SAP has announced release 1808 of S/4HANA Cloud targeting manufacturing and professional services industries. This is a monster of a release for SAP. It includes 9 new AI-powered scenarios to reduce the manual load on users. The new functionality covers eight areas of the business with the majority in Finance and R&D/Engineering.
SAP is also promising that this is just the start saying: “We are brewing something big for the next release – so watch this space.”
The Intelligent Manufacturing Cloud
One of the focuses of this new release is on what SAP calls the Intelligent Manufacturing Cloud. There is an arms race among ERP vendors as the manufacturing sector adopts cloud more widely. SAP has released new features across several business areas that affect manufacturing teams. These include:
- Capacity evaluation and adjustment: Offers the ability to visually detect load capacity and quickly resolve any overload (or “bottleneck”) situations.
- Dynamic buffer level adjustment: Improves manufacturing efficiencies as buffers are dynamically managed and automatically adjusted based on average daily usage changes.
- Buffer positioning visualization: Enables production planners to easily see buffers and manage inventory positioning, thereby simplifying the analysis required to relocate and reorganize decoupling points.
- Product marketability and chemical compliance: Simplifies and automates compliance processes, and therefore increases speed to market and reduces compliance costs.
- Quality management analytics: Provides deep insights for quality engineers to understand and manage KPI performance.
- Subsidiary assemblies for headquarters (support for two-tier ERP): Supports subsidiaries acting as an assembly plant for the headquarter organization. Provides automation of intercompany processes and transparency of the subsidiaries production activities to headquarters.
The overall aim of these new features appears to be reducing costs while increasing speed to market. To achieve this SAP has released new elements that focus on procurement and management of raw materials. It has also delivered tools to improve inventory management of both raw materials and finished goods. The final part of this is better expediting of goods to customers.
This is where the AI-powered scenarios that will speed up automation will pay off. SAP calculates that the savings could be up to 30-45%. This is a substantial amount of money.
Professional Services getting tools to improve profitability
One of the challenges for Professional Services Organisations is how to manage resources and effective billing. Items like timesheets and expenses that are filed too late can often go unbilled to clients. In addition, not having the right resources in the right place can mean losses as expensive contractors are brought in to work on contracts.
SAP has added three key elements to its PSO offering in 1808. They are:
- Staffing analysis: Provides a new user interface for monitoring resources needed to ensure all requests are fulfilled on time so that users can review the demands of an upcoming project, as well as the respective supply and effort distribution.
- Cap in time and expense billing: Enables project managers to define the upper cap limit for projects at the billing line item as negotiated with their client – and further monitor the cap value in the SAP S/4HANA Cloud system to ensure that billing and invoicing does not cross this defined limit.
- Consultant timesheet entries: Empowers consultants to react immediately to any notifications received whenever a project manager rejects their time entries, so they can make any needed adjustments before resubmitting the timesheet.
What other new features has SAP added?
S/4 HANA Cloud 1808 is quite a beast. There is a total of 42 new and 360 previously announced Scope Items. In addition it contains 111 enhancements along with support for 3 new countries and 2 new languages.
In addition to Manufacturing and Professional Services the other main lines of business improvements cover:
- Finance: There are 24 new scope items and a large number of enhancements. They focus on best practice for Finance and cover areas such as Accounting and Financial Close, Treasury Management and Cost Management and Profitability Analysis.
- Sales: This sees 2 new scope items and a significant number of enhancements. It covers the whole sales processes from Order and Contract Management to Sales Performance.
- R&D/Engineering: The majority of the improvements here are new scope items. They cover the entire life of a product from Portfolio Product Management, through to Compliance, Engineering and Lifecycle Management.
- Sourcing and Procurement: While there are only 3 new scope items, SAP has focused on Operational Procurement and Invoice Management.
- Data Management: New and enhanced features focus on Enterprise Information Handling.
- Application and Infrastructure Management: SAP has added support for situation handling.
Finland and Poland now get localised versions of the software in their own languages. SAP has also added support for Saudi Arabia.
What does this mean
This is quite a sizeable release for SAP. It addresses a lot of customer demand and adds upgraded capabilities. SAP is seeing manufacturers becoming more focused on moving to the cloud. These enhancements, while not cloud specific, will be welcomed by their customer base.
The big call out is the continuation of SAP’s AI-powered scenarios. Like many other ERP vendors, SAP is seeing customers wanting to automate labour intensive manual jobs. It is also seeing a demand for intelligent assistants. The two are not necessarily the same. A lot of the automation could be managed through smarter use of macros rather than an AI. That aside, SAP customers are deploying these new AI-powered scenarios as they believe they add value.
SAP is promising “something big” for the next release, 1811 which is due in November. Assuming this isn’t just a presidential style Twitter soundbite, customers will have their work cut out implementing it.