Preface

23

Why Read This Book?

23

Audience

24

Structure of the Book

24

Acknowledgments

27

1 Introduction to the Intelligent and Sustainable Enterprise

29

1.1 Cornerstones of the Intelligent and Sustainable Enterprise

30

1.1.1 Operational Automation and Real-Time Steering

32

1.1.2 Intelligent Technologies

35

1.1.3 Business AI

40

1.2 Integrated Intelligent Enterprise

41

1.2.1 Layers of the Intelligent Enterprise

41

1.2.2 Next-Generation End-to-End Processes

43

1.2.3 SAP Business Technology Platform

58

1.2.4 Integration as an Enabler

61

1.3 Editions and Deployment Options

67

1.3.1 Products and Deployment Overview

67

1.3.2 SAP S/4HANA

73

1.3.3 SAP S/4HANA Cloud Private Edition

74

1.3.4 SAP S/4HANA Cloud Public Edition

75

1.3.5 Release Cycles

76

1.3.6 Deployment Considerations

77

1.4 Summary

80

2 Finance

81

2.1 The CFO’s Agenda

82

2.2 Industry Pain Points and SAP S/4HANA Benefits

84

2.2.1 Creating a Single Source of Truth

84

2.2.2 Digitizing Finance Processes

85

2.2.3 Embracing Business Insight Capabilities

87

2.3 Key Finance Functionality

91

2.3.1 Universal Journal

91

2.3.2 Universal Parallel Accounting

96

2.3.3 Material Ledger and Transfer Pricing

98

2.3.4 New Asset Accounting

101

2.3.5 Cash and Liquidity Management

103

2.3.6 Automated Revenue Management

109

2.3.7 Profitability Analysis

111

2.3.8 Predictive Accounting

115

2.3.9 Financial Closing

118

2.3.10 Financial Planning

121

2.3.11 Consolidation and Group Reporting

125

2.3.12 Intercompany Matching and Reconciliation

134

2.3.13 Tax and Compliance Management

138

2.3.14 Central Finance

143

2.3.15 Value Chain Analysis

170

2.4 Finance in SAP S/4HANA Cloud Public Edition

173

2.5 Outlook

175

2.6 Summary

175

3 Manufacturing

177

3.1 Industry Pain Points and SAP S/4HANA Benefits

177

3.2 Key Manufacturing Functionality

181

3.2.1 Product Master Optimization

181

3.2.2 Production Planning and Detailed Scheduling

182

3.2.3 Material Requirements Planning

183

3.2.4 Production Operations and Engineering

189

3.2.5 Complex, Discrete, and Component Assembly Manufacturing

192

3.2.6 Process Manufacturing

194

3.2.7 Supply Chain Analytics

196

3.3 Manufacturing in SAP S/4HANA Cloud Public Edition

197

3.4 Outlook

199

3.5 Summary

202

4 Supply Chain

203

4.1 Industry Pain Points and SAP S/4HANA Benefits

203

4.2 Key Supply Chain Functionalities

206

4.2.1 Data Model Simplification

206

4.2.2 Inventory Valuation and Advanced ATP

207

4.2.3 Extended Warehouse Management

218

4.2.4 Transportation Management

227

4.2.5 Catch Weight Management

233

4.2.6 Quality Management

233

4.2.7 Commodity Management

234

4.2.8 Stockroom Management

236

4.3 Supply Chain in SAP S/4HANA Cloud Public Edition

237

4.4 Outlook

238

4.5 Summary

240

5 Sales, Marketing, Commerce, and Service Management

241

5.1 Industry Pain Points and SAP S/4HANA Benefits

241

5.2 Key Sales Functionalities

244

5.2.1 Data Model Simplification

244

5.2.2 Sales Order Fulfillment and Replenishment

245

5.2.3 Condition Contract Settlement

254

5.2.4 Foreign Trade

255

5.2.5 Credit Management and Revenue Accounting

255

5.3 Key Marketing and Commerce Functionalities

256

5.3.1 Customer Relationship Management

256

5.3.2 Billing and Revenue Management

257

5.4 Key Service Management Functionalities

258

5.4.1 Optimized Service and Service Master Data Management

258

5.4.2 Service Parts and Service Agreement Management

259

5.5 Sales, Marketing, Commerce, and Service Management in SAP S/4HANA Cloud Public Edition

260

5.6 Outlook

263

5.7 Summary

264

6 Sourcing and Procurement

265

6.1 Industry Pain Points and SAP S/4HANA Benefits

265

6.2 Key Sourcing and Procurement Functionality

268

6.2.1 Operational Procurement

268

6.2.2 Invoice Management

272

6.2.3 Sourcing and Contract Management

274

6.2.4 Supplier Management and Procurement Analytics

277

6.2.5 Intelligent Procurement with AI and Machine Learning

278

6.2.6 SAP S/4HANA for Central Procurement

280

6.3 Sourcing and Procurement in SAP S/4HANA Cloud Public Edition

285

6.4 Outlook

287

6.5 Summary

288

7 R&D and Asset Management

289

7.1 Industry Pain Points and SAP S/4HANA Benefits

290

7.2 Key Research and Development Functionalities

292

7.2.1 SAP Enterprise Product Development

292

7.2.2 SAP Responsible Design and Production

294

7.2.3 SAP Enterprise Portfolio and Project Management

294

7.2.4 SAP Enterprise Product Engineering

299

7.2.5 SAP Product Lifecycle Management

299

7.2.6 SAP S/4HANA for Product Compliance

302

7.3 Key Asset Management Functionalities

304

7.3.1 SAP S/4HANA Asset Management

305

7.3.2 SAP Asset Performance Management

309

7.3.3 SAP Business Network Asset Collaboration

310

7.3.4 SAP Service and Asset Manager (Mobile)

311

7.4 R&D and Asset Management in SAP S/4HANA Cloud Public Edition

311

7.4.1 R&D in SAP S/4HANA Cloud Public Edition

311

7.4.2 Asset Management in SAP S/4HANA Cloud Public Edition

313

7.5 Outlook

313

7.6 Summary

317

8 Analytics and Reporting

319

8.1 The Evolution of Analytics

320

8.2 Operational Reporting

323

8.2.1 ABAP-Based Reports

324

8.2.2 Embedded Analytics

324

8.2.3 Native SAP HANA Applications

332

8.2.4 Embedded SAP BW/4HANA and SAP Business Planning and Consolidation

333

8.2.5 SAP Analysis for Microsoft Office

334

8.3 Enterprise-Wide Reporting

335

8.3.1 SAP HANA Enterprise Analytics

336

8.3.2 SAP BW/4HANA

337

8.3.3 SAP Datasphere

339

8.3.4 SAP Analytics Cloud

342

8.3.5 SAP BusinessObjects Business Intelligence

345

8.3.6 SAP Profitability and Performance Management

346

8.4 Reporting in a Hybrid Landscape

347

8.5 Cognitive Analytics and Generative Artificial Intelligence

349

8.6 Big Data Analytics and Data Fabric

351

8.7 Summary

353

9 Industry and Preconfigured Solutions

355

9.1 The SAP Strategy for Industry Solutions

355

9.1.1 SAP Industry Solutions in the Core

355

9.1.2 The Scope of SAP Industry Solutions

356

9.2 Solution Options from SAP

357

9.2.1 SAP Best Practices

357

9.2.2 SAP S/4HANA Fully Activated Appliance

359

9.2.3 Enterprise Management Layer for SAP S/4HANA

359

9.2.4 Industry 4.0 Solutions

361

9.2.5 SAP’s Industry Solutions

362

9.3 SAP S/4HANA Industry Clusters

363

9.3.1 Energy and Natural Resources

364

9.3.2 Service Industries

365

9.3.3 Consumer Industries

366

9.3.4 Discrete Industries

368

9.3.5 Financial Services

369

9.3.6 Public Services

372

9.4 Adapting to Global Change

373

9.5 Summary

374

10 SAP S/4HANA Cloud Public Edition

375

10.1 Considerations and Value Proposition

376

10.2 Core Functional Capabilities

379

10.3 Deployment

390

10.3.1 Fit-to-Standard

391

10.3.2 Deployment Resources

393

10.3.3 System Landscapes

398

10.3.4 SAP Signavio Process Navigator

401

10.3.5 SAP Central Business Configuration

402

10.3.6 Extensibility

402

10.4 SAP S/4HANA Cloud Private Edition

404

10.5 Content Lifecycle Management

405

10.6 Summary

407

11 SAP S/4HANA and the SAP Landscape

409

11.1 Sourcing and Procurement: SAP Ariba and SAP Business Network

410

11.1.1 Sourcing and Contracts

410

11.1.2 Requests and Purchases

412

11.1.3 Invoices and Payments

414

11.1.4 Intelligent Spend Management and SAP S/4HANA

415

11.2 Contingent Workforce Management: SAP Fieldglass

417

11.2.1 Vendor Management System

418

11.2.2 SAP Fieldglass and SAP S/4HANA

419

11.3 Travel and Expense Management: SAP Concur

420

11.3.1 Travel Spend Management

420

11.3.2 NextGen UI

422

11.3.3 SAP Concur and SAP S/4HANA

423

11.4 Human Resources: SAP SuccessFactors

423

11.4.1 Employee Data

424

11.4.2 Talent Management

424

11.4.3 SAP SuccessFactors and SAP S/4HANA

426

11.4.4 SAP Human Capital Management for SAP S/4HANA

428

11.5 Customer Experience: SAP Customer Experience

428

11.5.1 Marketing

431

11.5.2 Commerce

431

11.5.3 Sales

432

11.5.4 Services

433

11.5.5 Customer Data

434

11.5.6 SAP CX AI Toolkit

435

11.5.7 SAP Customer Experience and SAP S/4HANA

436

11.6 Master Data Management: SAP Master Data Governance

436

11.7 Supply Chain Planning: SAP Integrated Business Planning for Supply Chain

440

11.7.1 Sales and Operations Planning

441

11.7.2 Demand Planning

442

11.7.3 Inventory Planning

443

11.7.4 Response and Supply Planning

443

11.7.5 Control Tower

445

11.7.6 SAP IBP and SAP S/4HANA

445

11.8 Billing: SAP Billing and Revenue Innovation Management

446

11.8.1 Subscription Order Management

447

11.8.2 Convergent Mediation

448

11.8.3 Charging

448

11.8.4 Invoicing

448

11.8.5 SAP Customer Financial Management

449

11.8.6 SAP Billing and Revenue Innovation Management and SAP S/4HANA

449

11.9 SAP Digital Manufacturing

449

11.9.1 SAP Digital Manufacturing for Execution

450

11.9.2 SAP Digital Manufacturing for Insights

453

11.9.3 SAP Digital Manufacturing for Edge Computing

454

11.9.4 SAP Digital Manufacturing and SAP S/4HANA

454

11.10 Summary

456

12 Sustainability and Climate Action

457

12.1 Environmental, Social, and Governance Regulations

457

12.1.1 Emissions Reporting

458

12.1.2 Regulatory Requirements

459

12.2 SAP Solutions for Sustainable Enterprises

463

12.2.1 SAP Cloud for Sustainable Enterprises

464

12.2.2 SAP Sustainability Control Tower

465

12.2.3 SAP Sustainability Footprint Management

466

12.2.4 SAP Sustainability Data Exchange

467

12.2.5 SAP Responsible Design and Production

467

12.2.6 SAP Green Token

468

12.2.7 SAP Green Ledger

468

12.2.8 Greenhouse Gas Emissions Planning and Simulation in SAP Analytics Cloud

470

12.2.9 Sustainability in SAP S/4HANA Core

471

12.3 Summary

476

13 SAP S/4HANA Architecture

477

13.1 The Journey from SAP ERP to SAP S/4HANA

477

13.1.1 SAP S/4HANA Architecture

477

13.1.2 SAP S/4HANA as the Digital Core

482

13.1.3 Integration of SAP Products in SAP S/4HANA

483

13.1.4 The Roadmap to SAP S/4HANA and Innovations

485

13.2 SAP HANA Platform

489

13.2.1 SAP HANA Database

489

13.2.2 Virtualization

492

13.2.3 Scalability

494

13.2.4 Recoverability

495

13.2.5 Considerations for RISE with SAP

502

13.2.6 SAP HANA Operations

502

13.2.7 SAP HANA Logical Deployment Options

505

13.2.8 SAP HANA Platform Services

507

13.3 Hyperscaler Architecture

513

13.4 SAP S/4HANA Security

515

13.5 SAP S/4HANA Data Models

518

13.6 User Interface and User Experience

519

13.7 Data Lifecycle Management

524

13.8 Development and Operations

524

13.8.1 SAP Cloud ALM

526

13.8.2 SAP Signavio

527

13.8.3 SAP LeanIX

529

13.8.4 Role of Solutions in the DevOps Lifecycle

530

13.9 Summary

532

14 Extensions through the Clean Core

533

14.1 Business-Driven Development

533

14.1.1 Connecting People and Data

535

14.1.2 Building Differentiating Cloud Applications

535

14.1.3 Integrate Applications and Data

536

14.1.4 Extending Core and Software-as-a-Service Solutions

537

14.2 Clean Core

538

14.3 SAP Business Technology Platform

540

14.4 Extensibility Options for the Intelligent Enterprise Suite

543

14.4.1 Overview and Considerations

543

14.4.2 Key-User Extensibility

545

14.4.3 Classic Extensibility

548

14.4.4 Side-by-Side Extensibility

549

14.4.5 Developer Extensibility via ABAP Cloud

551

14.5 SAP Business Accelerator Hub

553

14.6 Summary

556

15 Business AI Technologies

557

15.1 The Intelligent Enterprise and SAP Business Technology Platform

557

15.2 Industry 4.0 Solutions

560

15.3 Artificial Intelligence

563

15.3.1 SAP Business AI

564

15.3.2 SAP AI Core and SAP AI Launchpad

566

15.3.3 SAP AI Services

568

15.3.4 Joule

569

15.3.5 SAP Build Process Automation

571

15.3.6 SAP HANA Cloud Vector Engine

576

15.3.7 SAP Build Code

578

15.4 Generative AI Use Cases

578

15.4.1 Sustainability Product Ledger

579

15.4.2 Invoice Match and Verification

579

15.4.3 Financial Planning and Analysis

581

15.4.4 Asset Maintenance for Industrial Manufacturing

582

15.4.5 Consumer Packaged Goods

583

15.4.6 Oil and Gas Asset Maintenance for Upstream Plants

586

15.5 Summary

588

16 Adoption Paths

591

16.1 Assessing Your Adoption Options

593

16.1.1 SAP Readiness Check

593

16.1.2 SAP Discovery Center

596

16.1.3 SAP Signavio

597

16.1.4 SAP Solution Scout

599

16.1.5 SAP LeanIX

600

16.2 New Implementation

601

16.2.1 Adoption Approach

601

16.2.2 Considerations

603

16.2.3 SAP S/4HANA Migration Cockpit

605

16.3 System Conversion

608

16.3.1 Adoption Approach

610

16.3.2 Considerations

611

16.3.3 SAP Conversion Software, Tools, and Accelerators

613

16.3.4 SAP S/4HANA Conversion Prerequisites

623

16.3.5 Minimizing Downtime

628

16.4 Selective Data Transition

632

16.4.1 Adoption Approach

633

16.4.2 Considerations

634

16.5 SAP S/4HANA Preparation Activities

636

16.6 Summary

637

17 Implementation Method and Accelerators

639

17.1 What Is SAP Activate?

639

17.2 SAP Activate Methodology

644

17.2.1 Prepare

645

17.2.2 Explore

646

17.2.3 Realize

647

17.2.4 Deploy

648

17.2.5 Quality Gates

648

17.3 SAP Best Practices

649

17.4 SAP Activate Tools

652

17.4.1 Self-Service Configuration

653

17.4.2 Expert Configuration

654

17.4.3 SAP Central Business Configuration

654

17.4.4 SAP Solution Builder Tool

654

17.4.5 SAP Solution Manager

655

17.4.6 Integrated Toolchain for RISE with SAP

655

17.5 Summary

657

18 Building the Business Case

659

18.1 Common SAP S/4HANA Business Case Challenges

660

18.2 Value Dimensions

662

18.2.1 SAP S/4HANA Core

664

18.2.2 The Intelligent Enterprise

666

18.3 Alignment to Stakeholders and Business Outcomes

667

18.4 Proven Process for Building a Case for Change

669

18.4.1 Recognize the Need

670

18.4.2 Frame the Opportunity

672

18.4.3 Conduct Discovery

673

18.4.4 Leverage SAP Software

675

18.4.5 Assess the Value

676

18.4.6 Validate Proposal

684

18.5 Develop Your IT Roadmap

686

18.5.1 Engage Phase: Analyzing the Current Mode of Operations

689

18.5.2 Envision Phase: Exploring the Target Operational Model

689

18.5.3 Evaluate Phase: A Deep Dive into the Transformation Approach

690

18.5.4 Enable Phase: Building Your Roadmap

691

18.6 Valuable Lessons Learned

691

18.7 Summary

692

19 Customer Case Studies

695

19.1 Multinational Industrial Company

695

19.1.1 Vision

696

19.1.2 IT Project

697

19.1.3 Benefits

697

19.1.4 Path Forward

698

19.2 Multinational Service Company

700

19.2.1 Vision

700

19.2.2 IT Project

700

19.2.3 Benefits

700

19.2.4 Path Forward

703

19.3 Manufacturing Company

704

19.3.1 Vision

704

19.3.2 IT Project

704

19.3.3 Benefits

705

19.3.4 Path Forward

706

19.4 Food Industry Group

706

19.4.1 Vision

706

19.4.2 IT Project

707

19.4.3 Benefits

708

19.4.4 Path Forward

708

19.5 Automotive Company

708

19.5.1 Vision

709

19.5.2 IT Project

709

19.5.3 Benefits

709

19.5.4 Path Forward

710

19.6 Life Sciences

710

19.6.1 Vision

710

19.6.2 IT Project

710

19.6.3 Benefits

711

19.6.4 Path Forward

711

19.7 Global Telecom Provider

711

19.7.1 Vision

712

19.7.2 IT Project

712

19.7.3 Benefits

713

19.7.4 Path Forward

713

19.8 Global Automobile Maker

713

19.8.1 Vision

714

19.8.2 IT Project

714

19.8.3 Benefits

714

19.8.4 Path Forward

715

19.9 Summary

715

The Authors

717

Contributors

720