I am always amazed that despite how big the SAP ecosystem is, I always manage to reconnect with old friends, a few of whom I connected with last month. We inevitably spent some time talking about RISE with SAP. In this month’s Executive Exchange Digest, I want to share some of what these two voices from the partner community are seeing and hearing from SAP customers.
Henrik Wagner is the RISE with SAP Practice Lead at Lemongrass Consulting, and Len Riley is the Chief Advisory Officer at UpperEdge. They both spend substantial time with SAP customers worldwide, helping them understand how to fully utilize RISE with SAP.
In Henrik’s case, we sat down and discussed some of the challenges and opportunities he sees customers facing. I recorded this conversation, which is available this month as an ASUG Executive Briefing. As an Executive Exchange member, you can watch this recording on demand.
Len and I took a more traditional approach to our discussion, so I'll recap the highlights below.
RISE is more than just SaaS
To be successful with RISE with SAP, you can’t focus solely on the software. As Len explained, “You need to look at the packaging and pricing for the software agreement, but you also need to look at the technical environment that underpins the software and the operational services being offered.”
Sorting through the different innovation capabilities of the base, premium, and premium plus editions of RISE with SAP, combined with the different RISE deployment models (public cloud, private cloud, etc.) is challenging enough. The tricky part is when you start unpacking the managed services component of RISE with SAP. As part of RISE, there is a large RACI document outlining the relationship between SAP and your IT organization to operate and maintain the RISE with SAP solution.
Len made a very interesting point about these services that I had not considered before. “So you already have a well-defined operating model, right? What are the benefits of the RISE operating model versus what you have today? A lot of organizations are looking at this and saying I don’t want to change my operating model to accommodate RISE because SAP is only a portion of my environment.”
So, where does this leave customers? In my conversation with Henrik Wagner, he noted the inevitability of RISE with SAP. If RISE is the licensing path forward for SAP, customers are going to have to reconcile the differences (if any) between their existing managed service model and what’s provided under a RISE with SAP agreement. Len also mentioned the need to take a much more comprehensive approach. “When we are going through a transformative discussion, we advocate for what we refer to as an integrated sourcing strategy, combining software implementation services, cloud services, and managed services. We focus on what the entire ecosystem and strategy looks like.”
So, understanding the managed services side of RISE is, at its core, a TCO question. Does adopting RISE mean you end up with an SAP-specific version of your managed services model? Assuming you can, do you make the RISE model your standard? For new SAP customers, this may be a relatively simple decision, but what about SAP customers running complex SAP environments? What is the best cost, least risk solution? Unfortunately the answer will depend on your organization’s existing landscape (both SAP and non-SAP).
So, where do customers struggle?
When I think about the value of the ASUG Executive Exchange community, one element is the ability to learn from each other’s mistakes. Len was able to share some great examples of what his organization sees. UpperEdge looks at this journey in three phases: Strategy, Sourcing, and Execution.
“A lot of organizations don’t scope phase zero (Strategy) the right way. They tend to underestimate the scope of what is required to get the project approved, or they don’t set appropriate expectations.” Len cited an example of a client they recently worked with. The client went through its first phase and estimated a project cost of $100 million. Len’s team assessed their integrated strategy evaluation and discovered that the actual project cost would be more in the $135 to $150 million range. Len pointed out, “So the kind of churn that goes into that is significant, right?”
When looking at the sourcing phase, Len mentioned that the biggest struggle comes from the team makeup. “Organizations don’t pull together the cross-section of business application leadership and infrastructure leadership with their procurement and finance teams to look holistically at how they’re orchestrating all the different sourcing events.” Again, Len had some great examples of where this had gone wrong. “The biggest disconnect we see is that the SAP bill of materials doesn’t align to the scope of the implementation. The phasing and sequencing and what’s included and excluded lead to mistakes when you don’t align the BOM to the business process master list,” he noted.
Another great point Len made was that companies rush to get a software deal in place without thinking about what else they need to source to make the entire program successful. “There are gaps that exist between software and implementation services, and gaps that exist between cloud services that don’t get addressed.”
Len and I also covered a few other topics, but I’m going to save those for another day.
Where does this leave me?
I’ve said before that RISE with SAP represents a watershed opportunity for you to negotiate with SAP from a position of strength. And equally important, it presents an opportunity for you to negotiate from a position of weakness, in the sense that you don’t know what you don’t know. So, here’s my big takeaway for this month–do your due diligence, and don’t be afraid to ask for (or invest in) some help to get it done! Take advantage of the Executive Exchange community’s shared knowledge. They say a rising tide lifts all boats. Our “tide” is your story, and sharing it lets us all get the most value from our SAP technology investments.
I look forward to hearing from you and hopefully seeing you in Orlando soon!