Many companies use SAP, and the decision-makers are constantly faced with the question of how to update their existing systems to the latest technology that is most suited to their needs. Is it time to switch to SAP Intelligent Enterprise? Are there worthwhile interim solutions? What is the best way to set up migration projects? And how can companies benefit quickly and optimally from the new opportunities created by artificial intelligence and the Internet of Things? SAP expert and Vice President SAP Intelligent Enterprise Carsten Fleer explains key aspects and procedures.
Experts agree that intelligent technologies and smart systems will determine and change our future. What are the challenges companies facing today?
When we hear about intelligent technologies and smart systems, we usually think of revolutionary innovations in software and hardware solutions that enable new, often disruptive business processes and thereby fundamentally change entire companies or even threaten their existence.
The real challenge starts a bit before that point, at the heart, with the core business. Meaning in the individual production processes, the monitoring of machines or the optimization of internal processes at companies. Companies have to digitalize their core business to gather important data and create networks, which form the basis for generating further customer benefits and competitive advantages. Companies therefore first need to generate data, then filter out the relevant information from the mass of data and use it correctly – in a way that is automated, target-oriented and fast. They need to look at the variety of old and new technologies, platforms and applications, identify the most suitable ones for their business and combine them in a productive way. Once this basis is in place, companies are in a position to consider new and comprehensive business models and, ideally, involve customers and suppliers in the process.
Sustainable further development is therefore no longer limited to individual company divisions. The entire company, with its diverse business processes, structures and overall system architecture – from production, accounting and sales to HR – must be taken into consideration.
On the subject of intelligent companies: What does the internal structure of an intelligent company look like?
Many companies have already developed into powerful data processing organizations in which every employee, every customer, every machine and every transaction produces new data every day.
Intelligent companies can use this data to draw conclusions about purchasing behavior, the efficiency of production processes or the maintenance cycles of their machinery. When they do this, it is essential that they are able to base their projections for the future on the experience gained from the past. If companies can already predict when a machine will break down or which goods customers will buy and from where, they can optimize their production and pricing and save costs. Companies can use sensors, IoT and intelligent systems to help them achieve this, but increasing automation throughout the company is also key. It consistently further reduces manual activities and breaks in the system, decreases the risk of error and speeds up processes.
Intelligent companies therefore view IT as an enabler for business success. They use the new SAP technologies and platforms to generate customer benefits and automate their own processes, thereby saving costs.
What is behind the SAP Intelligent Enterprise concept, and what are the greatest advantages?
With 'Intelligent Enterprise', SAP offers a brand 'new SAP world'. The new core product is no longer a purely reactive system that only maps the internal processes of a company. Instead, real-time operational data, customer activity and sensor data are used in planning and analysis. The focus is on end-to-end processes, such as 'lead-to-cash' and 'source-to-pay', which do not stop at the company itself.
SAP also relies on a large number of new products and methods that are constantly being enhanced and that help to digitalize companies and make them intelligent in all divisions and processes. In the 'new SAP world', it is much easier to use the latest technology and keep pace with the constantly changing user experience requirements of your customers.
Another very important innovation is that the SAP Intelligent Enterprise product suite has become a truly open system. In the past, SAP was considered to be a closed system with its own programming language, which meant that companies using SAP were almost fully dependent on the manufacturer. Now, in principle, any other system, platform or application can be connected to the Intelligent Enterprise suite. This is the ideal scenario that many companies like to rely on when pursuing a best-of-breed approach. The system is open not only in its cloud layer, but also in the underlying service layer. It is also possible to keep certain applications in the cloud and others on premises, all without any integration difficulties, resulting in the greatest added value for companies.
Very important innovation is that the SAP Intelligent Enterprise product suite has become a truly open system. In the past, SAP was considered to be a closed system with its own programming language, which meant that companies using SAP were almost fully dependent on the manufacturer. Now, in principle, any other system, platform or application can be connected to the Intelligent Enterprise suite.
What does the 'new SAP world' involve, and where can other systems be connected to it?
S/4HANA represents the digital core of the 'new SAP world', stored either on premises or in the cloud. In it, users will find components they are already familiar with from the previous ERP Central Component (ECC), enhanced by a simplified data model and the very fast SAP HANA in-memory database. Processes can therefore be mapped holistically and digitally. There are also many predefined standard processes for minimizing manual tasks, making S/4HANA an essential component of the 'new SAP world'. But there is still more to it.
Individual extensions, the integration of external systems and even digital services are provided via the SAP Cloud Platform (SCP). These include, for example, IoT gateways and the associated device management, interfaces with banks, machine learning services with trainable or pre-trained models such as image recognition, and much more. Cloud products like this are known for their fast and agile implementation. When in operation, they impress users with often lower operating costs, a fast innovation cycle and an excellent user experience.
The C/4HANA CRM and customer experience software suite and the Ariba e-procurement and strategic sourcing suite help companies to quickly adapt the functional scope to the functions required in the business.
What’s more, thanks to the new promise of customer centricity, the SAP applications are easier, more transparent and more inspiring for both internal and external users. In other words, the customer experience is excellent.
Still, the SAP Cloud Platform offers much more than just a place for hosting software. Can you go into that in more detail?
The SCP is not just technology on which to run an SAP application. It also offers many valuable functions for the integration of system landscapes and data and for enhancement using algorithms and AI, as well as a really good analytics platform. Developers who have already worked with cloud technologies in the enterprise range, such as Java EE, will find much of what they are used to from other platforms here. Lastly, the current SAP Cloud Platform is also based on the Cloud Foundry open source standard. Companies can therefore use WebIDE, a fully web-based development environment, to get to work on smaller development projects immediately.
Which industries and companies is SAP Intelligent Enterprise particularly suited to?
SAP software can generally be used in virtually any industry, since it maps the typical back-office functions of a company, such as accounting, controlling, purchasing, sales or materials management. In addition, there are a number of industry add-ons that are now fully integrated into S/4HANA.
Considering the size of the company, I would say that S/4HANA and C/4HANA are suitable for companies with approximately 500 employees or more. SAP also offers individual SaaS components for smaller companies, which can be used optimally and with a good cost-benefit ratio. In principle, there is something for everyone, you just need to find the solution that is right for you.
The cloud is becoming increasingly important. What are the benefits of the SAP Cloud Platform and S/4HANA software?
The cloud has generally become important because application management, hosting and the IT infrastructure do not form part of the core business of most companies. Cloud-based solutions are helpful in this case because companies no longer need to deal with infrastructure issues and can concentrate on the actual core business of their company. SAP S/4HANA can be a cost-effective solution, and it runs on all cloud platforms.
Further advantages of cloud services include their prompt scalability and flexibility, 24-hour access to geographically distributed IT resources from anywhere and on any device, good data security, optimal performance and high data availability, and the ability to implement new applications quickly and cost-effectively.
What is your advice for companies already working with legacy SAP systems and those currently considering introducing S/4HANA or a full transformation?
The added value for existing SAP customers lies in the innovative additional possibilities offered by the new SAP suite. Finding out about the cost advantages and additional business models that can be realized by using SAP Intelligent Enterprise is more important than focusing on how long SAP will continue to provide maintenance support for the old ECC stack. Companies should know that integration with SCP is possible in the ECC world today. As a result, this technological innovation is already theirs for the taking.
For new SAP customers, the best possible technological platform should be selected on the basis of the overall strategy or the digitalization strategy. These days, SAP offers the advantage of an open architecture. It is important to consider the consistency of end-to-end processes when selecting individual products. An S/4HANA preliminary assessment is recommended as the best way for making this decision.
SAP has extended SAP maintenance support for the old product line by a further two years until 2027. The transformation process can take months or even years for some companies, so why should they concern themselves with it today?
As already mentioned, the key driver for transformation should not be that the maintenance support package is ending soon. Instead, the focus should be on the added value from technological innovation and the consistency of end-to-end processes through to the customer.
The demand for digital processes with modern technologies is constantly and rapidly increasing. Digital processes with a high amount of customer benefits require a high level of integration into corporate business processes. These processes must be able to adapt quickly to new business requirements or new technological possibilities. With SAP Intelligent Enterprise, companies can increase the speed of innovation through standardization, improve customer experience through the use of feedback or optimize and automate processes through the use of artificial intelligence. It is important that these technologies are used in the right places in end-to-end digital processes. The earlier a company develops its existing IT landscape in this direction, the greater its competitive advantage in a rapidly changing environment.
What are the biggest challenges and concerns of companies during migration to SAP S/4HANA?
SAP has so far been perceived as being hugely complex, with lengthy, expensive implementation and migration projects, where business processes have to adapt to the conditions of the SAP solution rather than the other way around. That results in good, tried and tested business processes being changed – and not always for the better. In addition, there are concerns about the high training costs for employees and the perceived risk that production may collapse once the new system is introduced, for example because the new system cannot be managed so quickly and so well by the employees.
But there is no need for all of these difficulties and concerns. Along with identifying the right tools, companies must rely on the expertise of qualified SAP consultants who are experienced in agile procedures, reliable and able to implement SAP migration projects to a premium standard.
When migrating to the new SAP ERP suite, there is a more radical method, known as the greenfield approach, and a less radical method, known as the brownfield approach. Could you please go into these in more detail and talk about the differences and advantages?
In the greenfield approach, a new SAP system is set up and rolled out in parallel to the legacy system. Although all processes need to be set up anew, this is the right approach for companies looking to align with the SAP standard or introduce S/4HANA in the cloud. In this way, legacy systems can be streamlined and realigned to meet current requirements.
As part of the brownfield strategy, the existing ERP system is converted to a S/4HANA system. This is the strategy to choose if a company’s system is already closely modeled on the SAP standard, or if the company attaches great importance to the processes already implemented. Advantages include a lighter workload for involved business units compared to the greenfield strategy. In addition, legacy data and comparisons with previous years can be transferred to the new system.
However, it is also possible to use what is known as a colorful approach. This approach combines the two strategies, since a greenfield approach usually does not migrate legacy components and the brownfield strategy does not allow fundamental changes to the processes. That said, the complexity of the colorful approach should not be underestimated.
On the whole, it is not possible to predict which approach is best, as there are many factors to bear in mind when choosing the right transformation scenario. A detailed S/4HANA preliminary assessment will help point companies in the right direction.
What are the key steps in a migration to S/4 HANA, and how does LHIND help companies with this transformation?
At Lufthansa Industry Solutions, we rely on the aforementioned S/4HANA preliminary assessment to show our customers the best way forward. Together with customers, and in accordance with their IT strategy, we first define their end goal of how they envisage their 'intelligent company'. It is important to keep in mind that customers are laying the technological foundation today for the next 20 years. Therefore, it is essential to maintain a link to the corporate strategy when developing target business processes. We use tools and reports provided by SAP, among other aids, to identify weaknesses in the current system landscape and other innovation opportunities. Within the scope of our technical preliminary checks, we can determine the level of customization required by the customer and identify suitable preliminary projects in order to reduce the complexity of the subsequent transformation. As part of the workshops, we enter into a dialogue with the IT department and the business units to find out their needs, objectives and innovation potential. This enables us to develop a target architecture that not only presents the customer with the plan for its migration to SAP S/4HANA, but also demonstrates the future SAP Intelligent Enterprise world.
We offer our customers SAP consulting, support with new implementation or migration from A to Z and, if required, the subsequent operation of the solutions. With our qualified and certified SAP specialists, we are experienced in working with both the old and the new SAP products and have already successfully implemented countless projects.
In terms of the "new SAP world" – SAP Intelligent Enterprise – we offer the following services:
Consulting within the scope of the transformation of SAP system landscapes and their processes into new digital and intelligent worlds. Development of the optimal transformation strategy for the customer, from strategic consulting and architecture consulting to the creation of SAP transformation road maps with digitalized end-to-end processes and real customer experience:
- SAP strategic consulting
- SAP architecture consulting
- SAP road map consulting
- Quality audits and fitness checks of live SAP transformation projects
Implementation of S/4 introduction projects – from preliminary assessment to implementation:
- Brownfield SAP conversion (ECC to S/4HANA)
- Greenfield SAP introduction
- From SAP R/3 or ECC to SAP S/4
- SAP introduction
- SAP system landscape optimization
Consultancy and implementation offers concerning innovation, enhancement, integration and the SAP Cloud Platform (SCP), as well as SAP Analytics topics. In terms of the SAP Cloud Platform, emphasis is placed on expansion and integration involving the digital core (S/4HANA) and the SCP digital innovation platform as supported by SAP Leonardo. In Analytics, the portfolio ranges from architecture consulting and the execution of proofs of concept (PoC) with elements such as SAP S/4HANA Embedded Analytics all the way to implementation:
- SCP business and technology services
- SCP development
- Advanced business application programming development (ABAP)
- Fiori and UI5 development
- SAP Analytics Cloud
- SAP HANA Cloud services
- SAP BW
Consultancy and implementation concerning SAP SaaS solutions such as C/4HANA, SuccessFactors and Ariba or S/4HANA Cloud. This also includes the planning and implementation of SAP migration projects to transfer the on-premise products SAP CRM and SAP SRM to SAP Intelligent Enterprise:
- SAP C/4HANA
- SAP SuccessFactors
- SAP Ariba
- SAP S/4HANA Cloud
Management of applications and operation of platforms and systems in the SAP environment:
- Application and platform operations: Technical and specialized operation of applications and platforms such as SAP Basis and various database technologies.
- Service Desk application: consistent, professional, 24/7 1st level support in German and English.
- 3rd level support, maintenance and enhancement: development and maintenance of application components in connection with key technologies such as SAP, databases, EAI and application platforms.
We are an SAP Silver partner
Lufthansa Industry Solutions has had a close strategic partnership with SAP since 1997. Over the years, many successful projects have been implemented across all industries for medium-sized customers and large corporations alike. With our certified SAP specialists for SAP SuccessFactors, S/4HANA, the HANA platform and all modules, we support all phases of SAP IT projects from planning to implementation and operation.
Frequently asked questions
Questions about the new SAP world? Here are a few concise answers to help you find your way:
SAP has been pursuing a cloud-first strategy since 2014, meaning that innovations are first rolled out in the cloud. Innovations are also introduced in the on-premise version of S/4HANA, but may be delayed in some cases.
Cloud products are known for their fast and agile implementation. When in operation, they impress users with often lower operating costs, a fast innovation cycle and an excellent user experience.
How long it takes to convert to S/4HANA depends on whether emphasis is to be placed on the processes that make innovations possible, or whether the existing processes will be left as is in favor of a more technology-driven conversion scenario. In addition, the proximity of the current system to the SAP standard is also of relevance.
If well prepared, S/4HANA conversion projects (brownfield approach) can be completed in a few months, typically between six months and a year. Conversion takes longer when more innovations are to be integrated. However, this is usually due to conceptual work that is done in and with the departments rather than technical issues.
No, when using the SAP Analytics Cloud, your data does not necessarily have to be stored in the cloud. You can select whether your data should be replicated in the cloud or stay in the secure company network. This can be configured individually.
SAP S/4HANA (cloud and enterprise edition), SAP BW on HANA or BW/4HANA can all be used as data sources, as can Business Objects universes or a HANA database (as a service on the SAP Cloud Platform or on-premise).
Yes, SAP Analytics is available for mobile use. The SAP Analytics Cloud can be accessed via a browser or a mobile app. SAP even has an SAP Analytics Cloud app on offer. It already supports a wide range of data processing tasks available within a story. However, if the range of functions does not happen to be sufficient for your needs, there is the additional possibility of developing an individualized app. SAP provides a corresponding software development kit (SDK) for this purpose.
S/4HANA is not a necessary requirement to use the SAP Cloud Platform. Through its function as a digital core, however, it offers many easily integrated back-end services for business applications. For example, the SAP Cloud Platform can also be used in combination with an SAP ERP system.
SAP offers the Cloud Connector to enable the integration of applications and systems into the SAP Cloud Platform. It allows the secure integration of ERP back-end systems as well as internal third-party applications.
In terms of programming languages used for development on the SAP Cloud Platform, SAP naturally prefers its own UI5 framework and offers a variety of tools to help accelerate development. Other front-end frameworks such as Angular, React or VueJS can also be used.
A variety of programming languages can also be used for back-end services on the Cloud Platform. As a rule, however, back-end services are developed in Java, NodeJS and, for some applications, Python. Development is even possible in ABAP.