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SAP's RISE 'yet to prove its worth in practice...' Key German user group offers giant a progress 'reality check'

Analysts say S/4HANA upgrades remain sluggish, and users want to see things RISE shine before committing

Sapphire Now The 60,000 member-strong German-speaking SAP user group (DSAG) has issued a strongly worded statement in response to SAP’s lack of clarity on its RISE cloud upgrade at the annual Sapphire Now event.

Jens Hungershausen, DSAG chairman, said the package, which is supposed to bring together the lift-and-shift to the cloud, business process transformation and upgrade to the latest technology platform, had “yet to prove its worth in practice”. RISE with SAP was launched in January this year.

Where are the case studies?

Analysts and users were expecting more explanations and case studies to surface at the Sapphire event. But instead, SAP announced more new industry clouds – starting with retail consumer products, automotive, utilities, and industrial machinery and components – as well as extending it outside ERP heartland to HR and procurement.

"The planned industry-specific packages… sound interesting. The same goes for the improvements around human resources and the modular cloud-based ERP system," Hungershausen said.

"But these are all also intrusions into existing IT landscapes that are only possible if the relevant solutions can be understood in the context of the wider SAP ecosystem and corresponding projects can be implemented using viable business cases.

"We're looking forward to hearing about the initial experiences of companies in German-speaking countries with RISE with SAP, and we'll continue to serve as SAP's sparring partner when it comes to reality checks," he added.

DSUG was normally quite close to SAP and friendly in its public statements, making the bluntness of its response to Sapphire’s news “a strong signal,” Gartner senior director and analyst Christian Hestermann told The Register.

SAP’s core business is ERP. Since the launch of the latest ERP product, S/4HANA in February 2015, SAP has been trying to convince its customer base to migrate to the in-memory system.

But it is still a struggle. According to Gartner figures from 2021, of SAP's 35,000 existing ERP customers, only 26 per cent had bought anything to do with S/4HANA. Meanwhile, only 14 per cent had actually gone live with software.

S/4Hana slow to go

ERP upgrades are notoriously lengthy and difficult, as they address the detail of how a business is run. The RISE offer of lift-and-shift to the cloud, together with “business transformation as a service,” was supposed to accelerate both the migration to the omnipresent fluffy computing model and S/4HANA, but the picture remains confused, Hestermann said.

“Business transformation has always been a topic for SAP customers or any business. Nobody puts in a business model and stands still for the next 20 years. This idea of a huge new event, a new version and now everybody is — for the first time in their life — starting to do transformation: that's the big mistake behind this whole S/4HANA and RISE story,” he said.

Hestermann argued that some customers had already begun transformation on earlier versions of SAP’s ERP system, including ECC, but the vendor had stopped innovating on that platform and is instead asking them to migrate to a completely new platform.

“What ECC customers would like is a one-for-one, migration to S/4HANA, and then continue that transformation. It's not about moving to S/4HANA and start transformation. That's the fundamental mistake,” Hesterman said.

Speaking to the press and analysts, SAP CEO Christian Klein said S/4HANA was a way of helping organisations rapidly shift their business models in response to a changing economy.

“Everything has to be more personalised and S/4HANA, from the configuration model [means] you can combine wider services. We put intelligence into a data configurator that tells you what the consumer wants, we mix it with every payment model; you can also offer subscriptions.

"You can decide if you want to bill the customer, daily, monthly, every minute, whatever. When the business wants to launch a new business model, or wants to launch a new offering, in two days you can actually launch whatever you want.

"And this is what you're not getting when you're just migrating your ERP to the cloud," Klein said.

Business Network: Klein talks logistics

Speaking about the newly announced SAP Business Network, which is designed to bring together the Ariba supplier network and SAP logistics management systems, Klein said the idea was to create a win-win situation for suppliers. “As a supplier, I want to find more buyers, so for us, we deliver new services to show how can I generate more demand for the suppliers.”

He said that the disruption at the Suez Canal demonstrated the need for businesses to find alternative routes in their logistics networks. “This is now going to be solved via the Business Network," he said.

Duncan Jones, veep and principal analyst at Forrester said: "Ariba has been a sort of problem child for SAP recently but it seems that they have renewed enthusiasm for the concept of this network, which was interesting."

The problem is that while the concept of a supplier network sounds good, as it might save businesses having to find and qualify suppliers, there are many such networks out there, including Basware and Coupa. Meanwhile, in term of logistics insight, Infor bought the GT-Nexus platform in 2015.

That SAP was talking about a "network of networks" connected by APIs was interesting, Jones said, but he remained skeptical about SAP being a network operator.

Holger Mueller, veep and principal analyst at Constellation Research, was also doubtful the SAP Business Network would have anything new in terms of technology.

The border problem with SAP was that, with the COVID pandemic continuing, ERP – the German vendors' core product – was not the top priority. "SAP can make RISE as interesting as possible, but it is still not a top 3 concern," he said.

Even working with partners, the company would struggle to persuade the boards of businesses to do much with ERP until they have figured out how to re-open, Mueller opined. Companies with ERP were mostly happy "as long as [it] gets it done". ®

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