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German software giant SAP said its Rise cloud transformation programme is gaining momentum in Asia-Pacific as organisations look to speed up their move to cloud-based enterprise resource planning (ERP) applications, according to a senior company executive.
Speaking at a regional media briefing on the sidelines of this year’s virtual Sapphire Now conference, Scott Russell, executive board member of SAP, said since Rise with SAP was launched in January 2021, SAP has drawn over 100 customers to the programme, including Thai Medical Glove and Ra Chem Pharma in Thailand.
Russell added that about 80% of SAP customers on the programme are small and medium-sized enterprises (SMEs), adding that “Asia is going to lead the way” with Rise, which he said was not just about helping organisations move their workloads to cloud.
Noting that cloud migration is the easy part, Russell said organisations that move to cloud will require a flexible platform that enables them to understand which processes drive the greatest value, and to identify gaps and design new capabilities on a flexible, scalable architecture.
“That’s what Rise with SAP brings – we’re bullish and we’ve received great feedback so far in the market, and we expect to continue that as we’ve got a modular breadth of capability.
“We look forward to bringing that to life with companies across Singapore, Thailand, Malaysia, India, Vietnam and the entire region, because I think Asian companies will continue to expect to transform and lead the world going forward,” said the former president of SAP Asia-Pacific and Japan.
One of the key announcements at this year’s Sapphire Now was the launch of modular cloud ERP, which extends SAP’s S/4 Hana core ERP offering with more software modules in different domains and lines of business.
These include procurement, human experience management, analytics and governance, with more modules to be added later. Thomas Saueressig, an SAP executive board member who leads the company’s product engineering efforts, said the modular architecture was designed in response to customers who want an agile way of embracing innovation quickly.
“The work we did in the last 18 to 24 months was really to invest in all integrations,” said Saueressig. “We can now deliver a full modular cloud ERP, including industry-specific innovations from the Industry Cloud which we deliver together with our customers and partners.”
Russell noted that the modular capabilities will enable companies to chart their own transformation pathways with a single contract and subscription service, underpinned by a common data and security model.
It is uncertain, though, if SAP’s modular cloud ERP offerings will nudge more SAP customers in Asia-Pacific to adopt S/4 Hana. According to a 2020 IDC study, these enterprises are divided into three groups.
“The first group, also the majority, are onboard with SAP’s vision of creating an intelligent enterprise with S/4 Hana at the core. The second group plans to adopt a wait-and-watch strategy. Finally, almost a quarter of respondents are evaluating alternatives to S/4 Hana,” said Rijo George Thomas, senior market analyst for services and cloud research at IDC Asia-Pacific.
Ilona Hansen, Gartner’s vice-resident and analyst for customer and partner relationship management, said SAP’s modular ERP brand might cause confusion.
She said Gartner assumed that the term “modular” should express what it has defined as “composability”, which is manifested in composable ERP systems that provide administrative and operational capabilities for an enterprise to keep pace with change.
“It seems that SAP aims to provide higher flexibility to customers by choosing which modules to pick. Under this limited view, it is not really new, as every ERP system is modular and comes in ‘boxes’,” Hansen told Computer Weekly.
Hansen said modular ERP could also be seen from a multi-supplier, hybrid cloud or even multicloud perspective, adding that SAP’s modular ERP seems to be limited to its own offerings.
That said, she noted that SAP was well along the path of delivering true composability under Gartner’s definition, with its business transformation platform and applications. “It remains to be seen if there is more to come from SAP to support their interpretation of modular ERP,” she said, noting that the challenge might be organisational rather than technology modularity.
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