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The future of ERP, simplified: SAP

AvantiKumar | Sept. 1, 2015
Bernard Chiang, SAP Malaysia MD, said SAP S4/HANA's move to the cloud has massively trimmed redundancy and complexity, paving the way for the future of ERP.

Bernard Chiang, MD, SAP Malaysia 

Photo - Bernard Chiang, MD, SAP Malaysia.

 

SAP S4/HANA's move to the cloud has significantly slashed redundancy and complexity, paving the way for the future of ERP (enterprise resource planning), said business solutions provider SAP Malaysia.
 
Bernard Chiang, SAP Malaysia's managing director, said that ERP systems were originally introduced to simplify complex company-wide business systems.

However, most systems ended up being invariably complex in themselves, since they cover what is essentially a massive scope of tasks, said Chiang.

"Modern ERP systems allow for businesses to close operational gaps at all levels of business, ultimately passing on the right information onto the correct person at the right time," he said.

"They increase business agility instead of adding to complexity, and are mostly designed to keep pace with technological advances," said Chiang.

Legacy ERP

He said that according to Gartner, by 2016, heavily customized ERP implementations will be increasingly referred to as "legacy ERP".  Gartner noted that increasingly mature ERP systems and enterprise applications will force CIOs to take action fast in order not to be one-upped by the competition. By 2018, at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud.

"SAP is one of the organisations that has long held a thought leadership position in the field of service provision, and ERP is one of the areas that their foresight has come to the fore. Our latest generation of the SAP S4/HANA is a Software as a Service (SaaS) model that will run on HANA by removing satellite systems," said Chiang.

He said that while this may sound complex, the endnote is that this advanced system will simplify things. "Due to the massive amount of functionality that SAP has added with its ERP system, SAP S4/HANA has managed to provide a fully integrated system that actually has reduced data complexity just by getting rid of aggregates."

"The removal of satellite applications means a lower overhead, and that in itself also decreases the volume of data that is required to be processed. The end result -all the system needs is one, single database: SAP HANA," Chiang said.

He also noted that in "the increasingly complicated business structures seen today, a deeper focus on what companies can do to make things simpler for themselves is gaining importance.  As a business grows in size, it also grows in complexity. Keeping systems simple is crucial to success in today's business environment where speed and responsiveness are all important."

Keeping it simple

"Basically, 'keeping it simple' allows organisations to redefine the way they run by cutting across silos and fragmented, outdated processes - a single platform to open up innovation and scale across their businesses," said Chiang. "This is more so given that, in many industries, product life cycles have shrunk dramatically."

"Through simplification, organisations deploying SAP S4/HANA are empowered to keep pace with the massive amounts of data being generated today and deliver insights in real time, helping them invent what's next without disrupting what's now," he said, adding that SAP design looked to be "very futuristic in the sense of moving closer together the application and database layers."

"" It is likely that in future there may be a complete elimination in distinction between the two. As it is, the SAP S4/HANA model is way ahead of what SAP competitors are fielding today," said Chiang.

While the system was designed to be primarily using the Cloud, SAP has not left on-premise customers behind. "This is where we see other SAP acquisitions come into play, such as Ariba, and SuccessFactors. All in all, the upcoming release of S4/HANA seems to have been a well thought out and highly strategic move."

"The future is technology-driven and innovation has emerged more than ever to be a strategic priority.  Technology is the enabler and - even more so - the great equaliser, making it possible for almost any organisation to transform, innovate, and ultimately compete to win," Chiang said.

 

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