Building the Business Case for S/4HANA What is it all about Building the Business Case for S/4HANA What is it all about? What should we do? Kevin Reilly, ASUG Community Advocate S/4HANA & HANA Platform kevin.reilly@asug.com

What you will learn today S/4HANA Introduction Differences between Suite on HANA and S/4HANA Deployment Options The S/4HANA Implementation Migration planning Example migration schedule The S/4HANA Business Case Components of a good business case Business benefits Example business scenarios

S/4HANA Introduction

What is S/4HANA? The successor to SAP R/3 and SAP Business Suite New SKU and Code Fork Available on the SAP HANA database S/4HANA themes: Renewed interface with Fiori UX Simplified structure with SAP HANA Cloud deployment first

SAP R/3 vs S/4HANA SAP S/4HANA SAP R/3 Runs on AnyDB Built for lowest capability database Limited use of database functionality Client/Server SAPGui User Interface SAP R/3 SAP HANA only Built using all capabilities of SAP HANA Full use of database functionality e.g. geospatial, graph Fiori User Experience SAP S/4HANA

S/4HANA Deployment Options Cloud Shared HANA multi-tenant DB HANA Cloud Platform Extensions Quarterly Release Schedule 100% Managed by SAP Automatic Updates On-Premise On-Premise or Hosted ABAP Customization Yearly Release Schedule Managed by Customer/Partner Update schedule defined by customer

SAP S/4HANA Roadmap 1503 1506 1509 1511 http://www.sap.com/bin/sapcom/en_us/downloadasset.2015-03-mar-02-23.sap-s-4hana-frequently-asked-questions-pdf.bypassReg.html

SAP S/4HANA Customer Journey http://www.sap.com/bin/sapcom/en_us/downloadasset.2015-03-mar-02-23.sap-s-4hana-frequently-asked-questions-pdf.bypassReg.html

The S/4HANA Implementation

The S/4HANA Roadmap S/4HANA roadmap varies Existing ECC Environment Upgrades, Patches, Unicode Conversion Test Management, Change Management Custom Code Remediation & Reduction Data Reduction & Near-line Storage Build of technical readiness Hardware Procurement SAP BW or Agile Datamart

The S/4HANA Implementation 2015 2016 Roadmap Sandboxes HW Procurement BW Housekeeping BW Near-Line Store SAP BW on HANA Real-Time Analytics Solution Manager Custom Code Remediation ECC Housekeeping Test Management Suite on HANA S/4HANA Cloud Migration Year End

The Business Case

Components of a business case Better Business Engagement Improved Morale Customer Satisfaction Reduction in Days Outstanding Reduction in batch schedule Reduction in Stock Reduction in Hardware Cost Reduction in Project Costs 1. Financial 2. Quantifiable 3. Measurable 4. Observable Tip: try to move benefits . from Observable  Measurable  Quantifiable  Financial

Quantifying benefits Pilot / PoC Reference Sites Benchmarking Compare against similar companies SAP Value Engineering Services organizations provide simulation using your business conditions Validate based on experience of others Relatively inexpensive Verify capabilities Solidify Business Case Pilot / PoC Reference Sites Benchmarking Simulation

Business benefits matrix Doing new things Doing things better Stop doing things Financial Reduction in annual maintenance costs of hardware and infrastructure One time reduction in stock Increase total shopping cart size and value Reduced overtime due to less integration pressures DBA Tasks Quantifiable Reduced project costs Reduction in SLA misses for data availability Measurable Increased adoption Shorter development time due to simplification of the architecture Simplification of the solution stack as BWA Blades removed Observable Mix non-SAP and SAP data into one data model in real-time Ability to navigate from company level to document level in one report 30x Improved average query time leads to faster and better decision making and support

Where to add capabilities and value Finance soft close Planning and predictive finance Marketing to audience of one Material Requirements Planning (MRP) Advanced Available to Promise (ATP) High-volume inventory backflush Engage talent across the organization HR compliance across the organization Continuous cross-system control monitoring Fraud detection

Example: finance soft close Description: A traditional measurement of the finance organization is the speed at which a company closes its books. In benchmarking studies, SAP Value Engineering found that the top quartile–performing companies achieve the annual financial close in 26% fewer days than their peers, resulting in 61% lower General Ledger and closing costs. Industry relevance: Cross-industry Drive one common view of financial data to help ensure enterprise-wide consistency to minimize reconciliation Enable real-time processes for instant insight to make timely, relevant decisions Use prediction, simulation, and analysis to evaluate financial implications of strategic business choices Universal journal for both financial and controlling data On-the-fly aggregation of transactional tables Central finance to consolidate many back ends Real-time oversight of close progress Real-time insight into financial results Continuous intra-month processes SAP S/4HANA, on-premise edition SAP S/4HANA, cloud edition SAP Simple Finance solution 400 hours cut from period-end close 86% faster real-time analytics 2.5x faster cost postings * *SAP software implementation

Business Process View: Finance soft close Traditional system With SAP S/4HANA Close batches Consolidation batches Reporting on-demand Initial period Close & consolidation Initial period Close & consolidation The complexity found in decision making, process execution, and IT architecture has a high cost. The illustration on this slide shows specific examples of complexity in finance, and what results. Decision making: Finance has to wait for experts (usually in IT) to gather and prepare data to analyze. By the time this is done, the problems finance is trying to discover and diagnose have often become unmanageable. Process execution: Today’s batch-oriented processes, like period-end close, not only suffer from the inherent latency of a batch operation, they also rely on manual reconciliation between finance and controlling systems. The result is that there is no time left in a period to check for errors or even simulate what would happen under different conditions, such as an acquisition, divestiture, or reorganization. IT architecture: Because there has been little structural change in finance systems, IT must spend time to create interfaces and reporting layers to help bend the business into the predefined structure demanded by the system. As a result, businesses cannot really optimize the way they work. If they do reorganize, this creates even more of a burden on one-off interfaces or reporting structures to handle the differences. All this complexity is not trivial. It eats into more than 10% of profits. With traditional system: Close activities don’t begin until period end Multiple batch-run dependencies Batch bottlenecks that delay downstream High error-correction efforts Complex issues postponed until after close Time-pressured resolutions Delayed visibility into reporting With SAP S/4HANA: Real-time KPIs Elimination of end-of-period batch Continuous intercompany reconciliation Continuous financial reporting visibility Line-item detail reconciliation Automation for routine tasks Full management visibility of close tasks Traditional With SAP S/4HANA Process excellence

Business Scenario Recommendation Tool Easy and Free of Charge Intuitively get recommendations for business scenarios based on your system and industry Efficient You only spend minutes to request a report Transparent You’ll get a list of relevant business scenarios and other recommendations Request a free report at www.s4hana.com »

Key Takeaways

Key Takeaways HANA is not just about speed. It’s about process change. All migrations to S/4HANA need OCM support and attention Analyze S/4HANA functionality for process improvements Update training materials to include Fiori UX changes Potential reduction in technical support staff HANA Basis work can be less Cloud changes Hybrid environment can implement quicker in some cases Also moves some support from internal to cloud vendor Moves capital investment to manageable expense Migration to cloud moves selected headcount to cloud provider

Key Takeaways Value Realization Collaboration Orchestration Anchor initiatives and projects to explicit value targets Ensure post-project value realization is tracked Establish simple & effective Portfolio Management tools and processes Collaboration Active governance and collaboration between IT and the business customers are key components Structure incentive systems to encourage collaboration & discourage silos Orchestration Cloud applications alter how application portfolios fit together Engage the entire organization in mission-critical initiatives Establish clear project execution tools, and roles & responsibilities

ASUG’s Take on S/4HANA Adds value to your company Finance activities are quicker, more streamlined SAP VE group measures 25% faster close, 61% less expense Upcoming November release Was called Simple Logistics; will be renamed Leaked information says “Enterprise Management” Expands the value-add into rest of enterprise Simplifies the IT workload Less DBA work for BASIS folks Smaller footprint of database Simplifies the Processes for just about everyone else

Where to find more information sap.com/s4hana SAP Activate scn.sap.com/community/s4hana/ SAP S/4HANA Cookbook S/4HANA SAP Best Practices

Upcoming Events for SAP Controlling Financial Excellence Forum October 7 – 8, 2014 Newtown Square, PA http://fm.sap.com/1mobil e/SECHPE512_38870_ban .htm Controlling 2014 September 21-24, 2014 San Diego, CA http://controlling2014.erp corp.com/ Don’t miss out register today !!!

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Questions and Answers

Kevin Reilly Team Reilly, LLC Kevin@TeamReilly.net