Yesterday, SAP announced the release of Business Suite on HANA in a multi-cast press event held simultaneously in Germany, New York, and California. Even though this announcement could have been foreseen as a natural progression of both the organic development of HANA and SAP’s acquisition strategy over the past 6 years, it was met with a great deal of excitement from the analyst, partner, and customer communities.
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As described by SAP Co-Founder and Chairman of the Supervisory Board, Hasso Plattner, this announcement is the most substantial and potentially disruptive in the history of SAP.
An Overview of HANA
For those not familiar with HANA, it is a paradigm shift in the database world from traditional disk-based to in-memory technology. To give some perspective to the scale of change this technology can usher in, here were the goals of the initial project as set by the development team 6 years ago:
- All active data in memory
- Full exploitation of massively parallel computing
- Using design thinking throughout the project
- Radically simplified data model
- OTLP and OLAP back together
- Instant Business Intelligence (BI) on Transactional Data
- Abolish batch programs
- Data Warehouse should not be reporting system – it should be consolidation of disparate data sets
- No aggregates, no cubes, no roll-ups – all should be replaced with dynamic views on transactional data
- Data analysis provided through views on views - only use a meta-model
- Aggressive use of math for forecasting, analysis, planning – the industry has never been good enough, the more math we use the slower we got
- Interactive planning
- Mobile, whenever appropriate
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As with most things SAP does, HANA and Business Suite on HANA has been part of a measured and systematic strategy to transform the enterprise software space. Over the past 6 years SAP has been building up to this most recent announcement through a number of milestones:
- 2010 and Prior: Designing and building HANA
- 2011: HANA for analytics, Business Objects (BobJ), and Business Warehouse (BW)
- 2012: HANA Platform (developers, startups, Business One, planning, and Customer Relationship Management (CRM))
- 2013 and Future: Legacy and new, SAP is launching the Business Suite and delivering business innovation without business disruption
Yesterday’s announcement provides a wealth of opportunity as well as questions for the entire SAP installed based and partner network. A few initial points of information that were addressed in the briefing may help to answer some of these initial questions.
- Business Suite on HANA has been designed to be a non-disruptive technology (in the negative sense) i.e. there will be only one version of Business Suite that can run on HANA or traditional databases - just a changing of the database layer through SQL
- SAP has invested heavily in education to make sure there is the needed expertise in the market to support HANA, there are already 1,500 internal consultants and 1,000 partners trained
- For those companies interested in being early adopters, there will be a number of incentives and programs to get customers the support needed directly from the learnings of the development team
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Much more exciting than the initial questions that were answered in yesterday’s announcement are the opportunities that this new technology makes possible. Clearly, the initial benefits are around speed, with the ability to cut processing times by 1, 2, 3, or even more orders of magnitude. John Deere, a participant at the event and one of the first users of Business Suite on HANA, reports doing MRP batch jobs that used to take 6 hours in 10 seconds, but this is only the beginning.
New definitions of real-time are leading the way for an entire new wave of business process re-engineering. However, with innovative technology, there will be winners and losers. Not all companies will be able to use this technology effectively, much of it will come down to culture and figuring out the human element. As processes change so will the interaction of the user, so companies that can figure out all three, technology, change in business process, and change in user experience, will likely be most successful.
Looking Toward The Future of Manufacturing Technology
It's our belief at LNS Research that the manufacturing industry will be at the forefront of this innovation. A few areas ripe for innovation in manufacturing are highlighted below:
- Real-Time Planning: Manufacturing companies today struggle mightily with planning. A lack of speed and data accuracy creates uncertainty which in turn creates the need for inventory and lead time buffers. Real-time MRP provides the ability to truly become demand-driven and establish Lean-based models that have previously been infeasible. It will also create a need for real-time integration with the shop-floor that has never existed in the past. When MRP took 8 hours to run and was run once a day, real-time shop-floor data was not needed or used by planners. When MRP is run in seconds and is run thousands of times a day, real-time and accurate plant data will be required for survival.
- Manufacturing as a Service (MaaS): This trend has already started in the manufacturing industry. Companies like Rolls Royce and John Deere already think of themselves as solution and services companies rather than manufacturing companies. These companies don’t sell equipment, they sell a service in the form of up-time for a jet engine or combine. With enterprise applications running on HANA, companies will be able to, in real-time, collect data from global assets and deliver unique predictive analytics and improved service for individual customers.
Beyond these two scenarios, there are many more LNS Research will explore over the coming months and years. It’s easy to start listing all of the “hard” problems that were previously limited by processing speed. One’s mind immediately jumps to thoughts of:
- Real-time traceability across global multi-enterprise supply chains
- Real-time simulation in product development
- Point of sale data integration with manufacturing plants
- Multi-echelon supply chain orchestration
- Industrial energy management
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Unfortunately, as the power of this new technology becomes apparent to Line of Business executives, the bottleneck will very likely become how quickly IT departments can safely and confidently deploy with full lifecycle capabilities on data and applications, not how many new ways businesses can use real-time ERP data. However, if this new technology lives up to even a fraction of the excitement that was shown over this announcement at yesterday’s event, the manufacturing industry may once again become an area of leading technology innovation.
You might also be interested in:
Insights from the 2012 SAP Enterprise Operations Management Formum
SAP Manufacturing Forum: Solutions for Operational Risk Management
SAP Manufacturing Forum - Not Your Grandmother's ERP
