HANA is fast… So what?
Legend has it that the HANA In Memory Database started as a gleam in the eye of SAP co-founder Hasso Plattner, during a dinner in 2009 with CTO Vishal Sikka. What if a database could offer near zero response time? What would that change in the way developers wrote applications, not just for transaction processing but for large scale analytical processing? Most importantly, what would that mean for how customers could run their businesses?
Shortly thereafter, SAP engineers got to work on what first was called “the New Database”, while Vishal Sikka, or so the story goes, preferred to call it “HAsso’s New Architecture” (HANA).
HANA made two crucial breakthroughs. First, it was designed from ground up for “in memory”, keeping frequently used data (often around 20%) in “hot memory” with micro-second access time. Second, HANA was designed with analytics in mind, with a columnar format (unlike traditional row-oriented databases) and powerful embedded analytic functions. Skipping the details, this translates into spectacular performance in analytical processing of massive amounts of information, traditional as well as “unstructured” data like documents and images.
According to Vishal Sikka, HANA was ready in less than a year. The next question was: how to put it to work for customers?
SAP reinvents “enterprise applications”
When HANA was announced in 2011, SAP positioned it (temporarily as it turns out) as an “analytical appliance”, mainly for non SAP customers. Be that as it may, HANA has become the keystone for a sweeping renovation of SAP’s enterprise applications portfolio.
An important step was the 2013 announcement of the HANA-enabled SAP Cloud Platform (SCP). As I wrote in an earlier post, SCP brought “agility” to SAP, accelerating the delivery of agile cloud native applications, while protecting core business systems.
Then in 2015, SAP launched its new “digital core” S/4HANA, in a paradigm shift to “real time”: all information always up to date, for immediately actionable decisions, which is what companies need in an increasingly real time economy. S/4HANA also brought important new business functionalities as well as transformative digital capabilities like Machine Learning and customization of user experience.
Even so, a decision to move to HANA isn’t simple. Migration of core systems requires a big investment that can only be justified by what it could change in the way the business could be run.
Opportunities on the road to “Real Time”
Visionary CIO’s know that the economy is going real time, first in the consumer space and now in complex B2B value chains. Moving forward, information systems will have to enable real time business as well as accelerate innovation in business processes and models.
To build the business case, this “vision” has to be fleshed out with specific customer opportunities. In my experience they can be grouped in three categories.
Business agility for “quick wins”
Business lines are always in a hurry, so a compelling case needs some quick wins.
Even before moving to the digital core, customers can use SCP to deploy agile, “cloud native” applications, leveraging sophisticated capabilities in mobility, IoT and advanced analytics.
Consider an example in Predictive Maintenance: an SCP application developed for a manufacturing facility. This “intelligent” application receives incoming alerts from “smart” machines, determines the response and informs a maintenance engineer via a mobile app.
A nice example of a quick win but the digital core offers a lot more.
“Real time” business processes: operational efficiency and customer satisfaction
The initial take-off of S/4HANA was slow but has accelerated as customers better understand what the real time digital core can help them achieve.
Of course, just migrating to S/4HANA and then “business as usual” isn’t enough. Business processes need to be redesigned, leveraging the suite’s capabilities. Not all processes, certainly not all at once, but in line with the customer’s own priorities.
Let’s consider two examples of domains where HANA has been extremely successful:
- Supply chains: With easy visibility of always up to date information, supply chains can quickly react to deviations and opportunities, especially with real time analytics on transactional data. S/4HANA enables new processes for demand-driven business planning, response and supply orchestration, intelligent logistics, and order fulfilment. The bottom line is operational efficiency.
- B2B Sales: In many sectors, sales calls are still the norm, with tools like folders of samples, photos and specifications of machines, huge catalogues. Some companies are replacing these tools with SCP applications: accessing huge amounts of images and text in HANA on the back-end and using iOS front ends for a compelling 3D user experience of all products and options.
Now the buyer is ready to buy but traditional Enterprise Resource Planning (ERP) can’t provide a firm price and delivery date on the spot. With S/4HANA, the sales application in SCP can interface with the real time digital core to price the order, check inventory and production planning, and propose a firm price and delivery date. If the buyer agrees, the deal is done and the order is pushed into the system in real time. The bottom line is customer satisfaction.
In these and other core domains, examples of benefits include: 40% gain in invoice processing productivity, 10% improvement in manufacturing cycle time, 12% reduction of days in inventory, 10% logistical cost savings and 25% better on-time order fulfilment.
These opportunities are at the heart of the case for S/4HANA.
“Business innovation”: new products and services, new business models
Finally, a compelling business case should look ahead to new digitally enabled products and services and even business models. Since these opportunities are very industry and company specific, I’ll just make one suggestion.
Keep Machine Learning (ML), the most transformative technology since the Cloud, on the business innovation radar. It’s still early days, but the technology is moving fast and opportunities will be enormous. While S/4HANA already uses ML, SAP will keep its suite at “state of the art”, so that customers can innovate better and faster.
Since every enterprise is unique, it’s impossible to say in advance which opportunities will drive the customer’s business case.
What I can say is that building the case for real time with HANA requires serious work and a structured methodology. It’s worth doing, the benefits are huge.