Soon after SAP Sapphire & ASUG Accelerate Orlando concluded, ASUG connected with Sven Denecken, SAP SVP, COO SAP S/4HANA, and Head of Product Success. We discussed what he’d heard from customers at the event and in the weeks since, and gained insights on what SAP has in store for current and prospective SAP S/4HANA customers.
Denecken added to the conversation mix by conveying his views on gaps—skill sets and certain IT roles—that, if filled, could accelerate business and technology transformation. He also emphasized the need for more enterprise architects. Enterprise architects happen to be central to the upcoming ASUG Best Practices: SAP Enterprise Architect conference. For more information on that event, click here.
This is an edited version of the complete interview. Denecken eagerly jump-started the discussion without an initial question, describing his role, organizational context, and SAP Sapphire experiences.
Denecken: Let me give you a little bit of rundown when I talk about the SAP S/4HANA organization. There is the SAP S/4HANA product that is well known, but the organization also includes everything to do with supply chain. My organization and [SAP President and Chief Product Officer, S/4HANA] Jan Gilg’s organization (he is my boss and the President) also have Industry Cloud. This is a very broad portfolio that we cater to, with more than 10,000 people overall.
I think it was a very different SAP Sapphire than before and it was very successful. We had a lot of businesspeople. IT colleagues brought their businesspeople with them for very deep discussions.
When it comes to what we’ve added, more than a year ago we launched the RISE with SAP offering, a concierge service to support customers in achieving business transformation as a service. We’ve already crossed the mark of 2,000 customers. All of them are leveraging SAP S/4HANA in whatever deployment model. And, as [CEO Christian Klein] said on stage, a big part of RISE with SAP is that we start with analyzing [customers’] business processes with SAP Signavio, with best practices, showing them what “good” could look like. And we’re leveraging the SAP Business Technology Platform a lot, giving customers tools to get to SAP S/4HANA.
Question: What are the latest topics you’re hearing about from customers and prospective customers?
Answer: There are four topics that stand out for me, or maybe three. The first one is that supply chain is front and center in several discussions. It’s not only in classical warehouse management and getting manufacturing back. It’s also in disruptions that we saw with the capsized ship in the Suez Canal, in ongoing pandemic disruptions, and in what we now see with the terrible war in Ukraine. This has changed the perception of the importance of the supply chain, changing from a demand-driven view on supply chain to a constrained-driven supply chain, which means: “How can I purchase all the goods I need to manufacture?” This means turning the digital supply chain upside down, from demand- to constraint-driven.
This is where our cloud solutions are extremely powerful because they look at the same problem through a different lens. If you have standardized to the cloud, it’s easier to adapt to changes. That’s why, with SAP S/4HANA, there is a preconfigured plug to SAP Business Networks in RISE with SAP. There is a Business Network we created together with the automotive industry, called Catena-X, where they can now share data that they previously kept as “secret sauce.”
This is very important because of the high degree of standardization in manufacturing environments. Everyone may say that the public cloud is only a good fit for HR, maybe finance. But with what we’re currently doing—wall-to-wall infrastructure as a service—we’re doing that for Porsche … with BMW, with Daimler, and with Volkswagen.
Q: Are these examples of interest to U.S. automakers as well?
A: Yes, very often we see a repatriation of certain functionalities and manufacturing capabilities coming back into the U.S. The ability of sensors in IoT helps to enable digital twins of a manufacturing plant because you still need to compete in a global environment. You can only get that optimization with a 100% cloud-based standardized approach. I would say that is super relevant for the U.S.
Q: What else did you hear from customers at SAP Sapphire and what have you been hearing since then?
A: When I was sitting in on customer meetings, what we heard from them were questions such as, “Can you help me digitize my operations—not only the classical ones such as HR and finance, but other operations, such as manufacturing and supply chain?” Many industries want to invest in the highest degree of standardization. This means we need to define—together with the client—the starting point. That’s what RISE with SAP is about. That resonated well with large clients.
We also heard a lot more interest in software as a service (SaaS). The question was, why not SaaS? Why can’t we standardize? We’re doing that with many other vendors. We want to go on that journey. Post–SAP Sapphire, business or IT people are super quick with follow ups. They’re inviting us everywhere. I could clone myself 500 times and my boss 1,000 times, because I think there is now willingness to come up with a plan, an action plan. “How can I apply RISE with SAP to a higher degree of digital transformation?”
Q: What do you need for digital transformation?
A: We could use a lot more enterprise architects. I could use a lot more help from ASUG to get the enterprise architects together, like for an educated discussion about what a good landscape looks like. “How do I transform my landscape?” That is something where ASUG and SAP should work much closer together. Everyone says IT is back at the table. I want to be more specific. Enterprise architects and people who understand business transformation—they should be back at the table, and we need them.
Q: Have you heard more about business or technology challenges, or about economic uncertainty?
A: Yes. Let me give you a concrete example in the oil and gas industry. For two to three years, it was all about cost optimization, which asks for a lot of standardization. Now they’re asking for standardization, but for growth, to standardize as fast and as much as you can.
Q: What’s coming up for SAP S/4HANA in Q3–Q4 2022?
A: At SAP Sapphire, it was a little funny. Everyone was waiting for the big announcement. We’re not waiting until SAP Sapphire anymore. We are delivering every quarter, some products even every week. I don’t think there is or will be a big-bang release anymore. Part of my COO job is to put the buck on the right chip or in the right place. I think, again, supply chain and manufacturing are the big ones.
I see a tremendous acceleration of financial transformation and standardization in companies, specifically due to the impact finance has, be it for recession or growth, all toward how businesses are run. We are in a perfect spot with our extensive financial heritage. That’s why a lot of product investment goes to customers with global reach and needs for localization.
We also need the ecosystem; we’re not globalizing and localizing without our partners. We’ve also made some interesting advances in technology, in SaaS, which means extensibility. We developed many whitelisted application programming interfaces where partners can extend, or where customers can extend, while we now keep the core clean and updated every month. We’re now shipping innovations every month, whereas before we used to do a big release quarterly.
Q: The ASUG mission is to help our members optimize their investments in SAP technology to get the most value. What’s your advice to our members to do just that?
A: First, get a glimpse of what RISE with SAP can truly bring you, to analyze your status quo and define the journey.
Second, increasingly look at the degree of standardization that U.S. companies are willing to achieve, and in what time frame. We’re not only offering SaaS, but also, we’re offering a path toward standardization.
And the third thing is fasten your seat belt. There is a lot of innovation, from a feature-function perspective, now coming monthly. You’d better embark on a certain degree of standardization so you can turn on those features easily. Get rid of the technical debt together with us; get rid of the technical legacy together with us; and get rid of your customizations together with us—with us in SaaS, with us, SAP.