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Highlights of the SAP S/4HANA Cloud 1905 Release

Today marks the general availability of our SAP S/4HANA Cloud 1905 release. With our 1902 release, we have already provided the most complete and intelligent ERP on the market. To further strengthen our product, we are constantly working on new features.

As a top-level strategy, we have also started a process to redefine Cloud ERP in the context of end-to-end processes. Our aim is to provide the best-in-class Cloud ERP that combines the power of SAP S/4HANA Cloud and other key SAP Cloud assets. We are striving for a solution that covers the common end-to-end processes of any company, across all relevant lines of business and focus industries.

In this blog you can discover what our latest and greatest SAP S/4HANA Cloud 1905 update has in store for you. For a quick overview of the highlights check out my video below.



Universal Allocation

While most companies have clear rules to allocate direct costs based on direct connections to products, allocating overhead or indirect costs is more difficult. With the brand-new innovation Universal Allocation, SAP is conquering the complexity and simplifying cost allocations by combining various capabilities in a unified approach. Universal Allocation enables you to allocate and distribute overhead for cost centers and profit centers using actual or plan data. This provides you with high transparency and insights on the overhead allocation process, even within complex organizations.

Active Budget Availability Control for Cost Centers

Budget managers often struggle with inaccurate budget planning, which is often caused by outdated expenditure information. The new Active Budget Availability Control for Cost Centers allows for real-time budget availability control of costs centers, and supports the end-to-end business process, from budgeting to cost postings, and it offers specific budget reporting for the budget and cost-carrying objects. Embedded analytics enables you to monitor what has been spent and what is left of the budget. With this real-time transparency on various budget and cost information you can avoid budget overruns cultivating a better spend culture.

Figure 1:  The ‘Cost Center Budget Report’ capability allows for real-time transparency on budget consumption, commitment, actuals and remaining available budget.



Quality Management: Defect Handling Supported by Machine Learning

With defect handling in Quality Management, we are adding another intelligent innovation to SAP S/4HANA Cloud. This machine learning feature supports quality technicians in their daily work. When describing a defect, quality technicians can make use of the SAP Fiori application Record Defects and simply enter the text – even by using a mobile phone – and the application automatically proposes the best matching defect codes. This proposal by the system increases the data quality of all recorded defects and supports the detection of defect frequency and related actions for improvement.

Figure 2:  Using the SAP Fiori application ‘Record Defects’ quality technicians can record defects with a mobile device.


MRP Material Exception: Situation Handling for Material Coverage

Material Requirements Planning (MRP) is an essential step for manufacturers. To plan as accurately as possible, you can now make use of intelligent situation handling for material coverage to bring important issues to the users’ attention. A typical issue could be that a sales order gets cancelled. If this is the case, you can identify the related MRP elements, such as production order or purchase order, which may have already been created to fulfill the cancelled requirement. Detecting unnecessary supply elements in time avoids excess inventory and thereby reducing costs.


Sourcing and Procurement

Situation Handling for Predictive Contract Consumption

Another area where we are enriching with even more intelligence is Sourcing and Procurement. With a new situation handling scenario, which leverages predictive analytics, we are enhancing the already existing functionalities for contract consumption. The system can now forecast the point in time when a purchasing contract is expected to be 100% consumed. With this capability, procurement teams can predict challenges before they occur and mitigate potential risks of consumption before contracts expire.

Monitor Central Purchase Requisition Items

Over the last releases, we have enabled functionalities for better spend capture such as monitoring central purchase orders and central purchase contracts. With 1905, we’re taking the next step and providing analytical capabilities for central purchase requisitions. With this scenario, global purchasers at the headquarters can now monitor purchase requisitions uploaded from connected back-end systems in their central SAP S/4HANA Cloud system. Global purchasers can monitor the total value of purchase requisitions and make use of visual filters to display the total value by purchasing group, requisition status, delivery date interval, and delivery status. This transparency is crucial to enable the right actions, at the right time, so that businesses run smoothly.

Figure 3: Our SAP Fiori app ‘Manage Purchase Requisition Items Centrally’ allows you to monitor the total value of purchase requisitions and provides various filter options.  


Service Management

Independent Service Management in SAP S/4HANA Cloud

With our 1905 release we provide the ability to run Service Management independently in SAP S/4HANA Cloud for non-stock items. We are extending our solution beyond APIs to enable the creation of service contracts, orders and confirmations directly in SAP S/4HANA Cloud. Additionally, we ensure Service Management processes run in close integration with all other functions of an enterprise. With this, you can improve operational efficiency while at the same time building long-term relationships or handling one off services ordered by the customer.


Professional Services

Overtime Management

With new overtime management functionality, you as a consultant, can now record time on previously configured overtime categories. Once the consultant has decided which category to record time against, the project manager can approve this time recording and decide whether this overtime will be charged to the customer or whether it should be written off. This functionality helps to increase the percentage of projects on time, budget and scope.

Figure 4: In the timesheet, consultants can record time on overtime categories which they have previously configured. 


Enterprise Portfolio and Project Management

Project Ranking

In Enterprise Portfolio and Project Management, we are enabling project financial controllers to rank their projects. Financial controllers can decide which projects shall be included or excluded from the scope of the planning period, they can assign projects by using various filters such as. project name, profit center, processing status, upcoming milestones, and then simply move projects up and down in order to change their rank. This feature supports project financial controllers in their preparation for review meetings and allows for easier alignment within the project management office.

Figure 5: The SAP Fiori app ‘Project Ranking’ provides project financial controllers with the possibility to define different rankings for various periods and scenarios.


Sales and Distribution

Monitoring Delivery Performance

In the area of Sales and Distribution, we are leveraging predictive analytics to help monitoring delivery performance. This intelligent capability displays the overall predicted delivery delay status for both the ‘predicted delivery creation delay’ and ‘predicted delivery processing delay’ to allow you to identify the risk of a potential delay for open sales orders. With this scenario in place, you can gain early insights into your fulfilment on planned delivery dates and easily take actions for improvement.

Figure 6: Using predictive analytics you can monitor your delivery performance and gain early insights into predicted delivery delays helping you to take corrective actions early on.


Product Compliance

Improved Compliance Assessment

With 1905, an improved ‘Compliance Assessment’ capability for the substance list check shows statuses and issues as graphs and tables to provide enhanced details. The new analytical capability ‘Impact of Monitoring Lists’, helps you to monitor substances and analyze their impact on sales, suppliers, and production. With these features, this release enables you to streamline the processing of compliance issues and helps you to prepare for upcoming regulatory changes and analyze their impact on your portfolio.


Hybrid Cloud ERP with SAP S/4HANA Cloud

Integrated Sales Scheduling Agreements

In a hybrid Cloud ERP environment, this innovation creates sales schedule lines automatically from purchase schedule lines. Shipping specialists at subsidiaries can now more easily plan their delivery schedule according to the requirement from headquarters. With this, manual efforts are reduced, and communication delays and errors are minimized. Additionally, the increased sales forecast accuracy helps to focus on unique customer needs – providing you with the agility to react quickly to your customers’ demands.


SAP S/4HANA Cloud Release Assessment and Scope Dependency Tool


Last but not least, I would like to draw your attention to the new tool, the Cloud Release Assessment and Scope Dependency tool. Every quarterly upgrade of SAP S/4HANA Cloud brings new release features which need to be consumed in the context of configured business processes. The ‘Cloud Release Assessment and Scope Dependency’ tool, (RASD for short)  enables you to visualize your SAP S/4HANA scope and understand the impact of change. Furthermore, it guides you to potential innovations or new scope items that might be relevant for you. As this tool is personalized, we provide the foundation for optimal adaptation and focused testing.

Figure 7: The application 'Cloud Release Assessment and Scope Dependency Tool’ shows the release impact across all scope items and breaks down the changes LoB wise. 


Are you interested to learn more about SAP S/4HANA Cloud 1905? Stay tuned for the updates that my colleagues will be providing within the next couple of days.


For more information on SAP S/4HANA Cloud, check out the following links:

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