RISE with SAP - a change management program for customers and for SAP

It has been just under two years since SAP launched its RISE with SAP program, a package aimed at getting more of its on premise customers to S/4HANA in the cloud. As noted earlier this week in a customer case study, RISE with SAP is clearly an evolving project for the vendor - it is clearly committed, but is having to learn and adapt too. 

And that’s no bad thing, but it does mean observers, customers and partners need to keep pace with how it is evolving. It appears that in recent months SAP has fine tuned what the go-to-market reality is of RISE with SAP - one where it manages the technical cloud estate and offers consulting services to its customers, but also requires input from partners to manage business change/process optimization, as well as some heavy lifting from customers. 

It’s not the ‘one stop shop’ or ‘hand it over to SAP to do everything’ contract that some originally thought. 

Having heard from an early customer about their experience going for RISE with SAP, I was also keen to speak to SAP itself and the UK & Ireland User Group (UKISUG), at the UKISUG event in Birmingham, England this week.

One thing that we do know is that SAP already has 2,400 customers opting for RISE, over 1,000 more than it had this time last year - so there is momentum. And that offering certainly feels more tangible than it did 12 months ago, when we were questioning how long it would last. 

Speaking with Michiel Verhoeven, SAP’s UK&I Managing Director, he said that the reception to RISE depends very much on who you are talking to at a buying organization. For the CEO, or perhaps CFO, Verhoeven explained: 

With RISE it’s very interesting how I see people respond differently. If you ask the CEO of a company, they don’t care about RISE, right? They just care about a relationship with accountability, being outcome focused, a service level I can count on, new skills and capabilities. Fundamentally, that’s all they hear. 

Whether you use S/4HANA or RISE, that’s all they care about because they want customer experience, or sustainability improvements. 

However, when speaking with CIOs or other technology leaders, the response can be somewhat frostier. He added: 

But if you ask IT people, the layer down, they get very defensive. For good reason. Because they think you’re taking work away. Or they say ‘there’s no way that you can do better, what we’ve done for many years in our company with your products’. And the strange thing is we can do it better, and we have better access to skills globally, as opposed to just locally. It’s all about education. 

This is something that we’ve heard previously too. Handing over both the technical management piece and the business change management piece, as is intended with RISE, can lead to technology leaders questioning what that means for their own role. Adapting to higher value work is clearly the answer for these leaders, but that’s not always easy to communicate. 

The skills element is one attractive feature for going with SAP - companies are competing for a limited number of people, at high cost. And as we have seen in the cloud market, these vendors can attract the talent that most end users cannot. But what’s interesting too is that SAP is not pitching this as a ‘cheaper’ alternative to running SAP environments yourself - quite the opposite. 

Verhoeven was keen to point out that RISE is about securing innovation. He said: 

Some people say, I’ve just put my SAP estate on a hyperscaler, so why would I now make it RISE? You can maintain your own estate, no problem. But if you want the upgradability with BTP (Business Technology Platform) and it runs on RISE, it’s a whole lot easier to do it through us directly. 

That’s not a cost value proposition, that’s a time to innovation, time to change proposition. But for IT people that’s hard to justify because they’re typically managed on budgets that are constant and need to be reduced. As opposed to: you do a better job, we give you more money. 

That puts a strain on us to say ‘RISE is a TCO value proposition’. But it isn’t. It almost never is.

Some customers get it, Verhoeven added, citing Manchester Airport Group and Inchgate. He said: 

They’re very clear they don’t want to do it in-house anymore. Even though they did it. They’re prepared to tell their people ‘you need to change, you need to upskill’. That’s not an easy message, but it takes a bit of leadership. Those are the best customers for us to go with first. 

When the CIO wants to drive change as a business partner to the CFO or CEO or head of supply chain, that’s when it works. 

It’s all change at SAP

The customer that spoke about RISE earlier in the week noted that SAP has gone from being a software provider to a service provider, which has required a significant amount of change on the vendor’s part. Some of this is still ongoing, clearly, but it’s helpful that Verhoeven recognizes this too. He said: 

It’s a change management programme for both the customer and SAP. We, as SAP, need to be pretty humble and not just assert we will be excellent in everything we promise. And commit to continuous improvement. We have had issues with customers - how do you deal with it? How do you communicate? How do you take ownership and accountability? How you jointly solve it is much more important now than anytime before. 

But judging by Verhoeven’s comments, SAP seems to understand the significance of this culture change. He added: 

In the UK we had more than 1,500 inquiries on support - so trouble tickets. We analyzed those 1,500 looking at how many of them were related to real SAP product issues - less than 50. Okay, do you feel good now? Or do you say I still need to fix 1,450 with equal accountability? 

The answer is you cannot think that only 50 are really ours with, the others are the customer’s or the partner’s. We need to help them fix those 1,500. That’s a big culture change. 

The User Group’s perspective

I also got the opportunity to sit down with Paul Cooper, Chairman of the UKISUG, to discuss his thoughts on RISE and the developments in that area. My colleague Jon Reed wrote a broader piece about what the User Group is seeing in terms of SAP trends, which is well worth a read too. 

Firstly, Cooper was keen to highlight the drivers behind customers’ move to S/4HANA in the cloud, which he said isn’t by and large being motivated by the end of ECC support in 2027 - but rather changing operational needs, across a number of fronts. Cooper said: 

One of the things that we have picked up from people is the reappraising where they were, what happened and all the strange things that went on in the two and a half years during COVID-19 - needing to readdress some business process. 

A lot of people’s business models have changed, particularly some of the manufacturing buyers, and retail customers. I was talking to one of the members yesterday, who was talking about how they've always done deliveries from a depot and now they’re thinking about bringing that one step closer to the customer, by doing it from their stores. 

The accessibility to solutions and automation is more there in S/4HANA. If you think about the classic on-premise SAP, it’s effectively software that was written pre-the .com boom of the late 1990s, 2000s. So

There is a need to refresh that. I think we are also seeing that BTP is allowing people to innovate without touching ERP at the moment. So I wouldn’t put my finger on one thing that’s causing that, but you only have to talk to people and everyone has different reasons for getting there. 

It does seem to be that the robust business case is there, but there does seem to be a lot of variability. 

But Cooper agreed that the RISE with SAP program buyers are faced with now is not what they thought they were getting back in early 2021 - and that’s not necessarily a bad thing. Cooper noted that SAP customers have often had unique requirements and the versatility of RISE has resulted in a more evolved package. He said: 

I think at the start people thought RISE was ‘give me a piece of paper and that will be RISE’. But over the last 20 or so months it’s become clear that it’s quite bespoke to the individual organization. It’s not a one size fits all scenario. 

You need to engage with your partner, with SAP, and you need to allow them a bit of access and to understand what you do. Which I think it’s an interesting one, because classically you think of the large software vendors as ‘one size fits all’.

What you’re seeing with RISE is being a little bit more bespoke with the offering and how it gets deployed. Most people think RISE is getting people to S/4, but we’ve got RISE customers that have used it to start a wider cloud journey. 

I think it’s evolved. But also, I think I’m not sure they fully understood what they were leaping into as well at that point. I guess the thing I said last year not long after the launch was that it would be interesting to see if they sustain their interest in it into the future. And we have still seen a lot of marketing weight behind it this year. They’ve actually sustained the messaging and grown and refined the product. 

My take

The UKISUG event is probably one of the most valuable of the year when it comes to understanding the reality of what’s happening on the ground for SAP buyers. And to Verhoeven and SAP’s credit, they are actively involved with the event. I was told that Verhoeven spent many hours with SAP customers during his time in Birmingham, which can’t be said for all UK & Ireland MD’s of SAP’s past. It’s still early days for RISE, so we look forward to seeing how the program evolves into 2023 and getting some more solid use cases under out belt. Customer stories will be key to all of this.