LNS Research Analyst, Jason Kasper introduces and gives the opportunity for vendors to participate in the first LNS Research Industrial Internet of...
The SAP Conference for Environment, Health and Safety (EHS) Management in Houston last month provided a great opportunity to catch up with what SAP is doing in the EHS space. Click here to speak with Peter
The annual event gathered about 100 SAP customers and partners, mainly from asset-intensive and high-risk industries, all focused on SAP’s software for EHS management. The chemicals, oil and gas, discrete manufacturing, and transportation sectors were well-represented, among others.
The agenda emphasized customer case study presentations, and had a good mix of those along with a couple of strategy and roadmap presentations by SAP, and interactive roundtables to drill down on specific topics. In keeping with SAP’s EHS solution footprint, two tracks of breakout sessions were offered and focused on:
- Operational EHS and risk management
- Product safety and stewardship
A personal highlight for me was participating in a panel discussion on “Leveraging Investigation Outcomes and CAPA Processes to Foster Learning and Reduce Operational Risk,” moderated by Charles Corbit of ERM. Fellow panelists were from Dow, Southern California Edison, and Norfolk Southern. We discussed the challenges of getting maximum benefit from incident investigations, and especially how to promote organizational learning so that lessons learned from incidents get deployed to actually reduce risk.
In this post, I’ll highlight several key takeaways from the event, and provide analysis on what this means for SAP customers running SAP for EHS today, or considering doing so.
1. EHS Supports Digital Transformation
Right from the start of the conference, it was clear that SAP sees EHS Management as well-aligned with Digital Transformation initiatives. The opening keynote presentation by Michael Censurato of SAP, “EHS Management in the Digital Economy: Trend, Evolution, or Revolution?” laid out how trends such as hyper-connectivity, Cloud computing, and supercomputing are enabling transformations like increased collaboration, real-time actionable intelligence, and seamless connection between devices.
Several EHS Digital Transformation use cases were highlighted, among others, that have already been realized:
- Real-time exposure monitoring
- Intelligent waste containers
- Autonomous machinery
- Context-sensitive work procedures
In the SAP view, this type of innovative scenario is enabled by the S/4 HANA business suite with a simplified user interface, integrated business applications, advanced analytics, and connected devices. This was illustrated by multiple scenarios of a mobile worker wearing a toxic gas sensor, such as:
- Exposure above allowable limits is detected immediately
- Triggering a number of automatic communications and responses to protect the worker
- Report the incident for immediate intervention, investigation, and corrective action
2. SAP Continues to Invest in EHS R&D
Although SAP is a big player in the EHS software space, and has been for two decades, its EHS software solutions sometimes get overlooked, even by SAP customers. For SAP, EHS is a relatively small piece of a huge pie, and this tends to put it somewhat in the shadows. It also causes its commitment to the EHS space to be questioned by customers and competitors alike.
A key message delivered during the conference is that, in fact, SAP continues to be committed to delivering and improving a competitive EHS solution set. Presentations and demos showed how SAP has made steady progress in the total renovation of its EHS application suite over five years, starting in 2010 with incident management, followed by risk assessment, management of change, and the environmental compliance application. Product stewardship has also been well-represented in this renovation process with new solutions for product compliance, the SAP Product Stewardship Network, and most recently SAP Cloud for Product Stewardship for the process industries.
The renovated solution is pretty much built out as planned with a roadmap in place to bring along the rest of the environmental functionality and make further enhancements.
3. EHS Users Are Benefiting from SAP’s S/4 HANA Strategy and Technology
Another key theme highlighted by SAP in Houston is that the EHS solution portfolio is included in, and benefiting from, SAP’s overall S/4 HANA and Cloud strategies. S/4 HANA is the next generation business suite and platform, coming after the SAP Business Suite and good old SAP ERP. It’s the future of SAP.
ERP and other applications are being made available on the S/4 HANA platform in a phased manner. This involves decisions about what functionality will be included and when. Since EHS was included in the first wave, it is already offered in as part of S/4 HANA. It’s on the roadmap for future incorporation into as on-premises solutions and ultimately cloud-based.
There were also many examples shown of how SAP’s technology strength is being used to the benefit of the EHS portfolio. Some of these innovations such as the Fiori user interface are “standard,” in that they apply to all SAP applications. In other cases, these initiatives are being driven by customers in a co-innovation process. Customers provide input on use cases and requirements, test solution prototypes, and become early adopters. For example, in one roundtable session, several Fortune 500 energy companies expressed strong interest in working with SAP to explore the development of Internet of Things (IoT) and wearables solutions.
The LNS Research Take
SAP’s steady approach to EHS seems to be working. First, the ground-up renovation of SAP EHS that started in 2009 is well on the way to full realization with the initial release of environmental management in the EHS component extension. SAP continues to stick to that strategy and invest the necessary development resources, albeit at a slower pace than its customers might like. And judging by the number and diversity of customer case study presentations at the conference, SAP’s customers seem to be going along for the ride.
Second, the migration of the entire EHS suite (including product safety and stewardship) has been included in the S/4HANA platform and Cloud roadmap. This means that EHS wasn’t lost in the shuffle as SAP bets its future on S/4HANA and the Cloud, which was a real risk of occurring.
Although it won’t be simple or quick, current users of SAP EHS solutions should have a reasonable path to the future. And SAP customers looking for a new EHS software solution can have a reasonable expectation that SAP will continue to improve and support its EHS offering into the foreseeable future.
We will watch with interest to see how SAP and its customers use the available technology innovations to solve EHS problems. In a sense SAP has an unfair advantage in terms of its technology platform and committed customer base. The question remains whether SAP and its customer will co-innovate effectively to take advantage of the opportunity.Interested in how the IoT/IIoT & EHS Management will impact manufacturing? Access the report below!