What This Article Covers
- SAP’s Position on S/4 HANA’s Readiness
- When Reality Sinks In
- Agile Development
- Oracle Fusion (Agile) Development Revisited
- How to Get the Real Story on S/4 HANA
- Previous Proposals on SAP Application Readiness
There has been and will continue to be a tremendous amount written about S/4 HANA. Interestingly there is lots of confusion as to what parts of S/4 HANA are ready to be implemented. SAP has misrepresented the readiness of S/4 HANA on just about every occasion, and it has an army of SAP partners that do the same.
This army is all about getting S/4 HANA implementation business, so they are actively misleading their prospects about S/4 HANA. Additionally, these partners are also misleading prospects about the consulting experience with S/4 HANA. I know of two consulting companies that have zero experience with S/4 HANA but are confidently pitching S/4 HANA to prospects and are actively deceiving their prospects about their S/4 HANA experience. This is known throughout these companies, and this is considered completely normal. The justification for this is that it is necessary to get S/4 HANA skills and plus.
“everyone else is doing it.”
Most consulting companies do not have any significant S/4 HANA implementation experience. Most have none at all. Clients will find out about this after the deals are sold.
Another thing to consider on S/4 HANA is the following:
- S/4 HANA can only be implemented on top of HANA. (for no valid technological reason except to freeze out other database vendors using faux arguments about HANA’s performance is so unique)
- These consulting companies I am also referring to have zero experience with HANA (that is the database, not the ERP system).
I believe this deception about the actual S/4 HANA and HANA experience within consulting companies is widespread. I was recently reading a resume of a person who stated they had completed a six-month S/4 HANA implementation. However, their background and skill set is manufacturing in SAP, and the only completed module for S/4 currently is finance. Not manufacturing. I don’t know what this person worked on that could have been S/4 — probably just good old fashioned ECC. But he certainly did not implement S/4 HANA manufacturing. Furthermore, he listed that he had been on the project over six months ago, and he may have finished the project a month or more previous to this (I don’t know). This is even earlier in any of the development of any manufacturing functionality in S/4 HANA.
Both consulting companies and consultants want S/4 HANA on their resume, and one way or another; it will probably get on there. This same thing is happening with the IBP product. Suddenly I see IBP added to huge numbers of LinkedIn profiles, for an application that barely has any go-lives. Recruiters reach out to me, and when I tell them I have only tested IBP and not implemented it, they complain they can’t find IBP resources. Right, I mean that is what happens when an application is new.
The general presentation of this topic is often that people lie on their resumes. Yes, this is true. But consulting companies lie about their resources and alter their resumes. I had my resume altered when I first started working for Accenture. At that point, I had no real work experience, but Accenture took care of that for me. At this point, I don’t have a great feel for which is more prevalent. But I know which is more talked about. We barely discuss how consulting companies “enhance” resumes. This reinforces the overall construct that while individual people may do bad things, companies are just respectable entities.
SAP’s Position on S/4 HANA’s Readiness
While researching this topic, I found the following quotation from SAP. This article quote I found is quite amazing. See it below:
“If you look at the S/4HANA system that we released in November of last year that we are calling 1511, we can say that this is already a complete ERP system,” said Uwe Grigoleit, SAP global head of business development for Business Suite on HANA and HANA applications.”
Errrrr…..you could release a complete ERP system without much of the functionality working. That seems to be the line Uwe is walking here. I mean you can release anything, and it is still that thing. A motorcycle with no pistons is still a motorcycle. And you can release it that way. However, when a motorcycle is released that way, it is obvious. With software, it takes much more analysis to verify if the application is ready.
Let us go on to see more from Uwe.
“Why can we say this? If we are looking at pure modules we are shipping already, S/4HANA spans across financials, material management, inventory management, procurement, distribution, product and planning,” he explained. “It’s going across the vast majority of the ERP system already.”
- This gets away entirely from the question of the completeness of each of these modules.
- What Uwe does not state is that 1511 is not a completed ERP suite in that most of the functionality is incomplete. Some of the old functionality works, but it’s just a big mixed bag.
- S/4 HANA has multiple modules (recently renamed) that are called things like Supply Chain, Sales, Research and Development and Manufacturing, etc.. There is no mention of these names even in SAP’s marketing literature as introduced applications. Why? Why the strange four digit release numbers associated with each version (either on-premises or cloud)?
1511 is a beta release that has some components of functionality changed while many others are not. 1511 comes with a lengthy document called the “Simplification List.” This is a document that describes all the changes to ECC. The term simplification is just a euphemism.
- Many of the changes are not at all simplifications.
- Even if we leave out the topic of which areas of functionality are ready, unless you are a Greenfield customer that the company relied upon are not part of S/4 HANA. One would need to extensively read the lengthy simplification list, along with all the associated SAP notes that explain what things (fields, transactions, etc..) have been changed.
I am still digesting the simplification list myself. Understanding all the implications is a ton of work. So much so that SAP is primarily focusing on as migration or re-implementation is so difficult with S/4 HANA)
I think Uwe Grigoleit knows that what he is saying is untrue, but as Global Head of Business Development, let’s first acknowledge that he has probably told some whoppers in the past. Considering he may not have ever logged into a SAP system himself, it would be easy for him to hear something second hand, and then to start repeating it. Uwe Grigoleit is in sales, so he wants to sell S/4 HANA and therefore has a strong bias to mislead customers on the status of S/4 HANA.
Let us continue with more from Uwe.
“More recently, SAP released three new SAP S/4HANA “1603” cloud editions that provide industry-focused capabilities for marketing, professional services and more general enterprise ERP needs. In fact, the vendor is producing new updates for both cloud and on-premises SAP S/4HANA editions every quarter — so the answers to the question of functional completeness for S/4HANA are effectively changing every three months.”
As Uwe states, 1603 is the cloud edition of S/4 HANA. So 1603 contains focused industry capabilities for marketing and professional services. So that would seem to imply that 1151 does not have these capabilities. It would make sense that professional services firms would be a better fit for 1603 – although overall S/4 HANA is overkill for a professional services firm. All a professional services firm needs is a finance module with professional services functions, which can be attained far more economically from Intacct of FinancialForce. Most companies that implement S/4 will only implement it so they can resell that experience in consulting. They will say that S/4 HANA turned the moon into green cheese and gave all of their executive’s sex changes if they sell more HANA. Therefore, the information they provide on HANA is utterly unreliable. But this brings up a tangential question as to whether the cloud and on-premises editions are no longer the same set of functionalities.
SAP, through Uwe, is telling customers it’s S/4 Enterprise Management, which is the full suite, is ready to go. Notice at the end of the quotation, it contradicts itself, stating that the functional completeness of S/4 changes every three months.
So is S/4 complete? Or on the other hand, is it becoming more complete every three months? It cannot be both. Let us see…I now have to check Wikipedia as SAP is using the term in a new and unprecedented way.
At the midpoint of this race, this man would like to say he had completed it already. SAP so powerful, they can claim to have finished a race they are less than 1/2 way done with and the partner community, and large media outlets will reinforce this.
SAP is primarily using the term “complete” to mean “incomplete.” S/4 HANA is perfect, but it will become more and more complete every three months. Did you get that? Ok good, we can move on to more classic Uwe quotes.
Now this next quote is not related to the readiness of S/4, but it gives some more background as to where Uwe lives. It is from the same article.
“In S/4HANA, we are connecting classical ERP processes with new processes of the digital economy,” Grigoleit said. “For example, if we are talking about asset management as a classical ERP process, then we are making a connection to information networks so that you’re not entering data on your own — you’re getting the data out of the network automatically, connecting it to the asset management and location services.”
Ok, so we can see from this quotation that Uwe likes to spin a good yarn.
You see the issue is that a quotation can be repeated that is taken from a high-level SAP business development resource like Uwe or Bill McDermott, but without the context that these types of spokesmen from SAP live in a permanent fantasy-land, and take huge numbers of meetings, but don’t themselves touch or test software.
With a heavy dose of stock options pushing them towards unprecedented (in fact they do have precedent, but I decided to adopt SAP’s hyperbolic way of making statements for this sentence) levels of optimism, it is understandable that so much unreliable information like this is generated. I would like it if they were more honest and said something like….
“S/4 HANA is going to help me make $5,000,000 in stock options!”
Now that at least would be true.
When Reality Sinks In
So let us take this to the next step. Let us say the customer buys S/4 HANA, and it is only partially ready, and then what?
- At what point does SAP tell them that it cannot be implemented?
- Companies that buy S/4 HANA thinking they are getting the complete suite will be in for a rude awakening. And I am not sure which consulting company will tell them the truth on this topic.
I had a representative from Bluefin comment on a previous post of mine. Bluefin is a consulting company that has significantly increased its profile by publishing on HANA. Bluefin tends to release pollyannish information tinged with overwhelming confidence about HANA which while untrue, is expressly designed to get prospects all bubbly. It is Bluefin that stated with high confidence that Oracle is finished as a database for SAP in the future. I want to say with high confidence that SAP will backtrack on this policy and will eventually be forced to certify Oracle for S/4 in the future. Don’t even think of checking Bluefin for long term accuracy. Bluefin seeks to sell more business through bombastic claims. Forecast accuracy is not a concern.
Bluefin Solutions has recently graduated to publishing pollyannish information about S/4 HANA. But of course, it is other consulting companies as well. The rule with many consulting companies is a lie only a lie if it does not help quota attainment. Otherwise, it is categorized under a business development fib, and is “ok.” I recently heard of a conversation between an account executive and the head of a consulting company, with the account executive explaining that S/4 was not ready to be sold/implemented. That the consulting company had not S/4 or HANA resources. The head of the consulting company proposed that SAP would help the consulting company to implement.
This is a common illusion that some consulting companies have, that SAP will do them “favors.” This is an illusion that many people who work in SAP like to engage in. They pretend they are more connected into SAP than they are.
This consulting head thinks that SAP will let his consultants learn from SAP, and then he will be able to book these newly minted S/4 consultants out into the far future. (And even better if these trained consultants are H1-B, so they can’t leave for a while and the margin is higher! H1-B = Margin, Margin Margin!) The fact that S/4 is not currently implementable has apparently not occurred to him.
That is how these guys think. 100% benefit for themselves. Nevertheless, neither of these consulting companies have gotten any S4 business. There is very little S/4 implementation work currently.
A lot of people out there seem to think that SAP is in the business of doing favors. While there are exceptions, this is mostly a delusion.
SAP has missed its deadline on the rest of the S/4 suite, and it was now scrambling to get functionality released as soon as possible. Now, what do you do when you blow all of your deadlines? That is right, you adopt “Agile” and begin releasing things willy-nilly.
Agile has its benefits, and I use Agile on projects, but I don’t use the term Agile to cover up for lack of planning. What is completely apparent is that S/4 HANA was announced far too early.
This is not Agile. This is marketing getting too far ahead of development and living too comfortably on Fantasy Island, and then putting development on the grill to deliver too quickly. It has been well known for some time that making the types of changes to S/4 that SAP talked about making would result in many millions of lines of code being rewritten. Now the obvious conclusion is that SAP did not allocate enough time to allow for this to happen, or did not organize their internal teams appropriately to accomplish this task in their predicted timelines.
Oracle Fusion (Agile) Development Revisited
Interestingly what SAP is doing with S/4 has a precedent in the not too distant past and within a company that SAP does not like very much. That is right, what SAP is doing with S/4 is very similar to what was done with Oracle Fusion.
Oracle Fusion development went to Agile development, but the Fusion development just never seemed to end. Fusion was the subject of non-stop marketing on the part of Oracle, and Fusion never seemed to reach a point of finality. By 2016, pretty much everyone was burned out on hearing about Fusion has had very little market acceptance.
There is another similarity between Fusion and S/4 HANA. Like Fusion, the migration effort is enormous. See the following quotation from a comment on a Fusion article:
“Oracle is in a tough spot here because from what I understand, the move from the legacy apps onto Fusion Apps is not a straightforward “upgrade”, like you would expect from IBM, Microsoft or SAP but, rather, a complicated and expensive migration. This means when faced with the decision to move off e.g. PeopleSoft, customers are likely to evaluate Fusion vs Workday vs Successfactors (depending on use case). This is a tremendously dangerous place for Oracle to be in – none of the other ERP vendors have put themselves in this position, and SAP’s ability to upgrade from almost any version of R/3 (back to version 3.1I in 1998) to the latest version.”
This was written without consideration for S/4 HANA however. Mainly S/4 HANA faces the similar migration problems as Fusion as the change from ECC is so significant. This quotation was from John Appleby, the GM of Bluefin. Now while John Appleby notices that Fusion has enormous migration effort involved, he comments on an article. But when S/4 HANA is the same migration issues, he is silent on that topic. Why? Because Bluefin implements SAP.
That is the extent of much of the information available in enterprise software. The algorithm works something like this:
- If the author can make money on it, then hide the downsides.
- If one cannot make money on it, then be “objective” and bring up the downsides with competitor products. It’s all very scientific you see.
How to Get the Real Story on S/4 HANA
For the foreseeable future, the only way to know what parts of the rest of the S/4 suite work, is to test them or learn second hand from someone else (who you trust) who has tested it. You can’t ask SAP or ask their consulting partners. In most cases, the answer is that S/4 is ready to be implemented as soon as you can get around to signing a statement of work with them! Beyond this, S/4 is being made to appear far more implemented than it is.
One of the exaggerations that SAP proposes is that S/4 has 3700 customers.
I don’t doubt that 3700 companies somehow ended up with a S/4 license (most of them for free). This is the only definition of a customer — do you own (somehow) a S/4 license. But the actual number of S/4 implementations is probably less than 100, with most of these not live. And none of them live in the whole suite — for reasons that should be obvious at this point in the article. SAP recently reported that they have 170 customers live. SAP has stated that 30% of their clients are referenceable.
- 30% of 170 is 51 companies, well below my estimate of even less than 100 companies.
- And live can also mean different things. If S/4 HANA is live, it is live only with Finance, so that means it has to be integrated to ECC to function.
The idea that SAP likes to give that 3700 S/4 customers are in some state of using this software is so ridiculous that the industry needs to come up with a more strict measurement of what a customer is. A customer should not be someone who is only sitting on shelf ware. If you are a plumber and you give a gift certification for a particular plumbing service, and 80% of the people that have this certificate never use your services, this 80 % are not “customers” of that plumbing service. SAP has given away so many copies of S/4 that they will not release the actual revenues for the application. I suspect they have not only given away copies to existing users (who should get it for free) but for net new deals as well.
By the way, I am not the first to question the 3700 customer number for S/4. Most people who study this topic think this number is highly overstated.
Previous Proposals on SAP Application Readiness
Exaggerating the readiness of applications is nothing new for SAP. So please, if some people are going to comment to the contrary, let’s not pretend to be so shocked. SAP APO was released back in the early 2000s was a barely functional product that only made it through those early days because it was pushed by the major consulting companies.
Another “application” that comes to mind as one that was significantly pre-announced was Netweaver. I take the following quotation from Vinnie Mirchandani’s book SAP Nation 2.0:
“With so many unanswered questions, an emerging viewpoint is that S/4, as initially defined, is just a placeholder. If anything, it will probably evolve in the same manner as another of SAP’s initiatives, NetWeaver, did a decade ago. In their 2004 book on NetWeaver, Dan Woods and Jeff Word said with confidence:
“All this talk about successive versions and incremental progress and fulfilling visions could easily give you the wrong impression that SAP NetWeaver is still on the drawing board. That’s not at all true. SAP NetWeaver is here now. All the SAP NetWeaver components that we have mentioned are working products and can be purchased and used to make your business run better today.”
That turned out to be completely untrue. In fact, NetWeaver was never actually released as it never actually existed. NetWeaver was a name appended to other applications. I pointed this out repeatedly and wrote on this, and now all the people who were so high on NetWeaver never emailed me to apologize. On project after project, NetWeaver is nowhere to be found. Where is the World is Carmen San Diego? Where in the World is NetWeaver is a much better game to play.
I seem to debate a lot of people who have incredible confidence in their positions, but then appear to disappear when it turns out they were wrong. One excuse they will use is that they could not have known differently because they were told something was true by SAP. Anything to avoid the responsibility of being held accountable for previous statements. By the way, all these items which were so easy to see at the time, just happen to be in line with their financial interests. I can guarantee that those people that may respond to this post and talk about how S/4 is the “next stage,” and how it has an entirely simplified data model, will all have a financial bias for why they want S/4 to be accepted. However, they won’t discuss this financial bias. They will instead carry forward the conversation as if they are some impartial observer. However, I am in fact impartial, financially at least. I do not financially benefit if customers buy S/4 or do not buy S/4. That is an important consideration. Also, unlike anyone who works for Bluefin, IBM, etc… as an independent I can write what I believe to be true. I covered the topic of forecast bias in the SCM Focus Press book Supply Chain Forecasting Software and included it again in this LinkedIn post. And it is amazing to me, knowing what is known about forecast bias that we don’t seem to discuss bias when considering what people and companies propose.
Now, NetWeaver was something at the beginning related to rewriting parts of SAP in J2EE but later devolved into a marketing construct. S/4, unlike Netweaver, is something. It will not only turn into a marketing construct, but its development has been and will look like it will be fraught with greater confusion and problems than most other SAP applications. But whatever one’s opinions of S/4, and it should be acceptable to be unimpressed with S/4, without being admonished about how S/4 has a new data model that “simplifies everything.”
At least we should be able to agree whether S/4 as a suite, that is what is known as S/4 Enterprise Management is released. And it isn’t yet released. What is currently being re-written was written by thousands of people over decades, so no surprise it is taking longer than projected by SAP.
I have now heard all types of insubstantial reasons given why S/4 should be considered ready to use. Someone might use the Uwe quotes I have listed in this article.
I know from speaking to other senior members of consulting companies that they have bought the SAP hype, and do not know themselves the state of S/4 HANA. The amusing thing is that these are the people advising companies on S/4. Of course, many of the senior people, who will never work on a project don’t much care about whether S/4 is ready or not. They have a quota to reach and will say anything and do anything to meet that quota. If that means implementations fail, well, who knows they may be at another company when that happens. Quarters come every three months, the viewpoint of many is that they will deal with problems as they will cross that bridge when they come to it. Secondly, just getting S/4 deals allows you to put it on the company website, which may lead to more S/4 deals…, actually, etc..
One of the reasons I wrote this article is that I am beginning to wonder myself how many people who have investigated S/4 and know that outside of Finance (which also has rough areas and a big question mark with how may Fiori apps can be used). S/4 as a suite is not ready to be implemented.
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