With the recent launch of GROW with SAP, a new bundled offering structured to help midsize customers adopt cloud ERP, SAP aims to meet the fastest-growing companies of today where they are–and where they’ll soon be–in their digital transformation journeys.
Combining SAP S/4HANA Cloud, public edition with industry best practices and embedded AI and automation capabilities, GROW with SAP was designed to emphasize speed, predictability, and continuous innovation, three areas relevant to the business and technology needs of midmarket companies. By utilizing GROW, which also provides access to the SAP Business Technology Platform (BTP) development and integration environment, and the low code/no code SAP Build application development platform, such companies can seek to define their own apps and processes in a cloud-native way.
In a recent interview, Eric van Rossum, Chief Marketing and Solutions Officer, SAP Cloud ERP, discussed GROW, how it fits into and furthers the larger SAP Cloud ERP strategy, and why digital transformation requires a “mindset change.”
This interview has been edited and condensed.
Q. In your view, what was the initial business driver behind GROW with SAP?
A. I’d like to place this in the ASUG context first, because ASUG is to a large degree a community around the installed base. GROW represents a different perspective. When you look at how SAP wants to grow—on a macro level, from our strategy perspective around S/4HANA—we have two motions. We have the motion of taking our installed base, which we've engaged with for a long time, to the cloud. For this market—where customers already have an existing SAP asset—to help them with the move to the cloud, we launched RISE with SAP two years ago. RISE is about, at the pace of the journey of our installed base, being able to leverage what customers already have and move to the cloud.
Now, what we realized is that [RISE] didn't always resonate with net-new customers. That's what GROW is about. GROW is for net-new customers coming into the SAP family and customers in the midmarket space, which calls for different messaging and communication. At the same time, it's also built exclusively around a public cloud offering. Customers that are starting greenfield can go straight to [SAP S/4HANA Cloud,] public edition. In going after net-new and mid-market companies pursuing their next trajectory of growth, GROW is about how we bring those companies into the SAP family.
Q. In offering net-new and midmarket customers cloud-native ERP software, as well as with adoption services and learning resources, GROW seems structured to serve as an introduction to SAP software but also to the larger SAP network.
A. Companies that already know SAP are interacting in a community, through ASUG. We can also create a network around customers that don’t have that history with SAP. There’s benefit to existing customers learning from existing customers, but there’s also value in building a net-new community together with ASUG. How can we create a unique area for those types of customers to get together and share experiences of what they’re going through with SAP for the first time?
Q. In recent years, SAP has increasingly embraced the reality that its customers, especially those at an intermediate state of their digital transformation journeys, use hybrid technology landscapes and require integration between SAP and non-SAP systems.
A. We believe in modular architecture. I’ve been with SAP for 23 years. In the beginning, our value proposition was a monolithic, end-to-end process. “Run everything from SAP, and the world will be great.” That's just not realistic. I'd love everyone to run SAP end-to-end, but—from a consumption perspective—speed and agility are becoming much greater drivers of value than breadth of function. It would be great if you could do everything, from an end-to-end perspective, but if it takes you five years to implement it, that’s not what customers are expecting nowadays.
The [customers] that GROW targets are in an exponential growth phase or going to their next stage, therefore speed and predictability are extremely important to them. When you look at GROW, speed and predictability are at the core of what we're trying to do. We're taking an out-of-the-box, what-you-see-is-what-you-get, fit-to-standard approach, and providing the tools and services to help drive that. GROW helps companies go live fast; they can go live with GROW in six to eight weeks.
The philosophy is different. It's not, “Here's a blank sheet of paper. Write down everything you need.” It’s more, “Here are the best practices based on our 50 years of experience.” We know what companies need and we want to help them implement the solutions they need quickly, which we can do with our activation services. On-premises activation, for example, was focused on getting everything right as soon as the customer went live. It was a moment in time as opposed to a continuous journey. With GROW, we release functionality every six months. It’s about going live quickly, with a minimal scope, and then incrementally adding to it.
A customer in the solar energy space recently said, “As we grow, we can grow with SAP.” The main reason they selected GROW was because, every six months, new functionality is released that can help expand their business. That’s the mindset we're going after with GROW.
Q. What you’re describing, though GROW is built around the core ERP system of SAP S/4HANA Cloud, public edition, sounds like a methodology for engaging with SAP on a go-forward basis. GROW presents a pathway for continuous innovation with SAP, rather than one implementation.
A. I’d go even further—it becomes a paradigm shift, a change in mindset. We need to move ERP implementation as a whole into the mindset of a continuous journey. More specifically, to my point about starting small with a minimal viable scope, GROW allows you to go live quicker, and then you're continuously adding to that scope. There’s this question, which I think is also applicable for most of the installed base: How do we shift to this cloud mindset? How do we look at innovation as being continuous?
It starts with a mindset shift around how your ERP should be implemented. Cloud is a journey, not a moment in time. Part of that shift, also, is about moving from a fit-to-gap to a fit-to-standard approach. Customers will ask us to meet 100 [business] requirements. Eighty of those requirements are not differentiating, and so we advise them to just accept best practices: the other 20 requirements, where the customer is unique or there's competitive differentiation, is where SAP’s Business Technology Platform and products like SAP Build come in, to leverage extensibility in a modular approach.
Q. With GROW with SAP leveraging best practices that SAP has established through its 50-year history, in what ways does GROW reflect and represent a certain maturity on the SAP side, around Cloud ERP transformation in particular?
A. We want to leverage the strength of SAP, of being the company that invented ERP, developed best practices, and can help businesses scale globally in a compliant way. On the other hand, what we don’t want to bring from our legacy is complexity, which reduces speed and agility. With GROW, we have best practices and an out-of-the-box, fit-to-standard approach. At the same time, that is rooted in 50 years of knowledge of how you run a global company. In going after companies that have not worked with SAP before, that’s exactly why we created a brand identity around GROW, to message that correctly so that customers understand the benefits of this offering for their business.
Q. How would you compare GROW customers to those ASUG members within SAP's existing customer base, in terms of their overarching goals?
A. It’s about how companies are moving to the cloud. GROW is very much tailored toward companies that are starting fresh. Although the installed base is going to go on a multi-step journey to the cloud, the paradigm shift and the mindset change is exactly the same. They want to leverage an asset they already have, so they'll go on a different journey, but the mindset and the end goal is the same. So is the idea that they can leverage BTP for extensibility, and that they want a cleaner core. To get back to the standard processes, SAP Signavio is included in RISE with SAP. When our installed base uses Signavio, it's all about getting to a clean core, which requires extensibility; that’s an approach distinct from starting fresh with a growth in mind and building from the ground up. But the mindset and the principles are exactly the same, in terms of what you want to achieve. At the end of the day, companies want to get to the cloud, to achieve continuous innovation, to be able to continuously upgrade, and to be agile.
Q. Last question. Broadly, how would you characterize the opportunities for midmarket companies to achieve business transformation through GROW with SAP and through adopting cloud ERP?
A. If I look at why companies are choosing GROW, the number one reason is because they want to run with industry best practices. You want to know that, as you grow, you can leverage SAP’s 50 years of history for their main processes, so you can run and scale at a global level. There’s also great functionality from a business model perspective. For growing companies that are driving new business models or evaluating sustainability goals, they can grow with industry best practices that support future business models. And, again, you can scale. You can grow without limits. As you go into a new country, you need a system that is tax-compliant and localized. As you’re doing acquisitions, you need to quickly bring them into your system.
There’s also confidence and predictability. These companies have less time, aren’t comfortable with risk, and less budget to go to the cloud than a multibillion-dollar organization. Companies can go bankrupt if they don’t deploy ERP correctly. That’s why we include activation services in our fixed price offers: “We’re going to deploy this, it will cost you this, and you will go live in this amount of time.” You have to get it right in the mid-market space, because there’s less time, less margin, and less room for error. One company we work with in Italy, has 50 employees; they had gone from 15 employees to 50 in a two-year period. They’d doubled their revenue and employee count every year. The pace of change is so quick that you need best practices to get started. You need a platform where you can support new business models. You need a platform where you can grow without limits—but you also need to do it in a predictable way, at a predictable price, where it doesn’t break the bank.