I’ve worked for over twenty years for various System Integrators (SI), and whilst the names of the SIs I’ve worked for has changed, the specialism of SAP has not. I love the software – some might say if you cut me in half I would read SAP!
During those twenty odd years I have seen significant change and iterations of the software, from the heady days of the mid 90’s where package selections of ERP dominated, through to incremental upgrades in the 00’s.
So when S/4HANA was announced, everyone, including SAP, braced themselves for the next upgrade wave. Except it hasn’t happened, well not at the rate of adoption anticipated.
So why not? To understand this, we have to travel back in time – and then jump to the future!
Back in time
Previously, SAP upgrades have been significant enough to encourage clients to upgrade, whilst also being easy enough to accomplish with a modest IT budget. Essentially, it was the right thing to do, and it didn’t seem prohibitively expensive.
I vividly remember the announcement of HANA. I was working for a SI that also had a hardware division of the business and the excitement was palpable; this was a game changer and a dawn of a new SAP.
The SI’s were gearing up for mass upgrades and I recall working with my SAP team to build training and marketing plans.
During this process I was asked by my Head of Sales, to run through the technology and our plans. I took myself into London, one grey morning and spent an hour running through a presentation, explaining the technology, the impact it would have on clients and the benefits.
At the end of the presentation, the Head of Sales looked at me, explained he understood my excitement and passion and then asked, “Where’s the value?”
I argued this was a massive leap in technology, but he pointed out that he’d been around enough to see this a hundred times. Unless you could demonstrate clear value for the business, he wouldn’t be adopting it – and neither would anyone else.
He was right of course, over the next couple of years we did implement HANA. Mostly these were BW on HANA implementations where clients had a clear requirement to process huge volumes of data and make quicker and better decisions.
These organisations were typically losing business by not being able to respond to market conditions and therefore the cost of HANA were insignificant against this.
When S/4HANA was announced it all started to make a bit more sense. Here was a product that had been natively written for HANA. As the internet had become invasive and totally transformed not just business but our personal lives it made sense to create a new product, bringing all of the experience of ECC6 and redefined for the dawn of a new era.
With it, SAP promised to continue to support ECC6 for a further 10 years until 2025, giving clients plenty of time to plan, budget and upgrade.
Initially I found clients saw this so far away that they didn’t even think about it. Many had recently come from upgrading to ECC6 and the thought of upgrading again just too much to think about.
Even now, in 2019, there appears no urgency to adopt. Clients often tell me that they are going to wait until 2023 or 2025.
Some tell me they doubt SAP will hold to their promise to end ECC6 support; one even told me he planned to run S/4HANA on Oracle! (I am not kidding).
SAP clearly also acknowledge the issue with a “Move” campaign created to encourage the vast numbers that have the S/4HANA license to adopt. The Business Scenario Report (BSR) that was originally created to help clients understand what improvements they would see by adopting HANA has now been much improved with a V2 about to be released.
Where’s the value?
So what’s the problem? Personally, I step back in time to my old Head of Sales’ office, and ask myself what my clients are asking: “where’s the value?”
As CIOs have told me, it’s impossible to ask the board for a vast amount of money simply because it runs faster or we need to do this by 2025.
I can see their point of view. However, in order to see value, maybe we need to look to the future?
Welcome to the future
Just as the internet spawned a new way of doing things, emerging technologies like the Internet of Things (IoT), Blockchain, and Robotic Process Automation (RPA) are changing the entire landscape of business today.
Many clients have already adopted these new technologies to improve quality, speed to market and client engagement. For example, I have a client that produces aluminium car doors and have adopted sensors that can detect flaws in manufacture not visible to the naked eye.
If these flawed products got into the supply chain and two years down the line, car owners reported paint flaking off their cars, the door manufacturer would be liable. The cost saved here runs into the of millions of pounds.
So what’s this all got to do with S/4HANA then? Well it goes back to value.
Trying to find value in adopting S/4HANA in itself is simply futile. Yes, it’s simpler, faster and has dashboards and offers some value– but that misses the real advantage.
Jump to the future and think about these emerging technologies: they offer significant value, gaining competitive advantage, reducing costs and increasing insight.
If you think back to the car manufacturer the sensor technology is great and provides huge value, but where you have sensors you have data. And to make sense of that data and maximise its value, you need it to flow back into core SAP.
This is the ‘digital core’ concept that SAP has been talking about. My advice therefore, is stop trying to find a case to upgrade to S/4HANA for its own sake and look at specific business issues where an approach incorporating emerging technologies will provide the answer much more readily.
S/4HANA may not be the focus of attention, but it still has an important role to play in business success – now, and in the future.