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SAP C/4HANA, SAP intelligent enterprise top trends in 2018

The top five SAP trends from 2018 start with SAP C/4HANA and end with the intelligent enterprise.

If the end of the year is a time to reflect on the year's events, then the intelligent enterprise would get top billing for SAP.

Take the release of SAP C/4HANA, a customer experience platform that evolved from the SAP Hybris CRM platform and dominated SAP news in 2018. The platform represents SAP's initiative to redefine CRM itself and compete with Salesforce. It joins the SAP S/4HANA next-generation ERP as a core digital pillar of the intelligent enterprise, SAP's vision to use its SAP Cloud Platform to put analytics at the fingertips of any decision-maker.

Here's a look at five big SAP trends from 2018. Although the trends have been categorized as broad topics, many of them are interrelated and often involve highly integrated SAP technologies.

SAP C/4HANA ready to take on legacy CRM

The debut of SAP C/4HANA at Sapphire in June was one of the biggest newsmakers for SAP since the release of S/4HANA in 2015. SAP C/4HANA is an amalgamation of SAP Hybris, a CRM platform the company acquired in 2013, and other applications, such as CallidusCloud, which specializes in sales performance management and configure price quote software and was acquired by SAP in January.

The intent behind SAP C/4HANA was to introduce a customer experience (CX) platform that the company hoped could go toe to toe with CRM heavyweight Salesforce. SAP said its approach was not to take on the CRM market directly as much as it was to redefine the market by introducing features that use machine learning into the platform.

We have a new idea, a better idea. And the better idea always wins.
Bill McDermottCEO, SAP

It took a while for SAP to assemble all the pieces that comprise SAP C/4HANA, said Bill McDermott, SAP CEO, at the Sapphire conference, but he expressed confidence that the platform can take on legacy CRM.

"We have a new idea, a better idea," McDermott said during a press conference at SAP's flagship conference. "And the better idea always wins."

McDermott suggested that the company was going to focus only on tuck-in acquisitions going forward, but it turned out that SAP was not done with big acquisitions. In October, SAP announced plans to acquire survey analytics company Qualtrics for $8 billion. The Qualtrics CX management and voice-of-customer technology are expected to be integrated into SAP C/4HANA, providing deeper levels of customer sentiment and internal employee sentiment analytics.

S/4HANA momentum -- or lack thereof

The migration to S/4HANA -- or the reluctance to do so -- remained top of mind for most SAP organizations in 2018. While the move is real and inevitable, according to SAP, it remains a daunting proposition for customers. The majority of SAP customers have not taken steps to make the S/4HANA journey yet, but it's clear that they should think about the process and deployment options.

A key step for implementing S/4HANA involves building a business case, and, according to experts, it helps to have real-world examples that bolster such a project. In one such example from 2018, the CIO at global bakery King's Hawaiian explained how a move to S/4HANA was central to its digital transformation. Although it was a greenfield implementation rather than a strict SAP ECC to S/4HANA migration, the lessons shared by King's Hawaiian could be useful for any CIO planning an S/4HANA move.

SAP Cloud Platform integration

SAP continued its efforts to position SAP Cloud Platform as the underpinning of the SAP intelligent enterprise. SAP's vision centers around a digital core of S/4HANA and C/4HANA. The two pillars are bolstered by other cloud-based applications such as SAP Ariba for procurement, SAP SuccessFactors for workforce management, and Concur for travel and expense reporting.

But the SAP intelligent enterprise isn't confined to SAP cloud applications alone. SAP focused on a message of openness in 2018, suggesting that all kinds of applications and systems -- SAP and non-SAP -- can be integrated into the intelligent enterprise.

Another important move was the release of the SAP Cloud Platform ABAP Environment in October, which enables developers to use their advanced business application programming skills to move existing SAP on-premises applications to the cloud or to develop new ABAP-based cloud apps.

 The main question going forward is whether the SAP Cloud Platform and its integration tools can pull it off. Integration of the scale and complexity that the SAP intelligent enterprise demands is no easy task.

SAP addresses the indirect access issue

SAP's struggle to clarify indirect licensing access was another major trend in 2018. Many industry observers acknowledged that the indirect access issue was an industry-wide problem -- not just one that beset SAP -- and that the integration of systems could accelerate the problems.

SAP attempted to address the issue in April by announcing a new usage-based licensing model. The model charges customers based on the number of documents they create that pass through an SAP system rather than using the traditional user-based model. Although it remains to be seen whether the new licensing model will work, some observers were satisfied that SAP had addressed the problem.

"SAP's leaders have finally realized that this was a mis-selling scandal more than it was a licensing problem and have acted accordingly," said Duncan Jones, vice president and principal analyst at Forrester Research.

Experts also encourage SAP customers to take control of the licensing issues by better understanding their SAP contracts and the landscapes in which they operate. Both parties should work together to resolve any licensing disputes.

Building the SAP intelligent enterprise

The concept of the SAP intelligent enterprise appeared in virtually every product announcement or initiative in 2018. SAP sees this intelligent enterprise as a system of interconnected applications that can improve existing business processes and enable new ones.

At SAP TechEd in October, SAP CTO Bjorn Goerke explained how the intelligent enterprise is built on core digital systems, like SAP S/4HANA, and connected to other applications via the SAP Cloud Platform. The whole system is infused with technology, like IoT, machine learning, and other forms of AI, through SAP Leonardo, SAP's next-generation technology development platform.

There are many examples of how SAP companies are already building the intelligent enterprise, but experts say there are significant obstacles to making it happen for most SAP customers. For one, SAP developers and technology partners will need to gain new skills and change traditional ways of thinking to build the intelligent enterprise.

This was last published in January 2019

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