With the release of SAP S/4HANA embedded analytics, users can now perform analytics in the transaction system in real time. Common questions I hear are: Is it still necessary to have a separate BW system? Should I eliminate the BW system to simplify my landscape?

Key Definitions

SAP BW – BW/4HANA is SAP’s latest enterprise data warehouse solution. It allows native SQL access and has simplified the data integration process for reporting on both current and historical information.

S/4 Embedded Analytics – Embedded Analytics enables users to perform real time analytics on transactional data to gain instant insight across their business.

Answer

Since we can view and build reports directly from the S/4 (ERP) system, why do we still need a separate BW system for reporting?
If your reporting needs are only focused on ERP data and the reports are operational in nature, then yes, S/4 embedded analytics alone may be sufficient to satisfy your reporting needs and a separate BW system may not be needed. Otherwise, you should still consider having a separate BW system.

Traditionally, SAP reporting tends to focus on data from the SAP source systems (ERP, CRM, etc.) with the inclusion of some external data (less than 20% in many cases). Over the past few years, the need to look at a much larger variety of data sources to support business decisions has significantly increased.

This can include multiple SAP and non-SAP systems, external sources such as social media data, online behavioral data, digital marketing data, geo-spatial data and unstructured data such as text, images and videos. For example, you may want to analyze the effectiveness of your digital marketing campaign and compare the marketing data with your sales/finance results. You may want to leverage social media data to help you understand how popular your products are and use the findings to help you plan your inventory and assortment more accurately.

To achieve this, you need a system that can collect, merge and harmonize data from various sources. A single S/4 system cannot achieve this. SAP does not recommend using embedded analytics to consolidate data from multiple systems and it is meant for operational reporting only. Even though the S/4 system comes with an embedded BW system, it is not designed to be used as your enterprise data warehouse. Here is why:

  • It is mainly used to support certain business processes such as BPC (Business Planning and Consolidation)
  • The embedded BW in S/4 is version 7.5 on HANA which does not include all the latest features and improvements delivered with BW/4HANA. Currently there are no plans to enable SAP BW/4HANA for Embedded BW in S/4.
  • As a rule of thumb – SAP suggested the amount of data persisted in the Embedded BW should not exceed 20% of the overall data volume of the system.

That brings up another point: a data warehouse is designed and built to handle a large volume of historical data whereas an operational system mainly focuses on current data. ERP system (S/4) is not designed to keep a long history of changes and features – slowly changing dimensions are not normally maintained in the ERP system.

As you can see, S/4 embedded analytics and BW/4HANA address different reporting needs but both solutions complement each other and can be fully integrated. For example, you can leverage the new integration capabilities of SAP BW/4HANA such as open ODS views and HANA Smart data access to merge real-time operational data with historical data in the data warehouse. You can visualize the data using standard BW/4HANA functionalities or Business Objects tools. You can compare real-time actual sales data with historical snapshots. Data from various systems can be mashed up and presented in a single report or dashboard.

Conclusion

The introduction of real-time analytical functionality like SAP S/4HANA embedded analytics does not mean SAP BW is going to become obsolete. SAP BW/4HANA is SAP‘s next generation of enterprise data warehouse solution, it empowers business to connect historical data with live data and Integrate data from multiple sources into one logical data warehouse. For those use cases where only ERP data is needed and only operational reporting is required, a BW system may be optional. In any other cases, where data needs to be collected from multiple sources, consolidated and harmonized, the need for a BW system still exists.