It is the largest ERP vendor in the world, serving Walmart and Costco, Chevron and Exxon Mobile, Ford and GM, and Google and Apple. SAP is a bona fide ERP juggernaut — and it is making a competitive play for midsize businesses with S/4HANA.
So where does that leave the legacy customers? While the end-of-life for legacy products has been extended, the messaging is clear: SAP is eager to terminate ECC 6.0 and Business Suite 7.
In 1972, five men started SystemAnalyse Programmentwicklung, or System Analysis and Program Development (SAP). Their objective was to build software that integrated various business processes and enabled real-time data processing. And their efforts proved to be successful: for nearly fifty years, SAP has played a dominant role in shaping the ERP world.
SAP is internationally recognized and maintains consistent global operation through the endorsements of countless partner channels around the world. Early on in its life, SAP had an extremely large market dominance. This remains an important benefit to SAP, as the installed customer base provides the company with cost-free salespeople and highly loyal users.
In 2011, SAP began the transition to cloud ERP with their SAP HANA database, which created huge capacity for rapid data analysis. Four years later, SAP released SAP S/4HANA, its current cloud software offering.
Traditionally, SAP services companies with 1,000-5,000 employees and $1 billion to $10 billion in revenue. However, it seems that SAP has recently begun targeting the mid-sized market segment, and this transition suggests that there are worthwhile advantages for SAP to approach these types of businesses.
In recent years, SAP has committed to taking the time to better understand customer experience and customer needs. This has inspired SAP to begin a new campaign called RISE with SAP. Essentially, the goal of this campaign is to move current S/4HANA on-prem users to the cloud. RISE with SAP is designed to appeal to the users who are hesitant to move to the cloud because it is an on-your-own-time transition.
SAP has proven that they want to take responsibility for making desirable cloud strategies for their customers. Moving customers onto the cloud is a mutually beneficial pursuit, where cloud customers do not need to have an extensive information technology team because they are supported by the vendor.
Furthermore, cloud products are generally easier to access and require fewer servers. On the vendor side, cloud deployment provides a much better experience in maintaining apps in the future. It also minimizes the cost of support because fewer experts are needed to address outdated software.
SAP has a vast number of products; however, the three that standout in the marketplace today are SAP S/4HANA, SAP ByDesign, and SAP Business One.
We feel that SAP S/4HANA is best suited for companies with $250 million annual revenue or more. The focus of this application is sustainability, and it has built-in intelligent automation technologies.
SAP ByDesign tends to be best for companies ranging between $100 million to $250 million in annual revenue and claims to require minimal need for IT infrastructure. It is designed to offer large-scale business apps to small and midsize businesses.
SAP Business One is ideal for companies with $25 million and under in annual revenue. This application seeks to automate functions in finance and human resources.
SAP is arguably the most tightly integrated ERP in the market. The features and functions of SAP software are seamlessly interlocked, which can be a great thing — however, the functional richness of this software is easy to get lost in. And this tends to amplify the risk of failure on SAP implementations. So how can you minimize the risk involved in migrating from an SAP legacy system?
SAP has the urgency to support all current users, but at some point they have to stop offering support for old versions. It comes at far too high of a cost for them to offer infinite aid to outdated software.
We should trademark this next piece of advice! We always advise our clients to maintain their current software if there is not an urgent need to transition to a new one. Educate yourself on current market offerings and evaluate all available options. Even if it is not the right time for your company to participate in an implementation, do your due diligence and figure out what ERP solutions are available.
So, do not make yourself a hostage. You have access to the tools that you need to make the best choice for your company. Be encouraged by that reality and take charge of your ERP.
Even loyal SAP users must be apprised that there is a plethora of ERP solutions to choose from in the market today. This was not always the case — even five years ago, there were far fewer platforms to choose from.
Ask SAP about what your next steps should be. They know their products better than anyone, and there are good people working there. It may take some time, so be persistent, but it is worth the effort to hear from the experts.
If you still want more advice, enlist the help of ERP software implementation partners who know your company. It is the responsibility of implementation partners to educate themselves on your company so that they know when it is best to transition to a new software.
It’s why we’re here! Our passion is helping you make the best possible decision for every company that we work with, so reach out if you are not sure what to do next. We are happy to assist you in your next ERP venture. Contact us today for an individualized ERP consultation.