SAP’s on-premis­es cus­tomers must con­front sig­nif­i­cant scope and cost deci­sions while mak­ing the busi­ness case to move their ERP sys­tems to the cloud and adopt a cloud oper­at­ing model.

To incen­tivize cus­tomers run­ning on-premis­es edi­tions of SAP ERP Cen­tral Com­po­nent (ECC) and SAP S/4HANA to make their move and remove the road­blocks com­mon­ly expe­ri­enced by cus­tomers seek­ing to do so, SAP recent­ly announced the RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram.

A com­pre­hen­sive set of resources, ser­vices, and finan­cial incen­tives intend­ed to serve as a guid­ed dig­i­tal expe­ri­ence for cus­tomers mak­ing the tran­si­tion to SAP S/4HANA Cloud, this pro­gram could enable cus­tomers with on-premis­es imple­men­ta­tions of SAP S/4HANA and SAP ERP Cen­tral Com­po­nent (ECC) to reduce the cost of cloud migra­tions by up to 50%, accord­ing to SAP.

Giv­ing cus­tomers access to cred­its (avail­able until the end of 2024) that can be used to off­set the costs of main­te­nance, cloud ser­vices, or cloud sub­scrip­tions, the pro­gram will also give cus­tomers access to the SAP S/4HANA Cloud Safe­keep­er ser­vice. Cus­tomers run­ning old­er releas­es of SAP S/4HANA and falling into cus­tomer-spe­cif­ic main­te­nance as they upgrade to the lat­est ver­sion of SAP S/4HANA can opt for the ser­vice, which offers upgrade ser­vices, sand­box infra­struc­ture, and busi­ness con­ti­nu­ity for cus­tomers’ cur­rent sys­tems, via updates and patch­es, for two more years, giv­ing them more time to upgrade.

And in an effort to stan­dard­ize the migra­tion jour­ney, SAP has also announced that those migrat­ing to the cloud — along with part­ners assist­ing with their migra­tions — will fol­low a defined RISE with SAP Method­ol­o­gy, with mile­stone checks and report­ing sup­port­ed by SAP ser­vices and specialists.

To shed fur­ther light on the RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram, ASUG spoke with Mau­ra Hameroff, SVP of ERP Prod­uct Mar­ket­ing at SAP, who detailed the company’s path to this lat­est pro­gram, the impor­tance of align­ing busi­ness and tech­ni­cal lay­ers when ini­ti­at­ing cloud trans­for­ma­tion, bring­ing part­ners along to estab­lish a cen­tral RISE with SAP Method­ol­o­gy, and how cus­tomers might best uti­lize the finan­cial incen­tives includ­ed in the program.

This inter­view has been edit­ed and condensed.

Q: To set the scene for ASUG mem­bers, what cus­tomer feed­back led SAP to move for­ward with the RISE Migra­tion and Mod­ern­iza­tion program?

A: We start­ed our jour­ney, in terms of our strong com­mit­ment to the cloud, in June of last year, right before SAP Sap­phire. And that jour­ney has involved devel­op­ing inno­va­tions and mak­ing sure our cus­tomers can take advan­tage of those inno­va­tions in the cloud. SAP is built on a tra­di­tion of suc­cess as a cus­tomer-cen­tric com­pa­ny; we were built on the mes­sage of design­ing soft­ware for our cus­tomers. We car­ry that mes­sage with us to this day. 

As SAP made a clear com­mit­ment to the cloud last year, cus­tomers pro­vid­ed very loud, clear feed­back that they need­ed extra help from SAP to get to the cloud. The ques­tion is not whether they want to get to the cloud. It’s, ​“How do I get to the cloud, con­sid­er­ing how I’ve pre­vi­ous­ly worked with SAP and what I’ve invest­ed in SAP to date?” Over the last year and a half, col­lab­o­rat­ing with our cus­tomers, we’ve been test­ing and pilot­ing ideas relat­ed to how we can help them [move to the cloud.] 

Through­out this process, it first became tru­ly clear that what­ev­er we did had to be dif­fer­ent from an SAP ECC stand­point or an SAP S/4HANA stand­point. Our cus­tomers had quite dif­fer­ent start­ing points, depend­ing on what ERP sys­tem they were running. 

If you look at an SAP ECC cus­tomer, it’s a whole rede­vel­op­ment of their busi­ness process, whole sets of mod­ern­iza­tions need to occur, and they more quick­ly have clear vis­i­bil­i­ty of the val­ue of oper­at­ing in a com­plete­ly dif­fer­ent way in terms of their busi­ness models. 

For SAP S/4HANA cus­tomers, those cus­tomers have already bought into the new mod­el from a busi­ness process­es stand­point; what they need to take is that next step of tru­ly run­ning in a cloud-cen­tric oper­a­tional mod­el, to take full advan­tage of how their busi­ness can run differently. 

We’re cur­rent­ly lin­ing up a series of cus­tomers for an event, and we are focused on spe­cif­ic busi­ness process changes that they have achieved, because of that holis­tic cloud trans­for­ma­tion with RISE with SAP and across their envi­ron­ment; Mahin­dra Group, for exam­ple, can sell 100,000 cars in 30 min­utes. That’s what we have to help SAP S/4HANA cus­tomers get to: a holis­tic cloud transformation. 

We’re also focused on ensur­ing con­sis­ten­cy to achieve results. In today’s world, where resources are scarce and all com­pa­nies are pres­sured in a macro­eco­nom­ic sense and in their own indus­tries with com­pe­ti­tion, you can’t wait. You need to under­stand, in order to get a project approved, the CEO needs to under­stand how the com­pa­ny will oper­ate dif­fer­ent­ly as a result — not just the cost, ROI, TCO, and oth­er tra­di­tion­al evaluations. 

Last­ly, even with a clear­er view of what trans­for­ma­tion is meant to accom­plish, how the com­pa­ny will do things dif­fer­ent­ly, and when, cost is a fac­tor. It’s an invest­ment. Those are the three ele­ments that we considered:

1. Where the cus­tomers are today.
2. What they need in both of these jour­neys to get to their intend­ed results, pro­vid­ing that clar­i­ty and trans­paren­cy on when they’re going to get those results.
3. What addi­tion­al sup­port we could offer through incen­tives to off­set the typ­i­cal costs involved in migration

The RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram is bring­ing this umbrel­la togeth­er across the com­pa­ny. We’re not just launch­ing a web­site. We’re not just launch­ing incen­tives. This is prod­uct engi­neer­ing with cus­tomer suc­cess, ser­vices, and mar­ket­ing, bring­ing togeth­er every­thing that the cus­tomer needs through­out their journey. 

Q: As I under­stand it, The RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram is an expan­sion of what was pre­vi­ous­ly avail­able via RISE with SAP, with addi­tion­al sup­port, ser­vices, and a clear­ly defined method­ol­o­gy for trans­for­ma­tion on top of the finan­cial incentives.

A: Yes, it’s absolute­ly build­ing on what we had avail­able before. RISE with SAP starts with the cloud solu­tion; think of RISE as a bun­dle of cloud solu­tions and our man­aged infra­struc­ture that brings togeth­er pre­dictabil­i­ty, avail­abil­i­ty, and a ser­vice-lev­el agree­ment (SLA) with tools, method­olo­gies, sup­port, and services. 

On the note of tools, method­olo­gies, sup­port, and ser­vices, this is what we’re ele­vat­ing into an entire pro­gram. What we’re adding is, first, full trans­paren­cy: on what it takes, what the steps of migra­tion are, and how you can eas­i­ly start think­ing about and plan­ning your jour­ney through a new dig­i­tal expe­ri­ence for SAP ECC and S/4HANA customers. 

We’re also bring­ing all of the tools, ser­vices, and method­olo­gies that we have avail­able into a defined RISE with SAP Method­ol­o­gy. It’s based on SAP Acti­vate and the adop­tion frame­work, with four clear­ly defined steps. We’re also cre­at­ing clar­i­ty through report­ing, to help cus­tomers move from step to step. It’s no longer just up to the cus­tomer or the part­ner to fig­ure it out; now, SAP is help­ing both cus­tomers and part­ners main­tain clar­i­ty in terms of what they need to achieve, where they are in the process, and what it takes to get to [their des­ti­na­tion.] That’s huge.

Sec­ond­ly, SAP is now train­ing and upskilling our part­ners to do the same through our RISE com­pe­ten­cy, which now requires train­ing and upskilling on the RISE with SAP Method­ol­o­gy. Some of the ele­ments of this were already in place, but we’re adding that next lay­er to make sure the entire­ty of the method­ol­o­gy is fol­lowed in projects; and we’re requir­ing more spe­cif­ic roles on the part­ner side to be trained to help the cus­tomer archi­tect their journey. 

Q: How will build­ing the RISE with SAP com­pe­ten­cy to fol­low this method­ol­o­gy work from the part­ner side? 

A: It’s an offi­cial com­pe­ten­cy. SAP today has a com­pe­ten­cy based on SAP S/4HANA Cloud, pri­vate edi­tion. We’re evolv­ing this com­pe­ten­cy to be a RISE com­pe­ten­cy. We’ll do that by adding train­ing and cer­ti­fi­ca­tion: train­ing to the com­pa­nies, cer­ti­fi­ca­tion to the indi­vid­u­als. We’re adding addi­tion­al train­ing and requir­ing addi­tion­al cer­ti­fi­ca­tion, so that the part­ners can be upskilled into the RISE with SAP Method­ol­o­gy, and we can clear­ly say which part­ners are trained and capa­ble of run­ning the RISE with SAP Method­ol­o­gy for our customers.

Q: What cus­tomer feed­back led you to pro­ceed with bring­ing finan­cial incen­tives into the new RISE pro­gram, and how did you specif­i­cal­ly approach those?

A: The incen­tives cov­er three areas. As cus­tomers are mov­ing, irre­spec­tive of whether they’re mov­ing from SAP ECC or S/4HANA, they’re not going to move their entire estate in one fell swoop. There are sys­tems run­ning in the cloud, and there are sys­tems run­ning on-premis­es, as they com­plete their move and trans­for­ma­tion. Part of the incen­tives can be applied to main­te­nance costs, which bur­den cus­tomers in cas­es where they’re run­ning par­al­lel systems.

Sec­ond­ly, trans­for­ma­tion requires ser­vices. To lift-and-shift and start oper­at­ing in the cloud with­out the prop­er busi­ness process trans­for­ma­tion and evo­lu­tion of your frame­work for oper­at­ing in the cloud, it doesn’t hap­pen auto­mat­i­cal­ly. Cus­tomers gen­er­al­ly need help with ser­vices. That’s anoth­er angle that we’re hit­ting with the incentives. 

And third, the more cus­tomers get to the cloud, the more they want to do in the cloud, so we’re adding that next lay­er. Depend­ing on where the cus­tomers are in their jour­ney, and where they have allo­cat­ed their resources, those are the three areas that we have seen cus­tomers need­ing extra sup­port in, whether it’s to sup­port dual sys­tems, to invest in ser­vices that they need to break through and mod­ern­ize their busi­ness process, or an addi­tion­al set of solu­tions that they want to run in the cloud. From a plat­form stand­point, the more cus­tomers start to devel­op their exten­si­bil­i­ty in the cloud, the more they con­sid­er CPEA cred­its or addi­tion­al line-of-busi­ness appli­ca­tions. They might need to extend their HR capa­bil­i­ties, for exam­ple, or they might need to add more advanced finance solu­tions. The cred­its are devel­oped for cus­tomers that are already in a more advanced stage of get­ting to the cloud and want­i­ng more from the cloud.

The two design prin­ci­ples we used for the incen­tives are clar­i­ty and flex­i­bil­i­ty. In terms of clar­i­ty, this is your con­tract val­ue; you get this as a one-time cred­it, and you have three areas where you can invest. In terms of flex­i­bil­i­ty, cus­tomers are in dif­fer­ent ranges with what they need the most. Some cus­tomers have less com­plex­i­ty; in both the SAP ECC and SAP S/4HANA space, you see cus­tomers that start­ed on a clean-core jour­ney before even mov­ing to the cloud. They’re going to be more inter­est­ed in main­te­nance costs or in addi­tion­al cloud solu­tions or ser­vices. Oth­er cus­tomers that need more help will be look­ing at trans­for­ma­tion services.

Q: As you said, SAP ECC cus­tomers and SAP S/4HANA cus­tomers will take dif­fer­ent steps to ini­ti­ate the RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram. Can you detail what the steps are like from both of those start­ing points?

A: There are two lay­ers: a busi­ness lay­er and a tech­ni­cal lay­er. On the busi­ness lay­er, all cus­tomers need to look at their busi­ness process­es, map­ping inef­fi­cient process­es and oppor­tu­ni­ties for evo­lu­tion. That is what makes the busi­ness case, answer­ing the ques­tion of how effi­cient­ly or inef­fi­cient­ly you are run­ning today, ask­ing what oppor­tu­ni­ties there are for improve­ment. On the tech­ni­cal lay­er, you have to also assess your cur­rent envi­ron­ment, to under­stand the com­plex­i­ty of your exten­sions, of your depen­den­cies, of what you have mapped. Those steps are valid for both SAP ECC and SAP S/4HANA cus­tomers. But the way you do it is quite different. 

On the busi­ness lay­er, if you’re in SAP ECC, you are going to be look­ing at ser­vice man­age­ment for exam­ple very dif­fer­ent­ly. In a tra­di­tion­al world, you’re doing a ser­vice order for parts, for main­te­nance, for your ser­vice unit. In an inte­grat­ed busi­ness process world, you’re look­ing at them holis­ti­cal­ly; even if you’re still charg­ing cus­tomers sep­a­rate­ly, you’re look­ing at them holis­ti­cal­ly, and you’re sell­ing them together. 

For exam­ple, you can sell an air-con­di­tion­ing unit and ser­vice, which includes main­te­nance as well as the actu­al unit and ser­vice. The entire cycle of that busi­ness process, and bring­ing it all togeth­er, is dif­fer­ent in the SAP ECC world. That’s where you have to look at, today, what are the process­es you real­ly need to see? What would they look like? How are they going to mod­ern­ize our com­pa­ny? Where are we going to start? 

In the SAP S/4HANA world, it’s slight­ly dif­fer­ent. It’s about how much more effi­cient I can get. How many oth­er sys­tems I can con­nect with, to then be more effi­cient? Where else in the com­pa­ny and in the land­scape can I con­nect to? 

As anoth­er exam­ple, Mahin­dra was tasked with con­nect­ing their sales oper­a­tions with their man­u­fac­tur­ing oper­a­tions, their billing, and their e‑commerce oper­a­tions, tying it all togeth­er. That’s what you can do only in the cloud. And it’s not that every­thing was done on SAP at Mahin­dra, but RISE with SAP was at the cen­ter; they con­nect­ed mul­ti­ple sys­tems they could have nev­er done and run oper­a­tions in real time they could nev­er have run if their trans­for­ma­tion were not done in the cloud. 

From a tech­ni­cal stand­point, you have to look at whether you’re going to do a brown­field or green­field migra­tion, and that will rely on what type of exten­si­bil­i­ty and what tech­ni­cal debt you’ve built up over time. If you have already gone to SAP S/4HANA, you may have already looked at those aspects; you’re going to be look­ing at the depre­ci­a­tion of hard­ware, depre­ci­a­tion of infra­struc­ture, and how you do with high availability.

What you look at first will dif­fer between SAP ECC and SAP S/4HANA. Busi­ness and tech­ni­cal lay­ers run in par­al­lel, but depend­ing on where you are today and what you have devel­oped, those are the types of deci­sions you’re going to be making.

Q: Last fall, SAP debuted the 2023 release of SAP S/4HANA and ​“pre­mi­um plus” RISE and GROW pack­ages that embed capa­bil­i­ties for gen­er­a­tive AI and SAP sus­tain­abil­i­ty solu­tions. As recent­ly dis­cussed on the Q4 earn­ings call, more than 50% of cus­tomers who’ve signed up for RISE or GROW since that announce­ment have opt­ed for the pre­mi­um edi­tions. Can you talk about the RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram in rela­tion to those pack­ages, and to what do you attribute the ear­ly suc­cess of those packages? 

A: This is an evo­lu­tion of that. With [the RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram,] we’re con­nect­ing a dig­i­tal expe­ri­ence with the depth of our tech­ni­cal tools and method­olo­gies, and also adding finan­cial incen­tives we pilot­ed in Q4 [of 2023] with a hand­ful of cus­tomers to try to fig­ure out what it is cus­tomers actu­al­ly need from an incen­tive stand­point to dri­ve trans­for­ma­tion. This pro­gram is an evo­lu­tion and brings var­i­ous ele­ments togeth­er, and all of the ele­ments of the pro­gram itself are based on work that we’ve already done.

Every­thing is based on cus­tomer feed­back. The way we have designed the pre­mi­um pack­ages and how we’re going to advance them, that’s based on what cus­tomers tell us are the types of pack­ages that they want SAP to pro­vide to them. Our per­sonas include finance pro­fes­sion­als, IT pro­fes­sion­als, and COOs; we take feed­back from our cus­tomers in dif­fer­ent per­sonas, and then we look at the core of the prod­ucts and what addi­tion­al­ly can bring val­ue. We design our pack­ages with cus­tomer feed­back in mind, and we look at enti­tle­ments that we see the cus­tomers need the most. 

AI, for exam­ple, is no stranger to SAP. We start­ed with automa­tion, evolved into AI, and now we’re adding gen­er­a­tive AI to our solu­tions. The big dif­fer­en­ti­a­tions that we have include the busi­ness knowl­edge that we have and how we guide with that knowl­edge in the prod­ucts. In both RISE with SAP and GROW with SAP, the amount of automa­tion, best prac­tices, and guid­ance that we pro­vide in the prod­uct has been tremen­dous. Now, with inter­ac­tion through Joule and through oth­er mech­a­nisms, you can more eas­i­ly access data from mul­ti­ple parts of your sys­tem, bring it into con­text, and make action easy. That has been tremen­dous for our cus­tomers, who tru­ly see how both their employ­ees can run the busi­ness in a dif­fer­ent way, how they can be faster and bet­ter to their customers. 

Sus­tain­abil­i­ty is near and dear to com­pa­nies—and a require­ment in sev­er­al indus­tries. The fact that we’re com­bin­ing finan­cial data with green data, not just using aver­ages but look­ing at real data in real time, is a key dif­fer­en­ti­a­tion. Oth­er solu­tions look at aver­ages and do offline match­ing, but with our solu­tions we’re com­bin­ing data and able to run sce­nar­ios. If you change where your plant is, or if you make mod­i­fi­ca­tions else­where, what is the effect? What is the finan­cial effect of doing so, and what is the green effect of doing so? How is it going to look like in the peri­od of a year? That is a huge dif­fer­en­ti­a­tion for cus­tomers. Many cus­tomers are ear­ly in their jour­ney, but the fact that we pro­vide them with the tools to help guide them, even at this ear­ly stage, we see excite­ment about.

ASUG will con­tin­ue to mon­i­tor the roll­out of SAP’s RISE with SAP Migra­tion and Mod­ern­iza­tion pro­gram to com­mu­ni­cate and clar­i­fy its details for our mem­bers as more infor­ma­tion is made available.