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SAP customers who have elected to use the supplier’s database platform Hana for analytics or to run business applications better are not few in number – but neither are they plentiful or vocal.
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Hillarys Blinds, a Nottingham-based UK manufacturer and retailer of blinds, is one mid-market customer that has turned the high-speed, in-memory database to business account
It is among 5,000 to 6,000 customers who are running SAP business applications on Hana worldwide – although more will be using it for analytics use cases.
The supplier said in its full-year 2016 results, released in January this year, that S/4 Hana adoption had doubled year-on-year to more than 5,400 customers, which equates to 1.6% of its customer base of 345,000.
However, an SAP UK & Ireland User Group survey of 296 user organisations, published in November 2016, found that 5% of customers were using S/4 Hana.
It also found that 12% of that group of customers had simply not heard of the Hana-based enterprise resource planning (ERP) system.
Now, the supplier’s in-memory, columnar database has been the lynchpin of its strategy since 2010, when the first database was sold. And S/4 Hana, its full system for planning enterprise resources, has been its flagship product since February 2015.
Matters are confused, however, by the earlier Business Suite on Hana, which is what Hillarys is running. This is a suite of SAP applications that can be run on Hana, but were not originally written exclusively for Hana, as is S/4 Hana – which is, in turn, short for SAP Business Suite 4, an early component of which was Simple Finance.
Read more about SAP Hana
We look at the differences from traditional SAP architecture that are introduced by the software supplier’s Hana technology.
SAP has announced an intensification of S/4 Hana cloud delivery, together with an infusion of its enterprise resource planning with artificial intelligence.
Hillarys moved to Business Suite on Hana in August 2015, when S/4 Hana had been announced, but was still in its infancy as the full ERP system rewritten to be optimised for Hana – and therefore suitable for other rival databases.
Julian Bond, head of ICT at Hillarys, recounts how the company had then been on the ECC5 SAP ERP, not the more recent ECC6, which might have had given it better functionality.
“ECC5 was coming to the end of its support cycle,” he says. “We could have gone to ECC6 on the same hardware, but we decided we’d rather be at the front of the curve, and mobility was at the front of our thinking, too. Hana is an expensive investment. It is very important that you kick the tyres when selecting a partner. We used the Birchman Group, which has proper Hana expertise, and that made all the difference for us.”
The main benefit Bond reports from Hana is the speeding up of the SAP CRM 7 on-premise application that is used to deal with customers. “It runs much faster on Hana,” he says. “It used to be a dog, frankly, and the business had started to work around it.” Previously, it had run on an Oracle database, he adds. “That is not to say anything against Oracle – it just runs better on SAP Hana.” This means “a speeding up of customer service, reducing call times, faster resolutions of issues and a drop in complaints”, he adds.
A salient feature of the company’s business is that there is no such thing as a standard blind. “We don’t make stock blinds,” says Bond. “A key question for us is, ‘can we fit this blind technically?’.”
Hillarys has an army of fitter-salespeople who visit people in their homes and measure for blinds. There are two million size permutations and half a million combinations of colours and fabrics in play. The fitter has a tablet computer with which to place the order, and a hand-held device to take payment. He or she will get a lead time from the SAP back-end system, and the order will trigger the manufacture of the blinds.
“We were running our MRP [material requirements planning] process once a week,” says Bond. “With Hana, we run it once a day, which means we can respond quicker.”
Hillarys was founded in 1971 by Tony Hillary in his garage. He sold the business 30 years later to Close Brothers Private Equity, and today it is owned by another private equity group, European Capital. It has always stuck to an operational model that has eschewed retail outlets and showrooms in favour of bespoke, made-to-measure ordering – in a sense, made for the web.
The firm is currently looking to rebuild its ecommerce platform, which it now gets from Magento, says Bond. “We are looking for a richer web services integration into our Business Suite on Hana.”
The firm has also been using Hana for analytics. “Previously, we had been pushing [SAP] Business Warehouse to the limit of the overnight window,” says Bond. “With Hana, we process the data so much more quickly, reducing the time taken by 60%. That means can get greater insight faster, including from the mobile app, which sits on top of SAP’s mobile platform We get a richer picture of what customers are interested in, what promotions they go for, and so on.”
Bond is a frequent presenter at UK and Ireland SAP user group conferences. He says his impression is that a lot of mid-size customers are still waiting to see how S/4 Hana will pan out, and are sticking with ECC6. “It is hard to tell if take-up [of Hana] is accelerating or not. The main question I get is how to cost justify it.”
Bond and the Hillarys IT team – 50 or so strong in Nottingham – are currently “exploring additional benefits for Hana, for example new capabilities around rules engines to optimise processes”, he says. They are not yet using Simple Finance and Simple Logistics within S/4 Hana, properly speaking. Nor are they looking to move to a cloud environment for Hana or S/4 Hana.
“When we made the call in summer 2015, when SAP had some announced capability, it all seemed a bit vapourware. The commercial case didn’t stack up then. In three years, maybe it will.”
In an interview with our sister site SearchSAP.com, published in December 2016, Bond told how the firm’s IT team had deployed the Panaya CloudQuality Suite tool to test only what was most critical when upgrading to the SAP ERP on Hana. He recounted how the complexity of the manufacturer’s operational model was what led it to SAP R/3 in the first place, in 1999. “We implemented SAP in 1999, and even then it was one of the few standard, off-the-shelf products that could cope with the complexity that every product we make is unique,” he said. “It could help us cope with short turnarounds on blinds that are made to order.”
Panaya, an Infosys-owned, Israeli software-as-a-service company focused on making ERP systems more agile, recently published a global survey of 200 SAP managers about S/4 adoption.
Define a business case
It found that a slim majority (51%) have committed to move to S/4, yet most of them (69%) are still trying to define a business case for so doing. It also found that 31% of those who have decided on an implementation route have chosen system conversion or a brownfield approach over what Panaya describes as SAP’s recommended re-implementation. This, they surmise, is because of the high cost of new installations and their reluctance to throw away decades of customisations in existing systems.
In view of the fact that the firm sells an “SAP S/4 Hana Discovery Pack, which provides SAP customers the insights they need to identify the optimal conversion path that meets their organisation’s needs” as part of its CloudQuality suite, this research is perhaps not entirely disinterested. Nonetheless, it suggests the non-trivial nature of upgrading to the full S/4 Hana business suite from perfectly decent previous SAP ERP systems.