S/4HANA was once the future for SAP – but now it's in the clouds In 2020, global ERP giant SAP offered to provide "clarity and choice" on the future of its core platform, vital to the operations of a huge number of large organizations when it extended support for flagship product S/4HANA until 2040. Thomas Saueressig, who leads product engineering, said the in-memory ERP platform, first …
Also, if you are in volume manufacturing, the last thing you want is a flakey cloud system ecompassing the company motto "That's the only way to deliver innovation with speed and agility,"
You want stability, you want consistency, you want 100% uptime. You don't want "move fast and break things," that might work for social media, but it doesn't work in big business.
The cloud: Throw away your computers and their expensive developers and sysadmins and replace them with cheaper web monk... uh DevOpses. Take the money you save, multiply it by some random factor, and shovel it toward the circus of your choice (so they can run the same computers with the same developers and sysadmins which you can no longer afford).
Bollocks.
SAP is not a social media platform. SAP provides (allegedly) the means for a company to manage its resources. There is nothing there that needs to be in the cloud.
The CloudTM is just SAP's excuse for wringing yet more money out of its customers' coffers.
Especially since there is no such thing as a completed SAP migration . . .
>The CloudTM is just SAP's excuse for wringing yet more money out of its customers' coffers.
Interestingly, these companies (can't say for sure about SAP) are now forgoing their customers that won't move to The Cloud in order to move those that can/will to the subscription model.
We use pretty much the whole Atlassian stack where the Server tier license is being killed off, but we aren't big enough to justify using the Data Center license.
Given we can't move to The Cloud or only choice is pay a ton more for the next tier of license (we won't) or move elsewhere (a competitor?).
So apart from being able to withdraw services from customers who don't pay up on time (BTW have you tried getting payments out of a big multinational? Feels like Accounts Payable are staffed by Vogons, but in practice there are shortcomings that means some invoices, particularly for multi-year services, fall down cracks in the mail system, and there are considerable anti-money laundering processes in play), what's driving this for SAP? They have just pissed off a lot of customers with on-prem systems who are scared witless of moving this stuff to the cloud. It also means they lose their customisations, however half-finished they are. Surely would have been better focussed on reining in customisations so deployments actually get finished.
I fail to see how cloud is more cost-effective for even SAP. Their coders are writing code, which will be deployed on servers, with whatever arrangement they have chosen (VMs, Docker, Kubernetes, whatever). Surely it doesn't matter? But I've had this problem with another company, not ERP. Ask for a non-cloud deployment and the price goes up drastically. Why?
Rent-seeking lock-in until the company is dissolved.
Most of the on-prem licences are perpetual, with ongoing payments for support and upgrades. Even if not, the actual data is on your own hard disk and can be extracted if need be.
Cloud licences are paid monthly forever, with the ongoing threat to simply end your company permanently if you don't keep paying the protection money subscription.
"Lose" the wrong tax records and the company directors can end up in actual prison. Even Microsoft don't have that kind of power!
You'd have to be insane to let any supplier hold that kind of permanent existential threat over your business and personal liberty...
At this stage we are planning to cancel our enterprise support agreements with SAP at the end of 2024, there is no valid reason to keep facing increased costs for less value.
We are in the cloud in a number of ways including SAP SaaS based offerings, but this is a clear signal from SAP that shareholder return is the only thing motivating their board now.
Just started working for a company in the early part of the late stages of an SAP migration: they finally "went live" with SAP a couple weeks ago, and I remember overhearing part of a conversation where some higher level managers were talking about how SAP said that some particular route was the way to go, only now they've decided to completely abandon whatever that was -- some kind of integration with another program or component; I was only half-paying attention and I only caught a few seconds worth. So, for the last year or so the company has been paying through the nose for some consultants to work on something only for SAP to just walk away from it completely.
SAP seems to have gone full Microsoft at the height of their monopolistic practices where they knew they could kick customers in the teeth with a steel toed boot at Christmas and their only real option was to ask if they could have some more abuse. As the author points out, when you need a large scale ERP there aren't many options. One of them is Oracle, so you trade one set of problems with SAP for Oracle's love of trying to extract license fees. Based on comments I've seen here on El Reg, much of their strategy seems to be assuming/hoping their customers never read the contracts and will just pay whatever Oracle asks to make them go away. As bad as SAP is, they're still better than Oracle. At least for now, and not for a lack of trying on the part of SAP.
That's why I was listening at all, but they were clearly picking up in person a conversation they had started on IM or in some meeting I wasn't part of, so I kind of tuned out since I wasn't really able to follow much. Though later I'm suspecting one of those managers was tearing the consultants a new one over the same thing when they were trying to say the reason they couldn't get data flowing between SAP and whatever this other thing was is that there was no data loaded into the other system. The manager was having none of that saying how it's a programmatic problem. I mean... I don't know who on the consultant's side thought that was a good excuse, or if they just sorely underestimated the technical acumen of this manager, but normally this person is pretty even tempered or even jovial, but even having only known them for a couple of weeks, I could tell they were barely holding back their anger.
Anyway, good times. I thought it was something of a shitshow one of the last places I worked at, coming onboard a couple months after they went live with their ECC implementation in the pilot facility. Granted I may have missed out on all the major bumps early on, but clearly that company was able to pay for some better consultants.
"As the author points out, when you need a large scale ERP there aren't many options. "
There aren't many options for those in the unimaginative shoes of your average CIO. For anyone of any wit, there's plenty of other ERPs on offer, and always the option of building your own. The dull drudgery that ERP systems perform is the most basic transaction processing. All this AI, cloud, innovation, expertise, scale talk is just garbage - what is AI going to do to revolutionise accounts payable that probably pays each invoice for two or three quid? Or to streamline payroll when all that can be automated was done years ago?
Looking at example upstart CRMs, the getting started cost is perhaps £250k. I will happily concede that SAP is much more than just the CRM and includes the whole backoffice and financial package, but they too are basic, basic stuff. If you don't want to make your own, just buy some packages from the wannabees and recruit a decent IT team to nail them together, making sure you don't do anything stupid like involve offshore.
None of this will happen though. For the modern CIO, they've reimagined the phrase "nobody ever got fired for buying IBM" by substituting SAP or Oracle. The fact that your typical new S or O implementation goes horribly wrong and wildly hundreds of millionsly over budget doesn't seem to change things. Whereas taking a modest risk with a few million quid to build your own, now that's career suicide.
ERP is just an all-in-one one-stop-solution to a whole bunch of enterprise systems requirements. Unbundling Financials permits companies to begin to ask questions and replace “basic” with “better”; some years back, we had fun-and-games, there were better standard alone warehouse management systems than the WMS module of an ERP, however, we had to kill both the ERP “basic” WMS and the WMS’s basic Financials and web shop. Okay you now need skilled IT personnel to handle the integrations but if your business doesn’t need bespoke integrations then you are only a generic me too business competing on price.
"An ERP can cover a lot of functions"
...except it's not a single ERP, is it? The big ERP offers are in fact a motley collection of standalone software, some of it very old indeed, some the product of acquired companies, all packaged by marketing as a universal panacea, at a technical level adapted to make them work together, and then having the standard SAP or Oracle user interface nailed on the front so it looks like a single product. The capabilities of each element vary - some will be very good, some pretty poor, the majority pretty unexceptional.
Using the example of WMS, that's pretty standard logistics, everything there is about demand forecasting, supply chain timings and capacities, inventory control and logistics tracking. I doubt that AI is going to make many remarkable new inroads to what competent materials planners use IT systems have done for many decades. Even though I say "standard logistics", there is of course a world of difference between what is needed for FMCG, for fashion, and for product manufacturing and long term support. So either the big boys offer at least three different WMS, or they offer a single half baked solution that needs expensive cobbling to fit the buyer's actual need. Most of the people reading this site are familiar with big ERP instances that don't really meet the specific needs of the buyer, are wildly expensive to buy, adapt, commission, licence, and even more costly to change.
HRM went to SAP in the cloud it took a long time and the user interface is frustating. Everything is a website now and different parts are different domains with no connection between the name and the function is is supposed to do. But I can find the take a day off page and the overtime stuff but it took a long time searching and refinding it is difficult, did manage some traffic declarition in the past but everytime it's so difficult for a couple of euro's
“from a technology perspective, you did everything right. But you're just not the on the right contract to participate in further innovations.”
We want more of your money.
“SAP said that to stay ahead in the current economy, customers need to be in the cloud”
We want more of your money.
Stuff that!
No company could ever justify that. There's no possible ROI within the lifetime of the product.
The only sane option would be to stop paying SAP anything at all, stay on the old version and properly start the project to leave SAP entirely and permanently.
For that kind of money you could buy one of the smaller players outright, and get a revenue stream as well as a new ERP.
"That's the only way to deliver innovation with speed and agility,"
And the one thing you don't want, when you are running a business is your software vendor to move fast and break things. If the ERP system is offline or returning the wrong results, that will cost your company the proverbial arm and a leg. That is why you have development, test and staging environments, so that you know things will work, when they finally hit the live system.
I work in an industry, where processing can't be in the cloud, due to regulations, so no matter how hard SAP try and push, the systems will remain on-prem in that industry. Luckily we use a different system, tailored to our industry, and, surprise, surprise, it is on-prem only.
As we work 24/7, downtime for updates has to also be planned in. That is usually in a 2-3 week window, we get many more releases from the supplier, but only about a quarter get onto our test system - and 80% of those were broken in recent months and had to go back to the supplier to be fixed, before they could be tested again (one was no invoices for line items with 6 figure quantities, if you supplied 250,000Kg, the invoice would show 50,000Kg!), and those were official public releases from the supplier, just imagine if 80% of updates broke the system so badly you couldn't work, because it was a "fast and agile" cloud solution!
I value critical thinking so agree some scepticism is justified.
On Private Cloud Edition the reference architecture is three tier (development, test and production environments) where change is expected or two tier (test and production environments) where deploy not change is expected. Important to understand that change is software change not configuration that doesn't change the software just selects which option is wanted. Thus there is no loss of change control on PCE compared to OnPrem deployment.
The expectation with PCE is one Release of the SAP products per year which is different from the quarterly release cycle on Public Cloud Edition. Private Cloud Edition allows changes to the enhancement points available within the supported Enhancement Concepts, i.e. are upgrade safe. The full range of unsafe changes that were possible OnPrem are not supported, which is good as much costly junk can be avoided.
So SAP customers have the choice to Convert their local junk (Brown field) or accept that it's junk and go back to standard processes (Green field).
Finance people like to pretend that their OnPrem junk is an Asset so they can 'Capitalise' the implementation project and claim tax credits for Research and Development. Thus they can depreciate the asset over some years and so reduce taxable profits.
Not surprising that DSUG corporate users don't accept this treatment of their history. They have to decide if they want to deploy standard at lower cost or if they are in the software business..
At this years Sapphire Convention, one of SAP's main themes was that by using their software you are future proofing your investment. With 3 separate S4HANA product lines-Private Cloud, Public Cloud, and On-Prem; it seems that the only thing they are future proofing is that regardless of what path you go, in 10 years or so your are going to have to do a similar migration to the current ECC to S4HANA one most customers are going through today. So once again, you are going to have to spend a ton of money and time for an ERP upgrade that has limited business value.
I have been working with SAP software for more then a decade. The on-prem or hosted on-prem solution with HANA database is just the same bunch of legacy garbage code written in ABAP with German comments, 5 letter table and column names and potential 30 year old bugs, but painted with a new layer of complexities. No sane developer is going to want to touch any piece of ABAP code in 10 years. It is fascinating for me to see just how much money wasted and torture accepted the average SAP using company is willing to take for granted, just so that the managers can feel safe in their little SAP scented bubble.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
