Why “Rise with SAP” should be a wake-up call for the system integrators
Navdeep Singla
![Navdeep Singla]()
Navdeep Singla
CEO & Principal Architect: Helping clients in the Utilities and Energy industry define and deliver their Enterprise Mobility strategy
SAP hosted the “Rise with SAP” event this week where the SAP leadership team launched a new offering and also took direct questions from the audience. I also attended the event and here are my key takeaways from the perspective of various stakeholders.
Please feel free to add your feedback in the comments:
SAP Perspective
- SAP is pushing to increase annual recurring revenue (ARR) as a % of its total revenue. Answer to why is clear when you look at the revenue and valuation comparison of SAP and Salesforce.
- SAP is pushing for process standardisation by including S/4 HANA Cloud in the offering ahead of S/4 HANA on-premise.
- SAP wants to simplify the migration from ECC to S/4 HANA for its customers by minimising the parties involved in the migration process.
- SAP wants to have an ongoing and a closer relationship with its customers, rather than relying on the System Integrators (SI).
- SAP wants to be seen as a strategic vendor (and not a legacy on-premise vendor) by its customers.
Customer Perspective
- SAP professional services are generally seen as an expensive alternative by SAP customers. It remains to be seen how RISE can be delivered by SAP while promising reduced cost.
- The role of SIs is not very clear in this offering. SAP has promised that partners will play a major role, but how does that reconcile with one single contract for the customer is not very clear.
- SAP has mentioned that this offering will fit all customer sizes from small to large, however, it remains to be seen how this can be done.
- Like most of the big announcements from large vendors, the devil will be in the detail and how this translates into Ts & Cs in the contracts.
- Customers should explore SAP Store for standard S/4 extensions from SAP and Partners before committing to any new custom development.
System Integrator (SI) perspective
- It is controversial, but to some extent, SI’s revenue depends on SAP system customisations. Customisations also result in a more sticky relationship with the customer.
- SAP is asking partners to build their IP, however, building an IP is not easy as it may sound and needs a completely different mindset compared with billing focused services mindset.
- SIs should build relationships with specialist SAP extension partners and offer non-custom solutions to customer requirements. This may even help SIs generate a recurring revenue stream through royalty, which can only please their CFOs.
Original blog posted here: https://www.ondevicesolutions.com/rise-with-sap-different-perspectives
ERP & Finance Strategy
4 年I agree with your points and also concur that the role required from SAP partners is changing.?As SAP have changed emphasis from selling software as perpetual licenses on prem through their resellers to the new model of wanting to host Software as a Service directly with customers, partners have a different role. This new role is to provide customisation and develop IP but it has resulted from necessity.?A couple of years ago SAP were attempting to customize S/4HANA cloud service themselves, early attempts included extra staffing analysis aimed at the professional services users and some manufacturing related enhancements for this vertical. ?But this approach proved unsustainable and SAP have moved to a policy to NOT modify the basic generic cloud offering, but instead allow partners more access that required to customise the service for 25 different industry sectors that were identified in their “industry cloud” portfolio. SAP partner still provide a ‘value add’ to clients but rather than the historic role with partner “staff on site” during migrations, to a new role where partner expertise and knowhow assist the parts of the client system being migrated/integrated in cloud.?I use the word part given a realisation now by SAP of customer preferences not to move their entire ECC estate into a SAP cloud, but instead to leverage both an on-prem environment as well benefit from new cloud services.?The partner IP required comes from their experience of previous projects (not just in the form of formal APIs available through SAP, but also proven customization and templates) that speed up the process, reduce risks and help to optimise their new hybrid environment.?The partner new role is to help them get the ‘best of both worlds’. Anyone interested in more on this, please see my article last year What actually are all these different SAP clouds?? https://www.dhirubhai.net/pulse/what-actually-all-different-sap-clouds-david-penny/
Industry Architect, Energy and Utilities Industry Practice, EMEA
4 年Good summary Navdeep