Is SAP breaking out of the core?

Is SAP breaking out of the core?

I would preface this by saying that I am no techi, but my lack of technical experience and my love of looking at Sales reports and listening to gossip is perhaps an advantage on the topic.

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But I have a feeling that SAP is breaking out of its core ERP application and is securing the SaaS layer around the core and beginning to accelerate in the PaaS layer.

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If I look back over the past 4-5?years, I would write the following history.?

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Taking you back to 2017-18. The business case for S/4 is not clear or understood and the full product is not quite ready. Users think about S/4 as a fast version or SAP with nice front ends, and try to build a business case on this, or sort out any issues they have with their exiting ERP platforms. The approach to most of these projects was to think of it as an old school SAP ECC project either as a Greenfield Waterfall with a lot of ABAP or a technical upgrade. The one exception seemed to be central finance, which seemed to be a starting point for a wider transformation when the product matured. I would also note that in most of the conversions, the live system was not going to the cloud, and in many cases clients were considering using cloud based non SAP components for the SaaS products around the core.

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Leaping forward a few years and coming to 2019-20 where things are changing, most S4 solutions are being hosted on the cloud, and new patterns for migration are being considered. There is a smaller proportion of technical upgrades, and Greenfield and other more sophisticated approaches are being used with a more hybrid approach, selective data migration, cleaning of the core and new SaaS components. Clients are building their extensions and innovation in the cloud using micro services and SAP is beginning to hold on to more of the SaaS space around the core, especially in Planning, HR and Procurement. Central finance is not so often seen as a starting place. More likely it is a migration with data transformation and then some further functionality being added to support new digital business. It is less about finding the business case in what you have now, but driving it with the thing you want to do in future.

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Coming to 2021, the model for implementation developed in the previous two years, has not become standard thinking. Cloud is not expected as is cloud extensions and innovation. Clients are beginning to accept that Agile, DevOps and waterfall can co-exist on a programme and COVID has accelerated the business cases caused by digital disruption. But another thing I note is that SAP BTP is beginning to be used as the cloud extension and innovation platform for SAP, especially when these extensions and innovations are built close to the core S/4 and where integration with SAP SaaS and S/4 is important. My SAP S/4 business is really growing well but my BTP cloud business is growing nearly 30% faster!

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Why is this? Well to a non-technical person, I see SAP getting its commercials models and pricing right and competing with the hyperscalers better, or at least pricing in such a way that clients can clearly compare with other choices. Of course, the BTP products are getting stronger and in areas where integration with the core is important, the content in the BTP product makes sense.?SAP is also putting a lot of effort into actually making it work ‘out of the box’, with more and more easy connector to the SaaS world around SAP.?They are also putting effort in training their partners, and getting the messages out in the market, and I believe the market it absorbing the messages and taking notice.

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Rome was not built in a day and similarly, an SAP S/4 programme has a long gestation period. So many of the projects starting today were planned and architected 12 months ago and the POC’s carried out by clients to prove the business case were carried out when the BTP platform was less mature and consumable. So the sales messages landing today will affect projects starting in 2022 not today. But trust me the messages are landing and I am seeing more POC’s etc. on SAP BTP than before and less clients questioning its use and simply expecting it.

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P.S. These are my personal views and not ones shared with/by my employer


SAP customers are breaking out of their core ERP application(s). That is for sure! Cloud platforms with cloud native DevOps provide modern way to build and run industry and/or customer specific ”add-ons”. For me it looks that Azure, AWS and GCP are most often used for these ”add-ons”, SAP BTP has so much less developers and smaller ecosystem.

Derick McIntyre

Exec Enterprise Digital-transformation Advisory - EU EntArch (EA-portfolio : BTaaS, Pgm, CoE, MFG) SME

3 年

Great instincts David BTP must be a part of every S/4 implementation.. & hybrid [CI/CD] DevOps the value differentiator .. where SAP-extension & custom development capabilities are complimented by mature intelligence, integration & security functions necessary for Cloud delivery, DevOps governance by SolnMan in Hybrid delivery is now the complete Agile/flexible ALM package .. 30-years in-the-making ..

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Jochen Fischer??????????

CEO of NO MONKEY // Independent SAP Cybersecurity ADVISORY for CIOs, CISOs, Auditors and SAP Competence Centers worldwide ?? SAP Cybersecurity & Compliance Education // Keynote speaker // Cybersecurity awareness

3 年

The speed to transform has never been higher, and the pandemic accelerated this development dramatically. New technologies bring a lot of new possibilities, chances, and vulnerabilities. Don't miss out on this opportunity to secure your core and include effective security enhancements into your digital transformation. Hope is not a strategy and the "dark side" is very much aware, of where the crown jewels of an enterprise are sitting.

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Monika P.

Finance Digital Transformation Expert and Founder Trustee NaviDisha.org Charitable Trust (Transforming Lives Encouraging to Achieve Dreams).

3 年

Massive Disruption in Business set-process and outcome due to covid triggered (initially forced) a new-thought process and pushed CxO's to "ACT". Digital Transformation no longer remained a luxury or "10-year plan". It has became "Now or Never", a Survival matter. So when pushed against the wall, the situation is "early adopters are definitely going to be benefited, as well as organizations with Leaders who adapt & adopt with a 3D-view will influence and drive the wave. All set to ride.

SAP are breaking out of the core. It depends whether customers want to build or buy as to which route they go. I would say for builders then customers are more adopting cloud native or alternative options to SAP BTP so maybe this is an area that SAP needs to look at?. Customers are in my view deploying the benefits of cloud native and SAP BTP and using the benefits of both worlds.

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