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In October, SAP released S/4HANA Cloud 2011, the final 2020 quarterly release of the SaaS version for its flagship ERP platform.
Each quarterly release of S/4HANA Cloud includes new features and functions, some of which are major new capabilities and many of which are tweaks that streamline existing functions, according to Jan Gilg, SAP president of S/4HANA.
S/4HANA Cloud 2011 included three "big ticket" new capabilities that are primarily a response to customer requests that have arisen during the COVID-19 pandemic, Gilg said. The three major enhancements focus on service management, order management and cash management.
The service management functions are designed to help organizations start selling products as services or implementing subscription models; the order management functions streamline end-to-end supply chain processes and enable more flexibility in demand planning by adjusting the priority of orders; the cash management functions are designed to enable organizations to collect cash faster.
In this Q&A, Gilg discusses how SAP determines what functions and capabilities to include in the quarterly releases of S/4HANA Cloud.
How do you drive the innovations that get included in the quarterly releases? Does input come from customers?
Jan Gilg: There are various channels. One is what we call impediments, where customers can use a portal to make suggestions on what they perceive as a gap or requests on what we should develop. Other customers have the ability to vote on the suggestions, and we take that and put it into our backlog. Another channel is that we embedded Qualtrics into S/4HANA, which was released last year for a small group of customers and is now available to everybody. Now in each Fiori app [S/4HANA mobile UX], customers can leave feedback that's more specific to the context [of what they are working on]. They can leave feedback and suggestions for improvements, which are channeled to product managers who then put it into the backlog.
So, you are also tracking how customers use S/4HANA Cloud?
Gilg: Yes, we want to understand what functions are actually used in the product, so we built a tool that correlates the experience data with the usage data. There are some interesting correlations, like often during upgrades, you get more [support] tickets and you also get feedback from customers. Usually [correlated data] matches pretty well together and sometimes you can trace this back to a certain event. It's a very helpful tool, where we can show how we bring operational and experience data together to improve our product.
What factors go into the decisions you make on where to focus for the features you want to include in a new release?
Gilg: There's a multitude of criteria that we use in product management to prioritize the backlog. Since ERP is a broad and complex product, we have functional backlogs, which are a mix of some of the innovations where we see potential for additional revenue opportunities. We have some things where we get pressure from our installed base where customers may need additional features, and we determine that the majority of customers will need that. There are also features that may help us open up a broad, addressable market. So, there are different criteria and weighting criteria that define the backlog.
You have a bunch of backlogs next to each other, and since we're serving end-to-end processes, and specifically in the cloud, we have to be complete and have to make sure that an end to end process works. The product managers go over those functional backlogs and make sure they all match up because it doesn't help if the finance piece of the process is priority No. 1 and another piece that's needed in logistics is only priority No. 50 and is not going to be part of the release. Product managers have to prioritize the adjustments to make sure that the process works end-to-end. There are also requirements that we get for the intelligent enterprise, which are primarily integration requirements, such as integration with SuccessFactors, with Concur, with Ariba. We need a certain amount of capacity left over to work on those integrations.
Since COVID-19, did feature and functionality priorities change?
Gilg: Yes, the pandemic changed the prioritization a little bit. For example, we have focused more on finance and have put more weight on cash management and receivables management. Also, in supply chain, we're focusing more on the planning side and things like connecting with the SAP Ariba Network and being able to adjust supply chains more quickly and more flexibly. So, the pandemic has definitely had an impact on how we prioritize backlog items.
What have customers told you about how they're dealing with the disruptions brought on by the pandemic?
Gilg: Some customers had to completely change what they produced. Some customers didn't have an online shop and they sold only in stores, but then everything got shut down and it's been a matter of survival for them to stand up an online shop within a couple of weeks and connect up the back end and keep that going. We've had to help customers shift priorities, and we've seen a shift more toward the essentials. In supply chain, for example, many customers have adjusted their supply chains more locally, and there's much higher interest in visibility and predictability. Many are moving away from optimizing purely on cost to resilience, which from a developer's perspective changes what we need to focus on.
What's the status of S/4HANA Cloud implementation projects in the COVID-19 pandemic? Are projects getting accelerated or are they slowing down?
Gilg: Overall, [500 S/4HANA customers were added in the third quarter]. So customers have continued to go live during the pandemic. Some projects are getting delayed, but these are more on the on-premises side, and some projects have been accelerated. For S/4HANA Cloud, we have seen almost no slippage, and customers have been able to move to more remote work and remote go-lives rather quickly and successfully because most of the implementations are less complex than for a large company that deploys on premises. For the cloud, customers are primarily interested in a subscription model more than the classic license model, so we're seeing much more demand for both public and private cloud deployment.