Creating a Business Case for SAP HANA

Excerpt from The SAP HANA Project Guide by Ingo Brenckmann, Mathias Pöhling.

Creating a Business Case for SAP HANA
For the last couple of years, one of a CIO’s toughest challenges has been keeping their organization focused on running IT landscapes stably and efficiently enough to meet organizational demand in the face of frequent budget cuts.
Business leaders have commonly looked to outsourcing to IT providers and consolidating landscapes and virtualization of servers to address budget cuts, while trying to sustain the level of information services the organization demands. The era of IT as the innovation engine for the entire company seemed to be over when new technology concepts began to emerge.The promise of cloud, mobility and in-memory computing are more than just cost efficiency programs for IT. With these new technologies, IT can rise again and CIOs can once again contribute to operational effectiveness with more than simple cost reductions. CIO’s should feel optimistic about providing innovative solutions that will have a significant impact on the bottom line of the entire organization.

In-memory technology, especially SAP HANA, is one of the top innovations capturing the attention of CIO’s. SAP HANA has the potential to change the way that companies work with their data. The majority of companies today are data driven enterprises and changing the way a company interacts with data could change the entire way the company
works. There are two main use cases for SAP HANA: optimization and innovation.

Optimization and Innovation Use Cases
The optimization use case brings value by reducing the time and effort that is spent on data analysis and/or reports. This is the easiest use case because it is possible to compare before and after a scenario. Reports, analysis, or even entire business processes can be
optimized. For example, a report that once took 34 minutes to run was reduced to 5 seconds with SAP HANA.

While use optimization depends on the variables, it is possible to estimate the savings. To calculate the value of the case, evaluate what the time reduction is worth to the company. It is important to note that it is less the process run time optimization that brings value, than the impact that this optimization has on the company. Saving time alone potentially only has an impact on a department’s coffee consumption, but using this time to increase productivity is the goal. So always keep in mind speed is “just” an enabler of value. Here a list of questions you can use to identify the value:

• Can we decrease the business process duration to deliver a higher output in the same amount of time?
• Can we accelerate follow-up processes if we optimize an existing bottleneck?
• Can we change from daily batch-driven processes to an on request/online process for higher process flexibility and more up-to date reporting results?
• Can we use the speed to run more reports in the same time period to improve the quality of our decisions?
• Can we expand reports / analysis offerings to a broader user group, as limited server capacity is no longer an issue?

Optimization use cases are easy to estimate, and the before versus after comparisons are clear for business decision-makers to acknowledge SAP HANA’s value. Most of the time, however, more value can be found in the second use case.  The innovation use case is a little more complicated because SAP HANA is used to deliver results that have not been produced before.

The innovation use case is effective when either the performance gain was previously not technically possible, or the effort to execute a certain report, analysis or business process had such a lengthy delivery time, that it was meaningless to execute it.

Identifying these scenarios and enriching the business by delivering pure innovation is the aim of the game. Innovation use cases are challenging to create. They are best created with an interdisciplinary team from IT and the business units brainstorming without boundaries in a “value discovery workshop”. The goal of the workshop is to collect ideas on possible SAP HANA scenarios.

The workshop leader asks team members to brainstorm and discuss a list of ideas. To identify good innovation use cases ask the following questions:

• What business need can be delivered that was not possible before?
• How does the change impact the overall process?
• Can the process be handled with higher quality?
• How does the new deliverable change the business?
• Are there any similar processes that can benefit from SAP HANA?

Once the workshop team captures several scenarios, they can then validate each one, typically estimating the impact on the business and effort to implement them to establish a priority list.

Customer Example
A customer is running SAP CO-PA reporting in SAP ERP. Due to a high number of products and customers, the analysis is done by product or customer dimension, but does not combine customers and products. With a report runtime of around 6.5 hours, the organization can tell the extent to which a specific customer or an individual product is profitable. An analysis of a specific product for a single customer is not possible. This combination of details on both dimensions would have a very long runtime and require high server resources which, even if technically possible, would not be practical. The customer developed two use cases. Here are the results:

Optimization use case: SAP HANA reduced the 6.5 hours process to 0.5 hours.

Innovation use case: Enabled by the dramatic increase in performance, developers enhanced the report to enable analysis on a granular level making it possible to look at the profitability of every single customer for any given product. Using SAP HANA for CO-PA, reporting can answer questions on how profitable a specific customer is with product X, and if that differs from product Z.

While the next chapter will take a deep dive into the way SAP HANA works, this chapter focuses on the value SAP HANA can provide. It will guide you on how to create a SAP HANA business case. We’ll take a look at the main cost drivers, as well as the areas of added value.

The next section will start with the value SAP HANA scenarios can deliver by taking a closer look at the different types of scenarios in detail.

Keep reading in The SAP HANA Project Guide by Ingo Brenckmann, Mathias Pöhling.