"If you could turn back time, if you could find a way" - Einstein, Cher and the ECC Rebels

A personal perspective (Written in estuary English, apologies for the poor grammar mostly written on my phone in notes)

1. Let’s chew the data and understand the problem statement.

This blog is aimed at helping the #ECCRebels, the loyal 17,000 odd SAP ECC customers, still uncommitted to moving to SAP S/4HANA ERP by 31/12/30 (Basis tech and Gartner).

Yep I said 2030 not 2027, let’s not forget SAP have got 6 more years to get this right,

* Some ECC systems will go out of support in 2025 and not all Netweaver components are supported past 2027.

Or put another way the customer has got six years to consider the pro’s

So by based upon current trends by the end of the decade there will still be a rump of at least 12,000+ customers that will not have moved, about 1/3 of the full fat S/4 client base (public cloud S/4 net new is not on the same scale). ?

This will be my last post on the subject, other to celebrate when SAP see sense, they will, they always do, and that does not mean extending the deadline past 31/12/30.

Only this week Gartner added further fuel to the fire by calling out the sluggish S/4 uptake by the #ECCRebels (and the critique seemed to cause a level of distress).

The recorder reported Gartners findings

2. Why this blog,

Well I’m passionate about the value SAP delivers, and I’m passionate in the belief that migrating upgrading to S/4HANA is the right move for the ECC Rebels.

87% of all global commerce flows through SAP (don’t forget who has access to all that data on RISE !)

99 top 100 global enterprises run SAP, of which 85 run S/4, we call these the early adopters many of whom now need an upgrade !

With 92% of the global 2,000 running SAP, again most on S/4 and again most needing to upgrade.

But the bulk of the #ECCRebels are in the layer below this, not mid-tier but somewhere in-between.

The S/4 migration message pushed by Julia White and Scott Russel has not landed with the customer, so what SAP believes is the right path for the customer differs somewhat from the customers view, the lack of empathy is a concern to all.

So as Cher belted out

“if we could find a way”,

to help the #ECCRebels and SAP ?

and I believe Dragon ERP has just that by “turning back time”……

How so ?

Well Albert Einstein believed that time wasn’t linear, and that the past, present and future all coexist together!

3. ECC is still best of breed !

So just as M theory aligned super strings, thus there are standard rules to the ERP Universe which play out time and time again; ERP fractals driven by tech singularity, an example being the need for some form of step change SAP upgrade every 5 to 10 years …. ??

So currently in the ERP universe as Einstein predicted we have R/2, R/3, ECC, Legacy S/4 and Future S/4 all co-existing together on a plethora of hosting options.

So lets me be slightly naughty and make the legacy dinosaur System Integrator’s go nuts, lets test the time is relative theory out on SAP ECC;

·?????? SAP ECC6 can run on the cloud

·?????? SAP ECC6 provides real time insights as fast as S/4 !

·?????? SAP ECC6 and AI are made for each other

·?????? It’s easy to make ECC UX shine

·?????? ECC6 can enable daily close as fast if not faster than S/4

·?????? If you are on ECC6 and need some specific process innovation then let’s go composable or maybe two tier ERP or use Intelligent PaaS micro services

·?????? ECC6 is the centre of your Intelligent data fabric

Ouch, all I have done is taken a standard S/4HANA PCE and Public Cloud pre sales script and inserted SAP ECC6..

But I’m not referring to SAP ECC6 from 2006, it’s the ECC6 of now, ECC has travelled through time, a bit like Marty McFlys Delorean sports car……. ??

A basic rule of the ERP universe is that SAP customers adopt SAP because of its unrivalled ability to constantly evolve their business operating model through continuous improvement, whether from consuming standard SAP (Clean Core / Vanilla / Fit to Standard), SAP partner addons or their own customer customisation (RICEFW)?

Link these points together and you realise the messaging around the move to SAP RISE IaaS and S/4HANA Cloud ERP needs to be nuanced to take into account the customers reality and priorities opposed to SAP’s various ideologies that are counter intuitive in terms of connecting with the customer, sparking the customers interest and generating SAP and partner revenue.?

How do we convince the rebels that SAP S/4HANA in whatever form is the best enterprise class ERP solution by a country mile, linked to the wider SAP cloud product portfolio? We go back to basics

SAP enables organisations to focus upon Operational Productivity and Operating Model Resilience to counter rapid change. This message is being drowned out by the constant narrative to rip out the old ERP solution and start again hosted by SAP.

4. Time is Relative:

So getting back to Einstein, SAP time is relative,

In the SAP universe the investment in SAP Core (ERP) is a generational investment, ?

This is where Cher chips in…..

"If you can turn back time, if you can find a way" Cher belted out whilst gyrating around the USS Battleship Missouri If you could turn back time video

this bit of Cher brilliance sort of explains what SAP ERP+ is

please indulge me

SAP like the USS Missouri is a generational investment, let that sink in. The move from R/3 to S/4 ?via ECC should be a seamless journey allowing for constant continuous improvement maximising the customers investment not a major and highly evasive business transformation programme. ?

Like the Missouri, SAP is a platform to enable constant business operating model refinement, SAP was the first true platform, a point that seems to have been forgotten. (For many of us, SAP Mail was our first corporate email system).

And the essence of a warship has not materially changed over centuries, it has gone through cycles of innovation like SAP, as enabling tech has evolved, but a fighting I4.0 warship of today is very similar to its predecessors.

And just like the guys and girls that used to maintain the USS Missouri, any good CIO knows that in every 5 year cycle you will need to factor in one major SAP upgrade.

Now SAP will say move to RISE and there will never be another major SAP upgrade, but they said that with ECC ! those S/4 early adopters I touched upon earlier are faced with just that now, and no one not even SAP can truly guess where SAP ERP will be in 5 years’ time !

By looking at SAP through the lens of a generational investment, you start to understand the ECC Rebels behaviour, moving to S/4 is far too much pain for not enough gain….

Most organisations running SAP ECC are people and process optimised, heavily automated and autonomous, SAP does what’s expected of it and they are generally happy with the solution, operating model orchestrated and their ongoing investment in it. These organisations have an embedded culture of continuous improvement, so a heavily bespoke SAP system is a reflection of this.? The customisation delivering the autonomy has been paying back benefits for decades which is a truly awesome ROI, this is not tech debt !

The organisation's priority is not reimplementing an ERP system which is trusted and doing fine, they know by reading ERP Today it can be enhanced using a myriad of non SAP solutions. ?Essentially Organisations are faced with crisis after crisis. This has been labelled ?"perma crisis" the ongoing operational and revenue disruption caused by global events. So the 17,000 ERP Rebels have other priorities, ripping up and starting again isn't one of hem.

5. Turning back time gives us the genesis for how to make SAP and the Rebels come back together

So going back to Cher one more time, back in 2006 the SAP ecosystem embraced on mass the move to SAP ECC6,

we had three flavours of upgrade from pure tech to a functional upgrade, often the upgrade would include the implementation of new Order to Cash, HCM, P2P and Reporting functionality, all delivered with little if any disruption or fuss.

I should know, I did loads of them

6. Pain v Gain (Needless hurdles to S/4 selection and adoption)

So why is the move to SAP S/4HANA proving to be so problematic….. Because no one other than Dragon ERP is really listening to the customer or user groups, ?

There will be some SAP ECC customers that want to reimplement SAP ERP to gain advantage driven by their business strategy, yes they will adopt a clean core, but this cohort of SAP customers will be in the minority, I reckon only 20% of the #ECCRebels will go down this route.

So why the resistance by the #EECRebels to the cloud, RISE and the S/4 clean core ? the view currently is that the pain does not justify the gain.

To say SAP customers are resistant to the cloud is wrong, most if not all will already have a robust cloud strategy based upon SaaS, PaaS and IaaS.

In fact many SAP ECC and early adopter S/4 customers have already moved to the hyperscaler cloud encouraged by SAP. Many existing S/4 CIOs are asking who will now pay the costs of migrating cloud IaaS if they move to RISE with the same hyperscaler.

Many CIOs see the move to SAP cloud and clean core ideologies being linked to SAPs long term goal to becoming a pure SaaS software provider in the same fashion as its competitors in?#Boomi?#SFDC?#workday?and?#servicenow, which is a fantastic long term strategy but it doesn’t align with customer priorities right now, think Perma Crisis. ??

The bulk of the #ECCrebels selected SAP because it enabled localisation, that was the big USP, SAP are saying fine you can still have this but you will need to upgrade or reimplement SAP ERP to S/4 and also take SAPs PaaS solution BTP to host all of the customisation, microservices and integration. The migration and ownership of the as-is customisation to BTP comes at considerable cost, with little customer benefit, so the vacuous move to the cloud to reduce TCO messaging is wholly incorrect.?

Let touch briefly upon the clean core messaging that seems to now be dominating SAP messaging, as it enables SAPs change of business model to pure SaaS and enables SAP to deliver its investment in AI quickly to the customer. In an ideal world no customer would ever have any form of customisation, but as I touched upon earlier SAPs appeal to the ECCRebels is just that. A clean core absolutely makes upgrading easier, but not significantly so ? SAP customers in general follow ITIL best practice and have well developed processes to support fix on fail upgrade regression testing. As I mentioned earlier going clean and loosing all the customisation that made the organisation semi-autonomous without replacement as is to often the case is a backward step and often leads to a higher TCO. And my last thoughts on clean core are it’s a needless distraction, partners and SAP will amend any software that does not work due to the customers changes, why wouldn’t they it drives revenue. So clean core is a hurdle many organisations just arnt interested in and delays their migration to S/4.

The move to S/4 should be nothing more than an enabling upgrade (for both the customer and SAP), but for many customers moving to S/4 has become far too complex and risky, primarily because the move from ECC to S/4 is not like for like. This disparity is forcing hitherto loyal customers to consider their long-term HCM, Procurement, supply chain and logistics strategies, often leading to far more complex multi domain transformation programmes running in parallel.

Back to the T-mobile T shirt, in 2006 SAP truly dominated the enterprise application space with ERP, HCM, P2P, CRM and Data solutions. Making the customer question should they migrate to New SAP cloud products or consider alternatives such as SFDC, Workday, Coopa, Boomi and hyper-scaler alternatives is a highly illogical and disruptive strategy.

Then there is RISE itself, RISE is a commercial contract that locks the customer into a tailored subscription based Infrastructure as a Service and Software as a service model (under the customers control and enabling on-premise style customisation flexibility), which should be the norm. The downside is that RISE is not a flat configurable license model but instead has layers, so the Base model adopted by most S/4 early adopters does not include AI or ESG, what the customer expects as standard actually comes as a premium, so again the customer is prompted to consider alternate solutions going back to my ECC6 pre-sales list at the beginning.? ?

And finally like all things in the ERP universe, there is a simple equation, every customisation replaced by clean core will require an investment in business change management, thus a reimplementation comes with significant business change cost, we all know failure to invest in business change will lead to huge operational disruption and reputational damage. The art to Kaizen business change is low risk adoption, to embed and sustain the change realising the expected benefits whilst minimising operational risk and impact.

Many of the ECCRebels are structured to deliver rolling continuous improvement, delivered by small in-house teams supplemented by their long term support partner. Kaizen becomes easier for the business to embed and sustain and delivers fast benefits, So the ECC continuous improvement delivery model has become capital, capacity and competency optimised (constrained) and simply does offer the bandwidth for a complex S/4 migration programme to be considered. ?

7. The way forward:

I have listened to the collective problem statement and have the answers CIO’S are searching for:

Option 1:? S/4HANA Hybrid Selective Tech Migration

I believe that there is clear value in leveraging SAP AI Foundation, ESG and the wider SAP cloud portfolio with a hybrid SAP S/4 solution

• Low Risk Minimal Business impact and disruption Limited investment
• Compliant until 2040+ that's 10 to 15 years of future proofing (ECC extended maintenance expires 31/12/2030)
• Supports your future business strategy by providing the entry point into the wider ?? Intelligent SAP cloud product base if required
• Safeguards your current investment in SAP (A customised system that is still returning benefits is not technical debt).
• The customer chooses what the move to SAP S/4HANA will look like and Dragon will help mitigate the hurdles……

Option 2: SAP ECC Upcycling

• Dragon ERP will future proof your ECC system with the necessary EHP6 upgrade if required.
• Re-platform onto a hyper-scaler of your choice Upgrade your DB to Hana if an onward migration to S/4 is to be considered
• Work with you to enhance UX and analytics if required.
• Work with you to take cost out of your SAP investment, We will ensure your system is fully documented and supportable We will work with Rimini Street to provide you with the SAP support you require to take your ECC system past 2030. ?

8. And Finally, if I were SAP CEO this is how I would fix the problem

1) Going back in time: I strongly suspect SAP will come up with an S/4 release that focusses upon ECC migration, essentially putting back some of the lost functionality enabling like for like, essentially going back in time to 2006. Maybe Muhammad Allam is working on this now !

2) HCM on S/4 opposed to SF, I think SAP need to now be really clear and evangelise the alternative to SuccessFactors being H4S4 a polished up ECC HCM, this would stem the loss of HCM customers to Workday

3) Walk away from mandatory IaaS Extend the S/4 PCE RISE concierge service to the major Hyperscalers, thus taking away the focus on tech. ??

4) Drop the constant clean core messaging and go back to basic why SAP matters and it isn’t the cloud, its all about the process.

5) Focus on innovation for all, make AI and ESG available to standard RISE customers.

6) Put Business Transformation at the forefront,?Signavio and LeanIX are game changers, SAP have invested a lot in these two products and they need to be available at a cost point that ECC customers can afford.

7) One S/4 ,Align all flavours of S/4 into one common product, public cloud S/4 is fantastic why are private cloud S/4 customer’s not benefiting ? We have a SAP resource shortage, further fragmenting the resource available across multiple ERP solutions will lead to delivery bottlenecks impacting SAP revenue. ??

8) This is a Paul Byrne quote, we need RISE 2, essentially learn from Larry and Oracle, give the customer what they want and they will gladly pay, as ultimately SAP ERP and the wider clousd product range is still the best.

Any questions message me.

SAP Board, I'm available if you want to chat