SAP RISE in review - CEO Christian Klein responds to the "one handshake" issue, and SAP user groups air out their top questions

Profile picture for user jreed By Jon Reed April 16, 2021 Audio version
Summary:
SAP's January RISE announcement left a wake of questions, provoking a vital debate on the role of SIs in ERP project success. Grab your beverage of choice as I take stock, via exclusive responses from SAP's CEO, as well as ASUG, DSAG, and UKISUG.

time-for-review

On January 27. 2021, SAP made one of its biggest news announcements in recent years, SAP RISE. Whether RISE turns out to be as important to customers as it is inside SAP remains to be seen, but: there was no mistaking the fanfare.

There is also no mistaking the resources SAP put behind RISE's go-to-market. Billed as "transformation as a service," RISE is not a product offering at this time.

That said, the features of certain SAP products, including the Business Technology Platform, and the Signavio business process intelligence acquisition, do figure prominently in how how SAP talks about RISE.

Gauging the initial SAP RISE reaction

Community reaction to the initial RISE announcement was decidedly mixed. Cynical Twitter comparisons to SAP's (mis)adventures with HEC and Leonardo made it pungently clear: SAP has its own prior baggage to overcome here. But what I picked up on was less outright cynicism, and more genuine confusion. Some of that confusion can be attributed to how SAP first explained RISE. Some of that confusion is because RISE isn't about one straightforward use case. RISE comes off as something of a transformational Swiss Army Knife for SAP customers, with multiple scenarios to consider.

SAP does not view RISE as limited to the obvious corporate goal of moving more SAP ERP customers to their cloud of choice - ideally on S/4HANA. In my view, making the S/4HANA cloud transition easier is a core RISE use case - as is managing/optimizing SAP ERP once it resides with a hyperscaler. That's certainly more tangible than arguing about what "transformation as a service" actually means. Those asking "What is RISE?" could start by considering it as a competitive response to the hyperscalers, without trying to beat the hyperscalers at their own game.

Yes, the major hyperscalers are key SAP partners also. I believe SAP thinks it can help customers with their SAP ERP cloud workloads better than a customer would without SAP's direct involvement (as in: helping a customer transform their business over time, not just lifting-and-shifting ERP to cloud workloads). SAP also makes a pitch for contract and licensing simplification, including the BTP consumption credits included as part of RISE. Unfortunately, the early version of that pitch led to unnecessary confusion about the role of SIs in the contractual aspects of RISE. I sought out, and received, reflections from SAP CEO Christian Klein on this topic.

No surprise, I have my own strong opinions on RISE. I believe SAP should use RISE as a way to exert more accountability over its SI partners, and elevate smaller/niche SIs - partners whose value in their chosen markets always seems to be unfairly overshadowed by the big SIs, whose names we all know. I also believe a standout aspect of RISE, the "flexible user equivalent" licensing, is surprisingly underplayed by SAP.

SAP CEO Christian Klein responds

Let's turn the floor over to SAP CEO Christian Klein, who emailed gracious replies to my RISE questions (and, to be fair, my occasional belly-aching). First up for Klein: since the RISE announcement, what has been the customer reaction? Klein's response:

Customer reaction has been very positive. They acknowledge that we are making their journey into the cloud simpler and more prescriptive than ever and provide all of them with a tailored path to get there. Most customers want to move off of their on-premise solutions but are hesitant to do so for various reasons. RISE with SAP offers them everything they need to holistically transform their business for a fast time to value - at their own speed and terms, regardless of their starting point, size, or industry. So interest is quite high.

And what is the most common customer question? Klein:

The most asked question is about differentiating SAP's role from that of our partners, both the hyperscalers and the service partners, and how we can chart their course to the cloud most effectively. For many customers, the fact that we can include hyperscaler services into the contract is definitely an advantage and another conversation starter.

Klein went on to talk up the virtues of RISE's business process intelligence, which he believes can help customers not only move to the cloud, but receive tailored recommendations on new business models. I'll share more of that in my next piece, but for now, this Klein quote jumped out:

There’s no value in taking a legacy system from on premise into the cloud if you don’t clean up the inefficiencies of old code, outdated needs and processes.

I see this quote as the core of why SAP believes RISE is needed. Now for that "one handshake" controversy. During several early public and private briefings, SAP leaders, including Klein, referred to RISE as a "one handshake," or, a "one hand to shake" relationship. That led a number of experienced SAP watchers to assume that the RISE program included SAP, the hyperscaler, and the SI partner - all in one contract, e.g. "one handshake."

This misunderstanding sparked the expected Twitter kerfuffle. I noted that ASUG.com was one site that got the story right early on, publishing a webinar transcript with SAP. The transcript clarified, via the comments of SAP's Robin Manherz, that the RISE SI relationship (and contract) is separate (that ASUG transcript is now members-only, but was public at the time). After confirming this with SAP, I published a clarifying Tweet:

However, the after-effects lingered - particularly amidst those  who advocate for greater SI accountability on ERP projects. Example: Josh Greenbaum's SAP RISE: The Good, the Missing, and the GSIs. In Greenbaum's blog comments, I wrote about the "one handshake" clarification, and what I saw as a new set of pros and cons for RISE. Now to go back to SAP leadership. I wrote to Klein:

Several RISE announcements and briefings had the phrase "one handshake" used by SAP executives. Customers certainly welcome the simplification of paperwork and project management, but wouldn't it be more accurate to say, "two handshakes, two contracts?" (With the RISE SI being the separate contract). Why or why not? Klein responded:

RISE with SAP is ultimately about simplification. Our customers can move to a subscription in the cloud with hyperscaler capacity as part of one offering. Looking back, we weren't clear enough that the included partner services are those of the hyperscalers only. That led to some confusion, and we own that. However, what is clear is that partners are crucial to our success. We cannot develop, sell or implement everything on our own. Our partners are key to unlocking value for our joint customers. Most important, though, is to explore how quickly and easily this one offering from SAP can help accelerate our customers' journey to the cloud.

SAP User Groups air out their top RISE questions

Three months in, what is the reaction of SAP user groups? DSAG, The German-speaking SAP User Group, issued a position statement when RISE was first announced. For this article, Jens Hungershausen, DSAG Chairman, sent the following:

The demands on companies in terms of speed, efficiency, and process intelligence are growing constantly, which is why it's imperative they have the right software and technology. S/4HANA public or private cloud might be the solution for them. But companies' IT landscapes are heterogeneous, so there can't be a one-size-fits-all strategy.

There needs to be complete transparency into the [RISE] offering: from a transparent transition of on-premise licences to cloud subscriptions, to standardized, transparent, and streamlined cloud agreements without hidden costs, and a potential exit concept from the cloud. For DSAG, this is imperative to ensure the offering works well and is popular. Clarity is urgently needed also on 'who is doing what’  to ensure that SAP's offer is also received by customers via the partners.

Paul Cooper, Chairman, UK & Ireland SAP User Group, sent me the following:

For some customers RISE with SAP will potentially be an attractive offering to help drive their organisation's transformation, but ultimately many will need more details (especially on the commercial aspect) before they can make an informed decision. Every customer situation will be different, so for many it will be a case of making the business case stack up. 

For example, if you already have a heavily discounted hyperscaler contract, will this be lost on the remaining elements by moving to RISE with SAP? Customers also need more clarity on how SIs will be supporting RISE with SAP and how this will change ownership of application maintenance and support?  Looking further ahead, will additional SAP products be added to the mix in the future?  Currently, customers will still have a separate contract for SAP Ariba for instance, so this doesn't quite constitute being a 'single handshake' with SAP.

Geoff Scott, CEO ASUG, Americas' SAP Users' Group, discussed RISE with me over the course of several interviews. I asked Scott how ASUG members have reacted. Scott:

What we're seeing is the responsiveness to thinking about S/4HANA in a post-pandemic world is extremely high. And if they're interested in re-engaging their S/4 journey after a pandemic year, they should absolutely look at RISE.

Scott says ASUG members have different levels of involvement with hyperscalers. Some have those relationships in hand. Others don't:

If you're that type of customer who says, "Hey, I don't want another contract; I don't want another infrastructure provider. I don't have the staff or the time to deal with that complexity." Then you should look at what RISE offers.

And what does Scott see as the top concern or question on customers' minds?

Help me separate out the infrastructure costs from the application costs. And is RISE really more cost-effective for me to include infrastructure in my SAP BOM, or not?

Scott went on to point out: many US customers are already well into their strategic planning for this year. It takes time for new SAP announcements to sink in. He says there could be a "shiny new toy" issue for SAP to overcome with RISE. Some customers respond to that by waiting it out, to see which SAP ideas and programs having staying power.

My take - ERP lift-and-shift is not enough

From the user group responses, there's no doubt: the top customer RISE item is clarification on the specific roles of SAP, the hyperscalers, and the SIs. Beyond that, I would argue for a deeper business case discussion. SAP promotes the potential to lower S/4HANA cloud TCO with RISE. That TCO case deserves scrutiny, but the RISE business case should go beyond TCO. If "transformation as a service" lives up to its billing, it's more than a cost reduction exercise. Perhaps SAP will want to get into that, in time for my next article.

Many SAP watchers have told me they see RISE as, at best, a narrow TCO use case - a simplification of running SAP ERP on a hyperscaler. I believe SAP's RISE ambitions are much bigger than that. Whether SAP can be a true transformation partner is for SAP to prove. In the numerous RISE briefings we were given, SAP executives vigorously brought up their desire to help SAP customers, once they move to the cloud, to standardize their SAP systems. Their message: lift-and-shift is not enough.

That's a message worth evaluating. And, by the way, it's not something the SIs have done a good job with. *Most* SIs are happy to keep on customizing your ERP on your "cloud" of choice, and sending the bills along. The hyperscalers aren't pushing that conversation either. That, in my view, is what SAP is really going after. They don't just want to manage the cloud relationship - they want to be trusted to enable the business transformation. If so, that's a tough challenge - but a better one to take on.

Klein also challenged me: to acknowledge the impact of SAP's customer success initiatives. Can SAP's customer success program address some of my SI accountability questions? I have a hard time imagining a global SI partaking in SAP's customer success metrics, but I hope to engage further with that program's leadership, and learn more.

In my next installment, I'll share more of Klein's views on how RISE can contribute to SAP customer success. SAP has been particularly vocal about the customer enthusiasm for RISE; the launch announcement cited more than 100 customers already underway. I'll be digging into one of those use cases soon as well, and will share that story on these pages.

Other questions on my mind:

  • How will the integration of Signavio impact what SAP can offer with RISE?
  • Are landscape automation and S/4HANA migration tools part of the RISE picture? Which third-party SAP partners deserve consideration for this purpose?
  • Why isn't SAP's own services group more involved with RISE? What are the pros and cons of greater SAP services involvement?

As for the "one handshake" issue, it's time to move beyond that, though customers should be aware they'll see plenty of "one contract" wording when evaluating RISE. That's always in reference to SAP and the hyperscaler - not the SI.

But as I wrote in my comments to Greenbaum, I still see an opportunity here. In my view, the community reaction to the "one handshake" talk shows a real desire for the SIs brought into a different accountability, or, in a more positive way, a shared collective stake in SAP project success. Perhaps the misunderstandings can now be turned into a long-term gain. I wouldn't bother with posts like this if I didn't believe it was possible.