The business value of HANA for NEW SAP customers

Friday, December 4, 2015

 

My pre-sales partner was asking me some time ago what is the value of Hana for a new SAP customer.

Often HANA is discussed in the context of existing SAP customers and also often on large enterprise (with huge dataset).

I have posted in the past a BLOG about the value of Business Suite on HANA.

The Business value of SAP Business Suite on HANA

But, there is an important business value for these new customers too. Instead of just answering to this request, I decided to post a BLOG about it.

Legacy applications

Most applications built until today were created in the constraints of existing databases and platforms. That means that it was either optimized for transactional processing (referred to as OLTP systems) or for analytics (OLAP). While one is built for high performance of day to day transaction posting, the other is optimized for reporting and simulations.

May sound rough, but all applications built with this old premise of separating OLTP from OLAP will be eventually considered legacy.

Systems were built separate, with different servers, data often replicated and not real-time.

Transactional + Analytical + Predictive = One system = One App

The introduction of SAP HANA changes this completely. HANA is an in-memory column store database that is built as very powerful application server, providing sophisticated analytical and predictive tools. Applications can be built to run directly on it, immensely leveraging the processing power of the platform. Moreover, the database provides sophisticated functions that makes it very suitable for transactional processing as well. This is huge game changer. Applications can now be built with transactional and analytical functions, together, in the same system, using the same dataset.

One of the biggest changes this introduces is about how we perceive and use applications. We grew up using systems with the old paradigm of “Work and only then Analyze”. Now applications can be built in a way that provide you with analytical and predictive functions together. Imagine, you are about to post a transaction and have reporting and predictive functions that can help you simulate the impact of your decision, providing options and helping you make a better decision. This is not only possible, it is already available. One of the latest applications built by SAP is called “Monitor Material Shortages”. This Fiori APP, gives you visibility of MRP shortages, provides options and helps you simulate result of your actions.

Think about it, this is major. Not long it will be before you will have an app that will allow you to consider price elasticity, historical consumption, cost of raw materials freight charges and simulate the estimate profitability of a sales contract before you even enter the sales price.

SAP HANA provides the platform to build applications never imagined before. Soon, we will all be working with applications quite different from our old “Post+batch+Report” approach. Everything else will be considered legacy…

Simplified Applications – Simplified Solutions

Another important advantage of having applications built to run on HANA, is that they are created with much less performance constraints. We used to build complex aggregation structures and logics only to support reporting. This is not required on HANA. One good example is the simplification done in SAP Financials. While it used to take 15 inserts in different tables, on HANA, the whole data model was much simplified, now with only 4 inserts.

These types of simplifications are being performed across the whole Business Suite.

This means simpler SAP applications but ultimately means simpler customer solutions. It is not only simpler to use SAP applications but also to customize and build upon.

Exemplifying again, given its complex dataset, creating SD (Sales and Distribution modules) often generate complex queries and optimization may be a challenge if you have random selection criteria. Reporting in a columnar in-memory database like HANA provides faster data access with much more predictable response time. In short, reporting is much easier.

Simplified Landscape

Another important value of running on HANA is that reporting is largely improved. You can take more information out of your transactional dataset. Faster. Very often customer requirements are operational reporting. These can be done with the use of SAP HANA Live, a set of data models that allow fast report building. Couple that to Business Objects and you have very powerful reporting tools. For some customers (not all), this is enough to satisfy reporting needs. No need of a separate OLAP system for reporting where data is replicated, not real time.

In this context, the number of servers in the customer landscape is reduced. Less servers means a lot less maintenance costs. Fewer applications to support, backup, etc.

It is very likely that more and more current separate SAP Solutions will merge to run together on the same SAP HANA appliance and database. This will translate into important architecture simplifications.

You can find detailed information about this landscape simplification in this very good article:

See on sapexecutivenetwork.com

The future of the Business Suite

The last point is possibly the most important: The new programming paradigm (OLAP+OLTP) will continue to translate into more and more new applications built to run on HANA. It is very likely that the business suite will merge all its functions into one. This will great reduce TCO. Smaller customers with smaller budgets than very large enterprises will also be able to leverage sophisticated SAP solutions like APO, eWM, TM etc.

It is inevitable that soon, there will be 2 different solutions, providing 2 possible avenues to take. Most of SAP innovations are taking advantage of HANA. Investing in ERP on HANA today, is a sure investment to SAP Innovations and, in my honest opinion, the right decision to take. Customers don’t invest into SAP only thinking about 12-month timeframe. Investing into SAP HANA today is forward-thinking. It is sound decision that guarantees the investment for the long run.

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