SAP S/4HANA Cloud update adds functionality for two industries

SAP focuses on manufacturing and professional services with the new features it's adding to S/4HANA Cloud. The enhancements are a continuation of what SAP calls 'intelligent ERP.'

The latest updates to SAP S/4HANA Cloud, released today, will primarily benefit two industries: manufacturing and professional services.

The new features include dozens of AI-powered scenarios to automate manufacturing processes and three ways to make professional services processes more transparent. The features follow a release in May, when SAP introduced 12 other AI-powered scenarios; nine were machine learning scenarios, and three were CoPilot-powered conversational UI scenarios. CoPilot is SAP's digital assistant.

The added functionality, according to SAP, is all about simplifying and automating ERP. "That's why we're automating the cloud ERP by 50% in the next two years," said Sven Denecken, SAP's senior vice president of product management and co-innovation for S/4HANA.

"[Customers] understand that whatever they use today, they will get a much simpler, much more powerful system, and they are going to get a lot of the legacy out of their business processes," he said.

Added functionality for professional services

In the realm of professional services, the features added to SAP S/4HANA Cloud include improved ability to perform staffing analysis, the ability for project managers to define a project's upper cap limit at the billing line and the ability for consultants to get quicker notification if a client rejects the consultant's time sheet.

Holger Mueller, principal analyst and vice president of Constellation Research, said he doesn't find the new professional services features "really exciting." He added, "[They're] not using AI, [and they're] not really working toward intelligent ERP. But then, not all can be intelligence; sometimes, you have to empower users to enter data." 

The new features, however, do excite Beyond Technologies, a consulting company that specializes in SAP integration. The 13-year-old company, which has had "a cloud-first approach for most of our applications since the beginning," moved its France operations to SAP S/4HANA Cloud in July 2017, said Leonardo De Araujo, owner and partner of the company, based in Montreal.

"One piece of functionality of [S/4HANA Cloud] that we're very interested in is resource management," De Araujo said. "Staffing analysis is key to our business. We haven't had in the past solutions that were able to track that. Now, we're seeing SAP release reports that can help us get a more analytical view on staffing. We're going to start playing with that as soon as we get access to it."

"On a more practical and more immediate level is new functionality for putting caps on billing for time and expense on projects," De Araujo said. Project managers will be able to more easily "manage the execution and get warnings early on to see if thresholds are being hit so action can be taken," he added. In essence, SAP has made it easier to establish and track the caps.

Another feature De Araujo said he welcomes is "improvements to time-entry sheets ... where we can have better documentation on exceptions and handling of exceptions when times aren't correct. That makes it easier to undo and correct entries. That's something in professional services that is quite time-consuming when a time is entered in the wrong project."

Enhancements for manufacturing

Back at Sapphire in May, SAP unveiled its vision of the intelligent suite. And, fittingly, SAP delivers some of that intelligence in [S/4HANA Cloud].
Holger Muellerprincipal analyst, Constellation Research

In manufacturing, Denecken said, "bottleneck situations are what everyone ... wants to avoid." To address this concern, SAP S/4HANA Cloud now provides the ability to visually detect load capacity and make adjustments. In addition, inventory buffer levels can now be managed dynamically and adjusted automatically based on daily usage.

The manufacturing-related enhancements to SAP S/4HANA Cloud also include automation of chemical compliance processes, quality management analytics and support for two-tier ERP.

"Back at Sapphire in May, SAP unveiled its vision of the intelligent suite," Mueller said. "And, fittingly, SAP delivers some of that intelligence in [S/4HANA Cloud]." With a focus on manufacturing, he said, "SAP keeps expanding the suite. Most of the intelligent offerings are prebuilt capabilities that stand and fall in practice with their applicability. We will know in a few weeks [or] a short number of months if SAP was able to hit the mark with them."

The road ahead for SAP S/4HANA Cloud

Moving forward, Denecken said, SAP is adding 20% of scope every quarter, so "it's fair to assume" SAP S/4HANA Cloud users can expect to see "constant innovation" in areas such as finance, procurement and HR. And along with manufacturing and professional services, SAP will add other industries, Denecken said.

According to Denecken, one thing is certain: partner extensions to SAP S/4HANA Cloud, which he said will be a theme of the upcoming SAP TechEd conference in October. "We see a lot of uptake from our ecosystem to build extensions on top of the solution."

"What you're going to see going forward is how can our partners leverage [the SAP Cloud Platform] to build micro-verticals on top, to build extensions, to leverage that 20% scope increase by adding another 5%, which is specific to them," he said. "What we don't want is that they say, 'Hey, I can't do anything with this cloud,' because you can."

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