Iain Saunderson, CTO, Spinnaker Support, says the tools and platforms you choose should not just serve your current needs but propel you forward.
SAP is going all-in on the cloud. And since SAP revealed its hand, there’s no denying that the strategy of pivoting towards cloud-centric innovations has sparked a vigorous debate among its customer base.
This pivot, emphasizing the RISE with SAP program, underscores a broader industry trend towards cloud solutions, but also raises critical considerations for enterprises tethered to on-premise solutions or external cloud platforms.
As SAP earmarks its latest innovation features – including generative AI and sustainability tools, exclusively for RISE customers – a significant proportion of its customers, both on-premises and cloud, risk being left out in the cold. These developments essentially prioritize certain customers over others based on their cloud migration status.
For those who have taken the step towards S/4HANA but chose not to embark on RISE with SAP, the message has been especially disheartening. Some have considered cashing their chips and walking away from SAP entirely.
At the end of 2023, SAP tried to quieten the unrest among these users. Assurances were made that SAP would prioritize their needs, with a special nod to on-premises customers. Yet recent moves have seen the company lay its cards on the table by reinforcing its commitment to a cloud-first vision.
But by doubling down on the cloud, SAP has created a narrative of confusion. SAP has made promises to on-premises clients without breaking step in its undeniable, steady march towards cloud services. Were those promises mere bluffs? This ambiguity has only intensified the feeling of disillusionment among many of its users.
This sense of being under the gun is exacerbated by the looming deadline of support for SAP ECC. With support phasing out in the coming years, SAP customers are at a crossroads. You can only play the hand you’ve been dealt – so do you stick, or do you twist?
Sticking entails pivoting entirely to the cloud and adopting RISE for access to the latest innovations. If you twist, you’ll have to seek software alternatives outside of SAP – or explore alternatives to maintain your existing infrastructure.
Strategic Choices for SAP Customers:
1. Embrace Cloud Migration
…and embrace RISE with SAP, too.
This is the option that aligns most closely with the vendor’s strategic vision, and, crucially, offers access to the latest innovations. Yet, this path demands significant investment and a reevaluation of existing IT infrastructures. For businesses deeply rooted in customized legacy systems, the transition poses considerable challenges, both financially and operationally.
The allure of a fully cloud-based ERP system lies in its promise of unparalleled flexibility and scalability. But in reality, swiftly configuring and deploying cloud environments is challenging – and customers who require complex, rapid deployments may find themselves hampered by delays.
None of this should come as a surprise.
So, what about customers who are ready to migrate to the cloud, but are not yet sold on RISE? There’s added complexity here.
While they recognize the imperative to modernize and leverage cloud benefits, they may be wary of RISE, its potential costs and the daunting prospect of navigating the migration without compromising ongoing business operations. And thanks to SAP’s recent flip-flopping on access to innovation products, who can blame them?
2. Transition to Alternative Technologies
For some, the end of support for current systems and the perceived innovation gap necessitates a more radical solution – migrating away from SAP entirely.
Opting for this route, though extreme, is being seriously weighed by several businesses. Yet, transitioning entirely from SAP entails a comprehensive shift not only in technology but also in business workflows and data governance models. It’s a choice that extends far beyond the realm of IT, influencing the whole organizational framework and strategic direction of the business.
But for those customers facing ending support for their ERP system, a major concern here is the potential failure to fulfill essential security and compliance standards. These issues are critical and should not be underestimated: safeguarding data, ensuring cybersecurity, and adhering to regulatory mandates are arguably the highest priorities for IT and operational teams.
3. Rethink Support and Maintenance
What if we told you that you could maintain your current SAP systems, without succumbing to the pressure of perpetual upgrades in the name of innovation? This is possible with third-party software support. This route offers the potential for considerable cost savings, enhanced security and compliance support, and the advantage of customized, agile support that aligns more closely with your individual business requirements.
SAP ECC support is coming to an end. Support for customers on EHP5 and earlier is set to expire on December 31, 2025, with support for EHP6 and later customers concluding in 2027. As these deadlines inch closer, businesses have difficult, fundamental choices to make.
The future of your SAP environment will be shaped by several factors, from organizational scale and sector specifics to your existing IT setup and broader strategic goals.
But, ultimately, this decision-making process should revolve entirely around your business’s own needs and ambitions. The aim here is for a tech strategy that drives growth, fosters innovation, and sharpens competitive advantage.
With SAP’s licensing terms kicking off at the start of the year and a 90-day heads-up required for any shifts to third-party support, the timeframe for making a decisive move is quickly tightening.
Remember, this choice is about more than maintenance and support. It’s also about holding onto operational freedom and strategic adaptability in the face of SAP’s shifting strategic priorities and messaging.
So, for executives who place a high value on maintaining their strategic direction and operational autonomy, the recent developments within SAP’s ecosystem offers a pause for thought.
The cloud-first push, coupled with the special emphasis on RISE with SAP as a vessel for innovation, simply underscores the urgency of retaining control over your tech – and business – decisions. The stakes are high.
It’s a reminder that the tools and platforms you choose should not just serve your current needs but propel you forward, keeping you agile. So, ask yourself, is your current SAP configuration truly delivering this level of dynamism and foresight? If the answer leaves you wanting, it might just be the perfect time to cash out and consider new horizons.
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