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Introduction:
In addition to S/4 HANA On-premises/private cloud edition, SAP also offers SAP S/4 HANA Cloud Public Edition. Software-as-a-Service (SaaS) or Public Cloud Edition of SAP S/4 HANA, has high standardization and less flexibility to configure/modify. This has most of the pros and cons of a standard cloud solution. ‘The End of Corporate Computing’, Nicholas G. Carr, MIT Sloan Management Review & ‘How Software-as-a-Service Is Accelerating Digital Transformation’, Harvard Business Review are good articles that can provide a basic overview of Cloud Computing and SaaS.
System complexity and implementation size are important factors to be considered to determine the suitability of Public Cloud Edition. If the system complexity and implementation size are low, then cloud solutions should be evaluated. Since the cloud solutions can scale up faster than the on-premise solution, regardless of implementation size (with low complexity), cloud solutions can be considered. If the complexity of the implementation is high, then enhancements along with advanced functionalities may be required. Hence, the cloud solution may be difficult to cater to many complex business requirements.
So, small to mid-size companies can consider public cloud options, since the business requirements are less complex, and the customization required is minimal (with limited integration). Subsidiaries are another area where public cloud solutions are relevant. SAP has released various documents related to the application of S/4 HANA Cloud Public Edition for subsidiaries in a two-tier architecture. More details about this are available in the SAP Press E-Bite - SAP S/4HANA Cloud for Two-Tier ERP Landscapes.
There are differences in the functionalities available for On-Premise/Private Edition and Public Cloud Edition. Also, there is a common perception that S/4 HANA Cloud Public Edition does not have some features that cater to complex business processes. However, more functionalities are introduced by SAP regularly. As of now, every year there are 2 major releases in February and August. Additionally, smaller fixes are released during these major releases. Systems are upgraded automatically during this release cycle. Please note that one of the major issues for most SAP on-premise customers is the high level of customization and inability to upgrade the system to the latest version. With this biannual automatic upgrade cycle and clear core concept with reasonable restrictions, this issue will be non-existent in the Public Cloud Edition. Moreover, Public Cloud Edition provides new features every year and customers can evaluate and activate it accordingly. Moreover, customers can use the ‘Customer Influence Portal’ to request SAP to develop new solutions that are not available in the roadmap.
Hence, it is important to keep track of the available features in each release of Public Cloud Edition and frequently monitor the roadmap, so that companies can evaluate the pertinence of the solution to their business requirements. Interestingly, some of the new features are first released in the Public Cloud Edition before it is released in the on-premise or private edition. For example, in the Transportation Management area, the ability to use SAP TM Freight Order charges in the SAP SD billing document was first released in the Public Cloud Edition. Now this is available in on-premise / private edition too. Similarly, certain functionalities such as Freight settlement integration with FI/MM module are different in a Public Cloud Edition. In Public Cloud Edition the freight settlement is connected to lean service management (and not for the external services management) and SAP may or may not release this in the on-premise or private edition in the future.
This blog series will showcase some of the interesting solutions and important processes that can be achieved in S/4 HANA Cloud Public Edition. Since SAP has detailed documentation for process flow, setup, and testing, these blogs will primarily focus on business problems, solutions/results, and business benefits.
Business Requirement: Supplier Delivery Prediction
At the peak of the Gartner Hype cycle, Artificial Intelligence (AI) and its applications have great traction nowadays. So, I will start with an interesting AI/ML(Machine Learning) feature related to purchase order predicted delivery date in S/4 HANA Public Cloud. In general, when shippers/manufacturers order raw materials or semi-finished goods from vendors, it is usually difficult to estimate the accurate delivery date of the products at the receiving warehouse/plant. A delay in delivery can impact production and the availability of finished goods. This can in turn affect the outbound delivery schedule and customer satisfaction. So, it is a common requirement to predict a realistic delivery date based on multiple factors and historical data using AI/ML.
Solution:
In S/4 HANA public cloud, scope item 3FY (Prediction of Delivery Date for Purchase Order Items) deals with supplier delivery prediction. Here, Machine Learning algorithms identify the supplier delays based on the multiple situations and predict the chances of delay. It recognizes potential delivery delays and gains insights into the performance of the supplier based on past deliveries. This is an out-of-box functionality from SAP and the following steps are required.
Intelligent Scenario Set-Up:
Ensure the scope item is active, and the scenario SUPLRDELIVPREDICT is published and available. The scenario definition contains the input/output data parameters, model type, algorithm, and other details.
Train & activate the model:
A large set of data is important to train the model. As per the documentation at least 1 year and/or 100k to 1 million records is the ideal volume of data. Also, data that is too old from a business perspective should be avoided. This means that customers who implemented AI features earlier will have more data in the system and the results/outputs from the AI model will be more accurate. The model still works with lower amount of data, but the accuracy may not be that precise. Once the model is trained, it can be activated. Only one model can be active at a time. We may have to re-train the model and the frequency can be determined as per the evaluation of the results. Scheduling options are also available in the app.
Predict the delivery date:
Users can either use the Monitor Purchase Order Item App or the Scheduled Planned Tasks setting in the above Intelligent Scenario Management app to predict the delivery date for multiple purchase order items. Additionally, filters can be used to identify the orders that have potential delays, and users can follow up with the vendors or explore alternate sources of supply. In the beginning, this may be a manual process. But with Gen AI and RPA (Robotic Process Automation), these processes may be automated in the future. Other downstream processes such as notifications to carriers, customers, and other stakeholders, etc can also be automated.
Note: Refer to scope item 3FY for more details related to process flow, setup, and test scripts. (https://me.sap.com/processnavigator/SolS/EARL_SolS-013/2308/SolP/3FY?region=US)
It is imperative to check whether the predictive delivery date is accurate. In the beginning, reports can be developed to check the accuracy of predicted results and compare them with the actual inbound receipt process (Please note that it will be a challenge to monitor the accuracy of predicted results in sandbox or development systems as the data may not be accurate). If we identify that the models are not predicting the expected results, using intelligent scenario management and BTP, advanced/custom models can be developed with the use of internal/external predictive analytics tools. Otherwise, we can use SAP Customer Influence Portal or wait for SAP to release the updated version of the App. The important point to note is that architecture to predict delivery date in PO items is in place and there are multiple options to improve the results.
Business Benefits:
- Decrease manual effort to monitor and resolve issues earlier (proactively)
- Plan and deliver materials more reliably.
- Avoid production delay and rescheduling.
- Get up-to-date lead time updates for goods/services at the master level for direct and indirect procurement.
- Better visibility of supplier performance and inputs to streamline sources of supply.
Conclusion:
SAP S/4HANA Cloud Public Edition is a ready-to-run cloud ERP that delivers the latest industry best practices and continuous innovation. As of now, the target customers are those with low to medium system/process complexity. Every year, there are 2 major releases, and the system will be upgraded automatically. Hence the customers need not plan for long projects to upgrade the system and can activate the latest features released by SAP quickly.
One of the common business requirement of supplier delivery prediction using AI/ML is now an out-of-the-box solution in SAP S/4 HANA Cloud Public Edition. Detailed documentation from SAP significantly helps to understand and implement the solution easily. Also, it is a bit impressive to see how quickly SAP is deploying functionalities based on the latest trends (AI in this case) in Public Cloud Edition and how easily customers can use it. Another advantage of the availability of this tool in S/4 HANA Cloud Public Edition is the possibility of upgrade by SAP based on various self-learning techniques and additional parameters. If we need to use AI, it is important to start early and adopt the standard SAP architecture earlier than later. There will be significant advantages for being the first mover.
SAP has not fully released the Gen-AI capabilities via SAP Joule and it will be interesting to evaluate various use cases and business requirements/solutions available for end customers and implement it. Considering all these, it is critical for most of the customers to evaluate whether SAP S/4 HANA Cloud Public Edition with its current scope and future roadmap is suitable for their business processes and keep monitoring the evolution of the product.
Link to other SAP blogs: https://community.sap.com/t5/user/viewprofilepage/user-id/179579
