The current mood is politically, socially, and economically challenging. This has only marginally to do with the bad mood concerning SAP. However, the topic of integration is likely to be part of it.
Background and context
In recent years, SAP’s business strategy for the necessary company growth was primarily characterized by acquisitions of numerous cloud providers under the former CEO Bill McDermott. They assured that he was able to achieve his main goals: the positive development of SAP’s stock price as well as the positive development of his personal income. From today’s perspective, however, his strategy was too short-sighted. Some of the acquisitions were bad investments, and the necessary technical integration to SAP’s existing systems could not be provided. This also had a negative impact on the S/4 strategies “Cloud Only” and “Cloud First”.
A successful S/4 transformation is directly related to integration, which simply did not exist in the usual form until years after the acquisitions had taken place. When Christian Klein took over, the necessary integration of the cloud products became his main task. While necessary, this realization had a highly negative impact on SAP’s stock price. Integrating existing solutions cannot be convincingly sold as a grand vision to investors.
It is once again up to customers to make the best of the integration situation. For most customers, S/4 projects aim for a hybrid application landscape, i.e., on-premises systems with cloud solutions. The focus is on SAP’s own numerous cloud solutions with the new S/4 technology. The issue here is not integration, but the unreliability of when new functions necessary for the project might become available.
The integration problems mentioned are mainly caused by large acquisitions such as Ariba, Fieldglass, Concur, and SuccessFactors. While a strong business case can be made for each of them, they all rely on different technological foundations. This makes integration into SAP’s core systems a mammoth task. Despite SAP’s best efforts, the uniform interface remains a pipe dream. When introducing these solutions, an up-to-date inventory should be made in advance. On the one hand, of course, with SAP directly, but on the other hand, for quality assurance purposes, also with corresponding reference customers and user groups.
Another extensive but underestimated integration topic is in-house developments. There are several issues to be addressed here. To begin with, all in-house developments, such as reports and programs, should be reevaluated to see if they are still necessary. After all, many are no longer used after system changes or personnel changes. SAP has analysis tools available for this purpose. The necessary in-house developments should be converted to the new S/4 technology as soon as possible. This phase can and should be started before the S/4 project even launches, because the changeover takes up a lot of time.
Additionally, a fit-gap analysis can help examine which in-house developments can be replaced by new S/4 applications in the standard. Finally, the technical integration of in-house developments into the cloud solutions must also be ensured.