Swearing Allegiance To SAP

I received an invitation to a conference by consulting firm Barc, in which I found the remarkable sentence: The incompatibility of SAP and non-SAP data slows down companies! An old epiphany that even SAP had many years ago. Unfortunately, SAP took a wrong turn and maneuvered itself into the offside with the Data Hub – the idea was not bad, but the technical construct and the implementation were wrong.

Almost all analysts agree that ERP users spend too much time collecting and preparing data instead of trying to understand and analyze them. Lifting the treasure trove of data is still far too costly, and neither a fast database nor a more modern ERP can help with this particular problem. So it really comes down to swearing allegiance to SAP or looking for alternatives.

With S/4 and Hana, once they run operationally, they consistently continue the well-known ERP path of the past 50 years. Even if Hana is better than AnyDB and S/4 is better than R/3, ECC 6.0 and SAP Business Suite 7, the objective remains the same. With RISE, SAP customers get promised even more efficiency and cost-effectiveness, but nothing fundamentally changes. Currently, an almost perfect Business Suite 7 is on par with a poorly customized S/4. If Hana and S/4 improve, then things will move in the right direction, but digital transformation is a disruptive process that should not be taken lightly.

Swearing allegiance to SAP is a sensible, if expensive, path. SAP is a secure and stable foundation, but SAP has also become quite pricy compared to competitors. SAP platforms serve a purpose, and customers have invested in ECC or S/4 and have no interest in destroying this ERP now. However, what SAP users want, according to former SAP CEO and now ServiceNow CEO Bill McDermott, is hyperautomation, which enables the aforementioned merging of data, see SAP Data Hub, and also algorithms.

In general, McDermott believes it is a mistake for companies to talk about digital transformation but implement it in a traditional way. Many ERP users are upgrading their systems from another century and confusing that with digital transformation, according to the ex-SAP CEO. “And unfortunately, they’re putting all their resources into that,” McDermott explained at an event in The Hague that I attended. Digital transformation is not about doing things the old way but a little better. It’s about changing the system entirely.

In the coming years, many customers will swear allegiance to SAP and customize S/4 Hana, incurring high project costs. At the same time, my successors, the young CIOs, will look for alternatives because they will realize that RISE, Data Hub, NetWeaver, and Hana are not necessarily bad, but just not up to date.

More and more I’m coming to believe that companies going down the traditional ERP path with Hana and S/4 will soon face a rude awakening, because we existing SAP customers are looking at digital transformation through 20^th-century glasses. Bill McDermott said, “In comparison, there is now a whole new world that is becoming aware of the power of hyperautomation.” To unearth the treasure trove of data mentioned at the beginning, we’re going to need that meta-level. With SAP’s updated S/4 product roadmap, many customers are already questioning their strategy for data, BI, and analytics.

And there’s something else I learned in The Hague: ServiceNow wants to establish a cooperation with process mining specialist Celonis, among others. In addition, McDermott is using the tools of the Danish SAP migration specialist Gekkobrain. With Gekkobrain, SAP legacy customers can analyze the Abap modifications built into ERP/ECC 6.0 and streamline and execute part of it on a meta-level. So I, too, will swear allegiance to SAP and look for alternatives to leave my successor an up-to-date system.