SAP S/4HANA real-time analytics best for tactical decisions

Experts say the built-in tool is fine for operational decisions when running S/4HANA business processes, but not for sophisticated strategic planning and predictive analytics.

Real-time analytics is at the peak of its popularity, so it is no surprise that SAP already has the technology...

baked into S/4HANA, the vendor's newest ERP platform. The SAP S/4HANA real-time analytics tool includes forecasting capabilities, along with dashboards and reports. But according to experts, while S/4HANA has robust analytics, it may not be able to fulfill all business needs.

SAP's strategy for many of its capabilities, including business intelligence (BI), has been to acquire companies such as Business Objects, according to Dan Vesset, group vice president at research firm IDC. While the tools SAP included in S/4HANA are good, they fulfill more of a tactical need, he said.

"The [analytics] tools built into S/4HANA are best suited for tactical and operational decisions," Vesset said. These are typically decisions made using the process flow of the application, including HR, procurement and supply chain decisions. The application itself is the data source, and there often isn't a need for complex analysis of the data or integration with other applications, he said.

The embedded tools work because of these factors, not in spite of them, and they provide good insights into data residing in S/4HANA without having to wait for batch processes to finish, Vesset added.

Staying in SAP S/4HANA for analytics

With S/4HANA real-time analytics, SAP is trying to give users a reason not to switch to SAP Analytics Cloud or BusinessObjects and to work within the context of a business decision, according to Brad Shimmin, service director for global IT technology and software at research firm Global Data.

"They know that what everybody's shooting for is putting analytics at the point of decisions, where decisions get made by actual business users," Shimmin said. The idea behind S/4HANA real-time analytics is that, for example, if a user is working on order-to-cash transactions, a decision point occurs at a part of the workflow where getting insight would be most beneficial. The tools inside S/4HANA can provide analysis without having to switch context or requiring the user to be a data science expert, he added.

Embedded analytics is almost a software requirement

Embedded analytics is nothing new. All the legacy BI vendors are doing the same thing as SAP: adding real-time analytics capabilities that are geared toward business users, according to Shimmin.

"If you own SaaS solutions, you had better well embed analytics in them, and if you have a developer ecosystem, you better provide that ecosystem with the ability to embed analytics," he said, noting that the ability could be a productized rendition of a dashboard tool or a RESTful API to integrate with the application. Vendors, including SAP, are now encouraging an "all-you-can-eat buffet of microservices" to embed analytics within applications, he added.

But embedded analytics doesn't fit every need

While a benefit of using S/4HANA embedded analytics is that everything is in the application, that is also its shortcoming, and you do need to pull data in from another application to assist with strategic or operational decisions, according to IDC's Vesset.

"As you get into more sophisticated analysis, like predictive analytics, [S/4HANA's embedded analytics is] perhaps not ideal for that. It wasn't built for that, and people shouldn't be expecting those tools to do that," he said.

The bad news is: It's not as easy to do more advance analytics, even if you're using another SAP application with S/4HANA. "As soon as you get into a diverse set of applications, including legacy applications from SAP and other vendors, you need more sophisticated integration," Vesset said.

In that case, companies may want to choose a third-party tool for real-time analytics that can support strategic and operational decisions and not just rely on S/4HANA real-time analytics. It's similar to about a year ago when companies would use SAP's partners for geospatial services to enhance existing content in the SAP system, Global Data's Shimmin said. Ultimately, what it comes down to is where you keep your data and what kind of investment the platform has made to make the most use of the data in the confines of analytics, he added.

While S/4HANA's embedded tools are fine for tactical decisions, experts seem to agree that, for more predictive analytics that are used in strategic decisions, it is worth looking into another tool -- from SAP or another vendor -- to integrate data sources and achieve the best insights.

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