SAP HANA – Where Does It Take Us and How to Benefit

8/11/2019 SAP HANA Where Does It Take Us and How to Benefit

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White paper

SAP HANA Where does it take usand how to benefit?November 2012


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SAP HANA Where does it take us and how to benefit? 3

PAC 2012

Contents

1. Introduction ________________________________________________________5

2. Challenges facing SAP users regarding SAP HANA ________________________6

3. Use cases and value-added of SAP HANA _______________________________7

4. Alternative concepts ________________________________________________12

4.1 SAP HANA and traditional databases __________________________________ 12

5. Checklist aspects to be considered when implementing SAP HANA _________14

6. Skills needed for implementing, using, and operating SAP HANA _____________16

7. Closing __________________________________________________________20

8. Appendix I: summary of quick poll _____________________________________22

9. Appendix II: applications running on SAP HANA __________________________25


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PAC 2012

1. INTRODUCTION

SAP users are already expressing a lot of interest in the topic of SAP HANA. At the

same time, however, customers are unsure as to what significance SAP HANA has for

their company: is it just another piece of technology or is it of strategic importance for a

company?

Whilst companies clearly perceive significant value-added in SAP HANA, they are also

asking how it can be best used to benefit their company.

This is borne out by a PAC survey of 109 IT managers and CIOs in Europe and the

USA. Almost half of the companies surveyed by PAC currently consider SAP HANA to

be a relevant topic: 44 per cent state that SAP HANA is part of their IT agenda.

However, only around a third of the companies have concrete use cases and even fewer

have embarked on corresponding implementation projects .

From PACs perspective companies still require clarification on use and the costs of

projects with SAP HANA. However, it affords many opportunities, as PACs analyses

have shown. This is because SAP HANA is not merely a technology, but can be of

strategic relevance for companies. As a database and application environment SAP

HANA is intended to be used both for data analysis and business applications. SAP is

planning to integrate SAP HANA into all current and future software and cloud solutions.

For some companies SAP HANA may be an alternative to relational databases. In order

to take full advantage of the benefits of the in-memory technology, an application needs

to be adapted to SAP HANA. However, SAP HANA is not, nor will it be, the only

database solution in an SAP environment.

At the moment companies are primarily using SAP HANA to analyze business data.

They want to use SAP HANA as an enhanced component in their existing SAP

landscape. However, in future the system will also be used as an alternative to relational

databases as part of the SAP landscape.

This white paper describes the challenges facing companies in the context of SAP

HANA, the most important use cases from their perspective, and concrete projects that

they are planning or have already realized. Further, the reader will learn what skills are

necessary for SAP HANA and what role IT service companies play in the implementation

of SAP HANA projects.


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PAC 2012

2. CHALLENGES FACING SAP USERS REGARDING SAP HANA

In PACs view, SAP HANA provides a host of opportunities for SAP users to improve

existing analytics environments and to create new analytical applications. Many SAP

clients who have already had a look at SAP HANA are aware of the value-added offered

by SAPs in-memory technology. However, they are asking themselves a host of

questions, such as:

! What tasks can and should SAP HANA handle in the company (in the context of

data analysis, business processes and data)?

! What strategic significance should SAP HANA have within the companys individual

SAP roadmap?

! How can SAP HANA be integrated into an existing SAP landscape (management of

a further hardware component, integration into system management)?

! How can SAP HANA contribute the most value to the company?

! How are the costs of SAP HANA to be assessed (license costs, required hardware,

operation of the solution and user support)?

! What skills are necessary in the company for the introduction, use, and

administration of SAP HANA?

! What external support is required for an SAP HANA project?

Companies are faced with many challenges in finding answers to these and many other

questions. Below the topic of SAP HANA is addressed from a number of perspectives.

The aim is to give the organization the tools it needs to better plan its projects with SAP

HANA.


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PAC 2012

3. USE CASES AND VALUE-ADDED OF SAP HANA

Three different usage scenarios for SAP HANA can be identified:

! Side by side: One example is the usage of SAP HANA to support SAP BW. This

use case is largely identical to the concept of the BW accelerator which is based on

SAP technology that is similar to SAP HANA. Another is SAP CO-PA Accelerator

that improves the existing profitability analysis of SAP ERP.

! Primary persistence:In this use case SAP HANA acts as the primary database for

SAP BW or for analytical applications such as smart meter analytics. In such a

scenario a traditional relational database is not necessary.

! On top of a SAP-HANA-powered SAP BW, applications such as BusinessObjects

Planning and Consolidation can be deployed in order to accelerate long and

complex planning.

! Platform: SAP HANA can be used as an alternative database for the SAP Business

Suite. This is not yet available but SAP is working on the adaption of its core

solution. In this scenario SAP HANA is used as the application and database

platform for both analytical and transactional workloads. Here platform means that

SAP HANA is the only infrastructure component needed for an application; relational

databases are not needed for analytical or transactional tasks.

! Also, SAP HANA can be used to develop and deploy native applications that

leverage the platform as a database and as an application server. Such applicationsare natively written to take advantage of the in-memory concept of SAP HANA.

Companies that are interested in using SAP HANA today intend to use it primarily to

improve their existing data analysis and reporting environments. PAC believes that SAP

HANA projects are primarily driven by two aspects:

! The aim of improving general performance to produce results faster;

! The need to fulfill the rising demand of lines of business for analytics more quicklyand effectively.


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PAC 2012

However, in-memory-based data analytics can provide much more strategic benefits as

it permits companies to react quicker to changing market conditions, customer demands,

and new opportunities.

Current relevant use cases for SAP HANA

IT users and suppliers have identified a variety of use cases for SAP HANA. In order to

better understand which of these are the most important among companies today, PAC

interviewed companies in the survey that indicated that SAP HANA is part of their IT

agenda.

Customer data analysis

As it turned out, many use cases are related to the classification and analysis of

customer data. Such analysis is being carried out to identify customer demands and to

select those customers that are best suited for a marketing campaign. Many companies

are doing this today with existing business analytics solutions, but those PAC surveyed

expect additional benefits from using SAP HANA for these purposes.

When we introduce our trade promotion solution based on

SAP HANA, we expect that thousands of users around the world will be

able to do much better analysis, which will feed into improved quality of

promotions and better conversations with customers.

Tom Greene,

CIO Colgate-Palmolive

Improved reporting

According to the survey, the improvement of reporting is another major use case that

companies have identified in relation to SAP HANA. This includes both speeding upoperational reporting and replacing inefficient reporting based on Excel files.


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PAC 2012

Use cases that the companies surveyed aim to realize with SAP HANA

Todays SAP HANA-related projects

When it comes to SAP HANA-related projects, companies are focusing on improving

widely used topics such as financial reporting and key performance indicators.

However, many companies are looking beyond these low hanging fruits. In this context

the companies talk about special use cases such as real-time data management and

text mining.

Real-time data management describes the use of real-time-enabled databases and tools

for the integration of data in real time. One important component for this, though by no

means the only one, comprises in-memory databases such as SAP HANA. Companies

use text-mining processes to analyze texts (documents, e-mails and social media

content), which is significant for investigating customer opinions.

18

12

11

1056

4

4

4

3

3

3

17

Composition of sample by

SAP HANA-related proposed use cases

Analysis of customer data

Improve reporting

Data warehousing

Risk analysis and management

Optimization of procurement,supplies, and/or logistics

Optimization of routes

Classification of customer data

Analytical requirements ingeneral

Data management

Enhance cost-effectiveness

Production control and planning

Estimation of investmentopportunities

No use case

PAC

2012

Sha

reinpercentageofcompaniesthathave

SAPHANAontheirITagenda,n=49,multipleanswerspossible


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PAC 2012

Type of projects that the companies surveyed implemented/are implementing/areplanning to implement

Outlook: more advanced analytics and ERP on SAP HANA

In the longer run, PAC believes that companies will focus more on SAP HANA projects

for more advanced tasks such as customer data analysis, which they have indicated asone of the major use cases.

Also, we expect to see more projects in the area of optimization (transports, logistics,

and procurement), since they can provide a direct business benefit for companies in

terms of cost savings.

In addition, SAP HANA will be used as a database for ERP environments once SAP has

started to deliver respective SAP HANA-enabled versions of SAP ERP and SAP

Business Suite. With this, SAP users are expected to be able to improve the

performance of their transactional applications.

14

11

11

118

8

8

7

3

3

16

Composition of sample by SAP HANA-related projects

(already implemented, current or planned implementation)

Financial reporting with SAP

Advanced analytics (e.g.

forecasts)Customer segmentation withSAP HANAKPIs on SAP HANA

Analytics for HR

Real-time data management

SAP Business Warehouse onSAP HANAData and text mining

Analytics for procurement

BusinessOne on SAP HANA

No concrete projects yet

PAC

2012

Shareinpercentageofcompaniesthatthave

SAP

HANAontheirITagenda,n=49,multipleanswerspossible


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PAC 2012

4. ALTERNATIVE CONCEPTS

4.1 SAP HANA and traditional databases

As an in-memory database SAP HANA is both suited to analytic tasks and can also

function as a database for transaction processing. SAP HANA thus represents in some

cases an alternative and in other cases a viable extension to relational databases as

used today by business applications. However, this is only worthwhile if the application

can take full advantage of the in-memory benefits. It further presupposes that the

application supports business processes that benefit from real-time processing.

Of course, SAP HANA can be used along with existing relational databases. For

instance, data from databases can be replicated with SAP HANA. Another example is to

load data from one or more relational databases into SAP HANA.

Alternatives to SAP HANA

Although SAP HANA has become a well-known brand, it is by no means the only in-

memory-database on the market. For instance, a number of software vendors in the

business analytics sector offer in-memory-technology.

In addition, in-memory-databases are most useful if powerful analytics and real time data

processing is needed. That means that not every piece of data has to be stored in an in-

memory-database. One example is historic data or log data that only needs to be

accessed occasionally.

In the PAC survey companies that indicated that they were not interested in SAP HANA

were asked what alternative solutions they intend to use.

The result was that the vast majority of the companies that are not interested in SAP

HANA say that they are happy to use traditional database technologies as they exist

today.

Only 7% of the companies intend to use other in-memory-databases. Another 11%

propose database technology that can be configured as in-memory-database. That

means they can switch to an in-memory application if necessary.

Without going into too much detail, it is worth mentioning that SAP HANA takes a

different approach to in-memory-database technology by using columnar storage and


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data compression. Hence, when thinking about the introduction of an in-memory

technology, a detailed comparison of the SAP HANA concepts with those of other in-

memory solutions is recommended.

In view of the still very young market for SAP HANA it is no surprise that many

companies are realizing projects with traditional solutions.

Also, this is consistent with the results of other PAC research in the area of data

analytics and Big Data topics. Typically, companies indicate that in-memory is an

important technology, but they see it as a complement to existing technologies such as

data warehouses and data integration systems instead of a replacement for all existing

relational databases.

Alternatives to SAP HANA

11

7

82

Composition of sample by in-memory conceptsalternative to SAP HANA

Usage of other databasesthat can be configured as in-

memory databases

Usage of other in-memorydatabases

No usage of in-memory

PAC

2012

Shareinperce

ntageofcompaniesthatdonothave

SAPHANAontheirIT

agenda,n=60,multipleanswerspossible


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PAC 2012

5. CHECKLIST ASPECTS TO BE CONSIDERED WHEN

IMPLEMENTING SAP HANA

As the previous chapters have clearly shown, there are relevant use cases for SAP

HANA. However, companies need to consider a range of issues before approaching an

SAP HANA project.

PAC has drawn up a corresponding checklist below:

! Preparation tasks:Several tasks should be performed before a company embarks

on an SAP HANA project. These include the identification of data that is relevant for

SAP HANA, and companies also need to assess topics such as data integration and

data quality as part of a data management strategy.

! SAP HANA-readiness of the SAP environment: Companies may have to

reckon with a possible increase in complexity of the existing SAP environment and

additional tasks concerning IT operations and end user support. In addition, SAP

HANA-readiness also means that companies should not carry out additional critical

SAP activities, such as consolidation and transformation projects, at the same time

as starting an SAP HANA project. Combining change projects with the introduction

of SAP HANA is only possible if this is part of the initial plan. As the survey

indicates, many companies do not yet have SAP HANA on their IT agenda as they

attach higher priority to other issues.

! SAP HANA strategy: Does the company follow a strategic or a more technical

approach to SAP HANA? A more technical approach includes operating SAP BW on

SAP HANA in order to improve operational reporting. A more strategic approach is

e.g. to use SAP HANA for the optimization of prices in real time. A company can

achieve the greatest value added from SAP HANA where the higher performance

brought in by in-memory technology is of strategic relevance for the enterprise.

Basically, the more strategic the project is, the higher the benefit for a company. On

the other hand, improved reporting can be a quick win and therefore a good starting

point.

!

SAP HANA roadmap: A company should consider how SAP HANA fits into theexisting roadmap for analytics (lifecycle of analytical applications and the underlying

IT infrastructures as well as the vendor strategy for analytics). If a company plans to


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extend or improve the analytics infrastructure (e.g. implementation of next-

generation hardware, software release update, or migration), it may consider taking

advantage of SAP HANA. In the longer run, this roadmap may also include the

migration of existing ERP applications on SAP HANA.

! Consider alternative solutions:Despite the clear value that SAP HANA brings, it

is advisable for companies to consider alternative in-memory solutions. Further,

companies should take into account that the dependencies on the software vendor

might increase if they opt for SAP HANA.

! Costs of SAP HANA:The costs of SAP HANA to be considered are license costs

as well as the costs of implementation and operation. The usage of SAP HANA may

also require additional data center capacities that should be taken into account as a

cost driver. Companies should evaluate the TCO over a longer period of time, such

as against the future development of data volume.

! Return on investment: Beside the cost considerations and business values,

companies need to be sure about the return on investment (ROI) for SAP HANA.

Suitable use cases include the reduction of inventory goods and instant decision-

making on optimal transport routes or investment decisions. A qualified service

provider can of course support the potential SAP HANA user in assessing the ROI

by developing different use cases.

! Identify promoters and users:It is important to know who within the company will

promote SAP HANA and who will be the possible users. The higher the level of the

promoters and the larger the end user base that can directly take advantage of SAP

HANA, the better. In some companies SAP HANA promoters are members of the

management.

! Collaboration of business and IT: To take full advantage of SAP HANA, it is

important to bring lines of business and the IT department to the table. Lines of

business need to understand the business value of SAP HANA, not its technological

benefits. This is important since SAP HANA provides mechanisms that can

potentially enable IT to better serve the needs of LoBs in terms of the delivery of

analytical solutions.

! Training and concepts: Does a company have the right training and

implementation concept (both for end users and the IT organization) for SAP HANA

to become a long-term strategy instead of a one-shot technology?


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6. SKILLS NEEDED FOR IMPLEMENTING, USING, AND

OPERATING SAP HANA

Certain skills are required depending on the way in which SAP HANA will be used.

Sound knowledge of the SAP HANA architecture and functional scope is always a must.

In addition, companies (or a managed service provider) need to know how to operate

SAP HANA within the SAP environment.

Accelerators, analytical database

Given that the use cases largely relate to the improvement of existing reporting and

analytics, experience of SAP BW and the data integration tools from SAP is very

important.

From a technical perspective skills comprise e.g. SAP HANA-specific data modeling and

SQL script as well as data integration/replication.

If SAP HANA is used to accelerate ERP processes, e.g. by deploying any of the

standard applications like CO-PA accelerator (profitability analysis), additional skills for

the related business processes (ERP, CRM) are necessary.

Development of new SAP HANA applications

If a company wants to develop native SAP HANA applications, then of course in-depth

knowledge of the programming environment (tools and libraries) and application

deployment mechanisms is needed.

It is also important to be familiar with the specific characteristics of the SAP HANA

platform in terms of program code and data operations. Only then is it possible to fully

exploit the in-memory specific features. The issue is not ultimately about writing new

client/server software, but real-time applications.

However, an understanding of the respective field of application is at least equally

important. If for example a new SAP HANA application is to be developed to optimize

transport routes, special knowledge from the transport sector is necessary.

The team should therefore be made up of both experts in software and business

processes.


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The availability of SAP HANA skills in different usage scenarios

Value-added from system integration partners

In PACs view, there are several reasons why the involvement of a system integration

partner in an SAP HANA project is recommended: organizations profit substantially from

external consultants and IT service companies. In PACs view companies are reliant on

external service providers not least because the number of SAP HANA experts is limited.

SAP HANA is still rather immature compared to other databases because it is not just

another database and the skills it requires go beyond basic database know-how. Having

external experts in place to monitor the overall application environment can be useful

especially if companies run critical applications on SAP HANA.

As PAC has learnt from market analysis, companies favor a provider that is capable of

providing a full range of services and solutions (software plus hardware). Therefore, SAP

HANA should be installed by a certified system integrator that is able to offer or resell

certified hardware that makes the client fully eligible for SAP support.

From the perspective of PAC IT service providers should offer at least the following

features:

Platform

Primary Persistence

Side by Side

Value-added/strate

gic

rele

vance

Availability

of skills(internal,

external)


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PAC 2012

! Practical project experience with SAP HANAin connection with SAPs analytics

solutions.

! Competence both in the field of the companys business processesand also in

relation to data management, in-memory technologies and SAP software.

! As SAP HANA is a combination of hardware and software, the IT service

provider should be able to demonstrate competence in both fields.

! Consultancy competence both in the field of IT organization and also the

departmentsof a company.

PAC considers that IT service providers should have all these competences, ideally in-

house or through appropriate partnerships.

SAP HANA-related service categories

The services surrounding SAP HANA can be divided into three categories:

! Business consulting: Alignment of SAP HANA strategy with requirements from

LoBs, alignment with the IT/SAP strategy of the customer, alignment with business

strategy and business goals, strategies for co-innovation.

! IT consulting: Development of proof-of-concepts, identifying and defining use

cases for SAP HANA, selection of SAP HANA-based applications (e.g.

accelerators), planning and design of native SAP HANA applications.

! Technical services: installation, setup, design of frontends, data integration and

data replication, operating services, SAP HANA programming, testing and

deployment.

! Know-how beyond SAP solutions: Ideally system integrators already have

practical experience both in the field of databases, data integration, and business

analytics in the SAP environment and the non-SAP environment. This is beneficial

as SAP HANA is used both with SAP applications and SAP data and also for data

from other environments.


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PAC 2012

7. CLOSING

One key finding of the survey that has been realized as part of this white paper is that

SAP HANA is already on the IT agenda of some, but by no means all, SAP users.

From PACs point of view, there are a vast number of use cases for SAP HANA but

companies need help in identifying and evaluating them. Despite the buzz around SAP

HANA, this discussion should be as open as possible.

Companies should be ready for SAP HANA in terms of their SAP environment and the

SAP roadmap, as we indicate in the Checklist aspects to be considered when

implementing SAP HANA.

Another key finding of this paper is that SAP HANA is not merely a technology, but can

be of strategic relevance for companies.

We hope to be able to get much more detailed information

much faster, enabling people to make better decisions as a result. We

want to improve our share of each category in our customers stores, and

we want to support them in growing their categories also.

Tom Greene,

CIO Colgate-Palmolive

PAC believes that system integrators play an important role in this discussion. They

should show the opportunities and limitations of SAP HANA. In addition, the system

integrator brings to the table specific skills needed to implement SAP HANA and to

support the transformation of the solutions. This includes skills to integrate SAP HANA

seamlessly into existing technologies such as databases.


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PAC 2012

8. APPENDIX I: SUMMARY OF QUICK POLL

Pierre Audoin Consultants GmbH (PAC) conducted a survey that analyzes the trends

and dynamics related to the in-memory database SAP HANA. As part of the study we

asked IT decision makers if SAP HANA or other in-memory concepts are being used or if

their use is planned. Further, the study responds to the use cases and concrete projects

behind SAP HANA and also considered the reasons in case that SAP HANA has not yet

been considered an option.

Evaluation the basics

This study is based on a survey of 109 managers and IT decision-makers conducted by

the independent market analyst PAC on behalf of IBM between July and August 2012.

The vast majority of the managers surveyed 84 per cent confirm that SAP solutionsform the core of their business application landscape while the remainder use SAP

solutions in a best-of-breed mode.

The participants in the survey provided information about the usage of the SAP HANA

in-memory database. The respondents specified the use cases and corresponding

projects in the area of SAP HANA. Companies that are not using SAP HANA gave their

assessment why.

County of origin of the companies surveyed

51

32

17

Composition of sample by country of origin

DACH region

Rest of Europe

USA

PAC

2012

Shareinpercentageofcompanies,n=109


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PAC 2012

The target group comprises companies from all industry sectors from Europe and North

America with a minimum size of 500 employees. 81 per cent of the organizations

surveyed currently employ over 1,000 employees, and a further 19 per cent currently has

between 500 and 1,000 employees.

56 companies are headquartered in the DACH region (Germany, Austria, Switzerland),

and another 35 companies are headquartered in Great Britain, France, and in

Scandinavia (mainly Sweden). A further 18 companies are based in the USA.

89 per cent of all interviewed decision-makers were heads of IT, Chief Information

Officers (CIOs) or Chief Technology Officers (CTOs), and the remaining 21 per cent

were members of the management or managing board or in another leading position.

Evaluation is SAP HANA part (or a topic) of the IT agenda?

Almost half of the companies surveyed by PAC currently consider SAP HANA to be a

relevant topic: 44 per cent state that SAP HANA is part of their IT agenda. However, only

around a third of companies have concrete use cases and even fewer have embarked

on corresponding implementation projects.

Relevance of SAP HANA among the companies surveyed

45

55

Composition of sample by relevance of SAP HANA

SAP HANA is a topic on theIT agenda

SAP HANA is not a topic onthe IT agenda

PAC

2012

Shareinpercentageofcompanies,n=

109


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PAC 2012

Evaluation is SAP HANA part (or a topic) of the IT agenda?

As more than half of the companies surveyed did not have SAP HANA on the IT agenda,

the question as to why naturally arises.

As can be seen, many companies simply have other priorities for IT. SAP HANA may

become a relevant issue for them in the future, but this is not the case today.

For 15% of companies SAP HANA is not an issue as they already use alternative in-

memory technologies.

Only a handful of companies listed a lack of features as a reason not to opt for SAP

HANA. 8% were of the view that SAP HANA does not meet their current requirements

and 4% were unconvinced by the cost-benefit ratio.

Reasons given by the companies why SAP HANA is not a topic on the IT agenda

53

15

8

8

4

43

5

Composition of sample by reasons why SAP HANAis not a topic on the IT agenda

We attach higher priority toother topics

We rely on other in-memoryconcepts

Budget restrictions; costreasons

Does not match currentneeds

Cost-benefit ratio is notconvincing

No evaluation of the topicyet

Limited or no SAP affinity orstrategy

No answer/do not know

PAC

2012

Shareinpercentageofcompaniesthatdonothave

SAPHAN

AontheirITagenda,n=60


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PAC 2012

9. APPENDIX II: APPLICATIONS RUNNING ON SAP HANA

Source: website of SAP as of October 2012

This list is subject to change as more applications are planned or in preparation.

The following application run on SAP HANA by today:

! SAP ChariTra

! SAP Situational Awareness Rapid-Deployment Solution for Public Sector

with SAP HANA

! Smart Meter Analytics

! SAP Supplier Infonet Powered by SAP HANA

! Sales Pipeline Analysis

!

SAP Bank Analyzer Rapid-Deployment Solution for Financial Reporting withSAP HANA

! SAP Cash Forecasting

! SAP Collections Insight

! SAP CRM Rapid-Deployment Solution for Analytics with SAP HANA

! SAP Customer Segmentation Accelerator

! SAP Deposits Management Rapid-Deployment Solution for Transaction

History Analysis with SAP HANA

! SAP Sales Analysis for Retail


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About Pierre Audoin Consultants

From strategy to execution, PAC delivers focused and objective responses to the growth challenges of

Information and Communication Technology (ICT) players.

Founded in 1976, PAC is a privately held research & consulting firm for the software and ICT services market.

PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market analysis as

well as operational and strategic consulting. We advise CIOs and financial investors in evaluating ICT vendors

and solutions and support their investment decisions. Public institutions and organizations also rely on our key

analyses to develop and shape their ICT policies.

For more information, please visit www.pac-online.com.
http://www.pac-online.com/

Documents

SAP HANA – Where Does It Take Us and How to Benefit