Partners, CIOs, CTOs, Digital transformation officers, Practice leads, Innovation directors and any managers interested in learning about clean core and how to achieve it.

Introduction:

In today’s fast-paced business landscape, digital transformation has become a critical component of success. To stay competitive, companies must embark on this journey, whether by starting from scratch or building on their existing investments. However, a key consideration in future-proofing an organization is ensuring a clean core. SAP recognizes this, and it is a crucial element of their strategy. At the recent SAP Global Partner Success Kickoff, Scott Russell, SAP’s Executive Board Member, and Karl, SAP’s Chief Partner Officer, emphasized that partners should lead with RISE with SAP, a Business Transformation as a Service solution that has proven effective in helping customers establish and scale a clean core platform.

A clean core, in the context of an ERP system, is essential for ensuring stable and reliable operations while being agile and innovative. By maintaining a clean core, businesses can future-proof themselves and remain competitive in an ever-evolving business landscape.

In this blog, we will explore different extensibility options available with SAP S/4HANA and how they can help businesses achieve their clean core objectives.

Why keeping a clean core is important:

An ERP system is the central system responsible for running an organization’s day-to-day operations. Keeping this system clean core compliant is essential in ensuring that the organization remains future-proof. According to a report by McKinsey, between 10 and 20 percent of the technology budget dedicated to new products is often diverted to resolving issues related to technical debt. This debt accumulates over the years due to numerous modifications to the core ERP system, resulting in significant maintenance and testing efforts during patches and software upgrades. This constant technical debt can leave companies frozen in the past by delaying upgrades and patches, and can make them slow to innovate while being exposed to unforeseen risks.

By prioritizing a clean core and implementing extensibility options that minimize modifications to the core ERP system, companies can avoid incurring technical debt and ensure that their technology budget is being spent on innovation and new product development. This approach can help businesses to stay ahead of the curve, remain competitive, and maintain the agility needed to thrive in today’s ever-changing business landscape.

Unclean core could manifest itself in different forms:

Code

Modifications to standard code
Redundant enhancements to standard functionality

Data

Database tables abused
Data structures and fields used for the unintended purposes

Processes

Unnecessary use of custom processes
Disregard to SAP-recommended Best Practices

Extensions/Integration

Use of non-approved add-ons
Extensions built on non-upgrade-stable interfaces
Integrations built using non-standard approaches

For its flagship SAP S/4HANA and line of business (LoB) cloud solutions, SAP offers different approaches for partners and customers to extend the digital core depending on the use case at hand. In this blog, I will focus only on SAP S/4HANA extensibility.

Extensibility of SAP S/4HANA:

Extensibility for SAP S/4HANA can be categorized into three sections: key user extensibility, on-stack developer extensibility and finally side-by-side extensibility on the SAP Business Technology Platform. For more detailed and up-to-date information on ABAP Cloud and ABAP Extensibility, please refer to the SAP S/4HANA extensibility guide and go to the two following communities: ABAP Development community and ABAP Extensibility community

Benefits of side-by-side extensibility on SAP Business Technology Platform:

SAP S/4HANA key user extensibility is designed to allow simple adaptations of standard functionalities to user requirements by using no-code/low code key user tools. Key user extensibility makes it possible to customize SAP S/4HANA even by non-developers hence the customization process is shortened greatly. On-stack developer extensibility follows a regular ABAP development process and is suited for extensions that need a tight coupling with SAP S/4HANA processes or require close proximity i.e. low latency or complex queries on the SAP HANA database.

Side-by-side extensibility on SAP Business Technology Platform is a powerful capability that allows organizations to innovate and implement new extensibility techniques in a decoupled way using SAP BTP ABAP Environment, Java, NodeJS, Python, etc.

Partner Hyperscalers clouds such as Amazon AWS, Microsoft Azure and Google Cloud, can be used to extend SAP S/4HANA however, SAP BTP is the most sensible way to build extensions outside the SAP S/4HANA stack. The main reasons being, SAP BTP is built on top and takes advantage of all the great infrastructure capabilities provided by our Hyperscaler partners and second, SAP BTP knows best the SAP context. Such context comes in different forms such as pre-built integrations and content and adapted tools chains and middleware.

One of the most significant benefits of side-by-side extensibility on SAP BTP is its ability to provide new user experiences. For example, with SAP BTP mobile services, organizations can create customized mobile applications that can interact with SAP S/4HANA, offering a seamless user experience and capabilities such as push notifications and disconnected operations. This is especially useful for organizations with employees who are always on the go or for external user groups who have no named SAP S/4HANA users.

In addition to mobile user experience, SAP BTP opens up the door to B2C and B2B integrations in a resource-optimized fashion thanks to SAP BTP SaaS architecture. With SAP BTP, businesses can easily integrate their systems with other external systems to streamline processes and improve collaboration.

Many of nowadays applications integrate multiple services from different sources. Applications that extend SAP S/4HANA and also integrate with SAP’s LoB solutions or 3^rd party services, will naturally be architectured for and deployed on SAP BTP.

Another benefit of extending on SAP BTP is the ability to build Artificial Intelligence, and Data Science projects given their high demand for storage of different data types originating from diverse sources. On SAP BTP Data and Analytics platform, organizations can analyze large data sets and gain insights that can help them make informed decisions. This is especially useful in industries like finance, healthcare, and retail, where data analysis plays a critical role in decision-making.

Finally, side-by-side extensibility on SAP BTP also supports the Internet of Things (IoT) given their high demand for event and message streaming, storage and processing. SAP BTP with its Data platform and Advanced event mesh infrastructure, organizations are able to monitor and control their connected devices remotely. This is particularly useful for businesses with large-scale operations, such as manufacturing or logistics, where remote monitoring can help reduce downtime, increase efficiency, and improve safety.

This paragraph is a bit lengthy because SAP BTP enables a whole universe of possibilities that may require a new blog on its own.

Conclusion:

With the release of the new SAP S/4HANA extensibility guide, customers and partners now have a clear path forward in their clean core journey. It is crucial for organizations to question any decision that may compromise the clean core of their SAP S/4HANA system. To ensure that the core ERP system remains stable, reliable, and maintainable while also allowing enough agility to innovate and pivot as market conditions change, customers must implement a strategy that aligns with the following principles:

Adopt a zero-tolerance policy for custom code and embrace the cloud mindset by relying on standard functionality and processes. Customers should drive discussions with the business to assess the business value of any enhancement. A clean core does not mean that no extensions are allowed, but for each extension, the return on investment (ROI) must be clear, and the implications and rewards must be well understood.
Ensure that any custom code is decoupled and built on upgrade-stable APIs, and make use of business events when possible.
Find the right balance between side-by-side and on-stack developer extensibility. This should be an architectural decision, as the pros and cons of homogeneous vs. hybrid extensibility approaches must be weighed.
If a pure clean core compliant state cannot be achieved, customers need to be aware of any inherited technical debt and have plans to regularly review it and replace it with future SAP S/4HANA innovations, SAP BTP extensions, partner IP, or other clean core options.

The 5 Golden Rules for implementing SAP S/4HANA Cloud is a great resource to read if you are interested in more details on the cloud mindset concept and its relation to the clean core.

Call to action:

To customers: demand a clean core approach for your digital transformations or new implementations. By prioritizing a clean core strategy, you can achieve operational stability, reliability, and agility, while reducing technical debt and staying competitive.

To partners: help our joint customers and SAP achieve a clean core strategy. Modifying the SAP S/4HANA digital core should be considered as the last resort, and all other clean core extensibility approaches should be given top priority. When APIs are missing, partners should 1) request the API via the Customer Influence Portal campaign and 2) maybe take the opportunity to develop clean core compliant intellectual property (IP) or industry cloud solutions that can benefit other customers. If there is any doubt, partners can seek help from the SAP partner organization by requesting the SAP S/4HANA extensibility advisor service or by finding the right partner innovation lifecycle services (PILS) depending on the stage you are at.

References

Tags: SAP BTP, ABAP environment SAP BTP, Cloud Foundry environment SAP S/4HANA Cloud Extensibility

Sara Sampaio

Author Since: March 10, 2022

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