What SAP S/4HANA migration means for the company

Interview with Thomas Popp, Managing Partner of Q2factory GmbH

DIALOG:  Mr. Popp, many companies simply see migration to SAP S/4 HANA as yet another complex job on the CIO's to-do list. Do you share this opinion?

Thomas Popp: Absolutely not. The CIO is undoubtedly the first port of call, but in this case the task is not solely his responsibility. S/4HANA has the potential not just to bring about technological improvements to the IT infrastructure – the dramatically different system capabilities it offers are nothing less than a paradigm shift. Business processes can assume an interdisciplinary structure that extends along communication and decision-making paths, from the individual employee all the way to the management board. For the CIO, this is not so much a job he has to do, but rather a completely new look at his role and his scope to maneuver. Instead of IT being driven by business, for the first time it now has the chance to run the business. To put it bluntly, in the age of Industry 4.0 and the IoT, this is his duty. The challenge for business is to understand the new capabilities of IT and to design new business scenarios based on this.

DIALOG: What challenges can SAP S/4 HANA overcome in industrial IT system landscapes?

TP: Above all, those that enable a more direct solution to the requirements of operative business. In recent decades IT tended to limp along behind industrial requirements, partly because the stringency of the process and functional requirements imposed by the various departments was often beyond the capabilities of the software. System landscapes became increasingly complex and difficult to manage. Many companies developed their own additional creations where customizing no longer sufficed.

All these components then had to be integrated, frequently a very time-consuming process. This gave rise to the problem of redundant data storage, with the replication of data throughout the system landscape – for instance synchronizing customer master data in the ERP and CRM systems and only collecting it once. S/4HANA completely eliminates this longwinded and error-prone procedure. Furthermore, S/4HANA can cope with the requirements of mobile applications and bulk data storage, which set the scene for the IIoT (Industrial Internet of Things) with detailed sensor data or the company's social internet channels around the clock.

DIALOG: What should companies do if they want to develop business models heading towards an IIoT?

TP: Above all, they should see the world through the eyes of their customers – or their machines and systems. Simple IIoT devices can monitor their own performance, enabling preventive maintenance. One possibility is to integrate HANA into the ERP system so that it can monitor all IoT bulk data and initiate maintenance jobs from a cell phone app. However, this analysis can also be automatically linked to a customer order or serial number, which opens the door to business models in which the main focus is not on the machine or product itself, but on its use. Similarly, S/4HANA can be used to create a dashboard, which displays all Twitter sentiments about the company groupedby  customer segment. For a marketing manager, this is worth its weight in gold.