Tom Seal (Senior Program Director, European Services)

Concerns around migration to S/4HANA include the complexity of the project and competing business priorities. Questions about the value of S/4HANA relate to the incremental value customers see in it over their current ERP, which in many cases they are satisfied with and which has a predicable cost.

Overall, customer’s concerns lean more towards the migration journey than the long-term value of S/4HANA as a future ERP platform.

IDC research conducted in March 2020 showed that only 48% of SAP customers were considering migrating to S/4 HANA. Reasons for not considering the move are related to both the cost and risks of the migration journey and uncertainty regarding the value they would ultimately derive from S/4HANA.

SAP S/4HANA Introduces RISE to Help with Migration

On the January 27, 2021, SAP announced RISE, a service to help its customers get S/4HANA in the cloud. RISE is described by SAP as providing business-transformation-as-a-service.

The service brings together all the elements required to move from any version of SAP or non-SAP environments to S/4HANA and makes it available for a recurring fee without upfront license or hardware costs.

The recurring fee can grow according to number of users and other parameters, and the duration will vary according to the complexity of the transition and the pace at which they want to execute it. The elements brought together under the RISE banner include migration tools, cloud services, and subscriptions to help customers on their transformation journey.

The scope of the service spans an array of tools that help customers assess their current system, scope their future ERP, and undertake the technical migration from old to new. The promise is that this service will be applicable to all organisations, regardless of their starting point, providing a single toolset to customers with wide ranging needs.

In terms of the tools that will help customers assess their current platform and processes and plan their migration, two key tools are highlighted:

  • SAP Business Process Intelligence Discovery Reports: This tool will help organisations assess the ways in which the current ERP is used in practice.
  • Custom Code Analyser, Readiness Check, Learning Hub: A set of analysis tools to assess the level of customisation and how much can and should be carried forward into the organisation’s future ERP.

SAP CEO Christian Klein mentioned standardisation several times when explaining the role of RISE, and these assessment tools in particular. SAP is hoping that these tools will help customers undertake a stock take of their business processes and then reduce their reliance on customisations — smoothing the road to S/4HANA.

Using Signavio as an Optimisation Tool

SAP’s acquisition of Signavio, announced alongside RISE, is also relevant here. Signavio offers a suite of process optimisation tools, including tools specifically aimed at supporting SAP migrations. The Signavio tools are very much orientated towards the reengineering of processes to better capitalise on intelligence and automation.

These tools and the Signavio acquisition could play an important role in convincing customers that there is business value in moving to a new set of processes supported by more modern technology. Demonstrating this crucial point hasn’t been easy for SAP so far, but Signavio could make a difference here.

The Benefits of S/4HANA RISE

RISE also encompasses all of the SAP components required to construct the customer’s future ERP, such as S/4HANA itself in its various editions, SAP Business Technology Platform, and a Business Networks starter package. None of these components are new, but the way they are to be sold is.

The licensing costs are wrapped into the RISE fee, and the promise is that, overall, the cost of transformation will be lower, and upfront costs in particular will be reduced.

RISE sounds compelling in its ability to help clients with their S/4HANA journey. This includes assessing their readiness to make the move to S/4HANA, undertaking the migration, and driving standardisation along the way. There are still many customers that will have questions about the destination — i.e., the business case.

Even if RISE gives a better understanding of the costs and risks of the journey, many customers can’t yet put a figure on the business benefits that S/4HANA will unlock. This remains the biggest unknown, and SAP’s most important challenge when it comes to S/4HANA in IDC’s opinion.

So, having eased the journey to S/4HANA with RISE, SAP must now also accelerate efforts to help customers build a business case of their future ERP platform. SAP will play a key role in working with current S/4HANA customers to quantify the value of digital transformation to make current S/4HANA resisters take the leap.

 

If you want to learn more about this topic or have any questions, please contact Tom Seal, or head over to https://uk.idc.com and drop your details in the form on the top right.

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