The UK & Ireland SAP User Group (UKISUG) held its CONNECT 2023 conference at Birmingham’s ICC, bringing together over 70 SAP partners to network and share industry insights.
With a noticeably packed house, UKISUG chair Paul Cooper took to the stage for his final keynote before passing the baton to UKISUG’s vice chair Conor Riordan. It was a moment marking both continuity and evolution within the SAP community.
The spotlight shifted to Ryan Poggi, making his inaugural appearance as SAP’s managing director for the UK & Ireland. Poggi’s message emphasized SAP’s latest pledge to foster trust and reimagine relationships during cloud journeys.
However, there was one big yellow elephant in the room (you had to be there…). Of course, that’s the recent news for on-premise and hosted deployment customers that the full benefits of SAP’s latest innovations will be reserved for cloud customers only.
In his keynote, Cooper addressed the flaxen pachyderm: “The bottom line is customers that have moved to on-premise or hosted implementations of S/4HANA feel misled. From a UKISUG perspective, this is a significant percentage of our membership.”
Cooper suggested that SAP didn’t communicate to customers that certain innovations, including GenAI, and other benefits would be withheld from non-cloud dwelling deployments. Information that customers feel would have been important to know at the beginning of their journey, not the middle or end.
At the event, ERP Today spoke with these on-premise customers and thoughts were decidedly mixed.
Some customers believe reserving important innovations for cloud deployments was SAP’s way of pushing cloud onto unwilling participants. Others, albeit not happy with SAP’s lack of communication, believe that SAP’s intent has always been towards driving innovation.
One customer expressed that giving incentive to adopt cloud deployment was like: “eating your broccoli – maybe we didn’t want it at first, but it’ll make us strong in the end.”
In a sit down conversation, Cooper and Poggi alike recognized that more companies than ever before are choosing to undergo S/4HANA transformations and that the key to their success is in trust.
SAP explains that cloud is the best environment to maximize the value of their latest innovations and innovations of this nature are not necessarily exclusive to cloud for any reason other than to maximize their value.
Poggi added: “We’ve made these decisions very clearly on the basis that we believe cloud delivers the best environment for these solutions. Generative AI is a classic example. Generative AI works best in a cloud environment. So for us to maximize the value of that, it has to be delivered in a cloud environment. Honestly that’s the focus, which is how do we maximize the value for as many customers as we can.”
However, Poggi assured UKISUG goers that SAP is listening to the on-premise point of view as well. During his keynote he noted that: “My commitment to you (and my ask of you), is to have these transparent conversations with our teams and encourage a connection to the right stakeholders on both sides. Our door is always open.”
“We are investing more in Customer Success Partners – focused on earlier, outcome-based engagements. We are also evolving our customer-facing teams to drive better value-based conversations to support your decisions, whatever stage of your transformation. We’re also focused on developing a resilient business, one that prioritizes long-term partnerships over short-term gains.”
“Lastly, we’re going to be laser-focused on creating followership and trust. My team have heard me say it 1,000 times: trust is based on doing what you say you’re going to do.”
The jury is still out on whether these strategies will ease the woes of on-premise users – SAP would do well to remember that trust is a privilege best earned with time.
However, it should be noted that the UKI Customer Satisfaction Survey reflected a commendable six-point surge and that cloud deployment uptake is higher than ever.
So where is the silver lining? From SAP’s point of view, in just a few short years customers have gone from not knowing what S/4 is at all to – in Cooper’s words – the complete opposite: “One of the things that shocked the press, and SAP, was the level of awareness and uptake of S/4. Virtually everyone knows what S/4 is now and the vast majority of our members are on a journey to S/4 now.”
Riordan suggested that – especially for customers who have been with SAP for years – utilizing RISE for cloud migrations is something that is now on their minds. However, it would be preferably deployed in four to five years from now -long past the SAP ECC 2027 deadline.
“Its not that they don’t want it – it’s that the timing is not right,” Riordan said.
One thing is clear – the conversation at UKISUG from 2022 to 2023 has shifted from whether to deploy S/4 to how to deploy S/4, marking a big SAP win and the end of a long-fought battle. Despite the tussle with on-premise users – cloud has still won the war.
