S4HANA Whitepaper v2.6

SAP S/4HANAEnterprise Management 1511 IBM’s Point of View IBM Internal Release Date: June 6th, 2016 Version: 2.6 SAP S/4HANA Enterprise Management 1511 White Paper Table of Contents 1 Introduction..............................................................................................................1 SAP’s Answer............................................................................................................................1 The CSCO & COO challenges..................................................................................................2 What does this mean for the CSCO & COO?............................................................................3 What to do: Redesign your operating model.............................................................................4 How to do it: Innovate your ecosystem......................................................................................5 What you need to do it: Boost your digital acumen...................................................................5 2 Executive Summary.............................................................................6 2.1 Our recommendation for S/4HANA...............................................................................7 2.2 Current maturity of the individual modules 1511...........................................................8 2.3 How to deal with the Development roadmap...............................................................11 2.4 Licence costs...............................................................................................................11 2.5 Consequences for existing customer development (ABAP).......................................12 2.6 Why S/4 HANA 1511...................................................................................................13 3 Our Recommendation for Migration....................................................14 3.1 For Greenfield implementations..................................................................................16 3.2 Mature ECC 6 installation...........................................................................................17 3.3 Current Suite on HANA...............................................................................................18 3.4 Clients on ECC – and HANA Sidecar..........................................................................19 4 IBM Value Proposition........................................................................20 4.1 Why does SAP HANA Matter to IBM...........................................................................20 4.2 SAP and IBM strong relationship................................................................................20 5 New Functionalities...........................................................................21 5.1 Introduction..................................................................................................................21 5.2 Simplify........................................................................................................................22 5.3 Supply Chain...............................................................................................................23 5.4 Manufacturing..............................................................................................................29 5.5 Sales...........................................................................................................................36 5.6 Sourcing and Procurement.........................................................................................43 5.7 Finance Integration......................................................................................................49 5.8 Asset Management.....................................................................................................50 5.9 Marketing.....................................................................................................................52 6 References........................................................................................54 7 Further Reading................................................................................ 55 8 Contributors......................................................................................56 9 Glossary........................................................................................... 57 10 Version History................................................................................. 58 11 What is SAP S/4HANA?.......................................................................59 12 S/4 HANA is the Answer for Digital Transformation...............................................61 IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. i SAP S/4HANA Enterprise Management 1511 White Paper Figure List Figure 1: Scope of S/4 HANA Enterprise Management. Source: SAP Community, 2015..............2 Figure 2: Corporate IT shift. Source: IBM CxO Study....................................................................3 Figure 3: CSCO challenges. Source: IBM and SAP Institute of Business value............................4 Figure 4: Improvement areas 1511. Source: SAP Community, 2015.............................................6 Figure 5: HANA Risk Matrix.............................................................................................................8 Figure 6: HANA Modules maturity...................................................................................................9 Figure 7: HANA Impact & Readiness Assessment Service Offering from IBM.............................13 Figure 7: Migration and Upgrade Path..........................................................................................17 Figure 8: The different client situations..........................................................................................18 Figure 9: Greenfield Implementation.............................................................................................19 Figure 9: Upgrade and Migrate......................................................................................................20 Figure 11: Migration for SoH..........................................................................................................20 Figure 12: Central Finance Sidecar...............................................................................................21 Figure 9: The different modules of S/4 HANA Enterprise Management........................................23 Figure 10: Detailed Business Scope 1511 On-Premise edition.....................................................24 Figure 11: CSCO insights from the Global C-suite Study, 2015....................................................25 Figure 12: Scope of Supply Chain.................................................................................................25 Figure 13: Further optimisations Supply Chain.............................................................................27 Figure 14: MD model for Supply Chain.........................................................................................29 Figure 15: Tables for Supply Chain...............................................................................................30 Figure 16: Scope of Manufacturing...............................................................................................31 Figure 17: MRP Live Transaction MD01N.....................................................................................32 Figure 18: Performance Improvement through code push down in MRP.....................................33 Figure 19: SAP Roadmap for Production Planning & Production Execution................................35 Figure 20: Scope of Sales.............................................................................................................38 Figure 21: Scope of Sourcing and Procurement...........................................................................45 Figure 22: Ariba vs HANA..............................................................................................................48 Figure 23: new Architecture acc to Gartner Source: SAP Community.........................................61 Figure 24: HANA Journey. Source: SAP Community....................................................................62 Figure 25: What SAP HANA enables. Source: SAP Community.................................................62 Figure 26: CXO Challenges. Source: SAP Community...............................................................64 IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. ii SAP S/4HANA Enterprise Management 1511 White Paper 1 Introduction The role of the Logistics function continues to be, delivering superior business support, but with access to a wider range of levers to make this happen. As a result, the role of the Chief Supply Chain Officer (CSCO) today is broader and more complex than ever. It is now widely recognised that creating and maintaining efficiencies in operations is the challenge for the Logistics leadership in many organisations. The CSCO is not restricted to optimising operations like Planning, Manufacturing, Quality, Sales and Delivery anymore. He is in the driving seat on the Digital roadmap. Today, the CSCO’s are expected to develop new approaches for managing their organisation, producing business insights on a daily basis, spotting market opportunities, and helping the business with scenario planning to help react faster. Ultimately they are involved in predicting changes in the business environment and driving the business for growth. In 2015, IBM surveyed 5,247 business leaders in more than 70 countries for our latest Global C- suite Study (the eighteenth IBM study to focus on the C-suite). We had 657 Chief Operations Officer (COO’s) who participated in our research. We identified a small group of COOs from organisations having both strong reputations as leading innovators and superb financial track records. These Torchbearers comprise 6 percent of all enterprises represented by COOs. In the chapter, we will focus on the most important CSCO challenges we gathered from that group. This will be the “going in position” to see how SAP S/4HANA Enterprise Management addresses these challenges. SAP’s Answer In November 2015, SAP delivered a massive wave of simplification and innovation in the core of SAP S/4HANA Enterprise Management, so called S/4 HANA Logistics, which is the big next step after the successfully release of S/4 HANA Finance. The S-4 HANA 1511 release is one of many more to come. Its scope is very comprehensive and offers simplified data model and an advanced user experience. Ever since the S/4HANA announcement in Feb 2015, a number of questions have been raised by SAP’s existing and prospective customers.  What is the advantage of the new S/4 HANA 1511?  When should one adopt S/4HANA Enterprise Management?  Would implementation of S/4HANA Enterprise Management result in losing any of the current functions or customizations available in our legacy applications?  How much time and effort will be required to migrate to S/4HANA Enterprise Management (1511 FPS02)?  What are the prerequisites? This document provides IBM’s Point of View (PoV) on ‘S/4HANA Enterprise Management (1511)’ and addresses most of the key questions raised by many of our customers. This document is written with the help of many IBM contributors – and can be used for our clients and colleagues, to understand better the completeness, strengths, benefits and the eventual IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 1 SAP S/4HANA Enterprise Management 1511 White Paper complexities of S/4 HANA Logistics. This paper has been presented in accessible language, avoiding technical references and terminology where possible. After reading this document and having a good understanding of the strengths and further development roadmap of S/4 HANA Logistics – this document can also be used as a guideline for a potential greenfield, brownfield migration, or a complete new implementation to S/4HANA. This document will be built upon, when new development releases will come in the next months. IBM will keep the document alive so the insights and eventual decisions on the deployment of S/4 HANA Finance and S/4 HANA Logistics are always based on actual status. Figure 1: Scope of S/4 HANA Enterprise Management. Source: SAP Community, 2015 The CSCO & COO challenges The digital economy is now a reality, and therefore transforming business processes, business decisions and business outcomes.  Over 75 percent of business leaders believe that achieving digital transformation will become critical to their organisation’s success within two years.  Almost all employees believe digital transformation is right for the organisation. They see the effects of the digital economy in their personal lives. It only makes sense to bring the same ease of use, the same connectivity and the same digital-driving opportunities to the workplace. Today’s C-level executives face the imminent challenge of digital transformation influenced by multiple market and technological trends (Figure 3). If we look at the relevance to the CSCO and the IT role, has changed substantially, taking the digital economy changes into consideration. Managing operations is not just about making products and matching supply with demand; it is also about adding value by developing superior products, services and processes. Torchbearer COOs are acutely aware of this imperative and far more intent on forming agile, inventive partnerships to help them reach the market first with ground-breaking innovations. An example? The U.S. white goods manufacturer Whirlpool is collaborating with various enterprises to provide smart home appliances with accompanying services, based on analysis of the data the appliances generate. Whirlpool aims, among other things, to help its customers save energy and water and use their time more efficiently by performing routine household chores without being tethered to their homes. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 2 SAP S/4HANA Enterprise Management 1511 White Paper Figure 2: Corporate IT shift. Source: IBM CxO Study What does this mean for the CSCO & COO? CSCO´s (Chief Supply Chain Officer) are responsible for the “mechanics” of planning, production, logistics and customer service and procure-to-pay processes. Their role has become more and more complex, and the environment that they are working in is changing rapidly and dramatically. CSCO´s now need to collaborate with an extensive network of suppliers, logistics providers, manufacturers and other business partners. They must tap into analytical insights at almost every decision point and, ultimately, create customer-activated supply chains. Insights from the IBM CSCO study (i.e. CSCO insights from the Global C-suite Study) revealed that outperforming organisations adopt an analytics-led and technology enabled approach to become a leading customer-activated supply chain that allows them to predict and act in a fast changing environment and drive their business to growth. See below the most important challenges we have collected from the study. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 3 SAP S/4HANA Enterprise Management 1511 White Paper Figure 3: CSCO challenges. Source: IBM and SAP Institute of Business value COO’s know they need to be prepared for a future in which disruption is pervasive: a future in which technological advances are increasingly blurring the distinctions between different industries, where new competitors are emerging from “left field” and customers are becoming even more demanding. The Torchbearer COOs in our study provide lessons from which COOs everywhere can profit and explain how they redefined the ecosystems in which their organisations participate and make their operations more efficient. What to do: Redesign your operating model  Align your digital operations strategy with your organisation’s business objectives.  Capitalise on advances in robotics and the IoT to automate your manufacturing and preventive maintenance, and investigate the potential of emerging technologies like 3D printing.  Identify the best sites for production and assembly based on total landed costs, bearing in mind the impact on your organisation’s agility and customer responsiveness.  Optimize your digital operations sustainably.  Explore the opportunities for crossing over into other industries. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 4 SAP S/4HANA Enterprise Management 1511 White Paper How to do it: Innovate your ecosystem  Focus on building a bigger, more innovative ecosystem.  Look for organisations that can help you customise your product/service portfolio and develop new offerings, or those with specific expertise that can help you make your global operations more agile.  Examine the pros and cons of using an asset-light versus an asset-heavy approach.  Adopt a decentralised management style; you can only reap the benefits of getting real-time operational insights by delegating decisions to the people on the ground. What you need to do it: Boost your digital acumen  Use analytics and modelling to make sense of the “big data” generated by machine 2 - machine connections and smart sensors, predict demand and optimize your operations.  The value of the IoT lies as much in the insights it unlocks as it does in the opportunity to create intelligent products and services.  Get personally involved in training existing employees and hiring additional employees to manage this tidal wave of data.  Move fast because people with the requisite skills will be in short supply, as the next wave comes ever closer. Most CSCO’s and COO’s are looking for:  Advanced analytics  Modelling and real-time data to streamline their own operations  Predict demand and monitor their production schedules more accurately  Making their supply chains more transparent to cut their processing and inventory-carrying costs and respond more rapidly to changing customer preferences “With real-time data, advanced analytics and a single view of the customer, we’ll be more agile and able to respond more rapidly.” IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 5 SAP S/4HANA Enterprise Management 1511 White Paper 2 Executive Summary With release 1511, SAP introduced the first step of a longer journey to complete SAP S/4HANA Enterprise Management Portfolio. There are 11 domains where Key Business Innovations for SAP S/4HANA Enterprise Management 1511 On-Premise edition can be expected. IBM looked into the functionality and related those with the functional challenges in the particular domains. Figure 4: Improvement areas 1511. Source: SAP Community, 2015 Innovations are broadly in 3 different layers: 1. Re-architecting for in-memory platform This layer comprises a set of innovations in the SAP S/4HANA Core, which has been modernised by simplifying & optimising the technology footprint, and by collapsing Online Transaction Processing & Online Analytical Processing to make the functionality more relevant and designed for data-driven businesses. Speed of in-memory eliminates the need of aggregates and everything can be done on the fly. Code push down done to implement algorithms which require a lot of read and writes to database layer from the application layer. HANA also has a lot of CPU. SAP and IBM can now focus on solving complex business problems without the technological bottlenecks. Example: Real-time available-to-promise (ATP) Checking brings in data from demand and supply together to run a mathematical algorithm to optimise the availability to promise of a given material for given sales order. Data from both Supply and Demand have to feed to a complex algorithm. Previously this was done in a batch and it took several hours to run ATP, not this can happen on the fly in real time! IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 6 SAP S/4HANA Enterprise Management 1511 White Paper 2. Responsive User experience This layer focuses on the role-based user experience, with a new Responsive design. The UIs are designed to run on any devices, desktops, tablets, smartphones, and even smartwatches and have been redesigned for exception-bases issue handling. Example: Previously VA01 (Sales Order Creation) required 7 screens. The new UI redesign and simplification has enabled to reduce the screens needed to just 1. 3. Unifying the functionality Core The third layer is the elimination of functional redundancies which had been built into the Business Suite over the years resulting in a simplified suite. SAP has taken a major step in simplifying the architecture around the core ERP and enabling the organisations to move towards the new digitised enterprise platform. Example: The constraint based capacity planning will become part of the core S/4HANA Enterprise Management and taken out of APO. More PP/DS1 functionalities are planned to be built into S/4HANA with a plan to move everything and decommission PP/DS module of APO. 2.1 Our recommendation for S/4HANA While SAP BW on HANA and Suite on HANA are relatively mature solutions, yet, we need to be honest with our customers. Despite the benefits of adoption of a HANA roadmap, the technology is still maturing. S/4HANA Enterprise Management is a multiyear roadmap and only a few core processes have been simplified so far and still a lot to be done in future releases. The 11 domains are just the beginning, however not all 11 domains have made it to the 1511 release.  Suite on HANA - Reference points are increasing as is level of maturity. At the moment, we see more and more successful migrations to Suite on HANA – which is a logical step towards HANA, opening up for the digital roadmap.  BW on HANA - Based on number of reference points and a level of maturity, this is Low Risk, Low Impact (in most scenarios) and bring big business benefits  S/4HANA Finance has rapidly become stable, and IBM is engaged in several migrations for Simple Finance.  S/4HANA Enterprise Management, Customers on latest version of ECC (Ehp6/7), will find very minor improvements on most of the 1511 (including FPS02) modules. Simplification has been done for Finance, Inventory/Material and some Sales tables. SRM, APO, EWM will co- exist in a side-by-side scenario for some more years while the functions are moved to S/4HANA, Ariba and IBP. 1 "Production Planning and Detailed Scheduling" (PP/DS) component: Use to create procurement proposals for in-house production or external procurement to cover product requirements and to optimize and plan the resource schedule and the order dates/times in detail IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 7 SAP S/4HANA Enterprise Management 1511 White Paper The following table summarises the above: Figure 5: HANA Risk Matrix For a customer to justify the benefits case of S/4HANA 1511, it is going to be a challenge. SAP is in a transition phase and adding functionality in a phased manner and has a multi-year roadmap. If a customer would like to re-implement SAP or upgrade due to simplified data model then this is a good platform to start. They can start consuming Fiori apps as they get released. But if a customer is looking at reducing their TCO2 and reducing their footprint across BW, SRM, APO, EWM & TM systems then this is not the right time. These sub-systems will continue to co-exist in a side-by-side scenario for couple of more years. Also additional products like Ariba, Hybris, IBP 3 may be required and new functions are being added to compliment S/4HANA. The roadmaps are not clear and precise and SAP is not committing to a fixed roadmap. It is different with EhP release patterns and even if SAP does not commit to what their next EhP will contain, most of the customer can live with it. But with S/4HANA and release cycles every year and feature packs (FPS) every quarter and with many missing or reduced S/4HANA functionality it is imperative that SAP releases a committed one year Roadmap informing what is coming in the next few feature packs and the next release. This will give customers an enhanced confidence level. In our Migration chapter we have documented the best practice to migrate S/4HANA. 2.2 Current maturity of the individual modules 1511 This is a high level readiness of the S/4HANA modules. For more detailed gains and deficits, we refer to the Functionality chapter. 2 Total cost of ownership 3 SAP Integrated Business Planning IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 8 SAP S/4HANA Enterprise Management 1511 White Paper Figure 6: HANA Modules maturity 2.2.1 SCM Challenge S/4HANA Enterprise Management answer Comment Real-time availability of Inventory data model simplified. This will bring a lot of EWM has only basic granular data to improve performance relief on S/4HANA. Analytic Fiori apps and planning and execution none for any of the decisions transactions. Intelligent storage EWM & TM continues as side-by-side options. locations Support for inventory and Some WM features like cross-docking, dynamic cycle production decisions to be counting, Task and Resource management & Value made without human added services have been removed. intervention Product quality monitoring No innovation in Shipment or Delivery and predicting failures 2.2.2 Manufacturing Challenge S/4HANA Enterprise Management answer Comment System support to deal with tighter MRP Live available but for several features, the if the client is using collaboration with business old MRP still needs to be run. This needs to be APO, they will need to partners solved in the next version. continue using it to compliment S/4HANA. Robotics to help to reduce or No PPDS functionality build in on S/4HANA 1510 Benefit will be realized eliminate defects, optimise but some expected in 1610 and majority in 1710. only when PPDS productivity and localise supply Until then customers continue to run APO moves fully to chains in a cost-effective manner S/4HANA. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 9 SAP S/4HANA Enterprise Management 1511 White Paper Challenge S/4HANA Enterprise Management answer Comment IBP impacts the TCO as this might need to run in parallel to APO (DP, SCP). Ability to gather accurate, No innovations for QM and other areas of complete manufacturing related manufacturing data, which allows to effectively minimise productions risks across the networks 2.2.3 Sales Challenge S/4HANA Enterprise Management answer Comment Solution Simplification for better Global Trade Service replaces SD Foreign Trade Several issues and Customer experience Finance Credit Management replaces SD Credit bugs being resolved via Management OSS Settlement Management replaces SD rebates Updated Roadmap for FPS02, FPS03 and Revenue Accounting replaces SD revenue 1610 awaited. recognition C4C and CRM recommended. Reduce bottlenecks and gather Sales Order Fulfilment Cockpit real-time insights on the fly 30 Smart Business KPI Apps. 2.2.4 Sourcing and Procurement Challenge S/4HANA Enterprise Management answer Comment Lower TCO via one solution Some Functionalities of SRM (SAP sourcing) will Sourcing functions are move to S/4HANA, additional functions will be spread over SRM, S/4 enabled in Ariba but for the next couple of years and Ariba. Not all customers will have to run SRM, S/4 & Ariba Vendors are on Ariba or willing to pay to be on Ariba Collaborate on different types of Not possible on S/4 but possible in Ariba Purchasing functions purchase orders and request are spread over SRM, additional information from the S/4 and Ariba. Small supplier Vendors not willing to pay for Ariba. Not all Vendors are on Ariba. Contract Lifecycle Management Not possible on S/4 but possible in Ariba on cloud. Hub Contract is on the S/4HANA roadmap for On-Premise but need the definitive timeline for this. Material data model simplification is a key Simplification, Spend Analytics innovation of 1511 and is a stepping stone to future enhancements. There are some Spend Analytics delivered with 15/11 but obviously a lot more would be required. 2.2.5 Finance Integration Challenge S/4HANA Enterprise Management answer Comment Currency evaluation None Transfer price support None IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 10 SAP S/4HANA Enterprise Management 1511 White Paper 2.2.6 Asset Management Challenge S/4HANA Enterprise Management answer Comment IOT for real-time integration with The streaming data from sensors can be However, for this Asset management. integrated with S/4HANA through Stream server S/4HANA cloud and big data integration. subscription will be required. Predictive Analytics for Predictive analytics can give an output of maintenance probability of occurrence of an event. This can be used to generate notification/Work order to perform maintenance in advance. Data from smart sensors can be integrated now. 2.2.7 Marketing Challenge S/4HANA Enterprise Management answer Comment System support to deal with the SAP Hybris Marketing boost of Social and client intimacy System support in Internet sales SAP Hybris Marketing Data insights - for better decision SAP Hybris Marketing support for target populations, countries, platforms etc. 2.3 How to deal with the Development roadmap IBP will replace DP and SNP & PPDS will be embedded into S/4 HANA. APO can continue to run side-by-side until all functionaries are met by S/4 HANA. Companies may choose to run APO and can do so until support is withdrawn in 2025. Some SRM functions will move to S4 while rest will move to Ariba. SRM and Sourcing will continue to run side-by-side. Companies may choose to run SRM and can do so until support is withdrawn in 2025. EWM will be embedded into S/4 HANA. EWM will also continue to run side-by-side until all functionaries are met by S/4 HANA. Retail, Distribution and LSPs will always continue to run EWM as a standalone system due to business volumes and need for a separate instance. In the future release (1710 or later) Transport Management will get embedded into S/4 HANA and TM will continue to run side-by-side until all functionaries are met by S/4 HANA. Customers could always continue to run TM as a standalone system due to business volume and need for a separate instance. Roadmap Links: http://scn.sap.com/docs/DOC-33110 2.4 Licence costs S/4 is having a new code base (S4CORE100) and hence legally separate license & payment terms apply. Licence costs are a consideration which needs to be taken into account – for a S/4HANA roadmap adoption. But there are different commercial models for individual customer situations. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 11 SAP S/4HANA Enterprise Management 1511 White Paper  The new SAP customers will need to licence for a) The business suite users b) HANA limited run time c) S/4HANA foundation to access the S/4 Enterprise Management Suite.  The existing install based customers can leverage the existing users take them to S/4.  They will need licences for a) HANA Limited run time b) S/4HANA foundation. The Suite on HANA customers will already have license for HANA Limited run time. Separate licensing will be required for the Line of Business (LOB) Solutions. This is optional. 2.5 Consequences for existing customer development (ABAP) HANA Impact Assessment offering from IBM will help understand the impact on the ERP Landscape prior to moving to Business Suite on HANA or S/4HANA and identify the quick wins to reduce project timelines and understand the business support required based on the impacted functionalities.  Understand what code will break and how to fix it before the project starts.  Based on production usage statistics, reduce the project scope and focus on what really needs to be fixed and tested.  Identify the activities that can start today, that will reduce project timelines, minimize production downtime and ensure a smooth go-live  Help the business prepare for the latest S/4HANA solution by identifying training requirements early and securing business resources requirements.  Establish a detailed project plan with effort estimations and resource requirements before you even start the HANA migration. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 12 SAP S/4HANA Enterprise Management 1511 White Paper Figure 7: HANA Impact & Readiness Assessment Service Offering from IBM In a migration scenario – there is no need to “Go back to standard first” – since the current enhancements can be remediated to work on S/4HANA. The advice to however to try to eliminate as much of Z-codes, before migration, since many old Z-codes are often not used anymore or can be replaced by new SAP Transactions or Fiori Apps. 2.5.1 Hana-tization  HANA-tization is the first step after migration to HANA database.  Enables your codes to run properly on new HANA database adopting the paradigm shift in underlying architecture from traditional relational db to in-memory db.  Mandatory phase for ABAP custom developments for any Suite on HANA migration project .  Includes checks and actions to be taken, post HANA migration, post HANA migration in Custom developments (standard – SAP has taken care) to check if they run without any disruption and hence ensures Functional correctness of Customer Business 2.5.2 IBM’s SAP Upgrade Explorer Tool (SUET) SUET is an IBM Asset utilized in Upgrade Project to identify list of the custom development and changes in the system and this feeds into the Hana-tization process. It generates a report on the SAP technical and development data, inactive and active objects. In addition to executing the SUET tool to identify the code that need remediation, we need to follow OSS Note 2241080 – Custom Code check content. This lists the custom code that needs remediation due to the S/4 HANA Simplification. Adjustments should be made based on Read/ write access. Reads should work as they are and writes should be done away with. Best practice is not to update standard SAP tables. 2.6 Why S/4 HANA 1511 Several of the Simplifications & Key Changes for 1511 are documented below. Many of the changes have restrictions for migration projects (check corresponding OSS Notes) so we need to be validated the conditions before the implementation. For a green field project most of the restrictions don’t apply. S/4HANA Simplification & Key Changes Master Data Area Business Partner is now capable of centrally managing master data for business partners, customers, and vendors. With current development, BP is the single Business Partner Approach / Customer- point of entry to create, edit, and display master data for Vendor Integration (CVI) business partners, customers, and vendors. The specific tables for customer data (KNA1) and vendor data (LFA1) remain available and are not impacted. Material Field Length Extension Changed from 18 to 40 characters Sales & Distribution Removal of all non-primary tables( status tables for SD Simplified Data Models example). Only the following tables remain (VBAK, VBAP, LIPK,LIPS, VBRK, VBRP,VBFA) IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 13 SAP S/4HANA Enterprise Management 1511 White Paper Pricing result table , KONV replaced by new table Data Model Changes in SD Pricing PRCD_ELEMENTS Foreign Trade TBD (More info required from SAP) FI-AR-CR Credit Management is not available in SAP S/4HANA, on-premiseedition 1511. It has been replaced Credit Management by SAP Credit Management (FIN-FSCM-CR) for Financials and Sales and Distribution (SD). Procurement Co-Deployment of SAP SRM TBD (More info required from SAP) Subsequent Settlement - Vendor Rebate TBD (More info required from SAP) Arrangements Inventory Management (MM-IM) Data model in inventory management All Inventory Management tables have been replaced (MM-IM) with MATDOC Material Ledger Obligatory for Material This is the only option. Valuation PLM The Enterprise Search models are now replication free search models (using HANA DB tables instead) within PLM Enterprise Search SAP Product Lifecycle Management (SAP PLM). This eleminates TREX. Easy Document Management (Easy DMS) BOM, Routing, Production Version PP Planning of components provided to the vendor must be now carried out with MRP areas. A separate stock segment for the vendor is not available anymore and the PP-MRP - Subcontracting main reason is the performance. It is also now easier to use subcontracting MRP areas, since we simply need to create them on customizing and they will be available for all the materials The default option to plan a storage location separately is the storage location MRP area. It means that the Storage Location MRP option to define on the material master that a storage location will be planned separately or excluded from MRP is no longer available. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 14 SAP S/4HANA Enterprise Management 1511 White Paper The source determination carried out by MRP was completely redesigned for internal and external procurement. For internal procurement, a BOM selection method is no longer available for selection. Now, the BOM is always selected according to the production version, therefore, it is mandatory to have a production version.For external Simplified Sourcing procurement, the source list is no longer relevant to MRP and it is enough to have a valid info record, in order to have a vendor selected for a planned order or purchase requisition by MRP. With these changes, the source determination on MRP is similar to the source determination on APO and, according to SAP, unified source of supply model is the basis for future innovations in sourcing. Financials Data Model Changes in FIN All FI tables replaced with ACDOCA, Data Structure Changes in Asset Accounting Refer to S4 HANA Finance White paper for more details Cash Management Refer to S4 HANA Finance White paper for more details Technical Changes in Controlling Refer to S4 HANA Finance White paper for more details Credit Management Refer to S4 HANA Finance White paper for more details Cross Topics SAP S/4HANA introduces a new style of output management. The new output management replaces all Output Management legacy frameworks (SD Output Control, FI Correspondence, FI-CA Print Workbench, CRM Post- Processing Framework). IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 15 SAP S/4HANA Enterprise Management 1511 White Paper 3 Our Recommendation for Migration Dependent on the “as is” landscape, there are a number of HANA adoption scenarios that will help you get to an end state of S/4HANA IBM helps determine which transformation path would be the correct HANA adoption scenario based on a number of factors, including compatibility of specific Line of Business and Industry solutions. Assuming a migration scenario is the logical progression for clients who are running on SAP ECC6 Any-DB, the objective would be to move to either Suite on HANA or S/4HANA. For clients that decide to move to Suite on HANA as an interim step, the enablement of the S/4HANA innovations, such as S/4HANA Finance or S/4HANA Logistics would be the next step to the transformation journey. Dependent on the existing SAP landscape, there are different approaches to perform the migration from an ECC6 system running on a non-HANA database to the S/4HANA end state. With S/4HANA Finance 1605, SAP have introduced an additional layer of complexity to the overall S/4HANA transformation journey. However, this will help customers that wanted to move to S/4HANA Finance and weren’t able to due to the restrictions associated to SAP’s transfer pricing solution. S/4HANA Finance 1605 is an enhancement of the previous S/4HANA Finance version 1508. It is not possible to move from S/4HANA 1511 to S/4HANA Finance 1605. This has created two possible paths to benefit from S/4HANA Finance (Figure xx).  S/4HANA Finance Add-on (versions 1503, 1508 and 1605)  S/4HANA Core (version 1511 and 1610) IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 16 SAP S/4HANA Enterprise Management 1511 White Paper Figure 8: Migration and Upgrade Path While SAP starts to release a more stable and mature version of the S/4HANA solution, the migration pre-requisites have also been adjusted to support a one-step upgrade and migration approach from ECC6 running on any Enhancement Pack. This means that EHP7 is no longer a pre-requisite for starting the S/4HANA transformation journey if you are looking to move to S/4HANA version 1511 or above. These are 3 main implementation paths that are available to move to S/4HANA. Implementation of S/4HANA Enterprise management is undoubtedly significant strategic decisions, both for IT and the Business. In our view, the adoption therefore has to be very customer environment specific. Instead of taking a ‘one size fits all’ approach, IBM customers are encouraged to evaluate their individual circumstances in the context provided below and plan their next steps towards adoption. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 17 SAP S/4HANA Enterprise Management 1511 White Paper Figure 9: The different client situations Given that SAP versions below ECC 6 are no more supported, we have created 4 categories of SAP ECC6 customers ranging from Greenfield, (i.e. new implementations for customers not on SAP) to ones which are already on a HANA enabled platform. IBM recommends a different consideration for each of these categories of customers – moving to S/4HANA is a key strategic investment decision and as with all other investments, the business case has to be carefully considered. 3.1 For Greenfield implementations If the customer want to refresh their SAP landscape and start with the best practice and, SAP S/4HANA 1511 should be the default version. The client will benefit of the latest technology and innovations- and will be on the Digital roadmap. The customer will benefit of a strong S/4 HANA Finance backbone. Disadvantage of this approach will be that the customer will be confronted with several comprehensive releases, with consequential regression testing cycles as new functionalities are added to the S4 CORE Currently, we have clients, who have decided in favour of this scenario and are progressing with their implementation. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 18 SAP S/4HANA Enterprise Management 1511 White Paper Figure 10: Greenfield Implementation 3.2 Mature ECC 6 installation If a customer is using ECC EHP 5 and beyond, and has an advanced industry solution, it is not advisable to do a complete upgrade to S/4HANA. There would be too little new functionalities to justify TCO and licence costs. However, to move towards the digital transformation roadmap we could consider the following scenario’s.  Migrate the database to HANA as a first step. Consolidate several SAP instances to one signal instance to reduce TCO, reduce integration and get one view of their data. Start a Central Finance Sidecar implementation or plan the migration to S/4 HANA Finance based on benefits case  Finally plan the migration to S4 HANA Logistics with version 1610 or later. The disadvantage of the above is multiple migrations are required to get to S4 HANA Logistic. The advantage is less disruption to business and getting the core HANA DB speed benefit quickly with a simple Suite on HANA migration. ECC6 Enhancement Pack 0 to 7, Non-HANA DB — Migration to S/4HANA one-step approach Upgrade to EHP8 and perform the technical database migration to HANA. Assuming the downtime window is achievable for cutover, this can be combined with the enablement of the S/4HANA Finance solution within the same production cutover window. The “HANAtization” of custom code (code correction) will be performed with the overall code remediation related to the upgrade. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 19 SAP S/4HANA Enterprise Management 1511 White Paper Figure 11: Upgrade and Migrate 3.3 Current Suite on HANA There are multiple options: Option 1: Migrate to S/4 HANA Finance 1503 with latest SP04 or wait until 1605 is released. This is a stable platform and will enable a smooth migration to S/4 platform and get quick simplification benefits. Option 2: Migrate to S/4 HANA 1511 as start prototyping and testing and then upgrade to 1610 when appropriate. Option 3: For a complex heterogeneous landscape with older versions of SAP, a new, consolidated S/4HANA implementation may be more efficient than a migration. The SAP Activate Methodology and other accelerators can support this S/4HANA adoption scenario. Default position would be to start with S/4 HANA unless there is an industry or line of business solution limitation, in which case an interim starting point could be Business Suite on HANA. Figure 12: Migration for SoH IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 20 SAP S/4HANA Enterprise Management 1511 White Paper 3.4 Clients on ECC – and HANA Sidecar A quick win to get onto S/4 HANA without disruption is to implement a Central Finance Sidecar. Install a new S/4HANA Finance system, and use data replication to move finance data from other SAP (and non-SAP) systems to benefit from the S/4HANA Finance solution. Not all finance functionality will be available on the central finance systems, and there needs to be process and data harmonization across the source systems. This solution will provide business benefits at reduced risk. Figure 13: Central Finance Sidecar IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 21 SAP S/4HANA Enterprise Management 1511 White Paper 4 IBM Value Proposition 4.1 Why does SAP HANA Matter to IBM SAP HANA is important to IBM. HANA is one of the key growth engines for the GBS Enterprise Application Service Line, and we need to be able to position HANA with our customers. 1. Every one of our major SAP clients has a HANA strategy of some kind – There are opportunities out there 2. Most of our customers are confused about which road to take to reach end state of SAP HANA – We can help 3. Each one of our customers’ needs a compelling reason to act – We can help develop the roadmap, business case and strategy for HANA adoption 4. We should help our existing customers finding their way for the best fit HANA solution – this roadmap is a joint interaction between client – SAP and IBM 4.2 SAP and IBM strong relationship IBM is a strategic SAP Alliance Partner, working closely across a range of areas and industries for many years. We have been building our capabilities in HANA since its launch in 2011, and our experiences range from assessment through to implementation through to support of SAP and SAP HANA. IBM has just been awarded the 2015 Pinnacle Award for SAP HANA Adoption Partner of the Year. "It builds on our two companies’ long history of bringing innovation to business, and extends IBM’s position as the global cloud platform" “Our secure, open, hybrid enterprise cloud platform will enable SAP clients to support new ways to work in an era shaped by big data, mobile and social," Ginni Rometty IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 22 SAP S/4HANA Enterprise Management 1511 White Paper 5 New Functionalities 5.1 Introduction In this chapter we will go into the several modules of S/4HANA 1511 1. Supply Chain (integration touchpoints to EWM & TM included) 2. Manufacturing (PP/DS, IBP-S&OP included) 3. Sales (Integration touchpoints to C4C, CRM included) 4. Sourcing and Procurement (excludes Ariba and SRM) 5. Finance integration 6. Asset management 7. Marketing (excludes Hybrid) Service Management, R&D, Sustainability & Human Resources are not covered in this version. There are no innovation for these modules. Service Management functionaries remain unchanged and will not be enhanced. It is in maintenance mode and SAP recommends new implementations to use C4C, CRM or Hybris. HR refreshes will add a few new functions in the future but SAP is recommending customers to move to Success Factors. Please note that there are no major changes to Asset management or Marketing modules but we still included these as there are some process and Fiori app worth talking about. Finance is not covered as the S/4 Finance 1503 White Paper has been published last year. This document would be updated after 1605 is released. We will address per module: 1. What Sub-modules & processes are covered for this module 2. Specific Challenges per module 3. Improvements and step back’s per module 4. Deep-dive per Master data record Figure 14: The different modules of S/4 HANA Enterprise Management IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 23 SAP S/4HANA Enterprise Management 1511 White Paper Figure 15: Detailed Business Scope 1511 On-Premise edition 5.2 Simplify According the CSCO study (2015), companies want to make their supply chain more tightly integrated and visible. The study has raised the need for advanced analytics and modelling tools in order to have optimised flows, real-time data, and dynamic resource allocation to serve each customer effectively. The study also highlighted the need for collaboration between business partners with accurate information. The figure below displays the key supply chain focus and how SAP S/4HANA can contribute to satisfy our client’s needs. The SAP’s definition of “simplified data model” in SAP S/4HANA Logistics is to combine data structures in Finance, Logistics and Controlling into fewer tables and build a SINGLE valuation method using Material Ledger. Traditionally, there was some overlap between master data and transactional data in master data tables and material valuation was carried out at IM (Inventory Management) and ML (Material Ledger Level). The new data model results in reduction of memory footprint, reduction in table inserts and updates (reduction from 28 tables to 4 tables), a clear separation of master data and transactional data and the net result is a phenomenal increase in processing throughput. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 24 SAP S/4HANA Enterprise Management 1511 White Paper Figure 16: CSCO insights from the Global C-suite Study, 2015 With S/4HANA, the Integrated Business Planning (IBP) for response management will integrate with the S/4HANA system to provide flexible Back Order Processing (BOP) rules. It will also allow for allocation planning within the IBP for Response Management system and integration to the S/4HANA system for availability check against the planned allocations. With the introduction of analytics right within the SAP S/4 system, material shortages can be reported on a real-time basis with a single query access to data. The rules that define shortages can be flexibly determined to provide insights into material shortages; while supply and demand can be presented in a chronological order showing available stock per day. The business benefits are faster and precise ATP confirmations to the customers, decreased stock and increased service levels, faster reaction to events which can change the availability situation, faster ATP checks and rescheduling based on changed availability. The user interfaces are also more intuitive and provides for decision making and exception handling within the user interface. 5.3 Supply Chain Sub modules & processes considered for Supply Chain Inventory and Basic Warehouse Figure 17: Scope of Supply Chain Management Specific Challenges for Supply Chain In Today’s world, there are three key demands a company has to meet - Speed, individuality, and innovation. This has posed many challenges to the supply chain process:  Companies must produce products adapted to individual customers’ requirements and deliver them as quickly as possible. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 25 SAP S/4HANA Enterprise Management 1511 White Paper  Customers can switch much easier to competition – or to someone who was not in that market before.  Manufacturers have to know when the product will be ready to ship and be able to respond fast to changes.  With the rise of new technologies, expectations of customers have raised significantly and classical inventory planning cannot keep up with flexible accommodations, or custom configurations which customers expect these days.  The lack of real-time reports on inventory positions often leads to delivery delays and dissatisfied customers.  Companies are pressured to reduce their inventory levels and storage costs to absolute minimum, this requires a holistic real-time view on inventory. Making informed decisions based on demand  Companies often struggle to increase inventory turnover and thus reduce days in inventory as they do not have sufficient transparency on demand to establish shorter replenishment cycles.  Lack of transparency also prevents companies to reduce inventory carrying cost by minimising inventory required to achieve desired service levels. It also prevents customer service professionals from providing granular and accurate commitment dates to orders.  Companies find it difficult to integrating outbound operations, and aligning production with demand due to lack of real time data. There are revenue loss scenarios due to stock-outs. So in supply chain – our customers are looking for:  Analysis of selling patterns – trend-mining capabilities – Collectively demand planning capabilities  Real-time decision support, like examples include re-routing a shipment based upon new demand knowledge, re-directing a supply order based upon an anticipated weather event, or sensing a critical part failure and changing a bill of materials or assembly point.  Intelligent storage locations and Shelfs  Inventory and manufacturing decisions – without human intervention Improvements and step back’s for Supply Chain Inventory Management powered by SAP S/4HANA enables organisations to harmonise warehouse inventories, demand and supply planning, as well as using all data and analyses on a companywide fundament. With real-time processing of inventory postings and inventory values rather than overnight jobs, warehouse space can be reduced to a minimum and lead to higher accuracy of inventory, increase turnover and reduced days of items in stock. Additionally, inventory management is in a position to take all production locations and external supply chains into account and can manage the changing demand for smaller lot sizes passing through entire logistic operations with all involved parties. It’s indisputable that a safety buffer in the warehouses is unavoidable. However, simulations and evaluations help managing capacities and quantities in a much more needs-based way than before. Real-time inventory information, including early error detection creates precise where-used information per unit. The ability to change a lot size to “ONE”, thus capturing the lowest level of granularity in inventory stock keeping is the result. A supplier in the healthcare industry achieved more than 1,400% faster operational reporting in inventory management with S/4HANA. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 26 SAP S/4HANA Enterprise Management 1511 White Paper However, Printing & Archiving of Material Documents is not possible now. It is planned to be realised for the next Service Pack. Material Valuation Activation of Material Ledger is mandatory with S/4HANA. This enables improved and more flexible valuation methods in multiple currencies and parallel accounting standards. It improves scalability of the business processes. In addition, Material Ledger is also a pre-requisite for the use of Actual Costing. With S/4HANA, there is a simplification of data model structure for inventory valuation. Data will now be stored mainly in universal journal table ACDOCA. The key innovation is the interface between finance and material. This integration is the key differentiator between S/4HANA and traditional ERP. All the innovations – like MRP Cockpit, Sales Order Fulfilment Cockpit, are based on good material valuation. Another innovation in this area is the significant increase of transactional data throughput for high volume transactions, especially goods movements. In classic SAP Business Suite the system calculates for materials with price control "Standard", also a moving average valuation in parallel, called "statistical" moving average price. This statistical valuation requires exclusive locking and exclusive locking is limiting the transactional data throughput. In S/4HANA, this parallel statistical moving average valuation is not available. Warehouse management: Standard WM functionality is available with S/4 HANA but it is not in target architecture. No new process improvements for Goods Receipt, Goods Issue or Shipment. Extended Warehouse Management (EWM): Existing warehousing (WM) functionality will be replaced by EWM. Migration for existing EWM (running separately) customers to natively integrated S/4HANA also needs to be evaluated. QIE within EWM also will be made obsolete. It is not clear how quality functions of existing EWM will work within S/4HANA. Transportation Management: Existing Logistics execution transportation (LE-TRA) is available with S/4HANA but it is not in target architecture and may be replaced by TM (Transportation management). TM has several advanced functionality on transportation planning, optimisation, freight charge / settlement, carrier selection & procurement, but has huge master data requirement. It is not clear what functionalities will be included within S/4HANA and to what extend it will be simplified. Figure 18: Further optimisations Supply Chain IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 27 SAP S/4HANA Enterprise Management 1511 White Paper Standard WM (Warehouse Management) functionality is available with S/4 HAHA but it is not in target architecture. The existing WM functionality will be replaced by EWM (Extended warehouse management). Migration for existing EWM (running separately) customers to natively integrated S/4HANA also needs to be evaluated. QIE within EWM also will be made obsolete. It is not clear how quality functions of existing EWM will work within S/4HANA. Existing Logistics execution transportation (LE-TRA) is available with S/4 HANA but it is not in target architecture and may be replaced by TM (Transportation Management). TM has several advanced functionality on transportation planning, optimisation, freight charge / settlement, carrier selection & procurement, but has huge master data requirement. It is not clear what functionalities will be included within S/4HANA and to what extend it will be simplified. Overall Key SAP S/4HANA Supply Chain benefits: 1. Increased visibility with real-time stock and material flow insight with the real-time processing of inventory postings and inventory values rather than overnight jobs. 2. Improved operational decisions with easier simulation of supply alternatives using various Fiori apps 3. Improved ATP and back order processing functionality due to real-time postings and clear picture on stock figures. 4. Improved on-time delivery percentage due precise stock situation. 5. Better tracking of overall material flows due to simplified data model 6. Real-time analytics and KPI as well as freight planning, truck visibility with Fiori apps and reporting. 7. Automate warehouse operations with RFID and sensors with IoT framework for integration. This framework is enabled in S/4HANA and more on this feature will come with future releases. 8. Features of automated picking, shipping, labelling and automated retrieval and put-away are enabled. 9. Mobile inventory management and warehouse applications via various SAP Fiori apps. 10. Improved inventory management and transparency via real-time processing of inventory postings with finest granularity and introduction of new stock overview transactions. 11. Simplified material valuation to enable parallel inventory posting for standard price-driven materials. 12. New role based SAP Fiori apps for inventory managers, warehouse clerks, and inventory analysts for real-time inventory information and situation simulation. 13. Performance optimisation for goods movements with simplified data model and simplified material valuation. 14. Early error detection mechanism with various reports and situation simulation using Fiori Apps. Though of the above mentioned improvements – we are still missing improvements in S/4HANA for:  Analysis of selling patterns – trend-mining capabilities – Collectively demand planning capabilities  Real-time decision support, like examples include re-routing a shipment based upon new demand knowledge, re-directing a supply order based upon an anticipated weather event, or sensing a critical part failure and changing a bill of materials or assembly point.  Intelligent storage locations and Shelfs IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 28 SAP S/4HANA Enterprise Management 1511 White Paper  Inventory and manufacturing decisions – without human intervention Unclear roadmap for EWM and TM Deep dive for MD elements for Supply chain Simplified MM-IM Data Model Up to SAP ERP 6.0 data model for stock inventory management consists of two document tables MKPF (document header) and MSEG (document item). Additionally, there were several aggregated actual stock quantity tables as well as tables like MARC, MARD, etc. where actual stock quantities along with material master attributes were stored. This data model has been changed completely. In S/4HANA, material document data will not be stored in MKPF and MSEG anymore. Instead it will be stored in a new de-normalised table MATDOC. It will contain the header and item data of a material document as well as a lot of further attributes. Additionally, the aggregated actual stock quantities will not be persisted anymore in the aggregation tables as well as in the material master attributes table. Figure 19: MD model for Supply Chain Couple of reasons for the new Inventory Data Model – first, the content of the aggregate tables could not be calculated directly from the inventory data in MKPF and MSEG alone. Further all configuration tables (IMG tables) were required to be mapped as they classify the stock type and all other data for example. Second, more tables used to get locked during the process - one set of locks were for quantity posting and another set of locks were for value. With the new SAP S/4HANA data model, the above issues are very well addressed. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 29 SAP S/4HANA Enterprise Management 1511 White Paper Figure 20: Tables for Supply Chain Benefits: 1. As fewer tables get touched, fewer tables get locked, a much higher throughput can be achieved. 2. Better and faster reporting as most information are in one place (MATDOC table). 3. More flexibility on reporting as actual stock quantity data will be calculated on-the-fly. 4. Basic Inventory and Warehouse Management Improvement Simplified Inventory Valuation data model Before S/4HANA, the inventory valuation tables contain transactional as well as master data attributes. With S/4HANA, the inventory valuation tables do still exist as DDIC definition as well as database object. However, they will only be used to store material master data attributes. The transactional fields will be retrieved from the Material Ledger. Hence, those fields are not updated anymore in the original tables. As a consequence, the above mentioned tables need to be updated less often, which leads to a higher throughput due to less database locks. S/4HANA features principle of One, scalable material valuation capabilities, utilising Material Ledger, that way customers can use multi - currencies, valuation methods per different accounting laws like GAAP. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 30 SAP S/4HANA Enterprise Management 1511 White Paper 5.4 Manufacturing Sub modules & processes considered for Manufacturing Figure 21: Scope of Manufacturing Specific Challenges for Manufacturing 1. A material planner is responsible for hundreds of materials and, challenged by dozens of exceptions in a day. Time consuming planning and evaluation processes where critical situations often cannot be detected easily. So the planners cannot optimally plan production schedules and sequences over longer time horizons. Manual intensive analysis of the stock requirements list along with additional information from multiple sources is required to answer these questions and finally resolve those issues. 2. Inability to gather accurate, complete manufacturing related data, does not allow to effectively minimise productions risks across the networks. 3. Production Planning and Scheduling Decision are based on incomplete, inaccurate and often outdated information. It is not possible to optimally reduce the cost of manufacturing operations and increase profitability. 4. In the traditional ERP system production planning and detailed scheduling are carried out in separate systems (ERP & APO) with different master data in these two systems. Both the systems have different material requirement planning process and tools too which results in data integration latency and errors. 5. Time consuming planning and evaluation processes due to the higher complexity of the process wherein critical situations are not covered. 6. Higher data volumes require more time to plan and evaluate. Due to the Long execution time – runs once a week, every couple of days, or nightly. 7. Analysis and reporting based on old data and the consequence is the result is inaccurate. For example planners are working on old MRP list results in inaccurate planning and consequently increase in inventory level. 8. Most important part is Capacity planning and levelling of resources. Based on old data planner is not able to plan and level capacity of Resources/ machines. 9. Manufacturing Engineering and Orchestration - With the traditional system there is disconnect between engineering and production product design and the bill of material. Even there is a lack of 3D visualisation in manufacturing and quality planning. Order scheduling and dispatching at the plant is also limited in such a system. This leads to lack of real-time visibility of the production process, status of production and hence adversely impacts the performance of the enterprise systems. 10. Batch processes prevented relevant decision making based on real-time, latest information. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 31 SAP S/4HANA Enterprise Management 1511 White Paper 11. Many applications & disparate software for different processes creating different versions of truth, duplicated and scattered information. Therefore, in Manufacturing – our customers are looking for:  Support for decision taking for sourcing opportunities and decentralisation vs. centralisation of production to improve flexibility, reduce lead times, and improve responsiveness Ability to gather accurate, complete manufacturing related data, which allows to effectively minimise productions risks across the networks.  Smarter systems to make some proposals for decisions automatically – increasing responsiveness and limiting the need for human intervention.  The technology which could bring together transactions and Analytics into one platform. Planning based on real-time reporting and analysis to get optimised and accurate results  System support to deal with tighter collaboration with business partners, to reduce time to market and increase flexibility in the context of volatile demands.  Technology support for 3D printing to allow parts to be produced anywhere.  Robotics to help to reduce or eliminate defects, optimise productivity and localise supply chains in a cost-effective manner Improvements and step back’s for Manufacturing SAP came up with the Innovations in Production Planning with the latest version of 1610 on- premise edition in SAP S/4 HANA in Oct 2016. With the release of 1610, SAP is taking these enhancements and innovations to another level. The major innovation is around material requirements planning (MRP), the process by which a manufacturing company analyses its sales orders, demand forecasts and inventory to determine which materials and components it needs to purchase, produce in house or transfer from a neighbouring plant to deliver on its order commitments. Improvements 1. Material requirements planning (MRP) in S/4HANA is in minutes across large data sets to keep materials plans in sync with changes in supply and demand. With the MRP live functionality in Fiori App, now the material planner does not have to enter into complex manual calculation using the cumbersome MRP lists to prioritise and finally resolve those issues. Solution recommendation and preview capabilities facilitates improved decision making based on improved identification and prioritisation of material shortages issues and their resolution. However, while working with MRP Live in SAP GUI we do not find this feature. It is just a straight forward transaction run of MD01N. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 32 SAP S/4HANA Enterprise Management 1511 White Paper Figure 22: MRP Live Transaction MD01N MRP Live has been delivered and allows a full “in memory” planning run, vastly reducing previous planning run time lines, allowing real-time planning. MRP run optimised for SAP HANA, reads material receipts and requirements, calculates shortages, and creates planned orders and purchase requisitions all in one database procedure. It minimises the volume of data that has to be copied from the database server to the application server and back, which considerably improves performance. Impact on business process - MRP Live does not write MRP lists with the exception of termination MRP lists for materials with inconsistent data. The termination of MRP Live run may be due to any reason (say planning date is beyond factory calendar) and in this case system will generate MRP List.  MRP app determines the materials with issues real-time. In S/4HANA there is no need for outdated MRP lists.  Multi-level, make-to-order planning (MD50) and individual project planning (MD51) is not optimised for S/4HANA. These elements can be planned in MRP Live without separate planning run using separate transactions. Advantages Now we can always evaluate the current requirements and the supply situation, based on the current receipts, current documents and current stock so that the customer and the users always get the right. Information. With the MRP‐Cockpit, combine with the decision support capabilities, the MRP Controller can make his work more efficient, execute more efficient, get the decisions and proposals, make the right decisions based on actual information. At the end the MRP Controller are able to use the MRP‐Cockpit as the main entry point for the complete daily work they are doing. The MRP Controller can evaluate the single shortages, the further week supply and the changes in the supply chain. If a material is transferred from one plant to another then the stock-transfer requirement is not known in the supplying plant until after the material has been planned in the receiving plant. MRP Live determines the sequence in which the materials have to be planned across several plants. MRP Live is the pre-requisite for the future production planning and detailed scheduling PP/DS solution in SAP S/4HANA. Performance is optimised through code push down in MRP, refer the below diagram for technical details: IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 33 SAP S/4HANA Enterprise Management 1511 White Paper Figure 23: Performance Improvement through code push down in MRP 2. Fast backflushing to maintain accurate inventories and enable fast and accurate production release and order promising. This enables streamlined supply chain planning and execution. 3. Sales and Operations Planning: The current ECC functionality of S&OP feature in APO environment is going to be replaced with integrated business planning (IBP) in a long run. Since IBP (S&OP on HANA) is more advanced than S&OP functionality of ECC along with advanced statistical forecasting techniques, multi-level demand and supply planning, collaboration tools and the most user-friendly excel based UI and web-based UI, what-if scenarios which will definitely going to bring much value than ECC-SOP for new customers and for the existing customer who are planning to implement IBP S&OP. Also since SAP has been investing more effort in enhancing IBP functionality than APO, it is a right thing to invest in IBP rather than go with conventional S&OP approach. Of course, there is an additional cost associated to license and implement IBP functionality but it is worth enough to invest. Point to be noted is that currently IBP is only available on SAP cloud and can be interfaced with on-premise S/4 installation. 4. Manufacturing and production companies continue to invest in a diverse and disparate set of shopfloor systems across multiple plants that are disconnected from enterprise planning and business systems. SAP S/4HANA will continue to enable integrated enterprise planning and shopfloor execution systems for real-time coordination of planning and execution and also provide the ability to quickly react to demand changes, predict operational issues, and improve operational performance. Industry relevance: Cross industry <Insert Title> 1. Reporting & Analysis The changed data model and embedded analytics allows on the fly analysis with real-time data. Case centric views can be used for comprehensive analysis. User case – MRP App: Monitor Material Shortage MRP App enables the immediate detection of material shortages based on real-time data which facilitates analysis based on the single source of truth. In the MRP App screen for Monitor Material Shortages, the system provides a quick overview of the supply and demand situation of a material and the current shortages. It also detects the material shortages and safety stock violations based on pre-defined thresholds. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 34 SAP S/4HANA Enterprise Management 1511 White Paper 2. Solution Proposals System supports by offering a complete set of solution option to solve the issues. User case – MRP App: Monitor Material Shortage The MRP App supports the MRP controller by offering a complete set of solution option to solve the user case of material shortage. It shows all supplies and demands in chronological order and determines available stock for each day. The system provides pre-evaluated solution proposals for fixing the material shortage issues (use case considered). Enables simulation of every proposal before applying it as well as allows manual adjustments of proposed solution. 3. Elimination of data redundancies and reduced data footprint by Table reduction – all aggregates & history tables dropped so removing Locking of records which directly removes the long waiting times for the users. Future Roadmap Figure 24: SAP Roadmap for Production Planning & Production Execution Step back’s  No clear guidance on how SAP Activate Methodology using the Guided configuration (and standard system configuration will interact).  Legacy SAP items remain within the backend configuration. With SAP’s focus on the Fiori UI and removal of non-simplified processes it would be easy to confuse why these items are still available and their effects on the system  In IMG there are multiple nodes with same module names.  Fiori applications are not designed for data maintenance. Not designed to update large data sets  Action flow using the Fiori is not always apparent to the user  Debugging of transactions is very difficult since UI is Java based and role based system is in between GUI.  Chrome does not display all the tiles due to cache and history. Needs refreshing quite often. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 35 SAP S/4HANA Enterprise Management 1511 White Paper  Fiori transactions cannot do prediction of the fields based on the history. We are still missing improvements in S/4HANA for:  MRP Live on HANA still does not have all the features that Classic MRP have. SAP Note 1914010 gives detail information on that.  Support for decision taking for sourcing opportunities and decentralisation vs. centralisation of production to improve flexibility, reduce lead times, and improve responsiveness  Smarter systems to make some decisions automatically – increasing responsiveness and limiting the need for human intervention.  System support to deal with tighter collaboration with business partners, to reduce time to market and increase flexibility in the context of volatile demands.  Technology support for 3D printing to allow parts to be produced anywhere.  Robotics to help to reduce or eliminate defects, optimise productivity and localise supply chains in a cost-effective manner Deep dive for MD elements for Manufacturing 1. Material Number field length extension - In SAP S/4HANA on premise edition 1511, the maximum field length of the material number is extended from 18 to 40. 2. MRP fields in Material Master – The following fields in material master are not used in S/4HANA, on premise edition 1511 MRP1 view  Lot size data – Unit of Measure group (considered only in retail) MRP2 view  Procurement data - Quota arr. usage MRP4 view  BOM explosion/dependent Requirement – Selection Method  Repetitive manufacturing/ assembly/ deployment strategy  Storage location MRP The back-end database fields for these "omitted functionality" remains existing in the system. 3. BOM, Routing, Production Version - With SAP S/4HANA, on-premise edition 1511, the functional relation between Bill of Material (BOM), Routing and Production Version has changed.  The Customising for date validity is no longer considered for BOM explosion.  Only BOMs with valid production version are considered during BOM explosion.  It is now mandatory for Manufacturing BOMs to maintain the product version for correct BOM explosion.  The customisation that determines the items valid for BOM explosion now has the default value ‘2’ (Version with latest valid-from date). This customisation is available in Define Modification Parameters under Production -> Basic Data -> Bill of Material -> Control Data for Bills of Material. 4. PP MRP – Subcontracting - SAP ERP had three different ways of planning parts to be provided to a subcontractor: IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 36 SAP S/4HANA Enterprise Management 1511 White Paper  Planning subcontracting demand together with internal demand in the make-to-stock planning section (3.0-logic)  Separating subcontracting demand and stock into single subcontracting planning sections (one section per subcontractor) and planning uncovered subcontracting demand together with internal demand in the make-to-stock planning section (4.0-logic)  Planning separately the demand of every subcontractor by means of subcontracting MRP areas (available from SAP ERP release 4.5) In SAP S/4HANA on premise edition 1511, the 4.0 logic was removed while the 4.5 logic was simplified.  The SAP S/4HANA MRP uses default planning parameters if MRP-area-specific material master records do not exist.  Creates an MRP area for every subcontractor.  It is still possible to create MRP area/supplier-specific material master data if required. 5. Storage location MRP - S/4HANA MRP only plans on plant and MRP area level. Planning on storage location level is not available in SAP S/4HANA, on-premise edition 1511. MRP areas cover the very same business requirements. Materials with MRP-area-specific MRP type 'ND' (no MRP) can be used instead of materials with a storage location excluded from MRP. Materials with MRP-area specific MRP type 'VB' (reorder point planning) can be used instead of materials with separately planned storage locations. The storage location time inventory or an expected receipt was changed in a single separately planned storage location functionality is a subset of the MRP areas capabilities. The reasons for this change are:  The MRP logic is simplified. There is only one solution for planning on storage location level  The MRP area logic is more advanced than the logic for planning on storage location level. All MRP types and lot-sizing procedures are possible on MRP area level The system creates planning file entries on plant and MRP area level. If planning is required on MRP area level, then the system only plans the affected MRP area. The system does not create planning file entries on storage location level and it did not do so in SAP ERP. The SAP ERP MRP had to plan all separately planned storage locations and the plant level every time inventory or an expected receipt was changed in a single separately planned storage location. Planning on MRP area level is more efficient. Miscellaneous changes Logistics Batch Management - The following transactions related to Logistics Batch Management are not available in SAP S/4HANA, on-premise edition 1511: MSC1, MSC2, MSC3 and MSC4. The functional equivalents in SAP S/4HANA, on-premise edition 1511 are the following transactions:  MSC1N Create Batch  MSC2N Change Batch  MSC3N Display Batch  MSC4N Display Change Documents for Batch Classification - With SAP S/4HANA, on-premise edition 1511 transactions of the Classification is renovated so that transactions may have changed functionality or may be completely removed within SAP Product Lifecycle Management (SAP PLM). IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 37 SAP S/4HANA Enterprise Management 1511 White Paper  User Defined Data Type (031) for characteristics has been removed.  Rename Characteristic functionality has been disabled.  Parameter Effectivity has been hidden.  Due to security reasons batch import has been limited and batch import is possible only from presentation server. New Material Type SERV - Material type "SERV" for services is introduced for Product Master in SAP S/4HANA, on premise edition 1511.  Supported user departments are:  Accounting  Purchasing  Basic Data  Sales Availability of Transactions in MM-IM - The following "MB transactions" are not available with SAP S/4HANA. In SAP S/4HANA only the single-screen generalized transaction MIGO is available: MB01, MB02, MB03, MB04, MB05, MB0A, MB11, MB1A, MB1B, MB1C, MB31, MBNL, MBRL, MBSF, MBSL, MBST and MBSU The transactions MMBE_OLD (Stock overview), MMBE (Stock overview), MB51 (Material Document List), MB52 (Display Warehouse Stocks of Material) and MB5B (Stock at posting date) are still available for some time. Business Partner Approach - Business Partner is now capable of centrally managing master data for business partners, customers, and vendors. With current development, BP is the single point of entry to create, edit, and display master data for business partners, customers, and vendors. Transaction like XD01, XD02, XD03 or VD01, VD02, VD03 / XK01, XK02, XK03 or MK01, MK02, MK03 etc. are not available in SAP S/4HANA, on premise edition 1511. 5.5 Sales Sub modules & processes considered for Sales Figure 25: Scope of Sales Specific Challenges for Sales The role for sales has become more and more challenging. Customers are expecting services and delivery times that are tailored to their particular preferences. They want to receive the most-up-to date information related to their orders at any point in time. Expecting sales representatives to share information with them, listen to their feedback and involve them in the order fulfilment process. Today’s key challenges for Sales: 1. Real-time data IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 38 SAP S/4HANA Enterprise Management 1511 White Paper Insufficient real-time data, causing inaccurate and insufficient details for order exceptions, service level and KPI monitoring and real-time corrections. Real-time data is a need to support managers to make more efficient order fulfilment decisions. 2. Advanced analytics Lack of advanced analytics to create a holistic view of the supply chain processes, integrating customer-related data – marketing analytics, customer feedback, social network and so forth – into their supply chain processes to use for decision-making, predict customer demand, optimise sales processes and provide better services to the customers. 3. Integration As customers are becoming more demanding and information about them becomes more digitised. Sales need to integrate more and more with departments like Marketing and Supply Chain Planning. Better integration of the various components of the supply chain to be able to identify risks and issues more quickly (e.g. stock shortages). Become more involved in the companies’ ecommerce operations to better manage customer experiences and quickly identify business opportunities. 4. Collaboration with customers Customers have a huge influence on a company’s product and service portfolios. Therefore, enterprises need to collaborate with their customers to improve and personalise the customer experience and to drive growth. Share information (e.g. through social networks) and look at the digital and physical path they take and use data and their feedback to predict new trends. SAP S/4HANA can resolve some of today’s key challenges for companies. It provides the capabilities to an internal sales representative to get a comprehensive overview of the current order fulfilment situation, using real-time data and analytics for troubleshooting and decision- making purpose. The sales representative will now have the ability to monitor, manage and collaborate on sales orders due for shipping and invoicing and gain full insight to the order fulfilment process, depending on the individual user needs. Seamless integration of capacity planning & enhanced ATP organisation, allowing sales representatives to commit availability dates to customers with a high degree of confidence. S/4HANA is the digital core and enables the company to use Internet of Things, Social networks and Business networks to drive digitized End-to-End processes, share information and collaborate with their customers and stakeholders. Improvements and step backs for Sales With the delivery of release 1511of S/4HANA Enterprise management the following list with simplifications/ modifications have been implemented: Key improvements include: 1. Sales order fulfilment ‘cockpit’ facilitated through FIORI front end user-interface: SAP S/4HANA enables monitoring of end-to-end order-to-cash process & take actions for any exceptions, information on the exceptions to resolve the issues. The sales representative can now filter sales orders with issues and take insight into process execution. He can visualise issues over the entire end-to-end sales process in a single dashboard. These include all blocks (shipping, billing, credit blocks, etc.), incompleteness of documents, any supply chain related issues (integrated with procurement and manufacturing) as well as issues relating to invoice postings to Finance. BENEFITS:  Gain full insight into the order fulfilment process customised to individual user needs powered by SAP Fiori. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 39 SAP S/4HANA Enterprise Management 1511 White Paper  Quick access to all related documents and forms to streamline customer interaction and flow.  Run actions directly in the system and track progress by prioritising list of sales orders by process stage and sorted by due dates.  Sales order cockpit enabling bottlenecks and issues to be identified quickly with solution proposals.  Sales representative Roles (NWBC) replaced with Fiori roles Internal Sales Representative, Billing Clerk.  SAP FIORI FRONTEND:  Personalised user experience, as per user’s needs, powered by SAP Fiori as frontend with instant insight onto any device.  Consolidation of activities, intelligent navigation patterns, intuitive usability.  Previously VA01 (Sales Order Creation) required 7 screens and now this is simplified and reduced to just 1 screen. The UI has been redesigned completely to enable the simplification.  Real-time available to promise (ATP) brings in data from demand and supply together to run a mathematical algorithm to optimise the availability to promise of a given material for given sales order. Data from both Supply and Demand have to feed to a complex algorithm. Previously this was done in a batch and it took several hours to run ATP, not this can happen on the fly in real time! 2. Analytics for sales planning and performance management: Operational Data provisioning in SD is not available in S/4HANA, the successor is HANA Analytics. Instead of prebuilt aggregates and/or redundant data for analytical purposes, the SAP S/4HANA Analytics approach is based on ODATA and Open CDS (aka ABAP- managed CDS = Core Data Services) directly on top of the original database. Corresponding analytics content will be provided within SAP S/4HANA. The SD specific business objects Sales Order, Customer Invoice, Outbound Delivery and many others on top of the database tables VBAK, LIKP and VBRK are represented by CDS views that encompass the access of the analytics CDS queries to the database in a uniform manner. This is achieved by offering semantical field names and associations to connected business objects such as Customer, Material, etc. The complete analytics content will be built on top of these core entities. To make effective use of the SAP S/4HANA capabilities for SD Analytics, there are new persistent fields in the database (which, in the past, were only calculated on the fly): a. Sales Order Open Delivery Quantity and Amount (on schedule line level - VBEP) b. Sales Order Requested Quantity in Base Unit (on item level - VBAP) Data Source adjustments might be required to comply with changed Scope and data structures within SAP S/4HANA. This needs to be verified on customer-specific basis. The new SAP S/4HANA Analytics concept as the target architecture technology is based on ODATA and open CDS and is introduced in addition to the existing analytics functionalities in SAP Business Suite. Basically Custom Code (ABAP based reports to analyse data) can be used after the upgrade to SAP S/4HANA OP but need to be verified if the code complies with the SAP S/4HANA scope and data structure. BENEFITS: IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 40 SAP S/4HANA Enterprise Management 1511 White Paper  Gather Real-time insight on the fly with pre-built analytical views for sales process performance analysis, 30 SAP Smart Business KPI apps  Real-time analytics and KPI: allows comparison between sales organisation and ability to communicate issues with the stakeholders, provides current view of the sales order performance and quality.  Seamless Integration of capacity planning & enhanced ATP organisation can make more informed decision without “lag” or data loss and commit availability dates to the customers with a high degree of confidence.  Focus on the most critical issues sliced and diced by sales organisation, customer segment, process stages etc.  Ability to leverage advanced analytics to manage accounts, opportunities and other activities to gain customer insights.  Combine analytical insights with operational actions with personalised set of KPI's.  Get real-time visualisation of KPI's thresholds and exception alerts based on specific triggers in the shipping and accounting process.  Combines analytical insights with navigation to operational applications 3. Rebate Processing SD Rebate processing will be replaced by Settlement Management. However, there is one exception, CRM TPM customers can still use SD Rebate Processing for their business process, but have to adapt to a SAP S/4HANA optimised solution (e.g. simplification item optimisation of SD Rebate Processing for TPM Customers). This means that existing rebate agreements can only be processed up until the end of the validity date of the agreement and must then be closed a final settlement. New agreements can only be based on condition contracts. Therefore, the corresponding transaction codes VBO1 resp. VBD for the creation of rebate agreements is not available anymore. Customers, who will integrate their existing CRM TPM scenario with S/4HANA, still have to use, SD Rebate Processing, even though a successor is already being provided by Settlement Management. For those customers, the existing SD Rebate functionality is optimised with regard to the database footprint. For this purpose, from a technical standpoint, the rebate index table VBOX is not available. TPM Customers are not able to create new rebate agreements in S/4HANA or extend existing ones. However, for the TPM process, this is not necessary at all, since for this business process rebate agreements are created by CRM TPM. If the customer is using extended SD Rebate processing, a rebuild of the S/469 content is required after the upgrade. The customer has to maintain new customising settings. 4. Output Management There is a new and modern output management with SAP S/4HANA. The new output management by design includes cloud qualities like, extensibility enablement, multi-tenancy enablement and modification free configuration. Therefore, the complete configuration differs from configuration that is used when output management is based on NAST. The configuration is based on BRF+, which is accessible for customers on premise. The target architecture is based on Adobe Document Server and Adobe form. BRF+ functionality (in combination with message determination) for forms determination supports the following print channels: Email, Printout, XML Supported print technology are Smart Forms, Adobe Forms, Adobe forms using fragments. Standard SAP script repository is used for especially footer and logos and can be accessed centrally. Billing documents migrated using old technology can be processed with this technology. For new billing documents only new technology is used, therefore need to adapt configuration according to new technology. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 41 SAP S/4HANA Enterprise Management 1511 White Paper As the new output management is an additional tool there should be no direct influence on custom code expected. Step back’s include: The following list of objects / functionalities in the traditional ERP system are not available (yet) in S/4HANA: 1. Advanced order processing and billing for contractors to the public sector: Functionality is not available in the current release of S/4HANA and is also not on the roadmap. Customers using this object that are planning to move to S/4HANA have to re- model their business accordingly. 2. Business role “Internal Sales Representative” is not available in S/4HANA. This also includes the Personal Object Work Lists. Instead a set of new FIORI roles, e.g. SAP_BR_INTERNAL_SALES_REP are offered as successor. In the current release, those roles offer a basic set of transactions that are typically needed for the day-to-day work of a sales representative. During the next releases those roles will be further enhanced with custom-made apps based on FIORI. 3. Commodity Management Sales: Commodity Sales is technically switched off in SAP S/4HANA, a successor is planned for a future release of S/4HANA. The De-activated main building blocks are:  Commodity Pricing through commodity pricing engine (CPE & CPF)  Basis Handling  Integration of commodity features into Sales Documents.  Differential & Final Billing in Sales  Integration of Sales into Commodity Risk Management.  Day End / Month End Processing  Commodity Analytics (position Reporting & Mark to Market) 4. Sales activities Sales Support is no longer available in SAP S/4HANA. The creation of new business documents or editing of migrated business documents is not possible. It is recommended to use SAP CRM on-premise (side- by-side with SAP S/4HANA) or SAP Cloud for Customer. 5. Industry specific complaint handling: The industry specific SD complaints handling in ERP is not available within SAP S/4HANA. The functional equivalent to be used is the standard SD complaints handling. Customers with a business function activated for industry specific SD complaints handling in SAP ECC can convert and activate the business function to SAP S/4HANA. However, independently from the activation status of the business function, the functionality will not be available in S/4HANA. Customers that do not have this business function activated in SAP Business Suite are not able to activate the business function after conversion to SAP S/4HANA. This business function is defined as “obsolete” in SAP S/4HANA. 6. SD Revenue recognition The "ERP SD Revenue recognition" is not available within S/4HANA and is replaced by "SAP Revenue. The new functionality supports the new revenue accounting standard as lined out in IFRS15 and adapted by local GAAP's. The migration to the new solution is required to comply with IFRS15 even if no upgrade to S/4HANA is done. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 42 SAP S/4HANA Enterprise Management 1511 White Paper Please note that the Release 1.1 of "SAP Revenue Accounting and Reporting" does not include the full functional capabilities of SD-Revenue Recognition. Examples of not available functionalities in SAP S/4HANA are:  Revenue Recognition Type D (billing based): Invoice cap and exchange rate per invoice are not available.  Call off Orders: while SD contracts are supported call-off orders are not available.  Customers that are using "SD-Revenue Recognition" would need to evaluate if a migration to "SAP Revenue Accounting and Reporting" is possible before conversion to S/4HANA. Prior to conversion to S/4HANA, there is need to migrate all sales orders and contracts processed by "SD-Revenue Recognition "to "SAP Revenue Accounting and Reporting", that are:  Not fully delivered and invoiced.  Have deferred revenue still to be realised.  For which you expect follow-on activities like increase quantity, create credit memo or cancel invoice. Deep dive for MD elements for Sales 1. Simplified Data model As part of release 1511, the following data model changes have been implemented:  Various existing status tables have been eliminated and all fields under these tables moved to the corresponding header and item tables for sales documents, deliveries and billing documents. Each append field in the status tables, that are to be used in S/4HANA, must be added to the relevant header / item tables with the same name and data type, as it does in the source table, and appended to the table-specific status include structure. Only then, the fields will be considered for automatic data conversion to the relevant document header / item tables and read by function modules that can be used to replace any “direct SELECT” code to the depreciated status tables.  Simplification of Document flow table.  Elimination of redundant document and rebate index tables.  Table VBBS (Sales Requirement Totals Record) is obsolete for S/4HANA. The requested (OMENG) and confirmed (VMENG) quantities used to be aggregated on a daily basis. With the new HANA ATP we do not need pre-aggregation anymore and therefore this table is obsolete.  Table VBBE (Sales Requirements: Individual Records) is used for S/4HANA.  Document category fields: Field length extension of SD document category (Data element VBTYP (Char1) has been replaced by data element VBTYPL (Char4)) and elimination of field VBTYP_EXT (Char4).  Data model changes in pricing:  Existing database table KONV is replaced by the new table PRCD_ELEMENTS. However, KONV is and can still be used for data declaration purposes. It still defines the structure of the pricing result within the application coding. The content of KONV is transferred to PRCD_ELEMENTS when moving to SAP S/4HANA.  Within condition technique, various changes to DDIC and interface changes:  Field VAKEY will be removed from all condition header tables (KONH, NACH, KOND3, KONDN, KONHM, J_3GPRLHD, WIND) IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 43 SAP S/4HANA Enterprise Management 1511 White Paper  Concatenated variable data field VADAT removed to avoid data migration of these tables as a result of the material number extension.  Increase of length for various fields.  For compatibility reasons, the field VAKEY_LONG (CHAR255) was added to the batch input structures.  Additional fields added to IDOC COND_A for price condition records  Several data elements have been extended especially with new data elements.  Increase of possible accesses from 99 to 999 KEY BENEFITS OF DATA MODEL CHANGES:  Lowers TCO due to data model simplification.  Reduced memory footprint (e.g. simplified document flow, elimination of index tables, fewer aggregates)  Increased performance of HANA queries and code push down (one select statement instead of two select statements, easier join for header / items including status and business data)  Increased robustness of rebate processing (no redundancies due to aggregates)  Faster business outcomes with reduced operational cost  Increased competitiveness with integrated, fast, and flexible business processes  Higher employee productivity with focus on value-added tasks 2. Business Partner With S/4HANA, there is a single transaction, centrally managed and mandatory master data approach for all business partners, vendors and customer master, using SAP business partner. The customer / vendor master object in the traditional ERP system will be redundant and there is no need for a specific user interface for customers and vendors anymore like known from SAP Business Suite. Only SAP Business Suite customers with customer/vendor integration in place can be moved to S/4HANA, on premise 1511. It is recommended, but not mandatory that business partner ID for both customer ID and vendor ID are the same. In traditional ERP systems, you could classify customers using transactions for customer master data maintenance (using the menu Extras > Classification). These transactions are not available in SAP S/4HANA even under the BP transaction. Other transactions, that are not available within release 1511, but are on the roadmap for future S/4HANA releases are: the mass maintenance transactions for customers and vendors and the business partner related IDOC message type for customer and vendor master data) DEBMAS and CREMAS. The IDOC for business partner will be available. Before data migration to S/4HANA can be carried out, there is a need for synchronisation of the customer/vendor master data to business partner in ECC. Data will need to be prepared and cleansed and business functions activation and configuration (BP and CVI configuration) will need to take place, before synchronisation can start. All fields in the customer master will need to be assessed and checked if there is a corresponding field in the BP master. Currently in SAP ECC the customer hierarchy functionality is built based on the customer master records. Further input is needed from SAP, if this functionality will continue to exist and potential changes to functionality and if release 1511 provides LSWM (or equivalent DMIS / MWB) for Business Partners. 3. Material Master Foreign Trade Functionality The foreign trade functionality will not be available anymore in S/4HANA, because SAP Global Trade Services (GTS) is the successor of this requirement. SAP GTS (previously IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 44 SAP S/4HANA Enterprise Management 1511 White Paper provided as an external service installed as an additional instance) can be natively integrated with S/4HANA. Letter of Credit/ Legal control/ Export control/ Preference management in Foreign Trade is not available anymore in the material master; instead the functionalities based on SAP GTS can be used. SAP GTS offers additional functionalities for Import- and Export Management. For intrastate, a customer can leverage the functionality within S/4HANA. Prior to conversion, careful analysis of all currently used foreign trade processes is needed. If the customer uses a 3rd Party Foreign trade system, it is possible that adjustment is needed by respective 3rd Party Foreign Trade system or SAP GTS can be connected to S/4HANA to run the respective foreign trade processes. 4. Material Type SERV (Service Materials) In S/4HANA Material type SERV is introduced for Product Master for simplification purposes. When you use material type SERV, some fields and departments that are irrelevant in S/4 are hidden from the screen. This gives all transactions relevant for material master, a leaner and simplified look. Therefore, a new material type SERV (Service Materials) is created with reduced user departments and fields in the classical transactions. Additional configuration for this material is required that are part of SET. 5.6 Sourcing and Procurement Sub modules & processes considered for Sourcing and Procurement Figure 26: Scope of Sourcing and Procurement Specific Challenges for Sourcing and Procurement The traditional challenges for implementing SAP Sourcing and Procurement solutions are starting to be addressed in the first releases of the S/4HANA solution, the basic premise of providing a simplified and cohesive approach to procurement activity is delivered through the delivery of a simplified object structure for procurement documents, and a single master data object for supplier business partner which facilitates supplier performance management processes. The previous solutions both in cloud and on-premise for SAP Procurement, such as Ariba, SAP Supplier Relationship Management, SAP Supplier Lifecycle Management, Sourcing and Contract Lifecycle Management, had introduced an inherent technical complexity into the landscape with different systems providing operational, tactical and strategic procurement activities. The alignment of the data throughout these systems, whether that is CRM middleware, ALE, flat files, SAP PO (Process Orchestration), or point-to-point eSOA complicates the landscape and support of one. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 45 SAP S/4HANA Enterprise Management 1511 White Paper The top priorities on the Chief Purchasing Officer agenda in current times, are the consolidation of spend and strategic management, increasing the levels of supplier collaboration, restructuring supplier relationships and managing them effectively, and increasing the use of self-service and mobile technologies to enable spend management solutions. S/4HANA Digital Core seeks to address these challenges within the Sourcing and Procurement modules in a number of ways:  Leveraging the Ariba Network to overcome the complexity of supply chains and provide a system that functions as a single point of interaction.  Integrating Supplier Lifecycle Management functions with collaboration tools for a more efficient and tighter collaboration with business partners is needed to reduce time to market and increase flexibility in the context of volatile demands, besides increasing supply chain visibility.  Introducing a simplified process using one data object for Purchasing Requirements, helping to shorten process cycle times  Inbuilt analytics either transactional or strategic, for example through improved contract monitoring or supplier evaluation reporting Improvements and step back’s for Sourcing and Procurement SAP S/4HANA optimises procurement through integrated processes. It improves procure to pay processes with a cohesive, unified solution. With S/4/ HANA in conjunction with new intuitive Fiori UI applications, immediate insight is provided into procurement documents and processes, for example purchase order histories, to accelerate business decisions. The application now provides configuration options for procurement analysis through virtual data models and various views. The new system capabilities that combines OLAP and OLTP together on the same Fiori screen to drill down into vendor line items, by material and by vendor with real-time exposure to spend performance provides a compelling value proposition to exploit. Supplier Lifecycle & Performance Management Supplier Lifecycle and Performance Management have truly started the journey in becoming an integral part of the S/4HANA core components and not a standalone process executed in a separate system. With the initial release of S/4HANA Enterprise Management, SAP have made the move to incorporate three core business functions (excluding sell-side components) from the SAP Supplier Lifecycle Management solution within the latest release of the S/4CORE component: Supplier Portfolio Management  Strategic Procurement activities such as supplier categorisation are now enabled through the portfolio management business function. Specifically, Strategic Buyers have the ability to classify and manage their supply base within Purchasing Categories. The integration components for D&B (Dunn & Bradstreet) Integration are also included in the S/4CORE delivery. Supplier Evaluation  Supplier Evaluation and Performance Management processes can be initiated and managed across the supplier base by Strategic Buyers. The full questionnaire library and survey management functionality from SAP SLC is available for use, and so business user input on Supplier Performance can be evaluated and included as input for Supplier Management activities. Collaboration and Activity Management (Integration with SAP JAM)  Increased collaboration functions are enabled for the Purchasing users to communicate and collaborate with internal parties, through activity integration with SAP JAM. The sell-side IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 46 SAP S/4HANA Enterprise Management 1511 White Paper components and functionality is not yet available in the initial release and so relevant sell- side integration with suppliers is not yet possible. Additional User Interface Changes for S/4CORE Release In line with the new streamlined procurement process, additional Fiori applications have been made available for use in the Supplier Lifecycle Management functions, which are delivered in the core release:  Supplier Portfolio & Category Management  Purchasing Categories can be created and managed and assigned to the supply base  Supplier Lists and status of the portfolio can be displayed within new Fiori apps  Supplier Appraisal  Management of Supplier Evaluation processes by the Strategic Buyer, including evaluation of results  Completion of Supplier Evaluation Surveys by internal users  Questionnaire and Survey Management Fiori Apps  Supplier Activity Management  Task processing Fiori apps for management of internal collaboration activities In addition to the changes made in the Fiori app library, the traditional GUI transactions for vendor and customer maintenance are made obsolete, and in line with the change in the data model the business partner is now the primary business object, meaning the BP (Business Partner) transactions are now used in order to complete the creation or maintenance of the business partner. Sourcing and Contract Management The processes from a Sourcing and Contract Management perspective that are delivered within the first releases of S/4HANA are streamlined and mostly based on the standard ECC transactional processes, facilitated through the same Fiori apps that have been available since the first release of the Fiori principle transactional apps. Sourcing The processes and transactions available within the S/4CORE components related to Sourcing processes are limited to the standard RFQ and Quotation transactions from ECC. Currently, there is no extended sourcing functionality that is included within the S/4CORE component. The expectation is that the Ariba "Upstream" solutions will be integrated with the S/4CORE component (to be confirmed by SAP), providing the full sourcing & contract management functions. Contract Management In the main, the Contract Management functions that are present within the S/4HANA initial releases are the same as those contained within the Business Suite on HANA enabled by the principle Fiori applications. There are however, a few improvements contained within this that merit discussion: SAP Fiori Apps for Contracts Three main SAP Fiori Apps that enable "operational contract management": 1. Purchase Contract 2. Contract Line Item 3. Manage Purchase Contracts IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 47 SAP S/4HANA Enterprise Management 1511 White Paper The contract management processes are facilitated through the above apps, which deliver a display only view of the standard ECC data structures for contracts. The most interesting of the above is "Manage Purchase Contracts", which delivers an analytical view of contract usage, status and validity. SAP Fiori App for Managing Sources of Supply A set of Fiori apps for establishing and managing Purchasing Info Records are utilised within the S/4CORE component, allowing the overview of the various sources of supply for a particular material across plants and purchasing organisations. The app "Manage Sources of Supply" gives a list display of the Purchasing Info Record, and links to the Fact Sheet apps for display of Purchasing Info Records. Operational Procurement There are a number of key changes to the operational procurement processes that will be employed within the S/4HANA Enterprise Management Core in the following areas; Self-Service Procurement, Collaboration, User Interface Changes and Purchase Order Output. Self-Service Procurement  The Self-Service Procurement processes have been simplified by consolidating the Shopping Cart and Purchase Requisition objects to a single structure based on the Purchase Requisition. The basic process of Requisition, Approval, Purchase Order Creation and Goods Receipt will be facilitated by the new user interfaces changes described below.  A current shortcoming in this is the workflow approval approach employed within the Procurement documents, this is utilising the standard ECC release strategy approach which will require development to satisfy the majority of customer requirements. SAP have stated this is an area of improvement in subsequent releases within their roadmap.  S/4HANA delivers Integrated Catalogue functionality within the Purchasing Requisition Fiori applications based on Enterprise Search functionality, utilising OCI extraction functionality (using OCI 5.0 protocol). S/4HANA Self Service Procurement must be used instead of the SAP SRM MDM catalogue, the content of which needs to be imported into S/4HANA via OCI5 (http://scn.sap.com/docs/DOC-35441).  Note: The ERP self-service procurement business function is made obsolete with S/4CORE deployment User Interface Changes A number of additional Fiori apps are delivered in order to manage this streamlined procurement process:  Create Purchase Requisition  My Purchase Requisitions  Confirm Goods Receipts Supplier Collaboration The Ariba network integration which is currently available for use with an ECC 6.0 system forms a core part of the S/4HANA release. Three distinct methods of integration are delivered for use, direct integration of S/4HANA with the Ariba network, integration through SAP Process Orchestration (on-premise) or using SAP HANA Cloud Integration (cloud deployment). IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 48 SAP S/4HANA Enterprise Management 1511 White Paper Figure 27: Ariba vs HANA Purchase Order Output With SAP S/4HANA a new Output Management approach is in place. By design, the new output management includes cloud qualities such as extensibility enablement, multi tenancy enablement and modification free configuration. Therefore, the complete configuration differs from the configuration that is used when output management is based on NAST. The new configuration is based on BRF+ which is accessible for Customers. In SAP S/4HANA, the target architecture is based on Adobe Document Server and Adobe Forms only. For the form determination rules (along with other output parameters) BRF+ functionality is used (in this sense in combination with the message determination). Output management based on NAST is no longer supported for new documents in purchase order. Purchase orders which are migrated from legacy systems and for which NAST based output has been determined, can be processed with this technology. For all new purchase orders the new output management is used. Therefore in Procurement for purchase order there is a need to adapt the configuration settings related to Output Management. Invoice Processing Organisations face a number of challenges within Accounts Payable processes that are looked to be addressed with systemised solutions:  Invoice processing takes too long, leading to late payment and endangering supplier relations  Lack of visibility into invoice and payment data  Invoice/payment approvals take too long  High percentage of exceptions, which require manual handling S/4HANA seeks in the future to address all these by simplifying processes for collecting, registering and checking invoices, verifying them against pre-configured business rules, and handling exceptions with SAP solutions for invoice and payables management. However, this is currently an area where there is little that is delivered within the S/4HANA Core that would be considered best practice. The current processes focus around the standard LIV (Logistics Invoice Verification) processes, in conjunction with Fiori enabled invoice approvals. The SAP roadmap will start to incorporate the open text VIM (Vendor Invoice Management) functionality, but it is currently unclear to what extent, i.e. will this include OCR and exception handling, and how will this integrate with the Ariba networks’ invoice handling. Additionally, there is a change of Authorisation Concept for Supplier Invoice. Before, posting of invoices for a specific company code it was checked, whether user is authorised for any plant. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 49 SAP S/4HANA Enterprise Management 1511 White Paper Now, the system checks in general the authorisation for the company code and in case of change of an item with purchase order reference, the specific plant is checked. Summary key capabilities:  Full Source-to-pay processes, including spend analysis, sourcing, contract management, supplier management, invoice management and payables management.  Support for total supplier enablement, including new supplier discovery and ratings enabling enterprises to Improve management of supplier based risks.  Improved functionalities, approvals on any device, purchase order cockpit, resulting in faster order and invoicing cycle times with fewer errors.  Self-service procurement: allows employees to search and request goods and services in a next-generation application with an user friendly interface. Allows to load and search for internal and external catalogue content. One user experience for the whole process and one click order concept.  Real-time Analytics and KPI: real-time calculation of managed and non-managed spend, contracts and suppliers, real-time supplier evaluation scoring. Fast and highly configurable analytical reporting with instant insight-to-action capabilities.  Standard integration to Ariba Business Network for sending purchase orders, confirmations and advanced shipping notification as well as invoice and the status update of invoices  Real-time calculation of procurement KPI´s analyse managed and non-managed spend, contracts  PO approval on any device.  Possibility to load internal and external catalogue content into S/4HANA using OCI 5.0 compatible contract sources.  Improved search and navigational functionality: ability to search across business documents and master data and navigate to other Apps.  The power of SAP HANA gives real-time visibility into invoice processing, and allows for better management  More transparency and control throughout the invoice processing lifecycle.  Automatic identification of discrepancies between purchase order item price, number, and quantity as well as the supplier's invoice.  New approval and release procedures to help ensure invoice payment on time.  New Fiori Apps: Supplier Invoice List  Create and approve Supplier Invoices  Non-Manages Spend (KPI app) Step- back Following BAPIs are not available BAPI_PO_CREATE, BAPI_REQUISITION_CREATE, BAPI_PO_GETDETAIL IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 50 SAP S/4HANA Enterprise Management 1511 White Paper Deep dive for MD elements for Sourcing and Procurement s Business Partner  In line with the change in the data model the business partner is now the primary business object, meaning the BP (Business Partner) transactions are now used in order to complete the creation or maintenance of the business partner. This will allow a holistic view of the business partner for all applications, however, in terms of the management of configuration does mean certain constraints when dealing with the business partner object, for example, the CVI (customer vendor integration) mapping and business partner number ranges must be considered across multiple application areas.  Traditional ERP system has redundant object models for master data. With S/4HANA, Business Partner approach is now capable of centrally managing master data for business partners, customers, and vendors. During the course of the business relationship, the business partner can assume other business partner roles and in this case, with S/4HANA, the general data, which is independent of a business partner’s function or of application- specific extension, need not to be created again. This prevents data being created and stored redundantly.  As a result of the above, the standard IDOC type for vendor master integration CREMAS is discontinued and not available within an S/4HANA system, and so the replacement technology for Business Partner replication via SOA (Service Orientated Architecture) will need to be utilised. Material Master  One of the key changes introduced within the S/4CORE release is the extension of the MATNR field length in the associate domain from 18 to 40 characters; this represents a significant data model change within one of the most prolific objects within an SAP ECC system. The related functionality for extended material number can be "switched on ", however, the technical data dictionary object contains this length of material number. This change does not represent any issues for a Greenfield implementation, and in fact paves the way for industrial specific content to be enabled within the S/4CORE release, i.e. Automotive, the IS-Automotive extension is where the "40 character material number" originates. SAP provide migration tools to analyse the impact of this change in the data dictionary, however, this is limited to the identification of customer tables containing this domain. This change represents a significant consideration for migration customers, as their custom code should be reviewed and assessed for impact, which could be a significant task. 5.7 Finance Integration For details about S/4HANA Finance module please refer to the Finance White Paper and PoV document – See references. Sub modules & processes considered for Finance integration None particular sub modules have been considered for this chapter about Finance integration Specific Challenges for Finance integration After the 1503 release of S/4 HANA Finance– the CFO community has a challenge to overcome the deficit of:  The functionality of "Transfer prices" valuating the transfer of a good or service according to legal, group or profit centre valuation is not yet supported.  The functionality of "Multiple Valuation of Cost of Goods Manufactured" providing parallel valuations in CO according to multiple accounting principles is not yet supported. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 51 SAP S/4HANA Enterprise Management 1511 White Paper  So group valuation, profit centre valuation and parallel cost of goods manufactured not currently supported. In a new system configuration activities are blocked. In an existing system, migration is blocked Improvements and step back’s for Finance integration Improvements: Material Ledger Material Ledger is mandatory as of now. The content of the material ledger table is integrated with the ACDOCA concept. Separate currency customising of Material Ledger is obsolete since Material Ledger will use the currencies defined in the Leading Ledger. Material Ledger aims for improved and more flexible valuation methods in multiple currencies and parallel accounting standards while simultaneously reducing system resources improving scalability of the business process. Material Ledger was chosen as the basis for material inventory valuation in S/4HANA so to act as inventory sub ledger in Accounting. Further it remains the basis for Actual Costing as well. This function is however optional. Please keep in mind the release restrictions that apply. See OSS note OSS note 2127080 Profit and Loss Planning CO-OM planning, P&L planning and Profit Centre Planning are now covered by Integrated Business Planning, not all S/4 HANA Finance customers do like this, but it can be turned off via an OSS note. Accrual/Deferral of Expenses and Revenues Old functionality has been replaced by a central function for all kind of financial transactions. CO- OM planning, this functionality needs to be implemented before you can move to 1511. Cash Management Classic Cash Management is replaced by the new SAP Cash Management powered by S/4HANA functionality. Bank Account Management is part of it as well. This was already the case for 1503. A Bank Account Management light version will be provided for those customers who do not have the additional license for SAP Cash Management powered by S/4HANA. Universal ledger and Central Finance We have not found major changes in those domains Step back’s: FSCM Biller Direct Is not available in S/4HANA yet, but the old code can be used to cover this transaction. Credit Management The FI-AR-CR Credit Management is not available with SAP S/4HANA, on premise edition 1511. The functional equivalent in SAP S/4HANA is SAP Credit Management (FIN-FSCM-CR). Credit Risk Analyser Link to Cash Management In the Credit Risk Analyser, the activation of the link to Cash Management has been disabled in Customising SAP Invoice and Goods Receipt Reconciliation This functionality is not available for S/4HANA OP 1511. Customers can however still use MR11 but the monitoring and organisation capabilities added by SAP invoice and Goods Receipt Reconciliation are no longer available. The monitoring of the GR/IR account needs to be organised by the customer themselves In conclusion – there are some improvements and step back’s and the S/4 HANA Finance – the CFO community has a still the challenge to overcome the deficit of: IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 52 SAP S/4HANA Enterprise Management 1511 White Paper  Currency evaluation  Transfer price support Deep dive for MD elements for Finance integrations Cost Elements Cost elements have become part of the chart of accounts, maintenance in account master data (transaction FS00) instead of separate cost element master data (transactions KA01, KA02, KA03, and KA06). Account master record includes new field for cost element category. Field status groups can remain unchanged but default account assignments must be set via transaction OKB9 rather than in the cost element master 5.8 Asset Management Sub modules & processes considered for Asset Management  Maintenance  Environment, Health and Safety (EH&S) Specific Challenges for Asset Management Predictive capabilities for improvement in reliability of assets, to improve the uptime of the assets. Analytical insight to drive optimal performance of assets, facilities and energy Therefore, in Asset Management – our customers are looking for: Functionality and analytics to support IOT Improvements and step back’s for Asset Management Maintenance Maintenance in S/4HANA has gone through minor changes in the core asset management area such as Plant Maintenance. Essentially there are 5 domains where we can see improvements for maintenance: 1. Refurbishment maintenance 2. Emergency maintenance requirement 3. Incident and risk management. 4. Maintenance monitoring Cockpit: This is an additional function where maintenance order, notification can be taken to a cockpit and monitoring done. 5. Maintenance planning can now be integrated with APO Maintenance and Service Planning There are other changes in maintenance such as Personalisation of object worklist, Attaching documents such word, PDF etc. Side panel while creating work orders, Visual enterprise can be used as documentation for work instruction. IOT for real time integration with Asset management. The streaming data from sensors can be integrated with S/4HANA through Stream server and big data integration. However, for this S/4HANA cloud subscription will be required. Predictive Analytics: Reliability centric maintenance can be easily achieved using S/4HANA predictive capabilities. Data from smart sensors can be integrated and then predictive model applied on the data along with other operation data such as past maintenance etc. Predictive analytics can give an output of probability of occurrence of an event. This can be used to IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 53 SAP S/4HANA Enterprise Management 1511 White Paper generate notification/Work order to perform maintenance. In case Native predictive models are not suitable S/4HANA can be integrated with R server to generate predictive analytics. Risk Management (EH&S) In S/4HANA Risk management can be easily integrated with Human Resources, Material Management and Plant Maintenance  Person can be searched and assigned to risk assessment and tasks.  Business partner can be searched and assigned to hazard analysis as observer.  Organisation area and person relation can be established in Risk assessment.  Technical objects such as equipment and functional location can be assigned in risk assessment.  During review Notification and plant maintenance process can be started if required for risk assessment.  Link objects such as equipment and permit to a control in safety measure.  Material can be linked to a control if the material is defined as safety measure in risk assessment Simplification Simplification of maintenance Transactions in Project systems: In S/4HANA target transaction is CJ20N. Other transaction such as CJ01, CJ02, CJ03, CJ11, CJ12, CJ13 etc. are still available but will be removed in future releases. Production Resources and tools (PRT) is not available in CJ20N for this we have to use standard transactions. It is recommended to use single maintenance transaction CJ20N (Project Builder) instead of using multiple project related transactions. End user knowledge transfer required to switch from multiple transactions to single maintenance transaction CJ20N. Select Interfaces not available in S/4HANA Open PS for Microsoft project for bidirectional data exchange, MPX upload and download functions, export to Graneda and MS access are not available in S/4HANA. Alternative solutions such as SAP enterprise project connect or PS BAPI’s should be considered. Construction Progress report and valuation In S/4HANA construction progress report and valuation related transaction such as /SAPPCE/PNV01, /SAPPCE/PNV03, /SAPPCE/PNV04, /SAPPCE/PNV05, /SAPPCE/PNV07. Switch to standard functions or custom code should be considered. For custom code related information see SAP note 2225844. Deep dive for MD elements for Asset Management Material used in S/4HANA has undergone a change when it comes to character length. It has become 40 Characters. This increase in length will help in creation of intelligent code for material. The material such as Spare parts, Manufacturer part number, operating Supplies and Assemblies is changed. Since all this material are also used in master record for technical objects, Task list and Bill of materials these objects are also changed wherever these material fields are used. <asset flow> IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 54 SAP S/4HANA Enterprise Management 1511 White Paper 5.9 Marketing Sub modules & processes considered for Marketing  Marketing  Hybris (though we refer to our CMO study for details) Specific Challenges for Marketing  New players and alliances from industry which core business is far away from the traditional business (Google, Facebook, Apple etc.) are entering the market  System support to deal with the boost of Social and client intimacy  System support in Internet sales  Data insights - for better decision support for target populations, countries, platforms etc.  Low threshold for customers to switch to new services and products  Hybrid approach as multiple tools required to run the end-to-end functionalities with S/4HANA, Hybris, C4C or CRM, ISA, WCEM etc. Improvements and step back’s for Marketing CRM S/4HANA does not come with full CRM functionality for marketing, but integrates with existing CRM solutions from SAP, both on premise as well as in the cloud. There are a number of Fiori apps in SAP CRM, and more FIORI apps will come over time. However, the user experience strategy for SAP CRM with S/4HANA will continue to use the default UI technology through CRM WebUI. SAP Hybris Marketing SAP Hybris Marketing is the S/4HANA „simplification “for SAP CRM Marketing. SAP Hybris Marketing is fully HANA optimised with a simplified data model for Contacts and Prospects, and comes with a full new HTML5 UI. It directly shares data with S/4HANA and SAP CRM 7 if deployed on the same HANA system and/or same NW system, with no need for replication or data integration. SAP Hybris Marketing also comes in a cloud option, the SAP S/4HANA, cloud marketing edition. Internet Sales Internet Sales is not supported by S/4HANA yet. Web shops based on SAP Internet Sales (SAP ISA) or SAP Web Channel Experience Management (SAP WCEM) are not available in SAP S/4HANA. From a strategic point of view, the required web shop functionality based on S/4HANA back- end will be provided by SAP Hybris e-commerce in a future release. Customers that use SAP Internet Sales (SAP ISA) or SAP Web Channel Experience Management (SAP WCEM) and are planning to move to S/4HANA, have to remodel their business processes accordingly or wait for an appropriate future release, which supports SAP Hybris e-commerce. Customer Interaction Centre Business processes that require a help desk / call centre integration cannot be executed in the customer interaction centre any more. Instead they have to be integrated into the interaction centre / help desk applications offered by CRM on Premise, Cloud 4 Service or SAP Hybrids. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 55 SAP S/4HANA Enterprise Management 1511 White Paper In conclusion: Roadmap for SAP CRM is not clear – it looks that for customers embarking on S/4HANA - will have to consider SAP Hybris Marketing. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 56 SAP S/4HANA Enterprise Management 1511 White Paper 6 References  SITSI I Vendor Analysis I Market InSight (2015)  CxO Survey 2015 – IT Supplier Evaluation: https://w3- 03.sso.ibm.com/marketing/mi/compdlib.nsf/41b3dc2211cc2f6ac12566a200259ba4/38b7fbeb 615ae8fa85257f3b002c539e/ $FILE/uk_cxo_survey_supplier_evaluation_marketinsight_15.pdf  SITSI I Market Analysis I Market InSight (2015) S/4HANA – Opportunities and Challenges for SI IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 57 SAP S/4HANA Enterprise Management 1511 White Paper 7 Further Reading Maintenance Strategy Rules https://support.sap.com/content/sap-root/release-upgrade-maintenance/release- strategy/release/on-premise/rules.html http://scn.sap.com/community/s4hana/blog/2016/05/12/sap-s4hana--frequently-asked- questions--part-12-q2-2016-update IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 58 SAP S/4HANA Enterprise Management 1511 White Paper 8 Contributors We would like to take this opportunity to thank the following contributors for their effort and expertise: Anton Kusters – Associate Partner – Centre of SAP competence Center Devraj Bardhan– Senior Architect – SAP Enterprise Architect, Germany Bijoy Bhattacharya - Managing Consultant SCM, India Nga-Sze Choi - Managing Consultant S&D, NL Estelle Dierckx - Managing Consultant SAP, UK Mike Beer - Managing Consultant SAP Sourcing,UK Partha Tripathi - Managing Consultant SAP, India Pradeep Santara - Managing Consultant SAP MFG, India Nitsa Kukreja - Managing Consultant SAP S&D, UK Bert Meyerink - Senior Management Consultant SAP, NL Andrew Worsley-Tonks, IBM Upgrade Architect, UK Mark Dudgeon – Distinguished Engineer, SAP CTO, UK Reviewers Sharmistha Sanyal - Managing Consultant SAP SCM, India Subhajit Basak, Kaushik Saha - Managing Consultant SAP Planning, India Dhruba J Ghosh - Managing Consultant SAP, India Sanjoy R Chaudhuri - Managing Consultant SAP, India Songita Mukherjee - Managing Consultant SAP FiCo, India Sangeeta Majumdar - Managing Consultant SAP, India Aditi Chatterjee Abhijit Maulik Oluseun Otulaja Koushik Ray Luca De Blasio IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 59 SAP S/4HANA Enterprise Management 1511 White Paper 9 Glossary RDMS (Relational Data It connects tables to each other through established relationships management system) l Easier to understand and use than hierarchical and network database l Eliminate redundancy ATP (Available to Promise) Business function that provides a response to customer order enquiries based on resource availability. It generates available quantity of the requested product and delivery due dates. Therefore it supports order promising and fulfilment, aiming to manage demand and match it to production plans . Greenfield and Brownfield Green-field and brown-field investments are two different types of foreign direct investment, or FDI. Green-field investments occur when a parent company begins a new venture by constructing new facilities in a country outside of where the company is headquartered. Brown-field investments occur when a company or government purchases an existing facility to begin new production. Common SAP tables l MARD is a standard SAP Table which is used to store Storage Location Data for Material information. l MARC is a standard SAP Table which is used to store Plant Data for Material information. l MSEG material document segment table l MKPF material document header table IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 60 SAP S/4HANA Enterprise Management 1511 White Paper 10 Version History <insert> IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 61 SAP S/4HANA Enterprise Management 1511 White Paper 11 What is SAP S/4HANA? SAP HANA (SAP’s in Memory Database Platform) is an established platform for SAP, especially for Analytics in the Systems of Differentiation domain, but increasingly in the ERP space and Systems of Record. Figure 28: new Architecture acc to Gartner Source: SAP Community  “In Memory” is a technology that:  Allows processing of massive quantities of real-time data  Provides immediate results from analysis and transactions  Utilises main memory (RAM) of the system for faster processing  In practices, this means:  Immediate Answers: Calculations, analytical operations executed 1000x to 10,000x faster  Real-time Access: Data doesn’t move through as many layers, no aggregation and logic is at data layer not application layer  Single Version of the truth: As a result of simpler data model, and no longer a need to move data to a separate OLAP for Operational reporting with data latency  Deeper Insight: Analyse massive amounts of data in fractions of a second  Lower TCO: Reduced requirements for expensive DBA to manage indices, reduced storage as a result of no indices or aggregates and compression S/4HANA reinforces the potential for improvements in the speed, efficiency, agility and simplification of SAP enabled business and IT processes. This real time processing against latest data opens up the opportunity for innovation of business processes as a result of ability to eliminate lengthy batch process. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 62 SAP S/4HANA Enterprise Management 1511 White Paper . Figure 29: HANA Journey. Source: SAP Community SAP S/4HANA is the new generation of solutions, which is designed to support customers in their digital transformation process. SAP S/4HANA is not just an upgrade of existing software, it is a completely new solution, which, when implemented, will change both the IT infrastructure as well as business processes. This transformation, of technology and business processes needs to be enabled by SAP’s partners in cooperation with the IT departments and business users at our customers. Figure 30: What SAP HANA enables. Source: SAP Community IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 63 SAP S/4HANA Enterprise Management 1511 White Paper 12 S/4 HANA is the Answer for Digital Transformation SAP S/4HANA will resolve companies’ key challenges and provide them a system that is single source of truth and gives them visibility and business insights instantly through real-time data. S/4HANA will give the ability to share information and connect to customers, suppliers and other business partners through various channels and on any device. S/4HANA will enable to build an analytics led supply chain, which is able to collaborate and share information with their customers, suppliers and other business partners. Real-time data and KPI will enable to build an agile environment, where being able to predict and forestall disruptions before it occurs. Key drivers for digital transformation can be divided into three categories, driven by: 1. Customer insights and experience:  Customer Insights based on analytical analysis aggregated with social media and cognitive computing  Increased sales by enriching core products with a „information layer “or a „service layer “to improve customer satisfaction and streamline buying processes  Extends service capability by providing additional channels and increase transparency on the service delivery capabilities leveraging social media and analytics 2. Business model innovation:  Extend product capabilities with an integrated service component  New product developments or enhancements to improve core product capabilities  Leverage of other industry capabilities to build new products and solutions  Capabilities to provide an integrated End-to-End view from supplier to consumer 3. Operational excellence:  Technology as an enabler to streamline and improve existing processes or to implement new features  Enablement of internal and external workforces via integrated business networks and devices  Continuous improvement of the processes through real-time analysis of the data  Improved performance through permanent exchange of knowledge  Improved decision making processes and providing data transparency The picture below shows IBM´s view of CxO challenges (e.g. market factors like new business model, globalisation, etc.) with move to digital transformation. IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 64 SAP S/4HANA Enterprise Management 1511 White Paper S/4HANA is the digital core and the enablement for the digital drivers. Figure 31: CXO Challenges. Source: SAP Community S/4HANA is the first digital core for digital business designed to help companies to re-imagine business in the digital economy. It is built on the most advanced in-memory platform – SAP HANA – and is designed with the most modern user experience – SAP FIORI. Companies can now drive end-to-end digitised operations across their key business functions via a fully digitised enterprise management core solution – SAP S/4HANA Enterprise Management. Combining the core capabilities with the solutions in SAP portfolio for each line of business, SAP S/4HANA lines of businesses (LoB) solutions allow companies to go beyond traditional transactions and drive digitised operations across all LoBs based on a single source of information from planning, execution, prediction, simulation to analysis all in real-time with one system IBM Corporation |June 6, 2016 Use or disclosure of data contained on this page is subject to the restriction on the last page of this document. 65 SAP S/4HANA Enterprise Management 1511 White Paper INSTRUCTIONS: Consult your legal advisor for approval before making any changes to the content of this section. Keep either the UK or Ireland address and delete the other one. IBM is a registered trademark of International Business Machines Corporation. All other trademarks are acknowledged. 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