With each quarterly earnings announcement showing dramatic increases in cloud ERP revenue, SAP’s strategic shift to S/4HANA cloud services is clearly now in full swing. In Q1 2024, revenue from the Cloud ERP Suite was up 32% and reached $3.48 billion US, marking nine straight quarters of 30%-plus growth.
Among the many benefits of moving to cloud, such as cost savings, scalability, data uniformity, etc., another big advantage is the opportunity to reduce your existing "Digital Debt" as part of the migration process. As detailed in previous Insights posts, Digital Debt results from the accumulation of processes, data and systems that have evolved over the years to create a situation where change of any type is costly and difficult. As with real world debt, Digital Debt must be constantly serviced at high costs; primarily in the form of low productivity, time-consuming data reconciliation, lack of end-to-end visibility, continuous maintenance updates, and inability to make changes.
There are many indicators that your company has excessive Digital Debt. Often several of the symptoms listed below will appear together:
- Lack of flexibility and agility
- Inability to measure results
- Lack of end-to-end visibility
- Need for ongoing data manipulation and reconciliation between systems
- High maintenance costs and slow support responses
- Limited scalability options
- Orphaned code that no one knows how to update
- End users resorting to manual offline workarounds to get what they need
Fortunately, the SAP cloud migration landscape includes several key tools for helping identify and reduce or eliminate Digital Debt as an integral part of the cloud planning and implementation process. This new Insights episode provides an overview of these tools and how they can be leveraged to optimize the transition to SAP Cloud Public or Private Editions. These include SAP RISE, SAP GROW, Digital Discovery Assessment (DDA), SAP Signavio, and Clean Core.
SAP GROW and SAP RISE
Based on varying company backgrounds, whether experienced with SAP on-premise or new to SAP, the RISE and GROW options offer tailored paths towards achieving customer success.
- For new companies that need standardized processes, want to always be at the latest release, and prefer a cloud provider to manage their infrastructure, GROW with SAP offers a seamless Greenfield deployment path to SAP S/4HANA Cloud Public Edition.
- For companies already using SAP on-premise because they need customization and control over their deployment environment, SAP S/4HANA Cloud Private Edition provides the power of cloud with the ability to adapt to specific needs. RISE with SAP enables a customizable forward path for either Greenfield or Brownfield deployment scenarios, or to run a hybrid, two-tier, cloud environment using both public and private cloud editions for different functions.
According to an SAP ASUG survey, “More than a third of organizations (35%) are investigating RISE with SAP". However, many are not yet moving forward with purchasing RISE with SAP, which demonstrates that SAP customers need to be better educated about the offering and how it can transform their business.
Both GROW and RISE with SAP are designed to support smooth customer transformation journeys from their unique starting points by leveraging the SAP modular ERP cloud architecture as shown above. The core cloud ERP can be SAP S/4HANA in either Public or Private cloud deployments.
Digital Discovery Assessment
SAP S/4HANA Cloud's Digital Discovery Assessment (DDA) is another SAP tool that enhances decision-making processes to achieve your organization's objectives. It provides seamless visibility and valuable insights into the extensive array of capabilities offered by S/4HANA Cloud. The DDA scoping capabilities empower your team to unlock transformative opportunities, streamline operations, and fully embrace digital innovation by leveraging SAP's modular cloud technologies.
DDA enables companies to decide on the right operating module of SAP S/4HANA – Public cloud or Private cloud or stay on-premise. Some of the criteria to make this decision depends on various choices like extensibility, infrastructure, cost, and range of functions. As shown below, DDA provides an easy to use scoping tool for determining the optimal solutions and configuration mix for your specific requirements, along with building a bill-of-materials (BOM) of interoperable solutions, with the ability to drill down for details. For global companies, DDA also allows for modeling availability of solutions across various regions and countries.
DDA tool can help companies to work together with a partner to create an in-depth look at the scope of needs, the integration of applications, and the localization of scope items. The Bramasol team actively uses DDA as a key part of the process for helping clients scope and model their needs, which forms an essential element of the foundation for implementation planning.
SAP Signavio
SAP Signavio solutions leverage business process intelligence technology to enable companies to understand quickly how an organization works and to model alternatives for managing change processes. Signavio also empowers employees to actively engage in improving underlying processes to drive efficiency and customer excellence. Signavio can be used to quickly extract and link online and offline data across different systems and system landscapes. The key steps in the Signavio process include:
- Discover your as-is state and prioritize needs
- Analyze and understand improvement areas
- Design your future state and build a robust plan
- Implement and manage change
- Operate and continuously improve
Clean Core
SAP's clean core initiative addresses the need to enable business value in the cloud without carrying forward digital debt or accumulating more ongoing customization that degrades the advantages of your cloud ERP deployment. The core consists of six key dimensions that form the foundation of a company's ability to enable a successful cloud strategy. Shown below, these include the software stack, operations, data, processes, integrations, and extensibility.
Focusing on each of these six dimensions, the clean core concept drives cloud compliance through master data and business process governance. Instead of banning customization altogether, it provides standardized guidelines for all components to streamline adaptation and testing during system upgrades.
Because the entire SAP ecosystem of applications is architected around shared core ERP and finance systems, that are built with a continuous emphasis on seamless interoperability, SAP's clean core approach provides ample leeway to enhance functionality for specific customer needs while still adhering to an overall clean core philosophy.
Summary
Taken together, and combined with insights from an experienced partner such as Bramasol, these advanced SAP Cloud migration tools enable companies to go well beyond the traditional choice of fit-to-standard vs. fit-to-custom.
By using the modeling and analysis capabilities of the Digital Discovery Assessment and SAP Signavio, companies can gain a custom-tailored plan and line-up of the optimal combination of SAP applications for their specific requirements.
Then, using the guided implementation capabilities of GROW, RISE and Clean Core, companies can work hand-in-hand with SAP and their chosen partner to execute the transformation roadmap in a structured and logical sequence to keep the project on-track and to yield optimal results in terms of reduced Digital Debt and higher productivity, along with extensibility, scalability and sustainability within the chosen SAP Cloud environment.