Thomas Saueressig - SAP S/4HANA Architecture

Dear Reader,

By using business software applications, organizations around the globe can plan, control, and steer their cash resources, production capacities, and material supply, as well as track their sales and purchase processes. The enterprise resource planning (ERP) story is a success story for businesses. SAP is both a pioneer and a leader in providing enterprises with real-time transparency into their business processes.

Since the birth of business software applications, we have moved from the mainframe to client-server, mobile, and in-memory computing. The technology leap of the past few years has been leading businesses into the cloud, and SAP has been a trusted partner to its customers in delivering software that has always supported all the technology shifts of the past. With nearly 50 years of experience, we have gained deep insights into how businesses run. Together with our customers, we have defined best practices that have become standard procedures designed to help our customers succeed in the future. To date, SAP has more than 440,000 customers and 21,000 partners worldwide, and, according to a 2018 Oxford Economics SAP analysis, 77% of the worlds transaction revenue touches an SAP software system. This means that the global and hyperconnected economy relies on ERP applications from SAP and their foundation: a stable technological architecture that still allows for business flexibility.

Technological evolution goes hand in hand with business transformation. With new technology, business models are changing at an ever-increasing pace, and business processes must be designed accordingly, which makes agility key for companies. At the same time, customer expectations are changing too, and we see an increasing demand for hyperpersonalized, intelligent products manufactured in a fair and sustainable way. This requires an ERP architecture to enable built-in agility, allowing companies to adapt to rapidly changing technological and market opportunities.

However, reality shows us that many companies have large and highly customized ERP systems today covering very complex business processes that have evolved over the past few decades. That is why we often see scattered IT landscapes that cannot be moved easily to the cloud. Adding to the complexity is the challenge of delivering an integrated experience across ERP systems and line-of-business solutions through consistent data models and a seamless user experience. This reality demands a new architecture for modern ERP systems, and it requires companies to take a big step toward modernizing both their IT landscapes and the way they run their businesses to keep pace with the changing customer requirements and market conditions around them. It also requires a modern ERP system to be fully integrated.

Today, we have taken the best practices from the existing ERP architecture to provide companies with future-proof solutions. SAP S/4HANA is our next-generation, intelligent ERP system, using real-time data with SAP HANA, embedded analytics, and machine learning scenarios. It embraces artificial intelligence (AI) since the future of ERP is AI driven. It is leaner, faster, and more agile, helping enterprises predict and adapt to business disruptions and market changes. As a modern ERP system, SAP S/4HANA supports companies in scaling their businesses with the agility needed to remain resilient and competitive and to deliver the ultimate customer experience.

From a business process perspective, customers in todays hyperconnected business world are looking for solutions that cover end-to-end business processes, rather than specific capabilities within a solution. SAP solutions bring finance, procurement, engineering, manufacturing, logistics, sales, and services together in an orchestrated way from the edge to the core, and from the shop floor to the top floor. Our vision for SAP S/4HANA is to provide a business-process-as-a-service ERP system with out-of-the-box integration to other cloud-native SAP solutions and open interfaces to third-party products.