SAP sSAP IOT

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E-Guide 
EXPANDING 
THE USE OF SAP
FOR IOT, BIG DATA,
AND ERP 
FUNCTIONS 
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SAP IoT products: 
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SAP S/4HANA 
expands from 
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EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
ANY WOULD-BE ADOPTERS remain clueless 
about the disruptive IoT’s veteran vendor, 
SAP. Discover how SAP systems can be 
leveraged not just for IoT, but with ERP 
and big data tools.
M
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
SAP IOT PRODUCTS: HOW DO THEY WORK WITH ERP AND 
BIG DATA?
Ann Grackin
SAP has been making a series of product announcements, developing thought-
provoking marketing materials and gaining prominence at Internet of Things 
(IoT) conferences. With its deep presence in the manufacturing sector, which 
is an early beneficiary of IoT or industrial Internet of Things (IIoT), it’s unsur-
prising that SAP would have IoT products to support its customers. But SAP 
users need help understanding what the many SAP IoT products do and how 
they integrate with an existing portfolio.
To understand IoT products, first you need to understand the IoT. Simply 
put, the IoT deals with devices and device services; various middleware prod-
ucts; IoT-oriented data analytics; and business applications that can use the 
data. IoT applications should be considered for equipment that is on-premises 
or remote, or for “digitalized” products. Thus, IoT products need to address as-
sets that are at rest in facilities or in motion. Figure 1 shows SAP’s IoT-specific 
offerings.
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
SAP
Figure 1: Simplified view of SAP’s IoT offerings 
SAP offers several products for the IoT market, including SAP IQ, SQL Any-
where, Event Stream Processor (SAP ESP), Afaria, HANA Enterprise Cloud 
and Netweaver. All of them work with other SAP enterprise and analytics 
products. Let’s look at each of these areas.
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
DEVICE LAYER AND SERVICES
The IoT requires software and services wrapped around the devices (sensors, 
mobile devices, GPS, RFID) as well as connected machines, often called ma-
chine to machine (M2M). First, software has to be able to connect to any device 
(device integration). At this lowest level, SAP does expect to connect to the 
devices of many partners. Sensor and RFID vendors generally have interoper-
able device connectivity. SAP can take over connecting the device integration 
layer with a middleware layer that can send data to relevant subscribers. Data 
from devices can be stored at a local level, moved into the cloud or moved into 
business applications. Such SAP products as SQL Anywhere can connect to 
this data. Layered on top will be a complex event processor (CEP); SAP’s is the 
aforementioned Event Stream Processor (SAP ESP).
The CEP is what’s essential and most important for the IoT today, whether 
you acquire products from SAP or other advanced providers. For SAP, infor-
mation from any source -- RFID data, various temporal data streams such 
as traffic, weather, crowd and social data, as well as events from traditional 
data systems -- flows into SAP ESP. The challenge with CEPs is that they are 
customer- and use-case specific. CEP providers have also built up a portfolio 
of analytics around their products. CEP got its start in the financial services 
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
industry, so manufacturing and the supply chain are newer domains.
SAP users should demand support for their particular applications from a 
standard CEP and analytics portfolio. Otherwise, they will have to build their 
own -- which is what they have to do today. The time is better spent understand-
ing how to use CEPs and the new data rather than getting stuck in the depth of 
the technology.
Organizations for which mobile devices are a key part of their IoT projects 
should look to SAP’s SQL Anywhere MobiLink for integration and the former 
Sybase platform, Afaria, for mobile device management.
INTO THE PLANT AND ERP
SAP manufacturing users employ such SAP products as Materials Manage-
ment and Plant Maintenance (PM), as well as some that work at the manu-
facturing execution system layer, including production data collection and 
manufacturing integration and intelligence that directs and monitors equip-
ment. Many manufacturers have some of these tools bundled with their SAP 
ERP system. SAP also offers enterprise asset management software and an as-
set tracking network called Asset Network Solutions to provide asset visibility 
across the value chain.  
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
SAP’s support for manufacturers is hardly new, so where does the IoT 
come into play? It’s about the concept of blending some of this asset data with 
data in the Internet. For on-premises equipment management, for example, 
the Internet can connect equipment outside of the enterprise. A third-party 
maintenance company can monitor equipment performance and do needed 
repairs. The predictive maintenance analytics in SAP PM can play a greater 
role here. SAP has shown some impressive demos of equipment manufacturers 
monitoring their equipment remotely.
Manufacturers of equipment containing digital components can use IoT 
connections to upgrade its software remotely. SQL Anywhere can play a role 
as the edge server, allowing connectivity from equipment and devices to sub-
scribing users who work outside the enterprise. Today this model is flourishing 
among manufacturers that supply large industrial equipment for plants, min-
ing, construction, agriculture and so on.
What about products on the move? Data from the manufacturing process, 
such as bills of materials, serial numbers and lot or batch identification on 
product labels, may now be part of the data that accompanies the thing. For 
industrial and electronic products, this device data can be embedded within 
the product. For packaged products derived from process manufacturing 
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
(chemicals, pharmaceuticals and food) an RFID device or a sensor may ac-
company the container or be attached to the package. Data from these sources, 
again, probably will be initiated through an SAP partner’s device-services layer 
and passed on to SAP ESP.
For manufacturers, use cases are significant. They can help you understand 
how events during production or during use at the customer site might affect 
long-term quality, or evaluate better distributionpractices to ensure product 
safety. A key concept in the IoT is sharing data: A manufacturer can share data 
with customers so they can learn more about product care, chains of custody 
and fair practices to support regulatory compliance. Because many customers 
have a plethora of systems standards and integration methods, B2B integration 
will need to be supported by an open SAP environment. As SAP works further 
on its cloud products, integration should get easier.
BIG DATA AND ANALYTICS
When users look at data sources, they imagine a huge variety of additional ways 
to understand the world. All this data blends up in the cloud, but for SAP, it’s all 
related to the vendor’s push for its HANA in-memory database. This brings us 
to the topic of bigger data.
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
Device services and big data are the one-two punch in IoT. Big data is not 
just about mammoth data storage, search and analytics but new types of data 
that legacy ERP users may not have today. It has been the domain of non-manu-
facturing applications in fields such as transportation, weather and marketing. 
Data streams from sensors measuring temperature or vibration require not 
just conversion from analog to digital data, but also context data (for example, 
time, date and location).  Social media and weather patterns are common data 
streams that are being collected and analyzed. Much of this data will come 
from other non-SAP application sources that will need to integrate with SAP, 
particularly in logistics, defense, construction and agriculture, where SAP ERP 
is not that prevalent.
From an analytics perspective, the IoT needs to be thought of as either 
monitoring complex short-term events or capturing longer-term analytics 
for trending and reporting. Examples include exploring data to discover new 
types of product or markets, big research (think genome), customer trends and 
weather patterns and their effect on diseases. Over time, mining this data will 
be the real value of the IoT for most companies.
Big data applications can sit on top of an existing ERP system or side by 
side, and users of SAP ERP can integrate with them through HANA. Analytics 
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Home
SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
can be near real time, and SAP ESP is designed to handle it. Many SAP software 
products have some analytics built in, and some users employ one of the many 
business intelligence (BI) analytics tools from SAP and other vendors.
But SAP is pushing a HANA approach for IoT analytics, and there may be 
an argument for this if your version of SAP ERP or BI can’t handle the new 
streams of data. Many companies have built up years of analytics that work 
well for them. So it is worth thinking about whether existing analytics can 
accommodate these new sources and create meaning from them. In the non-
SAP world, the answer generally has been no. IoT applications are designed to 
accommodate big data and blend it with traditional data sources. And because 
organizations often segment discovery and analytics from day-to-day transac-
tion activities, it often makes sense to have a side-by-side strategy.
PUTTING IT ALL TOGETHER
SAP manufacturing users are in the best position to leverage SAP ESP and 
HANA because they already have applications that can become smarter. But 
it will still require the system architecture to accommodate both on-premises 
and remote or mobile information. Figure 2 shows examples of SAP software 
configurations for IoT in mobile and on-premises environments. 
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Home
SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
SAP
Figure 2: Alternative Views of SAP’s IoT 
SAP has attempted to bundle IoT applications, but it still has a ways to go. Com-
petitors that have rich tool sets and libraries of prebuilt use cases and analytics 
have a technical jump on SAP, but SAP’s user base will likely consider SAP any-
time they go looking for products. The HANA offerings are very much a work in 
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Home
SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
progress and many installations are custom projects. This means HANA, and 
in particular SAP’s HANA Cloud Platform for IoT, which does bundle some 
tools and services, is only for those companies with an appetite for developing 
applications and not those seeking turnkey IoT portfolios.
With so much competition for the industrial IoT from digital manufac-
turing software providers, the ever-growing equipment providers who now 
consider themselves software companies, SAP must run fast to fill the void in 
its IoT libraries. Its continued move into the small to midsize business market, 
which requires well-developed use-case libraries, will be a catalyst to expand 
its product portfolios.  
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
SAP S/4HANA EXPANDS FROM FINANCIALS TO OTHER 
CORE ERP FUNCTIONS
Jim O’Donnell
SAP is releasing a new version of SAP S/4HANA, the ERP suite written for the 
HANA in-memory database, with expanded functions for core ERP processes. 
When S/4HANA was released earlier in 2015, it was limited to finance with the 
Simple Finance application.
Announced at SAP’s TechEd conference held recently in Barcelona, Spain, 
the new update is the first major release of SAP S/4HANA since it was unveiled 
in February, according to Uwe Grigoleit, the company’s global head of business 
development for strategic innovations.
“We first started with simplifying financial scenarios, and what we are 
now releasing is a lot of simplifications in the whole manufacturing area of 
S/4 of the classical ERP system,” Grigoleit said. “We have simplified inventory 
management, inventory variation, manufacturing planning and execution, and 
procurement sales and distribution.”
For financial applications, SAP S/4HANA offers increased efficiencies by 
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Home
SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
replacing multiple transaction screens with interactive cockpits that allow us-
ers to reduce cycle times by clearing payments or processing invoices in real 
time, Grigoleit said. The new functionality in SAP S/4HANA will bring similar 
real-time processing to other core ERP functions. Users will have much more 
reliable inventory stocks, for example, by being able to get accurate counts in 
real time, thus reducing the need for security stock, he said.
“This is a big benefit for customers, because if you can reduce your security 
stock by a few percent, then it’s working capital that you can directly release for 
other elements,” Grigoleit said. “In sales and distribution, you can now work 
with optimized rebates and schedules to really have customer-specificpricing 
calculation in real time.”
The S/4HANA update is expected to be generally available this month in 
on-premises and cloud editions. In October, SAP competitor Oracle unveiled 
a new software as a service ERP suite for discrete manufacturers.
SAP ADDS MOBILE CAPABILITIES TO FIORI
The digital world is getting more mobile all the time. And to help address the 
needs of mobile users for SAP Fiori apps, the vendor announced SAP Fiori 
mobile service and Fiori cloud edition, also at the recent TechEd conference 
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Home
SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
in Barcelona.
SAP Fiori mobile service is a new service based on the SAP HANA Cloud 
Platform that makes it possible for companies to mobilize Fiori apps for any 
device, said Senthil Krishnapillai, SAP’s head of mobile security technologies. 
It allows companies to build Fiori apps in the device’s native format, leading to 
a better user experience.
“There’s the idea of mobile qualities that we can add to the Fiori model 
without really having to reinvent the whole Fiori architecture and the cus-
tomizations that customers have done,” Krishnapillai said. “We are creating 
this app service on HANA Cloud Platform that combines a lot of these things 
together and stitches them in a very cohesive way, so that from an app pub-
lisher’s standpoint, he simply browses to the Fiori content server and selects 
the scenarios that he would like to make it into a mobile application. We will 
walk them through the whole building process.”
Fiori is built on the HTML5 Web programming language, which allowed 
Fiori apps to run on mobile devices as Web apps, but the new, native user ex-
perience could be quite different.
“It’s what we call a publisher tool, so the apps that are available either 
through S/4HANA or the Business Suite are available to be mobilized,” 
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
Krishnapillai said. “The customers can pick and choose which apps to mobilize, 
but it can be anything like purchasing approval or it can be an analytics app 
-- anything that’s using the Fiori paradigm. It will be a native app in whatever 
the device OS is and it will have the security, the single sign-on, the certificate 
-- all of that’s built in. It’s almost like [using] Facebook, LinkedIn or one of the 
email apps.”
SAP Fiori cloud edition is a HANA Cloud Platform service designed to help 
users implement Fiori. It comes with a limited number of Fiori apps for lines 
of business, including human resources, customer relationship management 
and retail, with functions such as manager approvals and employee self-service 
tasks.
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SAP IoT products: 
How do they work 
with ERP and big 
data?
SAP S/4HANA 
expands from 
financials to other 
core ERP functions
EXPANDING THE USE OF SAP FOR IOT, BIG DATA, AND ERP FUNCTIONS
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