Late last month, SAP announced the launch of GROW with SAP, a new bundled offering aimed at helping midsize customers adopt cloud ERP.
Combining SAP S/4HANA Cloud, public edition, with industry best practices and embedded AI and automation capabilities, GROW with SAP facilitates SAP Business Technology Platform (BTP) integration while enabling midsize customers to define their own apps and processes in a cloud-native way. GROW with SAP emphasizes the speed, predictability, and continuous innovation most relevant to fast-growing companies’ business and technology needs.
To help ASUG members make sense of the announcement, we recently sat down with Maura Hameroff, SVP of ERP Product Marketing at SAP, to ask a few questions about GROW and how it fits within the SAP suite of solutions.
Question: What can you tell ASUG members about GROW with SAP and the rationale behind this new offering?
Answer: SAP S/4HANA Cloud, public edition, is our cloud-native solution. And we have a very specific target for that solution in the midmarket space, especially for customers either starting their journey into ERP and cloud or coming from starting points of solutions that don’t fit their needs today—who are in that midmarket space amid growing and expanding their business. Those companies are not heavily IT-led companies, for the most part. Some of them, on the upper end, have a lot more, but they need solutions that fit their model, that are cloud-native and agile, so they can get up and running and start taking advantage of the solution quickly. They don’t need to rely on a lot of internal expertise or lengthy processes to get up and running. These customers were the key drivers for us to create GROW with SAP. Now, GROW is an offering that was built around SAP S/4HANA Cloud, public edition, which adds tools, methodologies, and services to help customers get up and running within four to eight weeks. That’s the basic scope; that’s what we’ve added around the tool, and we can build from there, either directly or through the help of partners.
The GROW offering includes SAP S/4HANA Cloud, public edition, as well as SAP BTP, our platform for customers to build extensibility. And we have a set of tools that start all the way from helping customers discover what the right scopes are for them to get up and running to providing models based on best practices for their industry and then connecting into our Cloud Application Lifecycle Management (CALM) application that helps them actually deploy. In the middle of that, we have the activation services that make that possible. That timeframe I mentioned, the four to eight weeks, is the result of using those tools and methodologies, as well as the best practices. So, in a nutshell, that is why we’ve created GROW and why GROW helps customers realize that process of using fast and cloud-native applications, getting up and running, then growing their business, no pun intended.
Q. One challenge specific to the midmarket is scaling organizations quickly and effectively. What conversations have you had with midmarket customers around their cloud transformation journeys, and how would you evaluate the progress of that midmarket sector in embracing cloud-native solutions overall?
A. Except for some more cloud-resistant countries, where there are a lot of restrictions or highly regulated industries, we're not necessarily seeing resistance to the cloud. Those companies are actually more likely to look at cloud-first because they don't have a lot of legacy systems. They’re looking at cloud-first in terms of modernizing their businesses. As businesses grow, they become really professionally managed and use tools for that, so their businesses become more complex. Triggers for that could be expanding to different countries or increasing the number of products that they have. As they get challenged with expanding their space, they realize it’s time for them to use ERPs to get there. They might then ask, “But is it complex? Is it for me?” That’s more of what we have to overcome: the complexity and the time-to-value.
Q. How does GROW with SAP fit into the overall SAP strategy toward simplifying landscapes instead of complexifying them?
A. Both GROW and cloud-native solutions are our shared answer to that challenge. The fact that it is a cloud-native service run by SAP means you don’t have to worry about the security or any of the infrastructure, which eliminates a lot of the burden that companies can’t deal with. We hear a ton about security and compliance and that companies in that space cannot keep up. Having a true, cloud-native solution that’s always up to date and having SAP be responsible for the service-level agreement (SLA) is extremely important.
And what we have done with SAP S/4HANA, public edition, and GROW is to take the knowledge that we have from 50 years of industry expertise and build those processes within the product. The genesis of GROW is simplifying and bringing that expertise. We have learned from all of our years what works in specific industries, and we have very specific processes. With our partners, we work with our customers to assess what they have and what they need. What scopes are the ones they need to get up and running? With that, we map them to the best practices in their industries. And that maps into the CALM tool, which gets them to production. The acceleration services play into that piece, bringing a small scope to get them up and running. And then you can add as you grow or as you need. That’s at the center: bringing that expertise to them, but in a way that eliminates the complexity or the extreme level of choice. Of course, a lot of customers will have needs that grow beyond that. But that's the point of being a cloud platform that enables them to extend. And in parallel, we're also working with our partner ecosystems, so they can bring their IP and their expertise into this same model of fit to standard.
Q. What pathways are in place to enable discovery for customers using GROW with SAP, or for those figuring out how they might maximize a potential investment in GROW with SAP?
A. It starts with the packaging. We simplified what we sell to our customers, so customers really know what they’re getting. And as part of that initial package, we are making sure they have everything they need to get up and running.
We have a base edition and the premium edition. SAP S/4HANA Cloud, public edition, is a full-on ERP solution; everything is built into the product, including all those best practices. In addition to that, we're adding CPEA Credits and BTP Build with Process Automation and Build Apps. We have that in two models: the base and the premium. The base is what you need at a minimum, and that's focused on customers that are more cost-conscious, have less requirements, or even for some emerging economies. And then, for the base, on the finance side, we enhanced that with group reporting and digital access. For the premium, we've added a little bit more, with additional finance solutions.
We know, based on our experience of the customers’ needs, that one part of the answer is putting in the package what customers actually need, making that easily clear and accessible. Also, thinking about CALM, with its tools and methodologies in one place, underlies our strategy here with all the tooling. Having that in one set of methodologies, and having clear packaging, ensures that customers can take advantage of everything that they have.
Q. Are you targeting any specific industries within the midmarket space where you’ve seen particular demand for an offering like GROW with SAP?
A. From an industry standpoint, where we see that demand initially is from professional services like consulting, audit, media, engineering and construction, public sector, higher education, banking, and high-tech insurance. Those are more service-centric industries. On the product-centric side, it’s industrial manufacturing, machinery, and components (IM&C), high tech, and automotive. That’s basically 70% of, from an industry standpoint, where we see demand. It’s about places where everything is a service, companies that need to combine physical products with services and make it a subscription. How do you do that without having an ERP that can combine the product and service, make it together, bill it as a subscription, tag on the usage if it's going to be use-based, billing … Those [criteria] indicate that those industries are really looking at this type of solution.
Q. Can you break down the points of differentiation between GROW with SAP and RISE with SAP, and how do you identify whether a customer is better suited to pursue one or the other?
A. We don’t pitch GROW and RISE in parallel to customers. We see that comparison happening more internally and with partners. When we’re going to events focused on midmarket and when those customers are looking for a cloud-native solution, GROW is our leading message, with SAP S/4HANA Cloud, public edition, at its center. For customers, we differentiate more in terms of whether they’re “starting fresh” or “migrating.” SAP S/4HANA Cloud, public edition, is that common element between GROW and RISE. In the context of RISE, public edition generally tends to be more of a two-tier type of model versus starting fresh with a new ERP. It complements whether you have a subsidiary divestiture, for example. There are a number of scenarios where public edition enhances private edition in the context of a RISE customer migration.
Q. What else would you like to share with the ASUG community about GROW with SAP?
A. GROW with SAP is us putting 50 years of knowledge into a cloud-native solution and lowering the barrier of entry for ERP for growing companies. That's, in a nutshell, what GROW is. We want companies in the midmarket space to see us as a partner and a helper in that space. They can bet on SAP to grow their business, and we will grow with them. Lots of solutions in the midmarket space can't grow with their companies. We want to both reduce the barrier of entry and grow with them and marry that with our industry expertise. And we want customers to be advocates with us on this fit-to-standard. Community is an extremely important angle for us with GROW. Our community is also getting up to speed on the activation methodologies, best practices, and how to really embrace this by starting with the fit-to-standard and then building on it. Advocates in the community will be key to success.