What is SAP S/4HANA: Overview, Architecture, and Capabilities

Primarily, SAP S/4HANA Cloud offers more than the traditional SAP ERP applications on real-time data and processing, automation, and user interface. The objective of SAP S/4HANA is to furnish every possible business process transformation with Machine Learning, Artificial Intelligence, and Predictive Analytics while allowing businesses to develop supplier chain operations intelligence, procurement, efficiency, and agility.

Accely understands that a robust ERP is crucial in achieving business goals. To truly capitalize on an ERP investment, a development has to be undertaken in the digital transformation space that automates corporate apps and systems seamlessly.

What is SAP S/4HANA?

SAP S/4HANA ERP Software Suite is a creation of SAP SE to cater to the complex business processes of modern-day companies. The SAP operates as the central nervous system, facilitating every business decision.

Sales orders, customer payments, vendor payments, procurement processes, product planning, production workflows, service requests, and delivery operations are some of the day-to-day activities the software helps companies to handle.

The integration with AI, machine learning, IoT, and big data assures that the user experience is ingenious in design and performance-based. Deployment alternatives may be on-premises, on the cloud, or hybrid, suitable for companies of different sizes.

While integrating multiple business activities such as sales, shipping, finance, and HR, it serves as a single data center for all operations. For legacy services and data support, it integrates with various third-party solutions and supports the SAP business suite from the previous generation.

SAP S/4HANA is built on top of SAP HANA, the ground-breaking in-memory database. In comparison to earlier SAP products, it offers real-time processing and analytics together with noticeably better performance.

History of SAP S/4HANA

Launch and Early Adoption

With an in-memory database, SAP HANA had its inception in 2010. It first appeared in the world to set a stage for S/4HANA, for in essence, older products such as SAP ERP and Business Suite could now benefit from faster performance.

Afterwards, on 2nd February 2015, SAP S/4HANA was formally launched at the NYSE. Both on-premises and cloud editions are available. The cloud version launched at SAPPHIRE NOW on May 6, 2015, while the on-premises version was accessible the same day.

By April 2015, S/4HANA had been adopted by 370 clients, demonstrating its rapid success. About 1,300 clients had been onboarded until October 2015. Around 5,400 customers were present at the end of 2016, which had increased almost 1.65 times by mid-2018 to 8,900.

Key Milestones

For what may well be considered the most significant update to ERP in more than 20 years, around 400 million lines of code had to be rewritten for the SAP S/4HANA release. This made it possible for new architecture, features, and integration support for many implementation models, particularly cloud implementation, which was new at the time and is now a part of our everyday life.

S/4HANA’s Innovations

The creation of SAP S/4HANA itself is enabled through an in-memory SAP HANA data platform that stores data in RAM and offers processing and analytic operations much faster than conventional disk-based databases.

Those who impact decisions will be able to act preemptively, making data-driven decisions when in-memory databases are able to provide immediate insight into operational data, trends, and KPIs. Instead of waiting for reports to be generated by the end of the day following batch processing on data collected from various modules, decision makers are offered real-time data processing and statistics.

Until now, Online Analytical Processing (OLAP) handled processing, reporting, and complex analytics and was separate from the Online Transaction Processing (OLTP), dealing with the day’s actual production, thereby duplicating data from several systems and reconciliation processes. S/4HANA did away with having to use multiple systems by merging these capabilities onto one platform; hence, analytical processing is directly embedded into transactional processing for real-time processing, reporting, and decision-making.

Timeline of Evolution

The architecture first built towards S/4HANA was called Simple Finance; it was launched at SAPPHIRE NOW in 2014. It introduced a diminutive data model that allowed real-time financial processing and reporting. This was atop SAP HANA.

To improve the integrated planning, execution, and tracking of transport operations and increase logistical visibility and efficiency, TM was added to S/4HANA in 2017. Predictive Accounting was released with the 1809 version of S/4HANA 2018. This allowed companies to proactively make decisions, forecast financial impact, and simulate possibilities for given outcome scenarios in the real world based on existing data patterns.

Since 2022, there have been separate on-premises and cloud editions of SAP HCM for S/4HANA; nevertheless, SAP SuccessFactors is a prevalent HR solution. Better customizations for business-specific requirements, connection with S/4HANA backend services, and a contemporary user experience are all provided.

The requirements and demands of various industries are addressed by S4 HANA SAP release cycles. For instance, the 1909 release highlighted pre-configured solutions for discrete sectors, the 2021 release cycles concentrated on financial and public services, and the 1610 release featured solutions tailored for the oil and gas industry.

Shift in Release Cycle

SAP SE has been releasing on-premise versions yearly since the release of S/4HANA back in 2015. But starting 2023, a two-year release cycle is intended to offer companies ample time to adjust, implement, and stabilize each new version.

Release Cycle and Versions of SAP S/4HANA

Release Frequency

Before, the on-premises S/4HANA followed the annual release cycle, thereby dishing out major updates to users every year and giving users the ability to schedule upgrades as they came with new features. SAP switched this strategy to a two-year cycle once 2023 was released. With seven-year maintenance support, major releases will be accessible in two years.

In contrast, S/4HANA Cloud releases twice a year, i.e., February and August, smoothly pushing new features in smaller, swifter waves through SAP management.

Version Coding

S/4HANA cloud versions use “YYMM,” or year and month version code. For instance, the “Release version 1709” was launched in September 2017.

Prior to the 2020 release, S/4HANA on-premises also followed “YYMM” versioning. Still, they have now switched to “YYYY” versioning, where each release version basically speaks the year of release, so 2020 means the release came into existence in 2020.

List of Releases for S/4HANA On-premises

The following are the main release cycles for SAP S/4HANA on-premises:

Why is SAP S/4HANA important?

It is far more than a new release of SAP working alongside the latest generation ERP suite; it is about doing things differently in this digital world. Simplicity, artistry, and speed are put together into SAP S/4HANA. Real-time processing of huge volumes of data becomes possible with the in-memory SAP HANA database, thereby pushing businesses away from batch-oriented processes to real-time business insights and swift decision-making. Besides exemplary performance, S/4HANA also gives a cerebrally simplified redundant data model that reduces redundancies, thereby simplifying systems and streamlining IT environments that contribute to reducing the total cost of ownership. The platform fosters business innovation and agility in very competitive sectors by embedding state-of-the-art technologies directly into business operations, namely AI, machine learning, and advanced analytics.

SAP S/4HANA’s Architecture Detailed Breakdown

SAP S/4HANA’s architectural design offers high-grade performance and great scalability to organizations alongside simplifying the IT environments of enterprises. Generally, three main levels signify it: database layer, application layer, and presentation layer. Their relevance lies in providing a user experience that is super slick, guaranteeing smooth processing, and real-time views into the data.

1. Presentation Layer

This is the HANA-presenting platform, with which SAP S/4HANA interacts and is visualized by the final segments of users. Classic SAP GUI screens, meanwhile, have now been replaced with role-based interfaces that recognize modern sensibilities and are responsive across devices by SAP Fiori. The presentation layer is heavily invested in usability by embedding dashboards, KPIs, and analytics directly into the processes so that the user receives immediate actionable insights.

2. Application Layer

The application layer is called the “brain” of SAP S/4HANA, as it contains the business logic and executes the processes. This is where the business applications in production, sales, supply chain, finance, and all other domains reside. The intent behind building this layer was to harness the in-memory processing capabilities of SAP HANA and the very fast execution of complex transactions and analytics. Utilizing this further are new-generation technologies like robotic automation (RPA), artificial intelligence, and machine learning to bring forth better process flows and widespread intelligent automation.

3. Database Layer

What really separates S/4HANA from conventional ERP systems is the SAP HANA in-memory database. It gives real-time access and faster processing of large volumes of data, whereas conventional databases depend upon disk storage and are thus slow in analytic operations. Being free from the redundancy of aggregates and indexes, the design it follows cuts down storage requirements and pumps efficiency into the system. This layer tremendously contributes to making S/4HANA’s digital core fast and agile.

Key Aspects of SAP S/4HANA Architecture

Core SAP S/4HANA is proposed with the architecture ideal for contemporary enterprises with a need for speed, agility, and in-built intelligence. It differs from other traditional ERP systems in so many ways, whereby it allows businesses to survive in the present while developing for the near future.

In-memory Computing

SAP S/4 HANA utilizes its in-built in-memory database platform SAP HANA that processes and stores information in RAM memory rather than on hard disks. Data retrieval time being greatly cut down allows transaction processing to go on faster, real-time analytics, and real-time processing of large volumes of data.

Simplified Data Model

Prior ERP systems presented complex data structures, so S/4HANA eliminates this. It gives way to simplification of processes, reduction of company systems, and cost savings in storage by eliminating unnecessary tables, aggregates, and indexes. With a clean data model, businesses have a single source of truth, thus enhancing reporting and analytics efficiency to a great extent.

Cloud Deployment

The S/4HANA systems can be implemented on-premise or via hybrid cloud, privately or publicly. By using public cloud, one can obtain scalability and speedy deployment, keeping a company cost-effective while adapting to changing market requirements.

Scalability and Flexibility

The architecture of S/4HANA is designed such that it expands according to company growth. It allows resource scaling depending on the need and serves businesses of all sizes. Scaling is modular, so businesses can pick and choose which features are crucial from the start and grow into more as needed without hindering ongoing operations.

Integration Capabilities

Built as a digital core, S/4HANA easily integrates with third-party apps and other SAP products, including SAP SuccessFactors, SAP Ariba, SAP Concur, and SAP Customer Experience. Open APIs allow integration all throughout the enterprise ecosystem and support end-to-end process integrations through SAP Business Technology Platform (BTP).

Core capabilities of SAP S/4HANA

Enhanced performance

The SAP S/4HANA represents a monumental transformation in businesses handling their data, now with enhanced functionality for real-time analysis and processing. This talent is crucial for any organization desiring to decrease expenses in its operations and make choices in rapid succession. Thanks to the in-memory database implemented in SAP HANA, S/4HANA reduces bottlenecks in data processing, allowing organizations to handle massive volumes of data with ease. The greater speed is vital in numerous other industries, such as managing supply chains, customer service, and financial planning, where time and precision matter.

Simplified architecture

The other revolutionary change is given by the simpler architecture in S/4HANA that renders a relatively more efficient and effective ERP system. An improvement has been made with the data model and the user interface, as both have been simplified-All of this simplification means ease of use on the user end and less technical attitude for businesses to deal with. With such a much simpler and leaner data architecture, businesses can retrieve data much faster and at a fraction of the cost of storage, ultimately leading to a much more cost-effective and flexible operation. This S/4HANA architectural guide places a strong emphasis on how this learner approach furthers digital transformation through lesser complexity and smoother operations.

Advanced analytics

The advanced features of SAP S/4HANA help companies to shape their customer experiences, manage their operations, and even forecast the future. The manufacturers’ decisions in S/4HANA are aided by AI and ML to help with predictive analytics and pattern scrutiny. Companies are able to use this feature to gain an edge over competitors, respond to changes in the market in a timely manner, and design marketing strategies that respond to consumer purchasing fetch.

User experience

SAP Fiori, an innovative user interface that offers role-based, streamlined, and intuitive interaction across all platforms, greatly improves the SAP S/4HANA user experience. Employee happiness and productivity are raised by this enhancement in the user experience since it makes it easier for them to access the system at any time and from any location. A more pleasant workplace and more effective work procedures are in line with the emphasis on improving the user interface.

Cloud and on-premise deployment

In today’s world, digital systems and applications perform integrations distinguishing systems from one another. The system’s connectivity features in SAP S/4HANA make it possible for companies to link their ERP systems with a host of other software applications, thereby improving data integration and overall process automation.

Integration capabilities

In today’s digitally connected world, the ease of interacting with other applications, systems, and processes is crucial. SAP S/4HANA connectivity features provide businesses the opportunity to link their ERP systems with other applications, thereby improving data exchange and overall process effectiveness.

Implementation Methodologies

For any consideration of implementing SAP S/4HANA, it is critical to plan implementation and design of the project business case that incorporates the target organization’s clearly defined objectives. Proper data conversion and mapping is critical in every project endeavor. There are numerous SAP S/4HANA deployment options available, each with particular advantages and disadvantages.

Cloud deployment: As a Software-as-a-Service (SaaS) product, SAP’s S/4HANA edition takes care of infrastructure and maintenance and will automatically send out the latest upgrades. It comes in both public and private editions. The complete SAP S/4HANA functionality is available in the private cloud, which is housed on a private network protected by a firewall. Through a service provider, the public cloud provides cost and efficiency.

On-premises deployment: A traditional licensing approach is used to offer SAP S/4HANA on-premises. The IT department of a company manages deployment and maintenance, and customers are in charge of regularly upgrading the system. It is quite compatible with the data management and storage needs of a certain organization.

Hybrid cloud deployment: SAP customers can use both on-premises and cloud technologies using a hybrid cloud approach. For example, a company using a hybrid approach may use some cloud-enabled SAP solutions while storing key data and applications on a customer’s hardware.

Greenfield approach: The Greenfield approach to implementation is an opportunity to make a fresh start. Organizations taking this approach have either never used an SAP ERC or are willing to completely re-engineer their data practices and workflows. This approach is relatively simple, though pricing can sometimes be higher as it involves a complete redesign of a company’s process.

Brownfield approach: A system conversion, often known as a brownfield method, converts an existing SAP environment to SAP S/4HANA. It appeals mainly to businesses that want to use some of SAP S/4HANA’s new features but aren’t ready to completely transform their data processes or operations.

Benefits of SAP S/4HANA

Thanks to SAP S/4HANA’s flexibility and range of industry-specific add-ons, there are nearly as many SAP solutions as there are business models.

Solutions tailored to a particular industry address the particular requirements of sectors, including manufacturing, retail, and healthcare. A company can select the functions that best suit its business cases thanks to flexible modules. The following are some of the main advantages of deploying SAP S/4HANA:

Cloud readiness

SAP S/4HANA gives businesses greater flexibility by being able to be implemented on-site or in the cloud. Scalability and cost-effectiveness can be supported by the program, and it is flexible to meet a variety of particular privacy requirements.

Enhanced forecasting

Management and staff are now empowered to constantly evaluate company operations looking for improvements, or detect more significant changes in particular workflows, via customized dashboards and reports. Issues can also be predicted. For instance, predicted problems may be highlighted in advance with S/4HANA.

Integrated workflows

The platform is intended to improve the efficiency of a number of corporate processes, including financial compliance, warehouse management, and supply chain tracking. Support for the Internet of Things (IoT) and Industry 4.0 provides up-to-date information on the flow of products and materials across a whole company.

Intuitive user interface

Collaboration across different teams gets much easier, and the checks and balances between them improve with SAP S/4HANA. The chances of making expensive mistakes and the time taken to complete a task both reduce when staff work from a single database.

Real-time data processing and automation

With SAP S/4HANA, companies can now utilize sophisticated analytics for immediate insights. Moreover, the drudgery of matching invoices and receipts is eased through AI, machine learning, and faster processing.

Simplified data management and decision-making

SAP S/4HANA simplifies an enterprise’s data model and streamlines information management, which lowers costs and increases productivity over a company’s whole lifespan. Lower costs for server maintenance, IT, and other areas occur from colleagues being able to readily access the same data on the same platform.

As the amount of data expands, SAP users can be more responsive to business changes since they have immediate access to data. As with SAP S/4HANA, the features of forecasting and analytics enable companies to serve their growth needs both for the near and distant future. Automatic updates like with SAP S/4HANA, where users have the latest features, permit new business and technology integrations to function as intended.

SAP S/4HANA Migration Challenges

Data migration

The most challenging aspect of upgrading an older system to a newer one is preparing the data to suit the transformations in the newer versions. During the update, or before it begins, perform the necessary data retrieval and extraction. Follow this by cleaning, transforming, and importing the data into the HANA system database.

Accurate data mapping

This includes addressing gaps such as absent, conflicting, or inappropriate data; creating rules to transform data so that the data type and length can be moved to the new database’s tables; doing data validation testing; and understanding the legacy system’s data structures.

Defined objectives

Determine clear objectives, ensure that they can be measured, and that they can be completed within a specified duration, as this is essential to keeping downtime to a minimum and ensuring that operations will continue, as failure or delay of the migration is often the result in their absence.