In times of great change or uncertainty, it’s important to have a clear view of the market, of customer and demand-related behavior, of supply chains, profitability, and more. This allows companies to identify potential room for improvement and lay the foundation for crucial decisions around innovation and investments. In this new reality, IT is therefore synonymous with the ability to change – and all the challenges that come with it for both companies and SAP. This year’s Technology Days event highlighted potential paths forward and offered solutions for mastering this “hyperchange”.
Companies must continuously adapt and react to changes, whether they’re caused by technology trends, shifts in the market or competition, or new customer or demand-related behavior. Crises like the current pandemic act as catalysts, reinforcing the development of trends and intensifying and/or accelerating change. To exist in these new dynamics and react appropriately to the post-COVID-19 environment, companies have to strike the right balance between optimization and efficiency increases on the one hand, and innovation and adaptability on the other. Three aspects in particular are crucial: Analytics and reporting, the cloud and its opportunities and obstacles, as well as differentiation through development.
Analytics and reporting
In times of upheaval, information needs to be available consistently, in high quality, and in near real time. The analytics market offers a range of innovative solutions that allow companies to better understand and use their data. SAP is a key provider with its Analytics Cloud. “SAP Analytics Cloud as a front-end analytics solution has seen very positive development and is suitable for the relevant application scenarios, like enterprise reporting or data analysis using artificial intelligence,” explains Steffen Pietsch, Chairman of the German-speaking SAP user group DSAG. Additionally, SAP Analytics Cloud will soon be a standard front-end solution in SAP applications, generating synergies.
The situation looks somewhat different for the data warehouse portfolio. SAP is offering BW/4 Hana on premises as a data warehouse solution, in addition to Data Warehouse Cloud. However, for existing customers, the transition poses a few challenges. While in the past, the rights of use for Business Warehouse were included in the Business Suite license, additional licenses are required for SAP Analytics Cloud, BW/4 Hana, and Data Warehouse Cloud, as well as other products that may be required. For many companies, this makes it challenging to put together a viable business case – especially since the BW/4 roadmap features little innovation and the migration path is not always an easy one.
“Data Warehouse Cloud definitely has the potential to become the solution of the future. But right now, there are just too many areas where, on a functional level, it lags behind a true enterprise data warehouse solution; these include data management, ease of integration, and dealing with large metadata structures,” summarizes Steffen Pietsch. This is where SAP needs to create the necessary clarity.
Cloud: Opportunities and obstacles
Cloud software has enabled and supported the somewhat abrupt transition to remote work triggered by COVID-19. The cloud undoubtedly plays a key role in making companies more agile, both in a technological and a business sense, and it encapsulates innovation. The speed at which cloud solutions are developed is simply not possible with on-premises solutions. However, the path to the cloud must also be economically viable, which means that less functionality should not come with a higher price tag. “It’s important that SAP provides total cost transparency and clearly illustrates the added value of these solutions. Customers need to know what they are getting and, in particular, what solution development will look like in the long term,” says Steffen Pietsch.
In addition to the uncertainty around all this, ease of integration – or lack thereof – can have a huge impact on an investment decision. Modern IT landscapes are typically highly integrated. When transitioning to the cloud, customers expect a seamless integration between SAP products. “In this regard, we still have a long way to go, but there has been some major progress made by SAP. They are definitely on the right track,” says Steffen Pietsch confidently, adding, “IT landscapes consist of more than SAP. Legacy third-party systems or communication with machines can sometimes involve some renovation work on the path to the cloud.”
Differentiation through development
Standard software plays an important role in optimizing processes and making companies more efficient. To be successful on the market, companies have to stand out from the competition. However, the opportunities to configure standard software are limited. To fulfill customer-specific requirements, SAP needs to provide strong development tools and a suitable development platform. In the past, with on-premises solutions, this was possible with the Abap programming language and related tools. With increasing cloud use, Abap remains extremely important for developing SAP systems, but is supplemented by the Business Technology Platform and its opportunities for cloud-native development. To allow companies to use Abap in the cloud, SAP has established the Abap RESTful application programming model, which eliminates the previously uncontrolled development in Abap. “This doesn’t mean that 20-year-old Abap code or copied Z reports can be executed in the cloud without changes, but it allows companies to continue to leverage their extensive Abap know-how. I’d highly recommend all Abap developers get to grips with the model,” says Steffen Pietsch.
To successfully master the hyperchange, companies need the right tools. A strong analytics portfolio provides a clear view of all the key performance indicators in a company and enables data-based decision-making. The cloud offers a good basis for accelerating change and boosting innovation. And to support companies’ transition to the cloud, economic viability matters. Licensing models and the cost and effort of the migration must be consistent with the desired added value. SAP needs to create more clarity so that customers can make informed decisions based on product visions and roadmaps. This is the only way to ensure the SAP portfolio evolves in harmony with IT strategies. Despite the popularity of the cloud, on-premises solutions remain relevant in the medium term because not all customers can or want to switch to the cloud as of yet. DSAG is therefore in favor of a “Cloud First” approach, not a “Cloud Only” one.