With arti­cles through­out 2022 that fea­tured ASUG mem­bers still con­sid­er­ing, yet-to-begin, amid, wrap­ping up, or at some oth­er point along their SAP S/4HANA jour­neys, ASUG want­ed to tap SAP lead­er­ship for plat­form per­spec­tives as the year was end­ing, and 2023 loomed largely.

In a recent inter­view, Eric van Rossum, Chief Mar­ket­ing and Solu­tions Offi­cer, SAP Cloud ERP, talked about progress and oppor­tu­ni­ties over the year, what he hears from cus­tomers about their chal­lenges and needs, and what’s on the SAP S/4HANA Cloud horizon.

This is an edit­ed ver­sion of the full interview.

Ques­tion: Look­ing back, what can you cat­a­log as the major achieve­ments and mile­stones for SAP S/4HANA Cloud in 2022?

Answer: S/4HANA adop­tion is robust — with more than 20,000 cus­tomers and grow­ing — across both exist­ing and net-new ERP cus­tomers com­ing into the SAP family.

On top of that is RISE with SAP, enabling cus­tomers to get on the cloud jour­ney with S/4HANA Cloud. We’re com­ing up on the two-year anniver­sary of RISE with SAP in Jan­u­ary 2023, and already, near­ly 2,500 cus­tomers are run­ning. Over 100 SAP part­ner data cen­ters around the globe have select­ed RISE with SAP to trans­form their busi­ness process­es and IT landscapes.

So, the momen­tum for SAP S/4HANA Cloud is con­tin­u­ing to grow, as is the trans­for­ma­tion jour­ney we’re deliv­er­ing for cus­tomers with RISE with SAP.

Q: When you talk to and hear from cus­tomers, what do you hear about the busi­ness and tech­nol­o­gy chal­lenges that SAP S/4HANA Cloud helps them tack­le today?

A: I like that you said ​“busi­ness chal­lenges” because, ulti­mate­ly, it’s about busi­ness out­comes, and tech­nol­o­gy should be an enabler of a cus­tomer’s desired busi­ness out­comes. When we’re talk­ing about a move, for exam­ple, from SAP ECC to SAP S/4HANA Cloud, that tech­nol­o­gy trans­for­ma­tion must be dri­ven by some val­ue aligned to those outcomes. 

We artic­u­late the val­ue of S/4HANA Cloud by putting it in terms of the three areas arguably most impor­tant to every busi­ness today: top line, bot­tom line, and the green line.

On the top line, SAP S/4HANA Cloud sup­ports new busi­ness mod­els and enables shifts into new mar­kets. Indus­try lines are blur­ring and giv­ing you an exam­ple, one of the biggest things we see is our cus­tomers mov­ing to sub­scrip­tion- and usage-based mod­els. That impacts the basic quote-to-cash process because you’re no longer just sell­ing a phys­i­cal prod­uct. You might be sell­ing a ser­vice or sub­scrip­tion to com­ple­ment the prod­uct, the actu­al pric­ing, based on some usage or con­sump­tion metric.

Regard­ing the bot­tom line, we dis­cuss how S/4HANA Cloud can help you take costs out of busi­ness. This is pri­mar­i­ly about lever­ag­ing proven busi­ness process­es for your indus­try. But this is also where we dis­cuss process automa­tion oppor­tu­ni­ties with SAP Sig­navio. Sig­navio can help cus­tomers iden­ti­fy oppor­tu­ni­ties where human inter­ven­tion can be auto­mat­ed or where there are breaks in a process, togeth­er with the low code-no code capa­bil­i­ties of SAP Build, which was announced at TechEd, build­ing RPA bots to take cost out.

Sus­tain­abil­i­ty has become a busi­ness imper­a­tive, so cus­tomers need to have a han­dle on their green line. SAP has long been the de fac­to sys­tem of record for finance, and we want to be the sys­tem of record for sus­tain­abil­i­ty as well. With S/4HANA Cloud, cus­tomers can adapt oper­a­tions and process­es to reduce emis­sions and waste con­sis­tent­ly, reduc­ing envi­ron­men­tal impact, as well as proac­tive­ly man­age reg­u­la­to­ry require­ments with com­pa­ny-wide con­trols and in-depth reporting.

Q: Can you look back and say there are some pieces of unfin­ished busi­ness with SAP S/4HANA Cloud?

A: There is always unfin­ished busi­ness! But one thing comes to mind. I’ve been with SAP for 23 years and start­ed as a con­sul­tant. At that time, you would go to a cus­tomer with a blank sheet of paper and ask, ​“What do you want?” Then you would work for two years and imple­ment it and nev­er want to touch that SAP sys­tem again until you upgrade sev­en years down the road.

Our unfin­ished busi­ness is con­tin­u­ing to help cus­tomers under­stand how the cloud has changed this dynam­ic by con­tin­u­ing to help them under­stand and adopt a cloud mind­set regard­ing ERP. 

Now, cloud mind­set. That’s a bit vague. To make it more con­crete, I see it as boil­ing down to a few key shifts in think­ing. The ​“blank sheet of paper” approach I men­tioned, which we had in the past, has flipped. We’re no longer look­ing to ERP to be every­thing and any­thing. Instead, we’re tak­ing a fit-to-stan­dard approach where ERP runs your indus­try-stan­dard, end-to-end process­es. Then, if you need added capa­bil­i­ties, you lever­age a plat­form like SAP Busi­ness Tech­nol­o­gy Plat­form to cre­ate the cus­tom apps and exten­sions you need. This allows you to keep your core ERP clean and standardized.

Cloud is also a jour­ney, not a des­ti­na­tion. Anoth­er catchy tagline, but it’s a fun­da­men­tal mind­set shift we want cus­tomers to under­stand. With ERP projects in the past, you’d bake every­thing you need into a big, mono­lith­ic ERP sys­tem — and then avoid touch­ing it as much as pos­si­ble. That’s ​“des­ti­na­tion” think­ing. Once it’s imple­ment­ed, you’ve arrived, and unless you want to mess with the code and cus­tomize, your capa­bil­i­ties are fixed.

Cloud ERP, on the oth­er hand, posi­tions you to take advan­tage of the lat­est inno­va­tions from SAP as soon as they’re released. In that sense, it’s an ongo­ing jour­ney of refin­ing your process­es and capa­bil­i­ties to meet the needs of what­ev­er the cur­rent busi­ness envi­ron­ment is throw­ing at you.

It’s a new way of think­ing about ERP, and it’s a pri­ma­ry rea­son why we launched RISE with SAP: to meet our cus­tomers wher­ev­er they are on their ERP jour­ney and help them shift to the cloud. No oth­er ERP provider has an offer­ing like RISE with SAP, and that’s why I’m pleased to see that it con­tin­ues to res­onate with customers.

Q: We want­ed to under­stand, from your per­spec­tive, what made the dif­fer­ence in S/4HANA Cloud growth and aware­ness among the North Amer­i­can cus­tomer base in 2022?

A: The growth in North Amer­i­ca shows we’re mak­ing sig­nif­i­cant inroads with dri­ving aware­ness for both S/4HANA Cloud and RISE with SAP, but we can always do a bet­ter job. In par­tic­u­lar, we could be clear­er in artic­u­lat­ing how these two fit togeth­er. That’s one thing I’ve heard from cus­tomers: there’s been some con­fu­sion about that. 

So, to anchor us, I want to talk about how S/4HANA Cloud fits with­in RISE with SAP. RISE with SAP is a com­pre­hen­sive solu­tion of prod­ucts and ser­vices from SAP and our part­ners to dri­ve busi­ness trans­for­ma­tion. The heart of RISE, the core prod­uct, is SAP S/4HANA Cloud. There is no RISE with­out S/4HANA Cloud. But RISE also has oth­er com­po­nents, includ­ing SAP Busi­ness Tech­nol­o­gy Plat­form (BTP) and SAP Sig­navio. This trio of S/4HANA Cloud, BTP, and Sig­navio is crit­i­cal, espe­cial­ly for exist­ing SAP cus­tomers. Let me explain why. 

Any­time you talk about ERP trans­for­ma­tion, it starts with busi­ness process­es. This is par­tic­u­lar­ly impor­tant for exist­ing SAP cus­tomers who want to move to cloud ERP but don’t want to give up their IP and invest­ments in their exist­ing ERP sys­tem. How do they decide what to retain and where to lever­age a stan­dard process? This is where SAP Sig­navio adds incred­i­ble val­ue. Sig­navio allows cus­tomers to com­pare their exist­ing process­es to indus­try stan­dard process­es to accu­rate­ly assess the fea­si­bil­i­ty of mov­ing to stan­dard. With this view, cus­tomers can also iden­ti­fy process inef­fi­cien­cies and oppor­tu­ni­ties to replace man­u­al work with automation.

This then plays nice­ly into the capa­bil­i­ties of BTP. Once you under­stand your cur­rent busi­ness process­es and how they stack up against the indus­try stan­dard, you can make informed deci­sions about the func­tion­al­i­ty you want to keep in ERP and what you want to move to BTP.

Q: As you reflect­ed on 2022, is there one ele­ment, one mile­stone, or one achieve­ment that you’re most proud of?

A: I would come back to RISE with SAP. I’m proud of not only the incred­i­ble adop­tion we’ve seen, which is nice of course, but also the RISE with SAP solu­tion itself: all the prod­ucts and ser­vices we’ve put togeth­er in a sin­gle offer­ing to help cus­tomers trans­form their busi­ness­es for the cloud.

The tagline for RISE with SAP is ​“Dri­ving busi­ness inno­va­tion togeth­er.” To us at SAP, that’s not an emp­ty promise. Suc­cess­ful cloud trans­for­ma­tion is a guid­ed jour­ney, and we’re excit­ed to part­ner with cus­tomers and see them succeed. 

Q: Let’s talk about SAP S/4HANA Cloud and RISE with SAP in 2023… Any addi­tions, enhance­ments, or evolutions?

A: That builds nice­ly on your last ques­tion. The core com­po­nents of RISE with SAP will not change, but we’re con­stant­ly look­ing to opti­mize the solu­tion to ensure we’re giv­ing cus­tomers the prod­ucts and ser­vices they need for suc­cess­ful cloud transformation. 

Q: With SAP S/4HANA Cloud, what have been the strongest indus­tries with adop­tion, and are those indus­tries that you will con­tin­ue to focus on? Are there addi­tion­al indus­tries that are growth tar­gets for 2023?

A: Good ques­tion. One of our strengths at SAP is our Indus­tries solu­tions and the teams that sup­port them. This means that we can meet cus­tomers’ needs in all indus­tries and is reflect­ed in the adop­tion of S/4HANA. No oth­er com­pa­ny can meet such a wide range of cus­tomer needs when it comes to ERP. Mov­ing into 2023, we will con­tin­ue to invest in our Indus­tries’ strat­e­gy so that our solu­tions will evolve with the indus­tries that they support.

Q: Are there any unique char­ac­ter­is­tics or anom­alies across the North Amer­i­can cus­tomer base that you find extreme­ly inter­est­ing and remarkable?

North Amer­i­ca. For me, it starts and ends with North Amer­i­ca. That’s also where we see our most sig­nif­i­cant com­pe­ti­tion. So, I would almost say it’s at the fore­front of cloud ERP — from an adop­tion per­spec­tive and dri­ving require­ments for cloud ERP.

Q: Any­thing else you want to men­tion direct­ly to the ASUG audience?

A: One oth­er thing. We recent­ly attend­ed the Gart­ner Sym­po­sium events in Europe and North Amer­i­ca and spoke about the future of ERP. One of the things we touched on is that SAP is 50 years old. That’s a long time for a tech­nol­o­gy firm to be around. 

Over the years, ERP has been declared ​‘dead’ or not ​‘sexy.’ But I think today — com­ing off the pan­dem­ic with unrest in the geopo­lit­i­cal envi­ron­ment; what’s hap­pen­ing with Ukraine; press­ing cyber­se­cu­ri­ty; sup­ply chain issues; and so on — ERP is more rel­e­vant than ever.

Infla­tion and work­ing cap­i­tal man­age­ment and how you man­age that; cyber­se­cu­ri­ty with­in an ERP sys­tem; the resilience sup­ply chain — all of it has ele­vat­ed ERP as a board­room topic. 

Going into 2023, that’s going to con­tin­ue. ERP is as rel­e­vant or more rel­e­vant than ever, but how we look at ERP has changed. The sig­nif­i­cant change is what we call mod­u­lar ERP, which is some­thing I’ve been point­ing towards in the pre­ced­ing ques­tions with­out using the word modular. 

In the old days, ERP was a mono­lith­ic sys­tem with end-to-end process­es and wall-to-wall SAP, all built into one sys­tem. It was­n’t easy to man­age that. I think the dif­fer­ence today and going for­ward is that the demands and require­ments of the busi­ness envi­ron­ment are suit­ed to a mod­u­lar ERP archi­tec­ture, where your core ERP relies on stan­dard indus­try process­es. You lever­age a plat­form like BTP to add mod­u­lar pieces to tai­lor and extend core ERP func­tion­al­i­ty and enable an open sys­tem where you can plug in oth­er appli­ca­tions from SAP or any­one else. If you look at where we are today and where we’re going polit­i­cal­ly and eco­nom­i­cal­ly, mov­ing from mono­lith­ic to mod­u­lar ERP is very impor­tant. See more of our Cloud ERP insights here.