- SAP Leonardo addresses ‘Innovation’ opportunity needs compare to S/4’s ‘System of record’ requirement
- SAP Leonardo includes different future facing technologies and service offerings
- One will need to select one or more tools/technologies to build an innovative solution
- In order to take advantage of SAP Leonardo strong SAP S/4 HANA core will be required
SAP experts who rely on running their operations with trusted ERP/ECC are getting overwhelmed by new age SAP’s terminologies and acronyms. especially in innovation streams like Leonardo.
Old timers like me always believed that SAP is all about best practice and use it out-of-the box functionality to have a long term sustainable SAP footprint. However, in recent years SAP product lines have changed drastically. SAP launched many new products to change old ERP system into an intelligent enterprise software.
In recent years SAP, acquired many companies that provides additional functionality on top of traditional ERP (e.g. Ariba, Concur, Rare.io etc.) SAP seems to be in process of amalgamating all these products in SAP S/4 umbrella. These new applications overlap with the core business applications from the old regime. This shift in strategy creates lots of confusion for people who have used SAP ECC for more than a decade. For example: Do we use SAP MM in S/4 HANA core to do our procurement or implement SAP Ariba that includes sourcing platform as well? I see SAP ECC as a full square meal i.e. Eat it and it’s good for you, while new SAP product offerings are like a buffet (I am sure it’s all good quality food), but one needs to do their research to pick a treat that fits their taste.
Here is my version of Leonardo
What is SAP Leonardo?
SAP product portfolio can be divided in the following three streams (Foundational, Differentiation and Innovation).
Leonardo is part of ‘Innovation’ stream on SAP roadmap.
Leonardo is not an age old ‘System of record’ powerhouse. Leonardo is an umbrella term to provide a platform to deliver various emerging technology and services.
Leonardo is not a module like my favourite ERP-Materials Management (MM) module where I can learn MM by understanding tcodes, screens, config, tables and enhancement points.
One needs to take Leonardo in the context of technology being implemented and related business use case.
Although you see six boxes in SAP Leonardo product line, I see three main streams:
Artificial intelligence related:
1. Machines learning (ML):
In this case, system learns from your behaviour and gets better over time. ML algorithms are for generic application like conversationsor for a specific use case.
Conversation UX (Generic service): This technology provides one more way to interact with system. It takes away friction of UI limitation. This technology relies on ‘Voice recognition’, ‘Text recognition’ and ‘Image recognition’.
Use case (UX): SAP products using this technology are SAP CoPilot or SAP developed Chabot. SAP CoPilot is directly integrated to SAP Fiori Launchpad. Users can chat with the system. Cool! I see this as a low risk implementation that can be implemented organization wide.
Predictions (Specialized services): In this use case one needs to feed model with tons of raw data and outcome. Once model is ready, system can predict outcomes. If business use case is specific/unique (Fraud detection, Predictive Maintenance) then you may need to plan time for ‘teaching model’ before you can use this feature.
Use case (SAP EAM): Predictive maintenance where ML algorithm digests all post historical data and predicts future failures. This is only viable where cost of repair is much higher than cost of failure. e.g. Critical components of chemical plants, power plants, airplane etc.
Use case (SAP MM/PP – MRP): Predictive models to predict material shortage based on sales orders, production order and historical trends.
2. Internet of things (IoT):
IoT is network of all sensors like voice, text, images, temperature etc. These sensors collect data and feed into an aggregator. Most of the time IoT will be implemented in conjunction with ML and Big Data technologies.
Use case (SAP EAM/SAP MM): Vehicle data tracking: Transportation company tracking vehicle GPS locations to optimize vehicle utilization is a typical business case. IoT framework can be implemented to collect and digest vital sensors data from engine, tires, transmission system and utilize to predict vehicle failure. In enterprise asset management (EAM) ‘Digital twin’ is based on this technology as IoT data can be shared between asset owner, operator and service provider.
Use case (SAP PP/SAP PM): Integrate machine sensor data to collect machine’s utilization. Link production work centers and maintenance work center using sensors. When machines is not working efficiently adjust production work center capacity and generate maintenance notification to report this issue. Collect and analyze data using analytics/ML.
Data utilization related:
The goal here is utilize data to generate new revenue streams or increase operational efficiency.
There are three marketed products in this category with a bit of overlap.
This is geared towards visualizations of data. SAP BI, Cloud analytics etc. can be used to implement analytics solution for the organization. More emphasis is on building self-serve models and dashboards that can be consumed by a wide range of users.
Use case: Digital Boardroom dashboard or various KPI dashboard that aggregates data from multiple sources. Display data in visually appealing and interactive fashion.
4. Data intelligence:
Data intelligence connects, aggregates, and anonymizes your data to prepare it for commercial consumption. This allows user to monetize on their data to generate new revenue stream, improve organisational efficiency or provide better customer experience.
5. Big Data:
Big data refers to large and complex data that traditional applications are unable to process. Big data technologies are application where data velocity and variability is high as well i.e. combination of structure data (database table) and unstructured data (text feeds). Big data technologies are used to collect different types of data and to provides tool (SAP Data hub) to generate insight in this data set. This data hub can integrate SAP and non-SAP data in one data set. This data can be used for aggregation (to feed to ML algorithm) or to the visual dashboards.
Trusted de-central network related – Block Chain:
6. Block Chain:
This is a gateway to explore distributed ledger or block chain technology.
This is SAP’s service for providing distributed ledger functionality to the customers. In my opinion, this technology is going through the hype cycle. It’s hard to come-up with a commercially viable business assess in an enterprise processes managed in today’s SAP footprint where blockchain technology can be easily integrated. Blockchain will be more applicable in ‘intra organization’ scenarios.
My simple mind can’t see application of distributed ledger in SAP finance world as Block chain is not a ‘double entry’ ledger.
Use case (SAP MM & SAP GTS): Pharmaceutical product tracing through global supply chain or Citizen’s data managed and shared by various level of the government.
One needs to find the right business use case and find matching technology from Leonardo product line to implement this use case. Remember that your business case can be either a ‘Problem statement’ i.e. I have a problem I need to solve OR an ‘Opportunity statement’ i.e. I see an opportunity to increase revenue/efficiency.
In case of Leonardo, there is no one size fits all. All organizations will need to come-up with a specific business case and implement relevant technology. You can use SAP Cloud Platform and Innovation tool kits and that provides services and expertise you need to implement one or more combination of these technologies.
These technologies will define success of future enterprises. All of these technologies may evolve at different speed and will achieve varying levels of maturity in the next five years. Keep an eye on these technologies (and launch a pilot project to get hands on experience) and this will help all of us define road map for our organization/clients.
Innovative application implementation should be implemented on top of strong S/4 HANA core implementation. For example: In order to be a good tennis player or a marathoner one must be in good physical shape. Once you develop an active & healthy life-style and are in physically fit condition (e.g. SAP S/4 core), you can excel in any activity you focus on (e.g. Analytics, ML, IoT).
I look forward to reading your comments.
- SAP Leonardo
- Open SAP – SAP Leonardo – Enabling the Intelligent Enterprise
- Gartner – Pace-Layered Application Strategy and IT Organizational Design, by: Mary Mesaglio, Matthew Hotle