SAP S/4HANA Embedded Analytics - The End of Conventional Reporting and Analysis?

“Why do we still need data warehouses, ETL and specific reporting tooling when we now have Embedded Analytics in SAP S/4HANA?” Recently a colleague asked me this question. Instead of going into defense, I wondered if he was right. Do these conventional tools still add value, or do they only bring additional complexity and costs?

Conventional reporting and analysis

For years if you wanted to have a little more than the standard SAP reports, you would have to use SAP BW, SAP BO Data Services, SAP BusinessObjects or equivalents from other vendors.

Traditionally separate systems were used to meet the needs of transactional and analytical requirements. Data had to be extracted, transformed and loaded to another platform before you could report and analyze.

Figure 1: Conventional vs S/4HANA

Changing these data flows would require considerable effort. With the release of HANA in 2011 and SAP BW0-on-HANA the year after, things started to change with more options for real-time reporting and virtualization, but not everyone has been able to migrate to this new situation yet.

SAP S/4HANA Embedded Analytics

In 2017 SAP introduced Embedded Analytics as part of S/4HANA. As you probably know, S/4HANA is SAP’s next generation business suite. Embedded Analytics is a set of analytical features integrated in the business suite that enables users to perform real-time analytics on the live transactional data. It is available with the new S/4HANA releases and requires no separate installation, implementation or specific licenses.

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It promises real-time insights on live transactional data without data redundancy or latency, i.e. no ETL or batch processing is required as compared to the traditional landscapes. As Embedded Analytics is integrated in S/4HANA and runs on the HANA database, the end-user has the capability to process millions of rows and large numbers of tables on the fly.

Figure 2: Example of an S/4HANA Embedded Analytics Smart Business Cockpit

Information can be displayed in-context, or in other words close to the transaction, in operational reports, smart business cockpits and SAP Fiori tiles. The reports not only show historic data, but they also help you in automated root cause detection (descriptive), contains forward looking functionality (predictive) and try to suggest the next best action based on machine learning algorithms (prescriptive).

Migrate today?

SAP S/4HANA Embedded Analytics brings many advantages. However, there are many requirements, the most important one is having a large part of your enterprise data available in S/4HANA. This would require you to move to S/4HANA, preferably all in one instance. Although data can be integrated from different sources, ETL tools are required if things get a little more complicated.

Also be aware that in order to fully utilize all capabilities of Embedded Analytics, you’ll have to teach the machine based on your historical transactional data.

Figure 3: Example of McCoy EWM Performance Cockpit in SAP Analytics Cloud

Specific reporting tools, like SAP Analytics Cloud, will give you more freedom to visualize with out-of-the-box visualization components, share information, plan and predict than Embedded Analytics will.

Conclusion

I don’t think that SAP S/4HANA Embedded Analytics will replace any existing SAP Solutions and S/4 HANA and although it has an embedded analytical engine, certain steps need to be taken before this engine to work. 

Embedded Analytics is optimized for operational reporting and it works best if your company has one single SAP S/4HANA instance. Predictive capabilities, like automated root cause detection, will help you get insights faster and assist you converting information into action. It will also help you in forecasting specific transactional data.

For the coming years an enterprise data warehouse, like SAP BW or SAP SQL data warehousing with HANA, will continue to help you cleanse and integrate your data from multiple disparate historical and current sources. As well as storing your data in a consistent way with one single source of truth allowing you to create your tactical and strategical reporting and analysis easier.