the worst of both worlds: It scales like a client server architecture and adds the complexities of microservices. Security is maintained outside of the database, services need various bindings, services require defined routes, every service must serialize and deserialize the payload for data exchange, every service needs to reevaluate the user security, etc. In brief, simple things are tedious, complex tasks are extremely difficult.
SAP Data Quality microservices
Another example are the SAP EIM Data Quality services to validate and cleanse various aspects of address data.
For such an offering, a microservice architecture is perfect. The required address reference data is part of each service instance. There is no need to sync the data across instances due to the static of the postal data. The user sends a http request with an in-doubt address payload to the service and gets back the corrected address, the information on what has been corrected, and the confidence level. It scales perfectly and the overhead is little.
It has emerged recently that SAP has extended its end-of-support date for legacy goods, moving from 2025 to 2027 – including a three-year transitional duration and a 2030 final cut-off stage. Up to then, customers who are not on S/4 Hana will be moved to a “customer-specific maintenance model”-translated: your service will become even more expensive.
In the run-up to their deadline(s), SAP have waged a long marketing war in order to move their customers to S/4 Hana; not just the use of deadlines as an ultimatum, but also releasing positive survey results and customer numbers, to encourage any who are undecided.
However, Support Revolution is sceptical of SAP’s methods, because their results and statistics aren’t consistent with what we’re seeing in the wider ERP market.
The study states, “The 300 participants […] spanned 10 countries covering three regions, from organizations with 1,000-25,000 employees across a multitude of industries and were either planning to deploy (73%), have in production (9%) or currently deploying (18%) SAP S/4HANA.”
The survey results suggested that, of 300 participants, 100 percent of them were either deploying S/4 Hana in the near future, or were already doing it. It is also worth noting at this point that this survey was funded by, and samples were provided by, SAP.
As you might expect, the figures SAP have given here seem a little far-fetched, compared to what other surveys and reports have found and the general opinion of S/4 Hana at the moment.
Why are customers worried about S/4 Hana?
We’ve established that SAP’s marketing strategies are inconsistent; namely, their customer surveys don’t actually line up with their customers’ feedback.
But why are SAP’s customers hesitant in moving onto the newest product? What’s holding them back – and what should you, and your organisation, bear in mind before making your minds up?
SAP’s customers don’t want to play
Customers have understandably been cautious about moving onto S/4 Hana. Any organisations moving to the cloud-based, SaaS S/4 Hana would not see a typical ‘lift-and-shift’ upgrade – rather a full system reimplementation. Almost like installing a brand-new ERP system.
Therefore, any customisations that customers have developed on their systems become very difficult to shift onto the new cloud platform. The options of customers who want to stay with SAP generally come down to these three choices:
Deny the S/4 Hana upgrade, and, in 2030, be put onto the maintenance model;
Accept the upgrade, and make every effort to rework the new S/4 Hana software to suit their needs (an expensive and in some cases impossible option);
Accept the upgrade, and change working processes to suit the new S/4 Hana functionality.
The support revolution of SAP
This leaves a lot of customers not going anywhere, not receiving any innovation or added benefit from their existing ERP suite, and yet, they are still expected to pay SAP’s substantial support fees.
High prices, for a service of very limited return. In any other situation – gym membership, insurance, streaming services – you’d consider cancelling your contract and looking elsewhere. Which hasn’t really been an option for Oracle and SAP customers – until fairly recently.
SAP’s management has been the source of distrust and dissatisfaction. The employees are now expected to answer for the low levels of customer satisfaction. SAP is becoming a grassroots democracy.
It wasn’t just the former deadline 2025 that had many customers dissatisfied with SAP’s management. In the past few years, executives also seemed to completely ignore on prem. Cloud was supposedly the way to go, but many customers had reasonable doubts.
SAP promises it has seen reason. During FKOM (Field Kick-off Meeting) 2020, it proudly proclaimed: We are ERP! There were no over-the-top praises of Hana. The once ambitious cloud program Embrace has effectively been reduced to an exclusive contract with Microsoft. AWS as Embrace partner is practically invisible. Google is still trying – most recently with a booth at the 2020 DSAG Technology Days – but customer interest is low.
SAP’s management failed to recognize the sign of the times. As a result, customer satisfaction is at an all time low, indicated by e.g. its negative Net Promoter Score (meaning that for the first time, customers would not recommend SAP’s software).
One step forward, three steps back
Another ambivalent example of how SAP is listening to customers again: the new deadline 2027/2030. To extend maintenance for Business Suite 7 with AnyDB as well as AS Abap, AS Java and the NetWeaver stack was the right decision – but who is going to pay for that? Technical, organizational, personnel and licensing challenges lie ahead. One swallow doesn’t make a summer, and extended maintenance doesn’t solve all of customers’ problems. Customer dissatisfaction roots in so many things: inconsistent on-prem and cloud APIs, confusing business partner definitions, half-baked roadmaps as well as lack of integration.
Another construction site: SAP Lumira
The ERP company seems a little misguided in general. Of course it’s the right decision to offer customers a strategy for visualizing analyses and big data – Lumira enjoys high customer acceptance, after all. However, it’s the wrong decision to cancel Lumira without a clear migration path to SAP Analytics Cloud.
Asking customers for their opinion is the right thing to do but asking customers what to do is another thing entirely. SAP needs to realize how big a role it plays in customers’ digital transformation. SAP is the ERP company, and customers look to it for answers and solutions, not just products.
SAP is taking a carrot-and-stick approach to moving customers from its legacy ERP software, Business Suite 7, to its newer S/4HANA platform.
The carrot is a bold promise to support S/4HANA at least through 2040, meaning that businesses switching today will get over two decades’ use out of the new platform.
SAP co-CEO Christian Klein says enterprises are keen to move to S/4HANA, but some of the larger ones are telling him they won’t be ready by 2025, the deadline SAP had previously set to end support for its legacy software. For those companies, “It’s not so much about the technology, it’s really about adapting long-standing business processes, adapting to the needs of the customers in the digital world,” Klein says.
There’s also been some concern that an SAP skills shortage could leave some customers without the help they need to migrate their systems.
The 2 percent solution
Extended maintenance will cost an additional 2 percent of the annual license fee, on top of the 20 percent fee for mainstream maintenance.
The new cut-off date will affect users of SAP’s core enterprise software component, ERP 6.0, and the core applications of SAP Business Suite 7, including Customer Relationship Management, Supply Chain Management and Supplier Relationship Management.
Procrastinators hoping that SAP will relent and offer another extension in future are out of luck: “For extended maintenance for the Business Suite 7 core applications, the end of 2030 is really the final date,” Klein says.
Even 2027 will be too soon for some, says EAC’s Greenbaum, noting that there are companies still running instances of R/2, a version of SAP’s ERP system that was superseded in the early 1990s.
The extension will remove a key commercial argument for SAP competitors such as Oracle, who have been playing on the uncertainty of what will happen after 2025 to tempt customers to switch, says Greenbaum.
t’s not a sign that CIOs should relax, he says. “I don’t think the customer of any vendor in this industry should be putting their feet up on the table and relaxing about digital transformation and about upgrading their business processes,” Greenbaum says. “But on the other hand, this allows for a calmer and more measured strategy, and that’s what people want.”
Many big data projects I have been asked to review were in critical condition and the root cause always was that the team followed the rulebook on how to build a data lake to the letter.
One of these big data rules is to transform the data at query time instead of preparing the key performance indicators (KPI) upfront and allow only those to be analyzed.
All too often the rule is executed by dumping all data as-is into the data lake. CSV files, database exports, spreadsheets, text documents,… it is chaos. As a result the data is physically present but essentially inaccessible.
Late binding
A data warehouse is supposed to be the single point of truth. Everybody can query the “Revenue” and everybody has the same definition of what “Revenue” contains and what it doesn’t. While this is a good idea for many measures, the definition of others is not always as clear.
In the weblog analysis the KPI “reading duration” is defined as “time between accessing one page and within 10 minutes another”. Why 10 minutes? What would be the impact on the calculated duration if using 9 minutes instead? While it is definitely a good idea to provide a KPI with the official definition “reading duration” for correlations, the data scientist will want to do more.
Hence the requirement to make the raw data (and consequently big data) accessible. But does that also mean in the original source format, meaning a 1:1 copy of the webserver logs? What will happen if that data gets converted from the text format into a compressed binary format easier to read? Would that violate one of the data lake rules if 100 percent of the information is present but in a different format?
New deal
Because storing the data in databases was the only option in the past, many data sources could not be added to the data warehouse or only in a pre-aggregated fashion. Today, I would use the data lake as data warehouse staging area on steroids.
All data are added in a binary compressed columnar table format. Parquet format* is the defacto standard. This makes it easier for the data scientist as well as the data warehouse to consume the data. The data warehouse still contains the aggregated data, using the official definition of the KPI.
Data science
The reason the data warehouse plays a significant role in this context is because of its ease of use and speed. Most of the users only care about the predefined KPIs. Their typical analysis is to create correlations between the data. And that is the sweet spot for databases like SAP Hana – smaller volumes, fast aggregations, fast search, many joins.
A data lake is the exact opposite. It can store unlimited amounts of data cheaply, can parallelize processing on a single table efficiently and provides complex processing way beyond SQL queries.
The combination of the two, data lake and data warehouse, is the winning proposition.
In this SAP MM blog article, you will find different aspects of the SAP MM Module, such as its functionalities and operations, as well as different components and subcomponents including master data, purchasing, billing, human resource management, and inventory management.
In this SAP MM blog article, I will cover these topics which are given below :
What is SAP MM Module?
Features of SAP MM Module
Advantages of SAP MM Module
Procurement Process
Types of Procurement
Basic Procurement
Special Procurement
Structure of an Organization
SAP R/3
Procurement Cycle
Inventory Management
We will begin this SAP MM blog article by learning the SAP MM Module. SAP MM Module is an integral part of the SAP ERP Software. SAP Material Management is used by various companies to handle their purchasing and transactional data as it is both cost and time-efficient. SAP Material Management belongs to the logistic function which helps the industry from procurement to delivery of products. SAP MM Module consists of various units to handle material procurement and vendors, inspect the material condition and quality, as well as payment of the vendors. What is SAP Business Process in SAP MM Module? SAP Business Process is an integral part of the SAP MM Module. It handles the sales, Manufacturing, Distribution, Unit Maintenance, Planning, and Warehouse Management of a company. It helps manage the Inventory and Human Resources of a company.
Features of SAP MM Module
Some of the key features of SAP MM Module are as follows: It deals with Inventory Management and Material Management. It is a process that keeps in check the scarcity or violation in the Supply Chain of a company. It Manages Procurement activities. To accelerate productivity and cut the cost, it manages Material (products/services) and resources of a company. It handles Master Data, Valuation of Material, Material Requirement, Invoice Verification, etc.
Advantages of SAP MM Module
It minimizes the cost of operations.
It reduces inventory losses by removing unnecessary or obsolete material.
Procurement Process In SAP MM Module
This article will certainly help you to understand about the Procurement Process in an SAP MM module. This SAP MM blog article will show the various kinds of Procurement Process.
Every company requires material or service to satisfy their requirements, and thus, they purchase them. This procedure is referred to as procurement.
