Why you still need a Data Warehouse system with SAP S/4HANA
Lately, quite a few statements as “With a SAP S/4HANA system we don’t need a Data Warehouse system anymore” caught my ear at our customers. Even SAP have broadcasted some signals that were pointing in the same direction from their headquarters in Walldorf, Germany. In my opinion, however, it is too hard to make such a general statement that would apply to all possible business cases. Obviously, many organisations are currently investigating what this exactly means for their specific business cases. In this blog post, I want to shed some light on this topic.
First, let’s take a short walk down memory lane and ask ourselves why it became necessary to extract organisational data, e.g. from a central ERP system, and store them as redundant data in a separate system, i.e. the so-called Data Warehouse.
From a business perspective, the answer is quite obvious: organisations aimed at harmonising and consolidating their business data to be able to compare these data throughout their entire organisation. As such, all data needed to be made available in one central system, providing facts, figures and data and serving as a “single version of the truth”. At the same time, it needed to be made easy to have a performant access to actual and historical data with the help of standardised data models and common business semantics.
Today, most of these requirements still apply, but also many new ones have been added. One example worth mentioning is the constantly growing data volumes. This has become a real challenge because the always increasing data ranges are to be connected with each other, so they can be analysed as agile as possible. The increases over the past few years in the diversity of data and data types require simpler ways for data harmonisation in order to be able to analyse these data across boundaries. Last but not least, the increasing number of different data sources requires new technical approaches to uncover and exploit the so-far unused potential of these data.
There is still only one system that is perfectly able to master all these challenges: a Data Warehouse!
Typical requirements to a Modern Data Warehouse system
The requirements to a Modern Data Warehouse system are typically to be seen from two perspectives: from a business perspective and from an IT technology perspective:
Business departments typically have the following requirements to a Modern Data Warehouse system:
Time is a crucial factor. Because of that, all the data should be made available in reports without any time delay.
- Added value of the data
The users need access to the organisation’s entire data pool. This enables them to utilise their full potential.
- Simple access
Access to data should be made very user-friendly should be possible anywhere-anytime.
Business departments want to create reports without depending on the IT department. For this, they need user-friendly and self-explaining Self-Service tools.
- Predictive Analytics
Today, it’s no longer sufficient to know what happened. Instead, users want to know why something has happened and what will happen in future.
From an IT technology perspective, a Modern Data Warehouse system needs to meet the following criteria:
- Openness (ability to integrate different data sources)
As many data sources as possible should be easily connected with each other.
It should be possible to set-up data models without any limits.
- Agile data modelling
It should be made possible for the IT department to implement business requirements relatively quickly and cost-effectively.
System access should occur virtually, and the data should be retained in the Data Warehouse system itself in only a few cases.
- Cloud integration
It should be possible to connect to and from the cloud.
Now let’s return to our initial question:
Do we still need a Data Warehouse system in the future?
I say: Yes! Many organisations will continue to have a separate, modern data warehouse solution in addition to their ERP system (e.g. SAP S/4HANA). Only in a few cases, when they only have limited reporting requirements, an ERP system or an ERP system in combination with a cloud solution may be sufficient to meet their needs. This depends on the exact circumstances, which should then be analysed. Many of the above-mentioned challenges to a modern data management cannot and should not be met by an ERP system.
Of course, some readers of this blog post, perhaps you too, will now say: “S/4HANA comes with an integrated BW system (Embedded BW). Because of that, I don’t need a separate Data Warehouse System”.
This statement may be partly correct for operative reporting, which is only based on data from a S/4HANA system. However, an exclusive view on operative reporting (e.g. sales reports at document level) is far too short-sighted at this point. Many of my customers want to merge, consolidate and harmonise data from different systems (in some cases also non-SAP systems). These data then need to be made available company-wide in a uniform and simple way, e.g. in the form of reports. In this case, a separate system is necessary and very useful. For this, a Modern Data Warehouse system offers all necessary features to provide all company data – virtually or persistently. A Modern Data Warehouse system serves as a single-point-of-truth and therefore records all organisation-wide data and provides access to all data.
Strategic Reporting in a Data Warehouse
Strategic reporting (e.g. flexible year-to-date analyses of controlling key figures compared with the previous year) remains to be done in a Data Warehouse system. Especially with today’s modern methods, there are new tools to do these analyses. They help organisations optimise their strategic decision-making process. The Predictive Analytics features in particular open up entirely new possibilities, such as system-based forecasting.
Modern Data Warehouse solutions offer the chance to analyse previously hidden data and make it possible to take a look into the future. From my point of view, these solutions will become more and more popular and support organisations with their operational and strategic decision-making processes.
It is crucial that the business departments have a quick and flexible access to all these kinds of reporting. A Modern Data Warehouse system offers exactly the functions necessary to support agile development approaches, to promptly implement new or changed requirements and to transfer them quickly into the productive system environments (time-to-market).
Many organisations also consider a cloud solution. This topic, however, has many other requirements. As such, connections from and to the cloud need to be supported and a cloud-based operation of the Data Warehouse system should be possible without restrictions. Another requirement is data protection, which has become even more crucial with the new GDPR rules.
In the end, each organisation has its own specific requirements and needs to find a way of letting their different systems interact with each other or of how their hybrid approach should be designed with regards to the analytic tools. You will also have to decide whether your Data Warehouse System is implemented on-premise or in the cloud.
The answers to this depend on your specific requirements. In order to put you on your way, I have prepared the following questions to help you find the right answers:
- Have you already invested in a Data Warehouse solution in the past?
- Is your ERP system your single data source for reporting or will you add other sources in future?
- Do you really need a complex process for data preparation or data harmonisation?
- What is your strategy for analytic applications?
- Can a Modern Data Warehouse system support your digital transformation strategy from a technological point of view?
Since this is a very broad and strategic topic, I can imagine you might have questions. Please don’t hesitate to contact me or my colleague, Dirk Langendörfer, to ask us your questions.
Possible questions you might consider and with which we can help you:
- What is the added value of SAP BW/4HANA as a Modern Data Warehouse system?
- How can you use your data to increase your organisation’s profitability?
- Which aspects are to be considered when moving to SAP BWonHANA (SAP BW/4HANA)?
- How can your BI strategy and your system landscape be realigned?
- What role will a BW system or a Data Warehouse system play in the future?
- Where to locate a SAP BW system in combination with a SAP S/4HANA system?
- Can you execute your reports exclusively from your SAP S/4HANA system?
- How to become more agile with your BI activities in order to provide your business departments with reports as quickly as possible?