Since our first SAP S/4HANA conversion in 2017, PASàPAS has monitored the evolution of the software and announcements from SAP on its development.
2021 started with a bang when SAP revealed “RISE with SAP” in the most comprehensive and thoroughly-prepared launch we’ve seen from them in the last 20 years.
Sven Denecken, SAP’s head of product success and COO of S/4HANA described RISE with SAP as, “the best concierge service you can get for your digital transformation”.
RISE with SAP is a commercial offer, which comes in different flavours, each of them bundling multiple SAP cloud software products delivered “as a Service” and sold under one subscription.
As the core component of RISE with SAP is S/4HANA Cloud, its two main flavours are aligned with the versions of S/4HANA Cloud:
- RISE with SAP S/4HANA Cloud includes what used to be called SAP S/4HANA Cloud Essentials
- RISE with SAP S/4HANA Cloud, Private Edition includes SAP S/4HANA Cloud Extended
There are other flavours of RISE with SAP, and more components, but in this article, we will focus on S/4HANA Cloud, Private Edition, aka PCE.
Why is S/4HANA Private Cloud Edition (PCE) so significant?
Since it was introduced in 2015, S/4HANA has been gaining ground, although not at the pace initially expected. This delay in uptake forced SAP to postpone the end of support for SAP Business Suite from 2025 to 2027 (2030 with Extended Support).
SAP struggled to find the right balance between promoting an innovative Cloud-based ERP, whilst also protecting the investment its customers have made in SAP Business Suite On-Premise.
For most of these customers, a re-implementation project could not be justified. Therefore moving to S/4HANA Cloud was not an option, even at a time when the merits of cloud-based software were becoming increasingly obvious.
With S/4HANA PCE, that has now radically changed. S/4HANA PCE offers all the characteristics that customers have come to expect from a Cloud-based / SaaS offering:
- The scalability offered by the main Cloud Hyperscalers (AWS, Azure, GCP, etc.)
- Industrialised security that would not be affordable for smaller scale, on-premise environments
- A fully subscription-based commercial model and hence, opex instead of capex
S/4HANA PCE also includes all the customisation options offered by S/4HANA On-Premise and therefore, enables the same functional flexibility.
Most importantly, S/4HANA PCE allows existing SAP customers to retain the investments they have made in their On-Premise ECC systems. The move from ECC to S/4HANA PCE can be achieved by conversion that will retain customisations and bespoke developments. This method has been used for moves to S/4HANA “On-Premise” for the past 5 years. It has proved to be a high ROI, low-risk approach that is now applicable for moves to S/4HANA Cloud (PE).
SAP has relaxed their “keep the core clean” requirement. This means that a mature ECC system, including all its configuration and bespoke code, can be converted to S/4HANA PCE, exactly as it would be converted to S/4HANA On-Premise.
On the commercial side, S/4HANA PCE has a very attractive model. One single SAP contract covers hosting by the hyperscaler of your choice (from AWS, Azure, and GCP), as well as Software Maintenance and Managed Services delivered by SAP.
Finally, regarding Application Lifecycle Management, with S/4HANA PCE the customer retains control of planned downtime. Upgrades can be planned around their business constraints. The standard contract includes one upgrade per year, with an obligation for the customer to upgrade at least once every 5 years. This is not an unreasonable target and enables SAP customers to stay on a supported version for a viable amount of time.
What will be the role of SAP partners with S/4HANA PCE?
SAP partners still have an important role to play with S/4HANA PCE. As well as the advisory and implementation services they have traditionally provided, partners will offer “Cloud Application Services”. These involve technical operations (such as transports management) and functional ones (configuration, developments, etc…), for which SAP has defined a detailed RACI matrix to optimise collaboration.
Initial feedback from our customers is positive. Yet there are some reservations: despite the 8Bn€ of SaaS/Cloud services that SAP delivers, some customers still perceive SAP as a software company more than a services provider.
If companies currently receive customised and flexible services, which address the everyday needs of their business users, switching comes with a risk of losing this quality of service.
That’s probably where we think partners’ value-added will be most needed: to make an industrialised and standardised service fit for customers’ consumption.
The partners who will best serve small and mid-size SAP customers are those that provide a broad range of services (infrastructure, cloud to cloud, heterogeneous landscapes administration, as well as SAP consulting, development etc…) in a flexible model, that can adapt to complement SAP’s standard service.
With its core competencies (On-Demand SAP expertise, SAP Support, Cloud Managed Services), PASàPAS has the right skills and offers (S/4HANA conversion, Move to Cloud) to help SAP customers make the most of RISE with SAP.
You can contact our team to discuss your project and goals here.