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UKISUG 2018: Upswing for S/4 Hana, C/4 Hana unknown to 39%

UK and Ireland SAP User Group discloses research showing steady rise in S/4 Hana implementation, but C/4 Hana is still an unknown quantity

On the opening day of its annual Connect conference in Birmingham, the UK and Ireland SAP User Group (UKISUG) unveiled research that showed a slow and steady increase in S/4 Hana adoption, but also revealed C/4 Hana to be comparatively neglected – unknown to nearly 40% of the customers surveyed.

The annual user group survey asked people from 345 organisations about the adoption of recent generation SAP technologies.

A total of 12% said they were using SAP’s full enterprise resource planning (ERP) S/4 Hana system, compared with 5% in 2017.

User group chairman Paul Cooper said in his keynote address to the group, which is celebrating its 30th anniversary: “Back in 2016, only 39% of you were using or planning to use S/4, last year the figure went up to 58%, and now we are at 70%. What a difference two years makes.

“So why the changes in numbers? Firstly, the solution has clearly been built out and matured. But secondly, SAP has worked with us to provide education on the journey to S/4, the benefits of the solution, and the longer term roadmap. All these factors have clearly made most organisations feel more comfortable about the move.”

Adaire Fox-Martin, global customer operations and executive board member at SAP, used part of her keynote address to talk about the supplier’s Move programme, which is focused on moving ECC6 customers to S/4 Hana.

“The movement of our installed base to the S/4 world is a very significant priority and topic in our boardroom,” said Fox-Martin. “Move is the focus of that. We recognise there are ‘why’ and ‘how’ questions we need to help with. What is the cost and change management required?

“We have to help people understand at a macro level regarding their industry what we have today in S/4 functionality and what will come in the future. We need to convey what functionality will be built into the core of S/4.

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“And then there is the micro, per company, view. We have had a large number of companies that have moved, but there are customers that need to understand the ‘how’ with a granular degree of specificity to them. They all have a unique starting position.

“So, under the auspices of Move, of which I am the personal sponsor on the board, we have looked at ways of managing the cost, to support you in the creation of the business case, and help you manage the time to migrate.”

The Connect conference takes place on the day that SAP announced its acquisition of Qualtrics for $8bn. Qualtrics is a Utah-based “experience management” company that seems to fit SAP’s turn to the customer, so featured prominently at this year’s Sapphire conference in Orlando, under the banner C/4 Hana.

So, how many of the user group’s respondents had heard of C/4 Hana? Almost 40% had never heard of it, and only 5% said they were “very aware”.

Jens Amail, SAP’s newly appointed UK and Ireland managing director, said on stage: “We are very proud of our acquisitions here, but we believe the way to get the most value out of these for our customers lies in the combination of best of breed and integration [with existing SAP technology].

“I have to admit, looking at the results of your survey [regarding C4], we can do better. The statistics are clearly not where we want them to be.”

Indirect licensing

The topic of indirect licensing is still at the forefront of SAP customers’ minds – at least as represented by the user group.

Cooper said: “It wouldn’t be a user group conference without us talking about licensing. It’s not going away – but we are making progress.

“In April this year, SAP announced a new licensing model for indirect access. We welcomed the new model and believe it will make it easier and more transparent for new customers to pay for SAP licences.

“However, we noted that SAP needed to provide further reassurances to existing customers. Most of us in this room have been SAP customers for many years and we need to know that we won’t be asked to pay more for indirect use cases and implementations that were undertaken in good faith prior to the new model.”

SAP did say it would show greater customer empathy. Brian Duffy, SAP Emea north president, has told the user group board that if a member has a problem around indirect licensing, he will personally make sure it goes away.

“These reassurances are genuinely great, but at this stage we need specifics. We need to know how empathy translates in commercial situations.”

Earlier in his talk, Cooper said: “As the technology industry has grown and the individual vendors have got bigger, most have flexed their muscles more. It’s because of this that user groups are so important.

“Not only can we influence product and strategic direction, but we can also keep vendors in check and collectively have a powerful voice on a range of issues.

“Vendors that get this and proactively engage user groups, even if they don’t always like what they hear, will be more successful in the long term. SAP certainly understands this and I think it is fair to say that we, not just in the UK but globally, probably have the most successful and mature partnership with SAP of any vendor and user group community in the tech industry.”

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