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SAP’s board has taken steps to clear up commonly expressed customer confusion in respect to its technology roadmaps, particularly in regards to S/4 Hana and the supplier’s cloud applications.
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The supplier plans to launch a new tool, Transformation Navigator, intended to guide customers as they make technology choices to effect their digital transformation strategies. Customers have told SAP they want guidance and not a plethora of choices, said Peter Maier, the executive charged with executing this board initiative, and the supplier’s general manager for energy and natural resources industries.
SAP has, in recent years, confronted customers with two big novelties: cloud applications, which include acquired properties, and its in-memory, columnar, high-speed database Hana, on which it has been building its full software suite for planning enterprise resources, S/4, and with which it wants to displace the Oracle database technology that has underpinned SAP applications for many years.
The outgoing chair of the UK and Ireland SAP User Group, Phil Adams spoke to Computer Weekly during the user group’s conference in November 2016. He said that SAP customers – or, at least, those who are members of the user group – crave clarification about the supplier’s products and services roadmaps.
Adams described the bedding in of acquired cloud propetrties Ariba, SuccessFactors, Concur and Fieldglass as “slower than we would like. I know you just can’t do [the integration] overnight, but it is clearly not all there yet,” he said. “I want to clearly see it on the roadmap. If they give us an idea of when it is going to be, we can avoid the disruption of trying to make it work ahead of its integration into the core.”
And, in relation to S/4 Hana, he said most people are excited about it. “But if SAP has a case where an early adopter organisation with a deep skill set in Oracle [databases], say, has made the move, then let’s hear about it.
“The view among our members is mixed. Some are cautious and don’t like being told what to do. But if there is a clear advantage and the cost is right, then why not? We like the Fiori apps and we know you don’t get the full advantage of those unless you run Hana. The clue [for the new ERP] is in the name: it’s not called S/4 Hana for nothing. But we have until 2025 to get used to the idea, and maybe the adoption will get driven up as current database infrastructures come to end of life.”
Guidance over choices
SAP’s Maier said that “more guidance, fewer choices” was the strong message that came back from the company’s recent, deliberate attempts to be more systematically “empathic”, as Bill McDermott, CEO, signalled at Sapphire 2016.
SAP Digital Transformation Navigator is a tool that, said Maier, customers will be able to use to interrogate the supplier’s roadmaps – that is to say, what will become available, when and how. “We’ll go big on this at this year’s Sapphire in May”, he said. The roadmaps themselves are three years in scope for on-premise and quarterly for cloud applications.
“We have listened to our customers, who need broader roadmaps for the cloud and on-premise, and we have changed how we communicate the vision for moving to an S/4-centric application landscape. And this is for all lines of business in all 25 industries.
“Our customers have simple questions. ‘Which solution should I use? What is the cost? How does it integrate? How do I get there? What is the cost of migration?’ The one common denominator is: ‘give us more guidance and fewer choices’.”
“It is wrong to say you have to start at the core [with S/4] and go to the edge [to applications such as HR system SuccessFactors],” he said. “That just adds to the confusion. The roadmaps will cover everything, end to end.”
At the time of SAP’s Q3 2016 results in October, Rob Enslin, president of global customer operations, said there were 350 live S/4 Hana customers worldwide, with 1,400 projects in play, and 4,100 customers signed up.
“When you look at the live customers in S/4, it is particularly pleasing that, out of the customers that are doing projects right now, more than 50% of them are full scope. In other words, with the 1511 release of manufacturing and the full ERP scope, most of these customers are now actually implementing full ERP scope for S/4”.
But how many of those S/4 customers are on the cloud, supposedly the big picture future of enterprise IT?
At the time, an SAP spokesperson confirmed to Computer Weekly that the majority of S/4 is on premise. “The majority of on-premise customers are implementing full scope as opposed to finance only. We see a significant acceleration in the cloud, both private and public.”
Read more about S/4 Hana
- On the opening day of Connect, the 2016 SAP UK & Ireland User Group conference in Birmingham, it was revealed that 5% of customers are using S/4 Hana, and 12% have not heard of the ERP system.
- November 2015: SAP releases new version of S/4 Hana that adds manufacturing functions, including inventory; plus, new mobile services for Fiori based on the Hana Cloud Platform.
- In a panel at the 2016 SAP Sapphire conference, early adopters shared ideas about how S/4 Hana forms the core of their digital business transformation.
SAP’s full year 2016 results were disclosed last week. They showed 2016 cloud revenues of €2.99bn, 14% of its overall revenue of $22.06bn, which represents 3% more cloud revenue, as an overall proportion, than in 2015.
During the analyst earnings call, transcribed by website SeekingAlpha, SAP senior leaders were keen to address the theme of S/4 Hana’s public cloud deployment.
“On S/4 Hana in the public, multi-tenant cloud, we will feature this business prominently at our investor day on 9 February,” said Enslin. “We have a leader named Darren Roos, who is running this for us on an end-to-end basis: think of it as a division going to market with S/4 Hana public cloud multitenant.
“What you’re going to find with those customers that have signed up for S/4 public cloud is that they are really cool; they do some innovative things and we’re doing really innovative things with them.”
There are now over 550 S/4 customers that are now “productive across not only financials but logistics”, with projects around the 2,500 mark.
“While the beginning of the cloud was clearly driven by individual line-of-business solutions, we now see it’s a time where ERP moves to the cloud,” said Bernd Leukert, director for products and innovation at SAP.
“And if you compare the modern S/4 public cloud solution with NetSuite, I think many people forget that NetSuite is on the market for more than a decade. The response time with our leading platform of Hana outpaces every transaction in NetSuite.”
It would seem that SAP is, at the start of 2017, stepping up its response to customer confusion about what is becoming available and when, on Hana and in the cloud, and to financial analyst pressure on broadening and speeding up its cloud applications offer.