SAP Cloud Stack on the Test Bed

Both the migration and the practical use of SAP technologies such as Datasphere, Abap Cloud, Analytics Cloud and S/4 Hana Cloud for Group Reporting have often not yet been sufficiently tested - especially as the requirements, objectives and decision-making bases are heterogeneous and different for every company. There is a lack of suitable precedents, so the risk is too high for many companies. However, a realistic prototype can be used to validly evaluate these tools and show how they can be introduced in the context of the overall architecture, thus supporting companies in their decision-making.

Consolidation in operational ERP

The current SAP Cloud Stack includes the innovative solutions Analytics Cloud, S/4 Hana for Group Reporting, Abap Cloud and Datasphere. The SAP Analytics Cloud (SAC) has been on the market since 2015 and includes comprehensive functions for analysis and planning. SAP set a technical milestone in 2019 with S/4 Hana for Group Reporting: with this modern consolidation solution, consolidation takes place directly in the operational ERP. The Abap Cloud was launched in 2022 and, as a modern development environment, is closely linked to modern SAP solutions such as S/4 Hana. Developers can create, test and deploy Abap-based applications here. With Datasphere, SAP is providing the next generation of SAP Data Warehouse as a cloud solution. The comprehensive data service was introduced in March 2023 and ensures seamless and easily scalable access to business-critical company data.

Individually, the solutions are already being used successfully in a number of companies. However, looking at the solutions in isolation is only one side of the coin - presenting them in the context of the overall architecture is the other. For the latter, however, there is a lack of suitable practical examples, which is why companies often struggle with the decision to migrate to the cloud. In order to test the SAP Cloud Stack and present the SAP future strategies in an overall architecture, the management consultancy Caleo has developed a unique prototype: 

Using the example of a fictitious medium-sized company, the developers have completed a very realistic project that illustrates the challenges and solutions as well as the advantages and disadvantages of the cloud stack. It can therefore be used as a precedent for decision-making.

Greenfield scenario for cloud

The fictitious textile company "Famosa Group" has its headquarters in Germany and a further 20 companies in 20 other countries, including six profit centers. A creative department, a purchasing department, a central sales department and a central controlling department were modeled for the project. In this scenario, the company is faced with the challenge that the IT landscape has grown historically and is fragmented, with several heterogeneous accounting systems in use. The group already has a business warehouse in use, but only uses it on a granular basis and has not made a large investment. As the ERP systems will no longer be maintained in the foreseeable future - SAP will discontinue support for older ERP systems such as ECC, CRM, SCRM, SRM and IDM at the end of 2027 - the company is looking for a successor solution and wants to follow SAP's vision of cloud computing. 

Although constructed for a fictitious company, these requirements and challenges are extremely real and reflect the situation of many corporations. In the greenfield scenario, the developers introduced the four modern solutions Analytics Cloud, S/4 Hana for Group Reporting, Abap Cloud and Data-sphere in an overall architecture for the prototype. Both the applications and the development process were realistically mapped: With clearly defined responsibilities on the part of the fictitious customer and the service provider's project team, S/4 Hana for Group Reporting was introduced first, followed by the three other tools in the subsequent waves. 

This was based on realistic data sets and financial data. This showed that a pure cloud scenario is possible and, under certain conditions, also recommended. Companies that embrace SAP's vision can actually follow it in reality.

Centralized service of the cloud

With the cloud, SAP offers a number of advantages over on-premises: Maintenance and security are provided as a centralized service, companies also benefit directly from SAP's ability to innovate and can be easily scaled. There is no need for an initial, high investment; instead, the costs for operation are incurred on a monthly basis. However, the doubts that many organizations have about the cloud cannot be dismissed out of hand: The issue of data security is probably the biggest cause for concern, followed by a lack of individuality in the systems and therefore certain missing functionalities. However, the prototype developed shows that these concerns can be resolved in practice: very individual requirements that lie outside the functional scope of the available product range and for which a complete in-house implementation is therefore possible are possible with the Abap Cloud. Developers with an affinity for Abap can build their own applications in this cloud environment relatively easily, quickly and without many associated processes. 

Datasphere in practice

The great added value here is also that the Abap Cloud is the latest technology stack; on-premises solutions are never up to date, but always lag behind. In addition, companies can continue to use the existing expertise of their developers. Datasphere also stands up to the practical test and is a good cloud alternative to the Business Warehouse. Conceptually, the tool works differently because it relies on virtualization rather than intermediate data storage and is also less driven by data streams. However, specialist departments can set up data streams in the Datasphere quite easily - i.e. without code - and also integrate applications. Individual intervention is possible - albeit within limits. 

The advantage over the Business Warehouse is that Datasphere is based on the sharing concept: specialist departments are and remain in control of their data and can decide for themselves with whom they share which data - which is then also straightforward. For example, if a report is required at short notice, departments can quickly create it based on a downloaded Excel file. Subsequently, IT can still replace this process with a proper connection, but specialist departments are flexible enough to report at short notice and initially without IT-supported data. Transferring data from one level to another is much easier in Datasphere than in the business warehouse.

Individual toolbox

SAP S/4 Hana for Group Reporting and SAC were also convincing in the practical test: the interface of the consolidation solution is immediately available in the cloud and the system can be technically deployed immediately - unlike on-premises. However, it is much more difficult to implement individual requirements in the cloud. SAP follows the "keep the core clean" approach here, so the individual toolbox for the IT and specialist departments is significantly smaller than in the on-premises alternative and is sometimes missed. However, if organizations remain close to the SAP standard, they can also benefit from the innovations - which are introduced through continuous updates. The course of the project also showed that certain difficulties resolve themselves over time: Certain connections, for example, were initially not possible, but were resolved by SAP after a few updates. Companies that dare to migrate to the cloud are rewarded with tools that benefit from all of SAP's innovative power and are automatically equipped with new features through regular updates. However, the prototype also shows that a change of perspective is always necessary, as is the willingness to follow the SAP vision and trust that development is heading in the right direction. After all, the tool stack currently does not always provide all the desired functionalities. However, if companies are starting from scratch anyway, it can make sense to rely exclusively on the cloud. As the basis for decision-making is individual for each company, there is no one-size-fits-all solution. Individual advice from experts who already have practical experience with various scenarios is therefore recommended. 

Conclusion

The new SAP technologies Datasphere, Abap Cloud, Analytics Cloud and S/4 Hana Cloud for Group Reporting not only offer impressive potential in theory, as this prototype demonstrates in a practical test: companies benefit from innovative strength, simple scalability and an up-to-date technology stack. However, challenges such as data security, a lack of individuality and functions that are not yet fully developed make it clear that a switch to the cloud needs to be carefully considered. The prototype of a realistic scenario shows that an overall SAP cloud architecture is possible and recommended under certain conditions. Individual consulting remains crucial in order to find the optimal path for migration and to evaluate the solutions in the respective context.

To the partner entry: