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Business Requirements
The business requires the ability to plan, ideate, design and improve products and/or services including the hand-over to manufacturing for execution. The R&D and Engineering business domain consists of the following business areas:
Product and Service Portfolio Management
Ability to analyze, optimize and align the various offerings within a portfolio to ensure they contribute to the overall success of the company's balanced and competitive product/service mix, adapting to market dynamics, and maximizing the return on investment.
Product and Service Requirements Management
Ability to capture, analyze and document the functional and non-functional needs of a product or service which guides product development and ensures the final deliverable meets expectations.
Product and Service Design Management
Ability to manage and execute the design process of product and service development.
Product and Service Production Management
Ability to orchestrate transition from development to production. It includes finalizing preparation and transfer of component and resource documentation, design diagrams, production instructions to manufacturing for the production of products and services to specifications.
Product Compliance Management
Ability to meet regulatory standards, industry specifications and legal requirements. It includes monitoring, verifying and documenting adherence to applicable compliance criteria to mitigate risks, uphold quality and maintain legal and ethical standards throughout the product lifecycle.
Product and Service Development Collaboration
Ability to collaborate on the development and enhancement of product and services by sharing ideas, expertise and resources to collectively contribute to the development process. Collaboration may occur internally within a company or extend to external partnerships with suppliers, customers or other stakeholders.
According to SAP Reference Business Architecture the R&D and Engineering business domain comprises the following generic (cross-industry) capabilities (available to view in SAP Signavio Process Explorer or SAP LeanIX, under the Products & Services Enterprise Domain).
Business Capabilities
Solution Options
SAP’s product portfolio offers the following solutions which enable the R&D and Engineering (PLM) capabilities, mainly for product development (Product lifecycle management | SAP Help Portal).
- SAP S/4HANA
- SAP Integrated Product Development
- Enterprise Portfolio and Project Management for SAP S/4HANA (old ECC SAP Portfolio and Project Management
- SAP Responsible Design and Production
- SAP 3D Visual Enterprise – Author, Generator, Viewer
- SAP Teamcenter by Siemens
- PLM system integration for SAP S/4HANA
- SAP Engineering Control Center for SAP S/4HANA
- SAP product data management integration to SAP S/4HANA
- SAP Product Lifecycle Costing
In SAP centric landscapes, S/4HANA core R&D capabilities continue to stay while customers can augment it with cloud-native SAP solutions and integration with leading third-party PLM platforms. Moving forward however, the platform of innovations is the cloud-native SAP Integrated Product Development on BTP (SAP Business Technology Platform) with unified integration solution, specifically designed to foster a smooth and robust connection with leading third-party PLM platforms.
Characterization of the Solution Options
The brief description of the solutions below focuses on their R&D capabilities, the full scope of their functionality is not part of the scope of this document. For additional details please visit the SAP Supply Chain Management - PLM Portfolio Overview.
SAP S/4HANA
SAP S/4HANA provides all the standard core functionalities to support basic R&D foundation with mature capabilities to develop and industrialize products. SAP S/4HANA R&D remains a reliable system of record, inclusive of the direct CAD integration through SAP Engineering Control Center. SAP S/4HANA allows to manage product information holistically and efficiently across the complete lifecycle, ensuring end-to-end visibility from requirements to design to manufacturing to service, in both process and discrete industries.
The key capabilities of SAP S/4HANA R&D are*:
- Product Change Management - Orchestrate product changes in a standardized, flexible and compliant way
- Authoring Tool Integration - Integrate mechanical, electrical and electronic CAD authoring tools; synchronize metadata and structures
- Design Systems Interoperability - Integrate external product lifecycle management tools and SAP; synchronize metadata and structures
- Handover to Manufacturing - Deploy flexible manufacturing practices to initial product design to improve quality, productivity and agility.
- Model-Based Enterprise - Virtualize product models with drawings, manufacturing information (PMI) and geometric tolerances (GD&T).
- Product Development - Control the development of complex products in a single, real-time environment.
- Recipe Development - Develop recipes and formulas rapidly, reusing existing ingredients incl. packaging design and labeling.
- Advanced Variant Configuration - Optimize model development, simulation and testing based on a state-of-the-art, user-friendly configurator.
* Note that other solutions with “product lifecycle management” in their names will be changed to "integrated product development". For example, “SAP S/4HANA Cloud Private Edition, product lifecycle management” will be renamed to “SAP S/4HANA Cloud Private Edition, integrated product development".
Specific S/4HANA solution components:
S/4HANA – Product Compliance
SAP S/4HANA for product compliance supports product safety and compliance throughout the product lifecycle and is integrated in all business processes. Key capabilities include
- Product marketability and component compliance
- Compliance document management
- Dangerous goods management
- Safety Data Sheet and Label Management
SAP S/4HANA – Advanced Variant Configuration
A variant configurator engine designed to easily create customizable products / services, to create seamless transfers between sales, planning, production, engineering and service and to provide insights into product configuration trends. Key capabilities include
- Single-level and multi-level variant configuration models (“lot size of 1”)
- Product variants for make-to-stock scenarios
- Reusable configuration valuation user interface that can be embedded into Fiori apps
- Modeling tools for variant configuration models
- Simulation environment for testing variant configuration models - this includes the simulation of configurable bills of material (BOMs)
- Variant configuration data for Embedded Analytics
SAP Integrated Product Development
SAP Integrated Product Development (IPD) is a comprehensive, cloud-native PLM suite running on the public cloud, leveraging the capabilities of the SAP Business Technology Platform (BTP). The adoption of a cloud infrastructure will enable integration of advanced Generative AI (GenAI) and native collaboration capabilities into the PLM suite, significantly enhancing the automation and collaboration aspects of the idea-to-market process.
(SAP IPD is a separate solution, not to confuse with SAP S/4HANA integrated product development - see naming change note above).
IPD consists of the following SaaS applications:
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For each SaaS application to which you want to subscribe, you must add the associated service plan as an entitlement for your BTP subaccount and create an application instance. Administration Guide
Core capabilities of the solution include
- Innovation Management
- Requirements & Systems Engineering
- Product Data Management (Standard and Professional)
- Product Data Integration (CAD Integration)
- Product Data Exchange
- Recipe Formulation
- Product Handover
- Product & Asset Visualization
More details on the product and roadmap:
SAP Integrated Product Development | SAP Help Portal
SAP Road Map Explorer
SAP’s Product Lifecycle Management cloud solution (formerly called SAP Enterprise Product Development) has been renamed to SAP Integrated Product Development as of 2025 January. This name change doesn’t impact the roadmap and the future direction of the product. Additionally, SAP’s product strategy for SAP Integrated Product Development remains grounded in the following key pillars:
- Recipe Formulation & Specification Management: Developing powerful capabilities on BTP, tightly integrated with S/4HANA Cloud with unique integration strengths with Compliance, Sustainability and Network integration for process industries.
- Collaborative Product Data Management: Strengthening core product data management capabilities to extend S/4HANA with a focus on simplifying product structure management and handover for discrete and asset-heavy industries.
- Integration with Leading PLM and CAD Solutions: Expanding seamless integration capabilities with third-party PLM and CAD systems to enhance our collaborative product data management offering.
Customers who received an SAP Enterprise Product Development entitlement before September 2022 need to migrate from SAP EPD SaaS application to the individual SaaS applications of IPD.
Migrating to Individual SaaS Applications | SAP Help Portal
SAP S/4HANA - Enterprise Portfolio and Project Management (EPPM)
SAP S/4HANA’s comprehensive Project Management Suite allows managing portfolio decisions and new product development projects (SAP EPPM for R&D projects use case).
Key EPPM solution capabilities for R&D Projects
Collaboration available in S/4HANA Public cloud: Project Collaboration | SAP Help Portal
Analysis as of embedded analytics as well as SAP Analytics Cloud
S/4HANA EPPM is integrated with SAP Integrated Product Development for Collaboration and Product Visualization. EPPM is a critical solution component for Engineering-to-Order (ETO) processes, e.g. in the Aerospace & Defense industry.
S/4HANA EPPM is the overarching successor of the various SAP ECC project components, like PPM, CPM, PS for which the standard maintenance is ending by 12/31/2027.
SAP Responsible Design and Production
SAP Responsible Design and Production (RDP) is a SaaS solution (a service on SAP BTP) that enables continuous delivery of regulatory obligations and supports action towards circularity to meet the demand of the circular economy. The solution aims to help your company fulfill its duties in extended producer responsibility (EPR) and packaging taxes. It also supports you in collecting data for reports for non-governmental organizations (NGOs) and it allows you to create rules for packaging that you can use to identify unsustainable or undesirable packaging to prevent its usage. SAP RDP supports your business in keeping product design and production decisions in line with regulatory and non-regulatory drivers towards sustainability.
Key solution capabilities:
- Collate packaging data for logistics materials from specifications, recipes, bill of materials, classifications and batches
- Measure the weights of each basic material and assess impact KPIs
- Provide transparency of materials usage and sustainability criteria for all products and packaging sold, produced and imported into local markets
- Calculate Extended Producer Responsibility fees and plastic taxes for all materials globally and manage obligations related to producer responsibility organizations
- Configure packaging EPR, sustainability and compliance reports to relevant PROs (Producer Responsibility Organizations) tax authorities, and NGOs
For a list of available reports and key features, see Key Features | SAP Help Portal.
For planned capabilities visit the SAP Road Map Explorer.
SAP RDP integrates seamlessly with SAP S/4HANA (both private and public cloud). For the full integration and data replication options visit Integration and Data Replication | SAP Help Portal.
SAP Responsible Design and Production Architecture
SAP 3D Visual Enterprise
SAP 3D Visual Enterprise Generator is a graphical processing client-server application that allows users to automate the processing of CAD and other 2D and 3D graphics. Translate nearly any 3D CAD file into a lightweight format for downstream use. Support specific work processes in engineering, manufacturing, and maintenance. With SAP 3D Visual Enterprise Generator, you can create enterprise solutions that enable nontechnical users to search, access, manipulate and integrate complex graphical data into any business or office application across an organization.
SAP 3D Visual Enterprise Author is a standalone application used to manage and author 2D, 3D, animation, video and audio assets residing on a computer or network. Create 3D animations and render rich visual content into common desktop documents, file formats, and business applications for secure downstream use.
SAP 3D Visual Enterprise Viewer provides visualization as a permanently available and fully integrated solution component. View and interact with authored and published content. This end-user tool is lightweight, powerful, easy to use – and free of charge. SAP 3D Visual Enterprise Viewer available on Android and iPad as well.
Unlike standard SAP mobile apps, this application does not rely on a back-end system in order to function. No connection with Relay Service, Sybase Unwired Platform, SAP NetWeaver Gateway or SAP ERP is required. SAP 3D Visual Enterprise Viewer for iPad does however rely on other applications to provide additional files. The following graphic provides an overview of the system landscape variants that are possible for SAP 3D Visual Enterprise Viewer for iPad.
Technical System Landscape | SAP Help Portal
SAP Teamcenter by Siemens
Customers can leverage Teamcenter to enable a comprehensive engineering focused PLM suite tailored for discrete manufacturing environments, especially with complex products (e.g., Aerospace & Defense, High Tech industry segments). For more details: SAP Teamcenter by Siemens | SAP Help Portal
Learn more about the partnership: SAP and Siemens – Better Together - SAP Community
PLM system integration for SAP S/4HANA
SAP PLM system integration for SAP S/4HANA (PLMSI) is an add-on that enables seamless integration of product-relevant data to realize bi-directional process integration between SAP S/4HANA and an external PLM system. PLM system integration replaces the SAP product data management integration (PDMI), the latter's mainstream maintenance ending by 12/31/2025.
PLMSI supports integration with
- SAP Teamcenter by Siemens
- Autodesk Vault
- PTC Windchill
- Dassault 3DEXPERIENCE
PLM system integration for SAP S/4HANA | SAP Help Portal
SAP Engineering Control Center for SAP S/4HANA (ECTR)
SAP ECTR for SAP S/4HANA is a graphical user interface and a direct interface to the SAP system. The interface integrates the data and functions of heterogeneous applications in a uniform platform with SAP PLM. The graphical display of the high-level architecture is available in the Administrator Guide.
With SAP Engineering Control Center, you can integrate business data from SAP software with design information from authoring tools for mechanical computer-aided design (MCAD), electrical and electronic computer-aided design (ECAD), software and other simulation tools. SAP Engineering Control Center (ECTR) can convert CAD to 3D Visual Enterprise.
SAP Product Lifecycle Costing
SAP Product Lifecycle Costing (PLC) is a solution to calculate costs and other dimensions for new products or quotations in an early stage of the product lifecycle, to quickly identify cost drivers along the lifecycle and to easily simulate and compare alternatives. PLC enables users to gain visibility across teams, proactively manage costs and support new product innovations and customer-specific engineered products. You can develop product cost estimates at the early stages of product development, for customer quotations & throughout the product lifecycle. SAP PLC connects to SAP ERP, SAP S/4HANA as well as legacy systems.
SAP PLC is an independent product (not an add-on) on SAP HANA – can be used as a standalone solution or integrated with SAP S/4HANA.
SAP Product Lifecycle Costing offers two system landscape options:
- Minimal system landscape
- Side-by-side scenario with SAP ERP
The minimal system landscape to run SAP Product Lifecycle Costing is to install the application standalone. This landscape is recommended when there is no need to consume data that from an SAP ERP system (e.g., existing master data).
In the side-by-side scenario you connect SAP Product Lifecycle Costing to an SAP ERP system to leverage and access existing master data and transactional data.
Criteria to determine the most suitable target solution
Industry specific requirements, product complexity and integration requirements are the main drivers for choosing the target solutions. We assume that SAP S/4HANA is part of the application architecture (current or target).
Consider the following criteria to define the right target architecture
1. Industry sector
SAP PLM offers solutions both for discrete and process industry customers as well as asset intensive industries.
Process Industry (Formulated Products)
The well-established Recipe Management in SAP S/4HANA and the innovative features in Integrated Product Development (e.g. Specification Management and Recipe Formulation, Product Compliance check and Packaging and Delivery Mechanism Design) makes the solutions suitable for process industry companies (e.g. but not limited to Food & Beverage, Chemicals).
SAP Road Map for Integrated Product Development
Discrete Industry (Designed Products)
For customers in discrete industry segments, particularly in segments like Automotive Suppliers, Industrial Manufacturing, High-Tech and Consumer Products, SAP PLM offers a versatile approach tailored to unique customer scenarios and business processes. It provides collaborative product data management capabilities with strong integration to Manufacturing, Sourcing, Procurement and Maintenance as key differentiator including Change Management.
Businesses (both process and discrete industries) exposed to existing Extended Producer Responsibility schemes (EPRs) and/or Plastic Packaging Taxes or engaged in voluntary NGO reporting should consider SAP Responsible Design and Production above and beyond the core SAP PLM solutions (S/4HANA, IPD, PLMSI).
2. Product complexity
Especially in discrete industries, the target application portfolio is driven by the complexity of the products.
- Customers with low or moderate complexity: the go-to solution is the cloud-native SAP Integrated Product Development complementing the core ERP (SAP S/4HANA), adept at meeting the specific needs of these customers. This approach is particularly suitable for customers requiring a straightforward, turnkey PLM solution. SAP IPD integrates with both SAP S/4HANA public and private editions.
- Customers with advanced engineering centric requirements: customers in certain industries (e.g. High Tech and A&D) with high product complexity have the option to leverage third-party PLM applications like SAP Teamcenter by Siemens together with the next generation SAP PLM system integration solution. Alternatively, they can choose a hybrid approach based on the SAP PLM portfolio.
3. Integration requirements
Customers with an existing PLM system (non-SAP) and/or authoring (CAD) applications can leverage SAP solutions to integrate with SAP S/4HANA to create a seamless digital thread (systems & business process integration) and establishing a single source of truth for product data from design to operate.
The details of the various integration options in a PLM landscape are addressed in a separate article.
4. Object Visualization
Object visualization in PLM refers to the ability to visually represent digital product data like 3D models and assemblies within a PLM system, allowing users to interact with and analyze the design in a visual manner throughout the product lifecycle, from design to manufacturing and beyond; essentially, it's the process of creating a 3D visual representation of a product within the PLM platform to facilitate better understanding and collaboration across teams.
All major PLM platforms offer advanced visualization tools, therefore the SAP 3D Visual Enterprise is only an optional component. SAP’s solution can be an option when advanced PLM application is not available. SAP Engineering Control Center (ECTR) can convert CAD to 3D Visual Enterprise.
SAP solution options based on industry characteristics and product complexity
* Companies with high product complexity and engineering requirements most likely have advanced investments in external PLM systems.
Conclusion
Companies using SAP have been running R&D and Engineering in their ERP solution and moving to SAP S/4HANA can continue to do so. While SAP S/4HANA has the standard core R&D and Engineering capabilities, customers recognize the need for more robust digital solutions to manage complex product design processes.
PLM is now increasingly moving towards the cloud, driven by the benefits that cloud computing offers. This shift is being catalyzed by the need for greater collaboration, automation, scalability and efficiency.
By adopting the structured approach described above, you can position the SAP PLM solutions to effectively meet the diverse and complex needs of various industry segments, ensuring that each customer can leverage the right combination of solutions to optimize their product lifecycle management processes.
