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SAP dangles bigger carrots for S/4HANA Cloud, Rise

SAP unveiled products and services to spur cloud migrations, including the new S/4HANA Cloud, private edition; a premium plus package for Rise with SAP; and migration services.

SAP unveiled a series of products and services aimed at enticing more S/4HANA Cloud migrations.

In one of the more significant moves, a new 2023 release of SAP S/4HANA Cloud, private edition, is now available and provides feature parity with legacy SAP ECC systems, making it easier for on-premises customers to move to the cloud, according to the company.

SAP also launched two incentives aimed at driving more S/4HANA Cloud migrations. One is a premium plus package for Rise with SAP, which includes AI capabilities and functionality for sustainability and advanced finance. The second is a program of services and incentives to help customers plan and execute an S/4HANA Cloud migration faster, at a lower cost and with less disruption.

The 2023 release of S/4HANA Cloud, private edition is designed to settle questions about whether S/4HANA Cloud is robust enough in functionality for ECC customers, said Eric van Rossum, chief marketing and solutions officer for SAP Cloud ERP, in a briefing.

"We had a lot of [the functionality in S/4HANA Cloud] but now every single part is fully covered," he said.

S/4HANA Cloud, private edition, which is a foundational part of Rise with SAP, will also follow a two-year release cycle, van Rossum said, with updates and new features generally released twice a year. Maintenance will increase from five years to seven years.

The private cloud product is different from S/4HANA Cloud, public edition, in that it allows customers to move to the cloud at their own pace and continue to depend on their existing systems, van Rossum said. This can be a multi-step process that depends on how long they've been running ECC and how customized the legacy systems are.

The public cloud edition, on the other hand, provides out-of-the-box upgradability but requires a complete reimplementation from the start, he said.

"Customers have the choice: They can go to public cloud right away, but it's more disruptive to do it that way, or they can go on that multi-step journey," van Rossum said.

Making the S/4HANA Cloud move easier

Rise with SAP's new premium plus package includes tools intended to take advantage of AI capabilities and provide choice and flexibility in migrating to S/4HANA Cloud, according to van Rossum.

It comes with sustainability applications like SAP Sustainability Control Tower and Sustainability Footprint Management, generative AI capabilities through the recently introduced Joule AI assistant and financial functionality to help CFOs with planning operations and financial forecasting accuracy.

Rise with SAP will also now include services intended to help customers plan and tailor S/4HANA migrations to their requirements, according to SAP. This includes AI technology that can help with test automation, generative AI for text-centric documentation and Signavio Process Insights to help customers build a business case for migration.

In addition, Rise with SAP now offers the SAP Customer Evolution kit, a free service that includes customer one-on-one sessions with SAP experts to evaluate the best way to move to S/4HANA Cloud.

"We sit down with customers in around a two-week engagement to analyze what their system looks like, do a readiness check and articulate the value drivers of what they will get out of moving," van Rossum said. "After that, they'll get a migration offer and roadmap document to work with."

Paying the premium for value

The feature parity that S/4HANA Cloud, private edition now has with ECC has the potential to convince customers to migrate, said Mickey North Rizza, group vice president for enterprise software at IDC. However, customers must see the value of capabilities like real-time data insights, up-to-date embedded functionality for central procurement, customer management and production planning and scheduling.

In addition to the feature parity, SAP S/4HANA, private edition, has business processes that support industry requirements, provide AI to automation and optimize processes as well as out-of-the-box integrations to make it easier to bring what customers need into the system, Rizza said.

As we move closer to [the SAP support deadline], organizations must prioritize this transition not just to be at the forefront of their market but simply to survive.
Mickey North RizzaGroup vice president for Enterprise Software, IDC

This will be important as organizations realize the need to move further into the digital world, she said.

"The timing of this is critical for SAP ECC organizations as it helps to move the needle toward meeting the support end date of SAP ECC and it helps [customers] thrive in the digital world," Rizza said. "While digital transformation has accelerated over the past decade, there's still a litany of legacy systems that continue to act as anchors preventing organizations from fully transitioning into a digital, agile and resilient organization underpinned with modern innovative technologies."

Continuing to stay on outdated systems carries risks like growing operational inefficiencies, reduced ability to innovate quickly and potential losses in market share as they struggle to meet evolving market dynamics, she said.

"As we move closer to [the ECC support deadline], organizations must prioritize this transition not just to be at the forefront of their market but simply to survive," Rizza said.

She also believes customers will invest in the Rise's premium plus package because it includes some sought-after components, such as the sustainability applications and the financial tools, she said.

"What is critical to understand here is that organizations will now get the necessary packages together in one offering that will help them do what they need to do when they need to do it," Rizza said.

The new migration services could help customers untangle the complexities of their legacy systems to prepare for the move to the cloud, she said.

"Many customers have so many customizations they still have yet to unravel and they want to modernize all of their systems to take advantage of whatever they can in terms of new technology," Rizza said. "SAP's cloud application services can help them drive to predicable outcomes and fixed costs from application operations to innovation adoption."

Jim O'Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.

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