Preface

21

Why Read This Book?

21

Audience

22

Structure of the Book

22

Acknowledgments

24

1 Introduction: From Digital Transformation to the Intelligent Enterprise

27

1.1 Cornerstones of the Intelligent Enterprise

28

1.1.1 Operational Automation and Real-Time Steering

29

1.1.2 Intelligent Technologies

32

1.2 Integrated Intelligent Enterprise

36

1.2.1 Layers of the Intelligent Enterprise

36

1.2.2 Next-Generation End-to-End Processes

38

1.2.3 SAP Business Technology Platform

50

1.2.4 Integration as an Enabler

52

1.3 Editions and Deployment Options

56

1.3.1 Deployment Overview

56

1.3.2 SAP S/4HANA

60

1.3.3 Private Cloud

61

1.3.4 SAP S/4HANA Cloud, Extended Edition

62

1.3.5 SAP S/4HANA Cloud

63

1.3.6 Deployment Considerations

64

1.4 Summary

66

2 Finance

67

2.1 The CFO Agenda

67

2.2 Industry Pain Points and SAP S/4HANA Benefits

70

2.2.1 Driving Integration of Information

70

2.2.2 Driving Enterprise Cost Reductions

72

2.2.3 Measuring Business Performance

72

2.2.4 Optimizing Planning, Budgeting, and Forecasting

73

2.2.5 Executing Continuous Finance Improvements

74

2.2.6 Providing Inputs to Enterprise Strategy

75

2.2.7 Developing Talent in the Finance Organization

76

2.3 Key Finance Functionality

77

2.3.1 Universal Journal

77

2.3.2 Material Ledger and Transfer Pricing

81

2.3.3 New Asset Accounting

84

2.3.4 Cash and Liquidity Management

86

2.3.5 Revenue Accounting and Reporting

91

2.3.6 Profitability Analysis

92

2.3.7 Predictive Accounting

96

2.3.8 Advanced Financial Closing

98

2.3.9 Financial Planning

100

2.3.10 Consolidation and Group Reporting

103

2.3.11 Advanced Intercompany Matching and Reconciliation

112

2.3.12 Tax and Compliance Management

116

2.3.13 Central Finance

121

2.4 Finance in SAP S/4HANA Cloud

147

2.5 Outlook

149

2.6 Summary

149

3 Manufacturing

151

3.1 Industry Pain Points and SAP S/4HANA Benefits

151

3.2 Key Manufacturing Functionality

155

3.2.1 Product Master Optimization

155

3.2.2 Production Planning and Detailed Scheduling

155

3.2.3 Material Requirements Planning

156

3.2.4 Production Operations and Engineering

161

3.2.5 Complex, Discrete, and Component Assembly Manufacturing

163

3.2.6 Process Manufacturing

165

3.2.7 Supply Chain Analytics

167

3.3 Manufacturing in SAP S/4HANA Cloud

167

3.4 Outlook

170

3.5 Summary

171

4 Supply Chain

173

4.1 Industry Pain Points and SAP S/4HANA Benefits

173

4.2 Key Supply Chain Functionality

176

4.2.1 Data Model Simplification

176

4.2.2 Inventory Valuation and Advanced Available-to-Promise

177

4.2.3 Extended Warehouse Management

185

4.2.4 Transportation Management

194

4.2.5 Catch Weight Management

197

4.2.6 Quality Management

198

4.2.7 Commodity Management

199

4.2.8 Stockroom Management

200

4.3 Supply Chain in SAP S/4HANA Cloud

201

4.4 Outlook

202

4.5 Summary

204

5 Sales, Marketing, Commerce, and Service Management

205

5.1 Industry Pain Points and SAP S/4HANA Benefits

205

5.2 Key Sales Functionality

208

5.2.1 Data Model Simplification

208

5.2.2 Sales Order Fulfillment and Monitoring

209

5.2.3 Condition Contract Settlement

214

5.2.4 Foreign Trade

215

5.2.5 Credit Management and Revenue Accounting

215

5.3 Key Marketing and Commerce Functionality

216

5.3.1 Customer Relationship Management

216

5.3.2 Billing and Revenue Management

217

5.4 Key Service Management Functionality

218

5.4.1 Optimized Service and Service Master Data Management

218

5.4.2 Service Parts and Service Agreement Management

219

5.5 Sales, Marketing, Commerce, and Service Management in SAP S/4HANA Cloud

220

5.6 Outlook

222

5.7 Summary

223

6 Sourcing and Procurement

225

6.1 Industry Pain Points and SAP S/4HANA Benefits

225

6.2 Key Sourcing and Procurement Functionality

228

6.2.1 Operational Purchasing

228

6.2.2 Invoice Management

232

6.2.3 Sourcing and Contract Management

234

6.2.4 Supplier Evaluation and Analytics

235

6.2.5 Intelligent Procurement with Machine Learning

236

6.3 SAP S/4HANA for Central Procurement

237

6.3.1 Central Procurement and Other SAP Solutions

239

6.3.2 Key Central Procurement Functionality

241

6.4 Sourcing and Procurement in SAP S/4HANA Cloud

242

6.5 Outlook

244

6.6 Summary

245

7 R&D and Asset Management

247

7.1 Industry Pain Points and SAP S/4HANA Benefits

248

7.2 Key Research and Development Functionality

250

7.2.1 SAP Innovation Management

250

7.2.2 SAP Enterprise Portfolio and Project Management

251

7.2.3 SAP Product Lifecycle Management

253

7.2.4 Product Compliance

254

7.3 Key Asset Management Functionality

256

7.3.1 Maintenance Planning and Scheduling

256

7.3.2 Maintenance Operation and Execution

258

7.3.3 SAP Asset Intelligence Network

259

7.3.4 Mobile Asset Maintenance

260

7.4 R&D and Asset Management in SAP S/4HANA Cloud

260

7.5 Outlook

261

7.6 Summary

264

8 Analytics and Reporting

267

8.1 Evolution of Analytics

268

8.2 Operational Reporting

270

8.2.1 ABAP-Based Reports

271

8.2.2 Embedded Analytics

271

8.2.3 Native SAP HANA Applications

277

8.2.4 Embedded SAP Business Warehouse and SAP Business Planning and Consolidation

278

8.2.5 SAP Analysis for Microsoft Office

279

8.3 Enterprise-Wide Reporting

280

8.3.1 SAP HANA Enterprise Analytics

281

8.3.2 SAP Business Warehouse on SAP HANA

282

8.3.3 SAP BW/4HANA

283

8.3.4 SAP Data Warehouse Cloud

284

8.3.5 SAP Analytics Cloud

285

8.3.6 SAP Digital Boardroom

286

8.3.7 SAP Profitability and Performance Management

288

8.4 Reporting in a Hybrid Landscape

289

8.5 Cognitive Analytics

291

8.6 Big Data Analytics and Data Lakes

292

8.7 SAP Data Intelligence

295

8.8 Summary

299

9 Industry Solutions

301

9.1 The SAP Strategy for Industry Solutions

301

9.1.1 SAP Industry Solutions in the Core

302

9.1.2 SAP Model Company

303

9.1.3 Industry 4.0 Solutions

304

9.1.4 SAP’s Industry Cloud

304

9.2 SAP S/4HANA Industry Sectors

305

9.2.1 Energy and Natural Resources

306

9.2.2 Service Industries

307

9.2.3 Consumer Industries

307

9.2.4 Discrete Industries

310

9.2.5 Financial Services

311

9.2.6 Public Services

313

9.3 Adapting to Global Change

314

9.4 Summary

315

10 SAP S/4HANA Cloud

317

10.1 Considerations and Value Proposition

317

10.2 Core Functional Capabilities

320

10.3 Deployment

325

10.3.1 Fit-to-Standard

326

10.3.2 Deployment Resources

327

10.3.3 SAP Best Practices Explorer

331

10.3.4 Self-Service Configuration User Interface

331

10.4 SAP S/4HANA Cloud, Extended Edition

332

10.4.1 Criteria for Choosing SAP S/4HANA Cloud, Extended Edition

333

10.4.2 Migration from SAP S/4HANA Cloud, Extended Edition to SAP S/4HANA Cloud

335

10.5 Content Lifecycle Management

337

10.6 Summary

339

11 SAP S/4HANA and the SAP Landscape

341

11.1 Sourcing and Procurement: SAP Ariba

342

11.1.1 Sourcing and Contracts

343

11.1.2 Requests and Purchases

344

11.1.3 Invoices and Payments

346

11.1.4 Intelligent Spend Management and SAP S/4HANA

348

11.2 Contingent Workforce Management: SAP Fieldglass

350

11.2.1 Vendor Management System

351

11.2.2 SAP Fieldglass and SAP S/4HANA

352

11.3 Travel and Expense Management: SAP Concur

353

11.3.1 Travel Spend Management

353

11.3.2 SAP Concur and SAP S/4HANA

356

11.4 Human Resources: SAP SuccessFactors

356

11.4.1 Employee Data

356

11.4.2 Talent Management

357

11.4.3 SAP SuccessFactors and SAP S/4HANA

359

11.4.4 SAP Human Capital Management for SAP S/4HANA

361

11.5 Customer Experience: SAP Customer Experience

362

11.5.1 Marketing

364

11.5.2 Commerce

366

11.5.3 Sales

367

11.5.4 Services

368

11.5.5 Customer Data

370

11.5.6 SAP Customer Experience and SAP S/4HANA

371

11.6 Master Data Management: SAP Master Data Governance

372

11.7 Supply Chain Planning: SAP Integrated Business Planning for Supply Chain

376

11.7.1 Sales and Operations Planning

376

11.7.2 Demand Planning

377

11.7.3 Inventory Planning

378

11.7.4 Response and Supply Planning

378

11.7.5 Control Tower

380

11.7.6 SAP IBP and SAP S/4HANA

381

11.8 Billing: SAP Billing and Revenue Innovation Management

381

11.8.1 Subscription Order Management

382

11.8.2 Convergent Mediation

383

11.8.3 Charging

383

11.8.4 Invoicing

383

11.8.5 Customer Financial Management

384

11.8.6 SAP Billing and Revenue Innovation Management and SAP S/4HANA

384

11.9 Summary

384

12 SAP S/4HANA Architecture

387

12.1 The Journey from SAP ERP to SAP S/4HANA

387

12.1.1 The Evolution of SAP S/4HANA

387

12.1.2 SAP S/4HANA as the Digital Core

393

12.1.3 Integration of SAP Products in SAP S/4HANA

394

12.1.4 The Roadmap to SAP S/4HANA and Innovations

398

12.2 SAP HANA Platform

402

12.2.1 SAP HANA Database

403

12.2.2 Virtualization

406

12.2.3 Scalability

409

12.2.4 Recoverability

410

12.2.5 SAP HANA Operations

417

12.2.6 SAP HANA Logical Deployment Options

423

12.2.7 SAP HANA Platform Services

427

12.3 Hyperscaler Architecture

430

12.4 SAP S/4HANA Security

431

12.5 SAP S/4HANA Core Data Models

435

12.6 User Interface and User Experience

436

12.7 Data Lifecycle Management

439

12.8 Development and Operations

441

12.9 Summary

448

13 Extensions

449

13.1 Business-Driven Development

449

13.1.1 Connecting People and Data

451

13.1.2 Building Differentiating Cloud Applications

451

13.1.3 Integrate Applications and Data

452

13.1.4 Extending Core and Software-as-a-Service Solutions

453

13.2 SAP Business Technology Platform

454

13.3 Extensibility Options for the Intelligent Enterprise Suite

457

13.3.1 Overview and Considerations

457

13.3.2 In-App Extensibility

460

13.3.3 Classic Extensibility

463

13.3.4 Side-by-Side Extensibility

464

13.4 SAP API Business Hub

466

13.5 Summary

467

14 Intelligent Technologies

469

14.1 The Intelligent Enterprise and SAP Business Technology Platform

469

14.2 Internet of Things

472

14.3 Artificial Intelligence

477

14.3.1 SAP AI Business Services Powered by Data Intelligence

478

14.3.2 SAP Conversational AI

478

14.3.3 SAP Intelligent Robotic Process Automation

479

14.3.4 Artificial Intelligence in SAP S/4HANA

482

14.4 Blockchain

483

14.5 Data Intelligence

484

14.6 Intelligent Technologies Use Cases

488

14.6.1 Use Case 1: Consumer-Packaged Goods Industry

488

14.6.2 Use Case 2: Oil and Gas Asset Maintenance for Upstream Plants

491

14.7 Summary

493

15 Adoption Paths

495

15.1 Assessing Your Adoption Options

497

15.1.1 SAP Readiness Check

497

15.1.2 Innovation Discovery for SAP Products

499

15.1.3 Process Discovery

500

15.1.4 SAP S/4HANA Business Value Advisor

501

15.1.5 SAP Transformation Navigator

502

15.1.6 SAP HANA Sizing Requirements

503

15.2 New Implementation

504

15.2.1 Adoption Approach

504

15.2.2 Considerations

505

15.2.3 SAP S/4HANA Migration Cockpit

507

15.3 System Conversion

511

15.3.1 Adoption Approach

512

15.3.2 Considerations

513

15.3.3 SAP Conversion Software, Tools, and Accelerators

515

15.3.4 SAP S/4HANA Conversion Prerequisites

525

15.3.5 Minimizing Downtime

532

15.4 Selective Data Transition

536

15.4.1 Adoption Approach

537

15.4.2 Considerations

538

15.5 Housekeeping Activities

540

15.6 Summary

541

16 Implementation Method and Accelerators

543

16.1 What Is SAP Activate?

543

16.2 SAP Activate Methodology

547

16.2.1 Prepare

548

16.2.2 Explore

549

16.2.3 Realize

550

16.2.4 Deploy

551

16.2.5 Quality Gates

551

16.3 SAP Best Practices

553

16.4 SAP Activate Tools

556

16.4.1 Self-Service Configuration

557

16.4.2 Expert Configuration

557

16.4.3 SAP Central Business Configuration

558

16.4.4 SAP Solution Builder Tool

558

16.4.5 SAP Solution Manager

558

16.5 SAP Model Company

559

16.6 Summary

564

17 Building the Business Case

565

17.1 Common SAP S/4HANA Business Case Challenges

566

17.2 Value Dimensions

568

17.2.1 SAP S/4HANA Core

570

17.2.2 The Intelligent Enterprise

572

17.3 Alignment to Stakeholders and Business Outcomes

573

17.4 Proven Process for Building a Case for Change

575

17.4.1 Recognize the Need

576

17.4.2 Frame the Opportunity

578

17.4.3 Conduct Discovery

579

17.4.4 Assess the Value

581

17.4.5 Validate Proposal

589

17.5 Develop Your IT Roadmap

591

17.5.1 Engage Phase: Analyzing the Current Mode of Operations

594

17.5.2 Envision Phase: Exploring the Target Operational Model

594

17.5.3 Evaluate Phase: A Deep Dive into the Transformation Approach

595

17.5.4 Enable Phase: Building Your Roadmap

596

17.6 Valuable Lessons Learned

596

17.7 Summary

597

18 Customer Case Studies

599

18.1 Multinational Industrial Company

599

18.1.1 Vision

601

18.1.2 IT Project

601

18.1.3 Benefits

602

18.1.4 Path Forward

602

18.2 Multinational Service Company

604

18.2.1 Vision

604

18.2.2 IT Project

604

18.2.3 Benefits

605

18.2.4 Path Forward

607

18.3 Manufacturing Company

608

18.3.1 Vision

608

18.3.2 IT Project

608

18.3.3 Benefits

609

18.3.4 Path Forward

610

18.4 Food Industry Group

610

18.4.1 Vision

610

18.4.2 IT Project

611

18.4.3 Benefits

612

18.4.4 Path Forward

612

18.5 Automotive Company

612

18.5.1 Vision

612

18.5.2 IT Project

613

18.5.3 Benefits

613

18.5.4 Path Forward

613

18.6 Life Sciences

614

18.6.1 Vision

614

18.6.2 IT Project

614

18.6.3 Benefits

614

18.6.4 Path Forward

615

18.7 Global Telecom Provider

615

18.7.1 Vision

615

18.7.2 IT Project

616

18.7.3 Benefits

616

18.7.4 Path Forward

617

18.8 Global Automobile Maker

617

18.8.1 Vision

617

18.8.2 IT Project

617

18.8.3 Benefits

618

18.8.4 Path Forward

618

18.9 Summary

619

The Authors

621

Contributors

623