Since the launch in 2017, we have helped customers adopt SAP S/4HANA® technology. But for many, the complexity of the migration has made them hesitant and uncertain about the business drivers and justifications.
Operating SAP AFS in the Digital Economy
For the past decade, SAP fashion customers have managed multiple system landscapes.
Brick and mortar retailers typically run SAP Retail (industry specific standard SAP ERP) whereas brands and manufacturers run SAP AFS (highly modified SAP ERP). For wholesale distributors, SAP AFS provides industry-specific processes that lets employees, customers, and business partners collaborate anywhere and at anytime.
But as wholesale distributors expanded into the retail industry and started their private labels, they realized that the platform was ill-equipped to handle retail trade scenarios. Likewise, when retailers began integrating their wholesale/manufacturing operations they found they couldn’t manage their wholesale business on their SAP Retail platform.
These vertical fashion companies had to manage these units using two ERP systems – one to support their wholesale/manufacturing business and the other for their retail operations.
This rise in two or more ERP systems, coupled with fragmented peripheral applications, restricted fashion companies from adapting to new and emerging market trends.
Limited visibility into global inventory, complex integration, and data models, data duplication, misalignment of supply and demand are just a few of the challenges creating the need for a vertical fashion solution.
SAP S/4HANA for Fashion and Vertical Business helps fashion companies unite disparate business operations and realize the full potential of mobility, big data, cloud, and analytics to support an omnichannel business model.
It’s the necessary core foundation for the fashion industry as it merges manufacturing, wholesale, retail, and e-commerce into a single digital core.
Here are a few of the reasons why fashion businesses should migrate from AFS to S/4HANA:
1. S/4HANA Is a Scalable Future-ready Digital Platform
The new retail world has multiple channels where consumers can browse and place orders.
Retailers will have to balance these channels without compromising service, efficiency, transparency, or fulfillment in any single one. This will require better platforms that can consolidate operations, prioritize steps in the supply chain, and handle new obstacles in the developing world of retail.
With S/4HANA, companies are now able to:
- Create a smarter, faster fashion on a common data and forecast foundation
- Empower employees
- Redefine customer engagement and commerce
- Create efficiencies, insights, and new revenue models by tapping into HANA in-memory processing
- Reinvent commerce with connected business partners, consumers, and devices
- Transform business processes with a complete and real-time understanding of customers, inventory, and sales
- Simplify IT landscape and business processes for business innovation and lower TCO
- Achieve global inventory transparency
- Enable channel integration across retail, wholesale, ecommerce, and manufacturing
2. S/4HANA Manages Current and Future Digital-Retail Scenarios
The specific group of 300+ AFS customers runs a system with a highly modified data model. Vertical integration of the value chain has become a challenge for these customers. With S/4HANA, companies gain a solution that supports retail processes across the entire retail value chain.
- Master Data: Provides a unified view of Articles, Customers, Vendors, Seasons, Collections, and Sites
- Price and Promotion Management: Offers centralized management of listings, pricing, promotions, and inventory
- Omnicommerce Customer Experience: Integrates direct-channel orders, deliveries, and point-of-sale systems for immediate inventory visibility across all channels (wholesale, retail, franchisee, and digital) to optimize cross-channel allocation methods from planning through execution
- Assortment Planning: Helps in seasonal forecasting, multi-channel allocation, and store replenishment
- Supply Chain: Optimize merchandise flow across the supply chain for Replenishment and Allocation, Demand Forecasting and Planning and Omnichannel Inventory and Order Response
3. S/4HANA Enables Manufacturers To Be Part of the Digital Supply Chain
The goal for fashion companies is to conceive, build, and deliver an innovative product to customers at the right time and right price.
This involves a chain of events which need to be perfectly orchestrated and repeated. This chain requires multiple processes functioning in an intelligent and coordinated way to ensure the organization achieves this goal.
It begs the question: Can SAP AFS keep up with the pace of these changes? The solution has served manufacturers well for years, but with today’s market trends it’s no longer sufficient.
SAP S/4HANA meets these new demands with a range of advanced functionality for production planning, inventory management, order promising, and more. It ushers in a new era of Digitized Supply Chains that are immediate, intelligent, and connected.
4. S/4HANA Has Enhanced the User Interface (UI) and User Experience (UX)
With the introduction of SAP S/4 HANA, it became clear that SAP supports the Fiori interface ecosystem and puts more emphasis on it than ever before.
A successful transformation requires digital adoption. With S/4HANA, SAP has ensured that end users can easily adopt new technologies, systems, and processes by employing a user-centered design concept.
- Simplification – Not all the users need all the options of the applications. Fiori reduces their number, so the users see a cleaner interface with relevant features to focus on what matters
- UX optimization simplifies the interface, resulting in higher customer satisfaction and less confusion
- Access from different devices wherever and whenever
- Role-based information configurable in advanced user management features
5. S/4HANA Integrates and Interfaces More Efficiently
One of the chief considerations when evaluating new software is: will it work with existing applications?
Companies often have to spend more to get commercial software to communicate and operate with their existing infrastructure. Operating separate systems for retail, wholesale, and manufacturing locations will increase the total cost of ownership. This is due to separate integration, development, and maintenance costs for each unit to overcome the structural differences in master and transactional data.
For example, integration to warehouse systems, vendor management systems, planning systems, reporting tools, etc. needs to be built separately for wholesale and retail systems. This leads to data redundancy, data inconsistency, and separate teams of internal resources working on different systems, thereby further increasing training costs.
With S/4HANA, companies can tap into the SAP Business Technology Platform to extend the core with mission critical functionality, deployed on the cloud. This platform paves the way to augment existing SAP investments by integrating with other SAP Products like SAP Ariba, C/4HANA, Success Factors, etc.
Additionally, with SAP Business Technology Platform, custom software can be built to integrate with your IT environment by leveraging your existing infrastructure providers like Amazon AWS.
Make the Transition!
The deadline is set. The support of AFS is going to end in 2027. This means that it won’t receive any updates past this date, and it won’t benefit from further innovations made by SAP.
The lack of innovation in a core business system is dangerous. Migrate to SAP S/4HANA soon.