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SAP debuted a new subscription service on Wednesday that packages managed cloud infrastructure and managed services all into one contract. The unveiling happened at a live, virtual event, headlined by SAP CEO Christian Klein, who also announced the planned acquisition of process mining company Signavio and the recent integration of Microsoft Teams into SAP products.
The goal of Rise with SAP is to help SAP customers who have struggled to migrate from on-premises, legacy ERP systems to the modern, cloud-based SAP S/4HANA.
For SAP, this is a critical step to achieving the much bigger and more consequential goal of getting its customers to become an intelligent enterprise, which uses cloud ERP and next-generation technology to become more flexible, resilient and data-driven.
But even just migrating to S/4HANA is a complex, time-consuming and difficult undertaking. Rise with SAP, an integrated product offering Klein called "business transformation as a service," is meant to simplify, focus and support the transformation to the intelligent enterprise.
The question for most business leaders is not why they would need to become an intelligent enterprise, Klein said, but how to get there.
Indeed, customer input was vital to understanding what customers need to make the transformation, he said.
"Before we designed the new offering, it was key for us to listen to our customers with empathy to exactly understand their challenges and what they need," Klein said. "The key challenge for many enterprises is the how -- how to holistically transform, especially when you are still successful in the market."
What's new is not the products themselves, but how they are delivered. Rise with SAP is a single subscription service that allows customers to build an intelligent enterprise in the way that best suits their needs and requirements, according to SAP. That includes business process intelligence (BPI), any cloud infrastructure the customer chooses, access to the SAP Business Intelligence Platform development environment, access to the SAP Business Network, which includes the SAP Ariba Network and other SAP SaaS applications, and SAP S/4HANA.
As part of Rise with SAP, SAP takes on responsibility for the contracts, service level agreements, operations and support, and becomes a single point of contact for the customer. The investment in the subscription service could translate into a significant cost savings: Klein said SAP customers will see a reduced total cost of ownership of up to 20%.
The offering is comprised of three components, or steps, on how companies can achieve their transformation:
- Business process redesign, which enables customers to continually analyze their business processes, benchmark them against industry standards and adapt them to new business requirements as needed. In order to facilitate this process analysis, SAP has acquired Signavio, a process mining and intelligence vendor in Berlin.
- Technical migration enablement, which includes embedded services from SAP and its partners to improve application landscapes, such as eliminating modifications and custom code, as well as harmonizing and governing data. This will allow customers to run systems on one data layer.
- Building the intelligent enterprise, which uses the SAP Business Technology Platform as the foundation for transformation. This enables customers to run integrated business processes that share one semantic data model across the enterprise.
Enhanced collaboration is also a part of the package with the integration of Microsoft Teams into SAP applications, which will lead to a "frictionless enterprise" and higher end-user productivity as employees collaborate without having to move between applications, Klein said.
Simplicity at last for SAP customers
Rise with SAP has drawn general positive reviews from experts, who said it provides customers with a concrete path to S/4HANA and the intelligent enterprise.
Joshua Greenbaum, principal with Enterprise Applications Consulting, said SAP appears to have really listened to its customers and acknowledged that each has its own version of the intelligent enterprise and its own method to implement it.
Rise with SAP shows that SAP is endeavoring to partner with its customers rather than dictating terms, he said. This is most needed by SAP's large customer base that is still largely running on-premises legacy SAP ERP systems.
"The real prize with Rise with SAP is migrating those tens of thousands of ERP systems which are very large enterprises and very complex systems, so it's really hard for big companies to make these wholesale migrations," Greenbaum said. "There's a lot of customer-centricity and customer empathy involved in this, it's a good package because it puts it all together -- and simplifying the engagement is a huge win for customers."
SAP had no choice but to listen to its customers, and Rise with SAP provides them with a good path forward and access to valuable products in one package, said Mickey North Rizza, IDC program vice president for enterprise applications and digital commerce.
"I like it because it gives one simple program for an organization to go from R/3 or ECC to S/4HANA, and with it you're going to get the platform that integrates everything regardless of what other applications you have, so your portfolio comes together," Rizza said. "On top of it, you get tied into the SAP Business Network, so customers really can't go wrong."
Signavio will help deal with complex customizations
SAP customers are typically large organizations with highly customized and complex systems that have slowed the movement to S/4HANA and subsequently the intelligent enterprise, she said.
"Their customers have 10 to 20,000 different customizations and they can't figure out if they still need those or not, they might use 20% of them, but they still don't understand it," Rizza said. "So for customers, the message of complexity has gone to simplicity -- how do we do it and how are you going to get us there. It's going to be a lot of hard work as it goes forward, but it's a really good path for them."
The simplicity message also resonated with Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers.
The process design step, which will be helped along by the Signavio acquisition, should be particularly valuable as customers need to justify a move to S/4HANA, he said. Terms of the Signavio deal were not disclosed.
"I liked the message of offering everything under a single contract and allowing the users to go piecemeal," Jakovljevic said. "It's also good that they are offering the process analysis part for free, which can even be used as a proof of concept for why they need to migrate to S/4HANA at all, for example, by showing how much you can improve certain processes and efficiency via process simulation."
How SAP customers deal with their complex customizations before they undergo a transition to the intelligent enterprise will be the key to the success of Rise with SAP, Greenbaum said.
"The big prize on the table for existing customers is what they can do with their customizations, and how they bring forward the competitive advantage that they built into ECC," he said. "A lot of Rise engagements are going to be about parsing that issue. They have these customizations and special things in ECC that are not available standards in S/4HANA yet, so what do they do? These are big, juicy, important strategic consulting engagements that will piggyback on top of the fundamental platform infrastructure, technology [and] components of Rise."