In early 2021, SAP announced its new RISE with SAP offering - a package aimed at getting more of its on premise customers to S/4HANA in the cloud. What RISE with SAP actually is, however, appears to be an evolving program.
Initially pitched as a ‘business transformation as a service’ offering, SAP said that RISE was an opportunity to upgrade to S/4HANA in the cloud and have SAP manage the entire stack, via a hyperscalers of choice - on a subscription basis. The ‘one stop shop’ contract is intended to include SAP Business Technology Platform Cloud credits, as well as an emphasis on process design and remediation, via SAP Signavio.
However, it’s become clearer over the months since its launch that there is certainly also a role for partners and SIs (which initially were concerned that SAP was taking on all the heavy lifting, on its own), and now we understand that a lot of what SAP is offering is a consultative service to help get customers to the cloud.
But behind the scenes, at least with one of SAP’s early customers, it seems that it’s not as clear cut as the marketing materials suggest. Inchcape, a British multinational automotive distribution, retail and services company, was speaking this week at the UK & Ireland SAP User Group Conference, where it shared its early experiences of opting for RISE with SAP.
The journey thus far has been a mixed bag - with Inchcape citing a positive working relationship with SAP, but also a number of teething problems. That’s not to say that it hasn’t resulted in positive outcomes and that Inchcape isn’t still heavily invested in the success of RISE, but it seems that SAP is still ironing out the kinks of what its RISE with SAP offering looks like long term.
And that’s okay. What’s clear from Inchcape’s story is that SAP is heavily invested in making RISE work and is listening and adapting to customer needs. There are still a couple of red flags that I’d argue need addressing, but the discussion presented was a very interesting insight into a programme that has left many people wondering what the reality of what RISE is like on the ground.
For background, Inchcape works with brands that include Audi, BMW, Jaguar and Lexus, and has annual revenues of over £7 billion, with operations in 32 countries.
Approximately two years ago, Inchcape began assessing its SAP estates, which it determined needed a lot of work. It had five instances globally, all of them on premise, and all of them on different versions, with varying levels of enhancement packs. All of them were managed locally by different third parties and ultimately was a very inefficient set-up.
The company is undergoing an extensive transformation agenda, and realized that in order to progress, it needed to modernize its ERP landscape. At the beginning of 2021, whilst it was writing an RFP to go out to market to hyperscalers, SAP announced RISE with SAP - which seemed serendipitous timing.
Speaking at the event this week, Vincent Petit, ERP and Finance Systems IT Director at Inchcape, said:
We thought, hang on a second, that sounds like exactly what we need. So we engaged with SAP and started talking to them to find out how it works. And the way it was sold was that it would be a ‘white glove service’ - that is the word they were using, ‘white glove’. Sign here, SAP does it all for you. We thought that sounded too good to be true, but we thought we’d find out more.
So we started a piece of work with them, assessing our systems, understanding what we need to do, and we decided we would go with it. We signed the contract on the 30th April and started our journey.
Inchcape is still on this journey and as it turns out, this ‘white glove service’ was not the reality on the ground. As already mentioned, Inchcape had a number of core systems that covered LATAM, EMEA, APAC, a separate instance in Belgium, and one for its AutoNexus business. In terms of where is now, Petit explained:
We went live with Belgium, which was our pilot, on 15th November last year. In Easter this year we went live with our EMEA and Group system. Then we decided to accelerate. Our initial contract was taking us through to the end of 2023, but we thought why not go faster.
So we decided to go ahead with APAC and AutoNexus, which went live in September this year. And we've got one left to do, which is LATAM, which touch wood, will go live on the 20th April next year.
Good news on that front. Going live ahead of schedule on such a massive migration project is a testament to the Inchcape and SAP teams. However, it’s worth noting that whilst RISE with SAP is pitched as an S/4HANA in the cloud offering, it seems that the reality is a bit more bespoke than that.
This is because Inchcape decided that S/4HANA was not what it needed right now. Instead, it is using RISE to standardize on systems, migrate to the cloud and adopt HANA as a database. However, the ERP system is still ECC. Petit said:
We have done the ‘IT project’ behind S/4 HANA. There is no doubt that we want to go to S/4 HANA, and I need to start working the business case. But this allows us to get there from a technical point of view. We on all HANA database, all on the cloud, all managed services, and all the same version. And now the next bit is the business transformation piece that comes with S4/HANA.
A pilot customer
Petit repeatedly describes Inchcape as a ‘pilot customer’ for RISE with SAP and he has clearly helped influence and shape the programme since its inception. He noted that a lot of things went wrong throughout the project - but that he also got a lot of attention from SAP, given that the company was an early adopter. He explained:
What went well is huge stakeholder engagement from SAP and from us. One thing that was really brilliant was that from starting the journey to signing the contract, which was the end of January 2021 to the end of April 2021, there was a huge in depth assessment of our SAP ecosystem - and for this there was a lot of help from SAP, they were brilliant.
There were a lot of systems that we weren’t even sure what they were, so we did a huge piece of work to assess this. That cannot be underestimated.
SAP was also keen to be flexible for the customer’s needs. Petit added:
SAP were very good in being flexible in letting us run the project the way we wanted. So they were quite happy to adopt our project management tool, which is JIRA, and to go with our governance process.
We ended up with a very close knit team, which is pretty much one team. We talk to SAP as much as our own team and we sometimes forget who is from which organization, so that went very well. Throughout, SAP and the service team at SAP was very professional, within the limit of the contract.
However, according to Petit, SAP has had to do a lot of learning and adapting too. He said that up until a year and a half ago, SAP was a software provider. But now, Petit added, SAP has essentially positioned itself as an SI. He said:
This is a huge cultural shift. And I think that the organization wasn’t ready for it. The RISE team knew what they were doing, but the rest of the organization wasn’t prepared for this.
There were a lot of silos, many different teams that didn't talk to each other - that was a big problem for us. This project embraces the whole of SAP, but only really the RISE team knew how to interact with the project, so that was a problem. So we spent a lot of time talking to SAP about that.
Petit is quite clear that the white glove service that SAP promised in the early sales engagement was not a reality - and the company has since dropped the terminology, he added. He said:
It is clear that there is quite a lot of involvement from customers still, and potentially partners, who are going to help you do this. I don’t think that was clear for SAP and it certainly wasn’t clear for us.
There was an expectation that it was going to be ‘easy’ and it wasn’t. The roles and responsibilities were certainly not defined at the start.
One example of an issue that Petit highlighted was when the company moved from its on premise licenses to its cloud licenses, Inchcape still received a maintenance bill for its retired on premise systems. He said:
This silo issue - the sundowning of existing licenses — this has been a little bit mind blowing when you think, why is this even a problem?
So I stood here a year ago, having just gone live with Belgium, so was on the subscription model for Belgium…and then in December last year I received a bill for my maintenance for Belgium…for the next year, which still included all the on premise Belgium licenses.
So I thought, hang on, this doesn’t seem quite right. When I questioned that, the answer was ‘well, you never canceled them’.
Excuse me? As soon as I raised this, SAP realized this wasn’t right. But because of the silo issue in SAP, they hadn’t thought that from a customer’s point of view, you’re going from one license type to another from SAP, so it should be seamless. It’s not that simple. This process is a lot easier and a lot better now, so it’s evolved a lot.
Another problem that Inchcape experienced, which again could be put down to the silos within SAP, is that once Petit and his team moved a system to the cloud - that system fell within the remit of SAP’s cloud BAU team. What this meant was that Inchcape wasn’t then able to get the immediate project support that was required. Petit said:
Something that is still a bit of a problem is the fact that…as those systems move to the cloud, that’s it, you’re on the cloud. So you are already within the BAU of the cloud team, which is not part of the project team.
This is causing conflicts. When something needs to be fixed, you have to log a call. But hang on, we are in the middle of a go live, we have a problem and we need help. That’s an issue.
This is slowly getting better, there is more awareness within SAP that the cloud BAU organization needs to appreciate we are in a project situation and need help - we don’t need to be told to log a call.
Equally, Petit wishes more thought had been put into the networking side of things. Inchcape opted for Google Cloud as its hyperscaler, but the need to work on the interfaces and other technicalities wasn’t thought through as well as he had hoped. He said:
This is not something that we necessarily thought about…how complex it was going to be. This needs to start from day one. We need a networking team from day one to be able to come up with the right way of connecting those things that are so important - otherwise there is no project.
Between SAP, Google Cloud and us, we had no idea how this connection was going to work, so we had to work it out as we went along. Please do not underestimate the amount of work or the preparation that needs to be done on networking.
And another issue for Inchcape is how the cloud contract works in practice - in that it doesn’t behave like what a customer may expect from a true cloud experience, flexing up and down as required. Petit said:
I believed I was buying a cloud solution, potentially SaaS or PaaS, where you could flex up and down. That’s not quite the case. The contract flexibility is not quite there.
Flexing up is not a problem - ‘sign here it will take eight weeks’. Frankly, that eight weeks as a cloud solution is not quite right.
But flexing down is much more of a problem. These are some of the things I’m talking to SAP about, so that we find a better way - something that is more in line with what we as customers expect.
A positive relationship
However, despite the problems, Petit is still positive about the working relationship with SAP. He has been pleased to see the launch of a standardization framework from SAP that is aimed at a path to adoption for RISE, which is clear about where the responsibilities lie between SAP, partners and the customer. Petit said he wishes that this had been available when Inchcape’s project started.
And he is pleased to see that SAP is working on the business value proposition. Petit explained:
SAP is working really hard to work on the business case, to adapt the business case to you and your specific needs.
It’s not just one size fits all. And that’s making huge progress. The business value of RISE is at the forefront of what SAP is working on at the moment. To make sure that they can articulate it and then we can re-articulate it to our board.
Petit is now also part of a customer advisory group that is made up of seven or eight different customers, working with SAP on getting the RISE offering right. And this is where Petit is particularly positive about the programme - SAP’s eagerness to learn from the customer about its needs. He said:
We’ve learnt and SAP has really learnt with us. As such, we’ve been able to influence the RISE offering. A lot of things are very, very different now compared to how they were 18 months ago when we started.
I was always very conscious that as a pilot I was getting help from SAP. But I also had a duty to help other RISE customers and go back to SAP.
The sales process was oversimplified, because it was new for SAP at the time. And frankly, we didn’t know what we were buying and they didn’t know what they were selling. It’s something that’s evolving and we are hopefully shaping it to make it easier for everybody else.
I think the maturity of this RISE offering from SAP has gone through the roof over the last 18 months - on something that nobody really understood, their customers or themselves, to something that actually now feels very professional.
There’s clarity, there’s understanding and there’s a whole organization behind this now working in the same direction rather than fighting against themselves.
A very honest account of a new programme. Inchcape’s story provides some clarity around what RISE looks like for buyers - and it’s clear that it has matured and grown over the past year and a half . It’s clear from Petit that it is a changing programme and SAP is very invested in making it work for customers. Petit said that when the company decides to go to S/4HANA this is going to mean a new contract, so it’s not currently built into what they’ve signed up for. But Petit is positive about the company’s future and is clear that Inchcape has benefited from what it has achieved from RISE thus far.