The trouble with a virtual event is you can't roam the hallways and pick up the side conversations in the same way as when you're there in person. One of the big talking points at this year's ASUGForward, the annual event of the Americas' SAP Users' Group (ASUG) surely must be RISE with SAP, the program launched earlier this year to help customers along the path to digital transformation and the vendor's cloud ERP platform, SAP S/4HANA Cloud. I dropped in on a few sessions yesterday during the event's opening day to see what I could glean, as a necessary counterpoint to what I've heard over the past few weeks at SAP's own SAPPHIRE event.
One thing I've noticed as I've followed the RISE story over the past few months has been how it has evolved. Initially, the focus was on purely contractual issues, probably because of SAP's characterization of RISE as giving the customer 'one handshake' by bundling its license fees along with the chosen hyperscaler's hosting fees. That created confusion over the involvement of SIs, who it turned out will still bill separately for their services in any RISE engagement. The ensuing debate was an unfortunate distraction from the core message of RISE, which is around helping customers transform their operations as they move to the cloud, as signaled by the accompanying acquisition of business process intelligence vendor Signavio.
Fortunately, that messaging had become much cleaner by the time SAPPHIRE opened, with RISE now firmly positioned as 'business transformation as a service'. To my mind, the emphasis on customer outcomes is a refreshing change from the kind of cloud migration programs we've seen from some in the industry, who barely disguise their haste to book new license sales and drive up recurring revenue streams. SAP wants that too, of course, but it recognizes these are not its customers' priorities.
Practical realities of business transformation
So to ASUGForward, where talk of RISE seems firmly focused on that business transformation message — but couched in the practical realities and ongoing experiences these enterprises find themselves in today. The move to the cloud is seen as inevitable, but it's typically a multi-phase process spread over multiple fronts and a series of years — and it's being pursued, not for its own sake, but because businesses need to adapt and transform. Front of mind is the adoption of more standardized businesses processes that lend themselves to automation. Ron Gilson, CIO of Wisconsin-based sausage maker Johnsonville and an ASUG board member, says that SAP's messaging is in line with those priorities:
SAP is putting a lot of emphasis on standard business process and automation with SAP RISE, the Business Technology Platform, RPA, all the work we're doing there, and then obviously Signavio, the business process intelligence. I think they're the right investments — they're hitting on all of the key priorities for customers.
But SAP is just one part of the technology landscape at a business like Johnsonville, and the move to more standardized processes and flexible automation is being pursued on many fronts, with a large portfolio of SaaS applications spearheading the move to the cloud. Much of the challenge is working out how to co-ordinate the SAP migration within that broader landscape. He elaborates:
Johnsonville, I think, is like many SAP customers. We're primarily on-prem for our core ERP, and augment that with a ton of SaaS solutions, whether they be SAP or non-SAP. I think like many SAP customers, we're still trying to figure out our long-term roadmap for our cloud strategy. The one thing I do know is that the proliferation of all the SaaS solutions, coupled with this transitional period, as we look at moving workloads from traditional on-prem to hyperscalers, it's going to create a significant amount of additional complexity in our organization ...
Cloud is probably going to be where the vast majority of our workload ends up. But during the transition period, we are going to have to make sure that, as we plan these migrations and we plan our roadmap, that we're taking into consideration all of the skills and technology that we're going to have around security, integration, and multiple technology stacks.
The cloud ERP journey at AES
One organization that has already begun to undertake that journey is power utility company AES. Alejandro Reyes, Digital Business Partner for Global Operations at the near-$10 billion-a-year revenue business, spoke about its cloud ERP journey and use of business process intelligence tools. Here again, the reality on the ground shows that each company's story is different, complex and often extends over many years. AES began its cloud journey in 2015 with the implementation of a cloud-hosted financial consolidation system, SAP BPC. But there are some systems that will never move to the cloud, because they are closely linked to operational assets and therefore regulatory requirements mean they have to stay on-premise. "But everything else, we try to put it into the cloud," says Reyes.
Consolidation of systems has been one of the main benefits of successive upgrades. That process started in 2017 with a two-step migration of one of the organization's largest ECC 6.0 systems, first from an Oracle database to Business Suite running on HANA, and then from there to S/4 HANA v1610. Three years later, in 2020, an update to S/4 HANA v1909 saw the next phase begin. Already well under way, by 2022 a total of seven separate ERP systems — five SAP and two Oracle — will have been consolidated into this one system running on the SAP-hosted HANA Enterprise Cloud, supporting 5,000 users. Further consolidation of ancillary servers as part of the v1909 upgrade has reduced ongoing maintenance costs by more than $1.3 million annually.
There was little opportunity for business process transformation in the 2017 migration but the 2020 update was a different matter. Various processes have been identified for improvement using SAP tools such as Spotlight and MaxAttention, while there's scope to apply machine learning and RPA, with the first use cases being automating financial processes to speed the monthly close, and introducing invoice matching. Meanwhile improvements to the scope of Fiori have enabled the development of new applications for finance and asset management. Along with these advances in automation, AES is also looking to automate regression testing using Tricentis testing tools, so that its IT teams can keep up with the pace of new feature introductions in the cloud environment. Reyes says:
We want to continue to take advantage of what SAP is developing. For us, it's important that we have an IT team that is enabled to really quickly implement these changes.
Next on the roadmap are moves to standardize integrations and take advantage of buying and invoicing modules in Ariba. A big move next year will be a migration to SAP CIS (Customer Information System) on HANA, using RISE.
Overall, the consensus seems to be that RISE is a welcome contribution, but as these stories illustrate, the scope of change that SAP customers have to contend with is far broader. There are several motions converging at the same time — consolidation of previously separate ERP instances, standardization of business processes to allow for easier and more flexible automation, the integration of a plethora of ancillary SaaS applications, at the same time as adjusting to the more rapid feature cadence of cloud and SaaS offerings. Some extra support on business process transformation is welcome, but it makes little impact on the scale of change that SAP customers have to contend with.