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Transform Research

and Development
with SAP S/4HANA ®

White Paper Background
and Key Definitions
The information outlined below is helpful to understand the contents
of this value proposition white paper. It gives clear details on the objective
and scope of the paper. Key definitions are also provided for select sections
of the paper to provide further clarification.

DELIVERABLE OBJECTIVE With the value proposition section, all quantified benefits
Provides information on the value in moving from are conservative estimated improvement ranges tied to
an ERP on a traditional database to SAP S/4HANA® the top value drivers. They are based on early adopters
and cloud and line-of-business (LoB) solutions or new developments/enhancements of SAP S/4HANA
+ LoB and cloud enhancements that can drive value.
Keep in mind that these should be used as a guide.
We recommend working together to assess your current
Within the process and sub-process deep-dives, there is maturity and the value of moving to SAP S/4HANA in
detailed content in table format articulating the following: order to develop a personalized business case.
Pain points
Represents major customer business and IT challenges
Current state with ERP on traditional database Detailed road map available on
Represents the ERP capabilities that are available (Customer Login Required)
on a traditional database This document and SAP’s strategy and possible future
developments are subject to change and may be changed
SAP S/4HANA capabilities
by SAP at any time for any reason without notice. This
Represents the capabilities shipped with the latest
document is provided without a warranty of any kind,
release of SAP S/4HANA
either express or implied, included but not limited to,
Cloud/LoB + SAP S/4HANA capabilities the implied warranties of merchantability, fitness for
Represents all other solutions that can be integrated with a particular purpose, or non-infringement.
SAP S/4HANA and provides business value. For example,
SAP S/4HANA + the SAP Integrated Business Planning
solution, or SAP S/4HANA + the SAP Manufacturing
Integration and Intelligence (SAP MII) application, etc.
These solutions are not embedded in SAP S/4HANA,
but integration scenarios exist for these
Planned innovations and future direction*
Represents new functionalities planned for future
release of SAP S/4HANA, or new integration possibilities
planned for SAP S/4HANA

SAP S/4HANA Research and Development

Capability and Value Proposition Overview 4

Innovation and Project Control Deep-Dive 7

Product Development Deep-Dive 10

Value Proposition 14

Customer References 15

SAP S/4HANA Research
and Development Overview
The rapidly evolving digital landscape and personalized customer demands have fundamentally changed the
way new products are developed and launched. In the digital world, new ideas, product usage information,
and new requirements from customers are continuously flowing into the research and development (R&D)
processes. Scientists and engineers are developing and iterating product pipeline at the speed of thought.

Digital tools are used for rapid design-prototype- SAP S/4HANA Research and Development allows New innovations are run across the enterprise,
test iterations to foster a “fail fast and fail cheap” companies to gain live visibility into idea pipeline, and expert evaluation of new ideas is live with
approach. They also simplify the complexity in portfolio prioritization, project actual vs. budget, collaboration embedded from discovery to launch
downstream processes such as manufacturing, new product design, development history, and via a stage-gate approach. Performance of the
service, and sales to execute a “lot size of one.” compliance across markets and categories. innovation process is tracked, iterated, and
This is why an immediate, intelligent, and integrated monitored from idea to mass production.
Design processes are faster, smarter, and enriched
product innovation platform is essential now for There is live planning, tracking, and monitoring of
with intelligent information. Live search on
efficient product development, timely market all deliverables from time, cost, and work-related
development history increases reuse and decreases
introduction, and fundamentally better initiative aspects of projects. Internally and externally there
time and investment in developments that go
success rates. are seamless staffing and service procurement
nowhere. Cost drivers are identified in the early stage
workflow via the business network.
With SAP S/4HANA® as their digital core, customers of the product lifecycle to easily simulate costs and
can iteratively and more collaboratively build a compare alternatives. Collaboration is enabled across Compliance is embedded in the design process
foundation for consumer-driven smart products extended design teams both within and outside the and live checks on new products for all markets
that are brought to the market faster with full enterprise more simply and seamlessly in a secure and categories can be made with a cloud solution,
compliance and limitless configurations and variants. cloud environment accessible anywhere and on dramatically improving the level of compliance in
any device. For discrete industries, a seamless CAD the context of increased customer and government
Since the release of the SAP S/4HANA Enterprise
integration with market-leading authoring tools pressure and transparency. Companies collaborate
Management solution in November 2015, the
supports cross-discipline product definition. For via cloud networks to collect compliance information
wave of digital business-enabling innovation
process industries, key reports, such as finding the from partners and suppliers and provide transparency
in our next-generation business suite has
percentage of pure substance in all recipes for margin to demanding customers and regulatory agencies
spread throughout the enterprise, across finance,
control, and key tasks, such as searching and editing across the product lifecycle.
manufacturing, procurement, supply chain, and R&D.
multiple recipes, are run live. Decision processes are
also simplified through intuitive visualization across
the enterprise, for example, in manufacturing,
service, and marketing. Engineering changes are
made with full knowledge of downstream impact.

SAP S/4HANA Research and Development Overview


New business models are being enabled by developing smart products that are connected intelligently
to their ecosystem. The products are continually improved based on actual live and predictive usage
data, driving higher customer satisfaction. Individualized products are enabled by a scalable, integrated
execution environment across the networked enterprise, making the increased SKU complexity simple.
Fluid variants and configurations are supported by machine learning to predict and correct compatibility
and configuration issues.

SAP S/4HANA and associated solutions enable

R&D to run as an integrated, smart, and responsive
process from idea to product to production.
These solutions unite the whole organization to
bring new products to market faster and in multiple
Innovation and Product
ways – visualization, access to development history, Project Control Development
simple product data management for variants
across product supply chain and lifecycle, research • Idea management • Product development foundation
collaboration with external teams, and transparent • Portfolio management (e.g., document management change
compliance. They enable new business models using management)
• Project management
connected smart products and a “lot size of one.” • Product development
With SAP S/4HANA, R&D is ready to meet the • Resource management
• Recipe development
needs of customers in the digital age. • Project financials control
• Authoring tool integration
• Project logistics control
• Product costing
RESEARCH AND DEVELOPMENT CAPABILITIES • Bill of material and routing management
• Variant configuration and classification
Outlined on the right are the primary capabilities for
• Handover to manufacturing
research and development where value can be
achieved through SAP S/4HANA + SAP cloud • Product compliance
and LoB solutions.

SAP S/4HANA Research and Development Overview


SAP S/4HANA enables companies to integrate, embed intelligence,

and visualize the entire R&D process from idea to product to production.
Smart new, individualized products can be developed with full compliance
and shorter time to market.

• Run design processes on live insights into customer • M

 anage flexible, high-performing, and ease-of-
needs and market opportunities use configuration and classification for product
• Perform multi-level “what if” analyses with predictive
insights to drive better design decisions • I ntegrate and validate compliance requirements in
the development process and manage product
• A
 nalyze live performance of the project portfolio with
declarations as part of the product properties for all
predictive insights at any stage of the innovation process
variants across the product supply chain and lifecycle
• Simplify access to project information for stakeholders
• P
 lan and communicate resource demand to match
and team members with the ability to drill down
available resources in the long and short term
• Define and analyze product costs and manage all
• S
 implify decision-making and processes across
engineering changes along the lifecycle effectively
the enterprise for manufacturing, service,
• Create a platform as the single digital backbone of and marketing through intuitive visualization
product data for internal and external collaborations
across the enterprise

• Provide connected design capabilities, integrating

requirements, mechanics, electronics, software
components, and simulation, as well as synchronizing
all downstream product development needs internally
and externally

Innovation and Project Control Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

Inability to collect Ability to collect ideas Innovation campaigns All information in one • Increased revenue
and select relevant across the enterprise. run in the enterprise; place, enabling the right from new products
consumer-focused The impact analysis is live expert collaboration decisions for stage- • Increased new products
ideas from across run via a batch process with discovery in gate-driven development meeting revenue/
the enterprise stage-gate approach projects with ability to margin targets
(SAP Innovation look forward, backward,
Management solution) and across versions
with embedded analytical
insights and automation

Inability to prioritize Visibility into complete Live tracking of • Role-specific SAP Fiori®
project portfolio and project portfolio, financial project user interfaces (UIs)
product development profitability and KPIs by leveraging leveraging embedded
decisions in alignment investment structure. SAP HANA® in-memory analytics and prediction
with corporate strategy Planning, progress, technology on live data for easy setup
roll-up, analysis, and and faster decisions in
simulation is done managing project portfolios
in batch runs and portfolio planning
• Roll-up, simulation, and
“what if” analysis for
portfolio prioritization
of entire portfolio, at any
point, at any level, with
direct insights into
all projects and actual
vs. budget

(continued next page)

Innovation and Project Control Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

Delayed project Stage-gate-driven Simplified access for Bidirectional Role-specific SAP Fiori • Faster time to market
milestones and missing R&D projects along project members to synchronization of UIs for management of • Increased portfolio and
delivery of required gate with scheduling give confirm milestones project information projects with multiple project management
deliverables; inability project management and network activities with external roles like program and resource productivity
to identify deviations operations transparent using SAP Fiori apps scheduling tool project manager, project
until too late and accurate view of (SAP Enterprise resource manager,
true project status Project Connection project team members,
application) with embedded analytics
to enable insight to action

• Lack of transparency Capacity planning, Real-time access to • Cross-application, • Live planning, tracking, • Reduced R&D expense
into project resource detailed project resource availability, multi-resource staffing and monitoring of all • Increased portfolio and
demands and allocation role planning, and skill sets, and and scheduling availability deliverables as well as project management
leads to project delays project staffing in organizational • Accelerated access to time and work-related resource productivity
as well as low resource a single application assignment during project and task details aspects of projects
utilization project staffing process through SAP HANA • Seamless staffing and
• Slow access to project in-memory technology service procurement
and task details reduces (SAP Portfolio and workflow with SAP
productivity of project Project Management SuccessFactors and
management resources application for S/4HANA) SAP Fieldglass solutions

Inability to plan Work breakdown Change the status Single entry point Reduced R&D expense
project costs and structure serves as of a work breakdown for project financial
budgets efficiently basis for hierarchical structure (WBS) controller to manage
and track actual versus project accounting; element through work breakdown
planned costs leads actual project cost SAP Fiori apps; structures and
to budget overruns visibility by using actual project costs related financial
multiple applications visibility by using one core processes with
integrated application simplified SAP Fiori UIs

(continued next page)

Innovation and Project Control Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

Inability to report Project financial Direct and accurate • Easy planning, Reduced R&D expense
project costs and and logistic access to project controlling, and
procurement data information is financial and logistic monitoring of all
accurately increases sometimes inaccurate information; provides project-related
risk of uncontrolled due to batch load ability to drill down procurement for project
deviations and waste process; drill down into details for project logistic controller in
not possible costs, resource simplified SAP Fiori UIs
usage, and progress • Integrated procurement
processes with SAP
Fieldglass and SAP
Ariba solutions

Unsecured communication Secure project Share and collaborate Project network • Faster time to market
of project documents document exchange on project documents services integrating • Reduced R&D expense
and product sustainability with partners, suppliers, in a secure cloud into design and
data via unencrypted and customers environment accessible supplier networks
e-mails and other anywhere on any for collaborative project
communication channels device (SAP Document execution on content
Center solution) and deliverables with
all involved parties
both internally and
externally in project

Product Development Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

• Inability to bring • Product-related • Searchable • Costs and other • Project and design • Increased revenue
consumer-driven documents managed development history dimensions calculated network services from new products
product offerings and linked to ERP to increase reuse for new products in ensure all internal • Reduced engineering
to market in a timely master data or decrease time the early stage of the and external team change cost
manner leads to low throughout the and investment in product lifecycle to members are
• Faster time to market
brand equity and end-to-end process development efforts quickly identify cost leveraging a single
stagnant growth that go nowhere drivers and easily digital backbone • Higher gross margin
• Context-sensitive
• Inability to use existing analytics • Increased profitability simulate and compare of product data
knowledge or leverage from executing alternatives (SAP • Enhanced context-
• Ability to release
external partnerships engineering changes Product Lifecycle sensitive analytics
engineering changes
leads to inefficiency with full knowledge Costing solution) provide instant
for a unique lot
• Inability to plan and number and of downstream costs • Cloud-enabled transparency on
manage engineering release date document live data
change leads to high management • Unified change
downstream costs and collaboration management
accessible anywhere with sophisticated
• Inability to identify
on any device (SAP work flow across all
reasons and/or
Document Center) aspects: mechanical,
reduce unsuccessful
product initiatives electronic, and
software engineering

(continued next page)

Product Development Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

• Lack of complete, Mechanical and Single and simplified • Enhanced CAD integration • Faster time to market
integrated view electrical disciplines multidiscipline product based on the SAP • Reduced engineer
of cyber-physical are integrated in definition across the Engineering Control Center change cost
products (complete end-to-end design enterprise reduces integration tool with market-
• Reduced fines and recalls
view including smart process development errors leading authoring tools to
due to non-compliance
product aspects) support cross-discipline
• Tests and simulations product definition
are not leveraged in • End-to-end, 360-degree
the early design phases product view including
requirements, mechanics,
electronics, software
components, simulation, etc.

Loss of information • Bill of material and Simplified decision- • Project and design network • Reduced fines and recalls
along the end-to- routing management making and processes services integrate into due to non-compliance
end process makes • Visual handover for manufacturing, supplier and asset networks, • Reduced manual rework
it challenging to to manufacturing service, marketing, bridging the gap between in manufacturing
enable seamless supporting bill of etc. through intuitive engineering, manufacturing,
• Reduced engineering
manufacturing materials (BOM), visualization (SAP maintenance, and services
change cost
and service routing, and visual 3D Visual Enterprise • Live multi-level BOM explosion
work instructions applications)
• Compatibility assurance
between parts of the product,
the product, and the ecosystem
• SAP Fiori app to maintain
multiple BOMs in an intuitive,
personalized, UI with
enhanced analytics
• Requirements management
integration enables bi- direction
information flow for a clear
development direction (continued next page)

Product Development Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

Inaccurate recipes • Integration with Accurate recipes • Ability to create, •T

 arget-driven, streamlined • Reduced fines and recalls
for R&D, plant, and site the SAP Recipe for R&D, plant, and view, and edit recipe development to due to non-compliance
leads to a breakdown Management site by using different multiple recipes optimize compliance process • Reduced scrap
of enterprise processes: application recipe types (with simultaneously •S
 tate-of-the-art • Increased gross margins
procurement, production, • Ability to access recipe development) • Some key reports formulation tool to guide
services, compliance, etc. the rules available in leveraging SAP HANA for margin control, product creation and data
the ERP instance for in-memory technology such as finding maintenance
selected markets and for seamless end-to- percentage of • I ntegration to cloud services
product categories end processes pure substance to ensure compliance
in all recipes, can checks and declaration
be run live based on up-to-date data

• Lack of access to all Product safety and Simplified, •C

 ompliance rules for all • Reduced compliance
compliance obligations stewardship solutions streamlined, and markets and categories in management costs
for product segment, automates compliance automated product one place in an analytical • Reduced fines and recalls
material, and markets determination and compliance processes environment to predict due to non-compliance
and inability to keep embeds compliance and embedded product compliance
up-to-date with ever- metrics in the R&D compliance in the •C
 loud services to
changing requirements environment R&D environment streamline collaboration
leads to high effort, (SAP EHS Management: and share and report up-
delayed go to market, product and REACH to-date compliance data
fines, recalls, and loss compliance;
of brand equity SAP Product
• Inability to connect Stewardship Network:
directly with suppliers product compliance)
and customers to
receive and provide
information of products
(continued next page)

Product Development Deep-Dive

Typical Pain Points Current State with ERP SAP S/4HANA Cloud/LoB Extension Planned Innovations
Business Benefits
on Traditional Database Enhancements Enhancements and Future Directions

• Handling configuration Variant configuration SAP HANA-optimized • New high-performance • Increased revenue
models is complex can be handled low-level configuration configurator as the key from new products
and costly through the complete in context of material enabler in engineering, • Faster time to market
• Support of business process requirements planning manufacturing, sales,
configurations (engineering, sales (MRP) simplifies and beyond to manage
involving multi- and distribution, variant management “lot size one”
discipline definition planning, etc.) • Flexible SAP Fiori-based
for individualized UI for configuration
products is challenging, and classification
labor-intensive, • Ability to create variant
and erroneous configuration models
in a simplified way for
supporting different levels
for sales and manufacturing
• Integration of classification
and configuration data
in embedded analytics
• Leverage machine learning
to provide better correction
support for inconsistent
configurations, leading
to improved customer
experience and smoother
and faster order processing;
the goal is touch-less (fully
automated) processing
• Seamless integration
of the configure-price-
quote process

SAP S/4HANA Research and
Development Value Proposition


• 1 0–20% reduction in effort and touches to define and • 1 0 –20% increased revenue from new products
release individualized and market-specific product variants • 2
 0–30% reduction in R&D expenses
• New business models possible – “as-a-service,” etc. • I ncreased product profitability
• 10–30% faster design process for smart product offerings • 1 0–20% reduction of manual rework in manufacturing
• 1 0–55% faster time to market with robust because of incorrect or incompatible product configuration
product data management processes • 15–20% more new products meeting revenue targets
Strategy Business
Enablement Benefits


Risk Employee
• 1 0–40% improvement in Management Engagement • D
 evelopment collaboration with internal
accuracy of engineering changes and external partners
• 1 0–50% faster responses • V
 isual enablement across the enterprise
to customer inquiries leading to improved decision-making
• 2
 0–80% reduction in reporting time for compliance • Improved accuracy of initiative book value and launch criteria
visibility of BOM and recipe across the lifecycle • L
 ive planning, tracking, and monitoring of all deliverables
• M
 ore compliant products on the market and reduction and time-, cost-, and work-related aspects of projects
in fines and recalls • H
 igher productivity and empowerment of R&D employees
• I nitiative visibility – one source of the truth from R&D through role-based SAP Fiori apps
to production • 7
 0–80% faster management of project tasks

 enefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced
SAP S/4HANA + LoB and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you
to determine the value proposition for your enterprise.

Customers are Achieving Value from SAP

Implementing a resource management process based on SAP HANA allowed Company
Volvo to gain insights into the demand and supply of development resources Volvo
for current and new development projects across the entire organization.
The scope was one central portfolio and project management solution for Industry
13,000 users, including 1,100 project and resource managers, across 24 sites Automotive
and various business units around the world. Research and development
costs were reduced by 30% as well as reductions in project lead times. SAP Solution
SAP HANA + SAP Portfolio
Click here for Volvo source reference. and Project Management

Customer Website


Varian Medical systems, a leading manufacturer of medical devices, Company
leverages the SAP Product Lifecycle Management (SAP PLM) application Varian Medical Systems
to plan, forecast, and execute its product development projects. It achieves
a high degree of standardization and efficiency to support a globally Industry
distributed product development environment. With SAP PLM, it replaced High tech
outdated 2D models with 3D models and visual work instructions that provide
a higher level of visual accuracy, understanding, and user engagement for SAP Solution
product and product support engineers. Faster preparation (70% faster, SAP HANA + SAP 3D
from one week to two days), delivery, and consumption of detailed training Visual Enterprise
material occurred when moving from paper-based manuals to interactive
3D deliverables. Customer Website
Click here for Varian Medical Systems source reference.

As customers are at various stages of realizing the value of S/4HANA, additional stories
will become available in subsequent updates to this white paper. 15/16
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