- ASUG’s study into S/4HANA adoption was highly skewed towards SAP’s marketing and sales messaging.
- In the study ASUG attempts to normalize the bumpiness with S/4HANA.
- The study minimizes the issues with pre-existing ECC customizations.
Introduction to ASUG’s S/4HANA Study
I am currently working on and plan to release the first study into the actual implementation case studies for S/4HANA. As part of this research, I reviewed any previous work performed in the area. One of the publications that came to my attention was the ASUG S/4HANA Adoption Survey. In many cases when a survey of this type is published, it is common to immediately to begin reading the study or to trying to understand the method that they used. I don’t think that is the best place to start. For me, the best place to start is by analyzing the source, which, is in this case, ASUG.
Analyzing ASUG’s Media Output
My research into both the media output of ASUG as well as its institutional structure indicates that ASUG lacks any independence from SAP. Therefore it should not be possible for ASUG to conduct a survey that can be relied upon for accurate information on what is happening on S/4HANA projects. And sure enough, when I analyzed the ASUG survey, there were obvious points where ASUG had obscured areas that contained negative information so that ASUG members and others that read the study would not find out what I know through my research. For this and other reasons, the paper is misnamed. It is not an objective survey of what SAP customers have experienced or what they plan to do with S/4HANA. This is a critical and often overlooked aspect of reading the output of any entity. The entity may have access to the information; it may have all the domain expertise in the world. But if it lacks the institutional structure, leadership, financial sources, etc..
To tell the truth on the research topic, its output must be highly filtered to see if some insights can be gained from consuming its content. For instance, SAP places people in ASUG in senior leadership positions who have allegiance to SAP and entire career is based on their relationship with SAP, so it is not going to occur that ASUG would publish any information that would cast S/4HANA in anything but a flattering light.
Having covered that, let us jump into what I found to be important or interesting quotes from the ASUG survey.
Quotes from the SAP HANA Adoption Survey
“Available in a variety of deployment options—on-premise, managed cloud and public cloud— S/4HANA is the replacement for SAP’s on premise SAP Business Suite, being re-architected to take full advantage of HANA. So, for all SAP ECC 6.0 customers and those on earlier versions of SAP ERP, S/4HANA is their future destination.”
So this quote is consistent with the overall article that sprinkles in promotional language throughout the “study.” Notice the two areas of the quote that are bolded. The statements may or may not be true, but the question should be why are they even in what is ostensibly a study.
As for the first part of the quote, almost all S/4HANA implementations are on-premises. Why doesn’t ASUG bring up this fact? SAP marketing literature frequently mentions that S/4HANA is available either on-premises, managed cloud and public cloud. So why is a duplicated of phraseology from SAP marketing collateral in ASUG’s survey?
“SAP is positioning HCP as the extension and integration platform common to all SAP solutions, whether on-premise or cloud. HCP is also the foundation for much of SAP’s new product offerings, from microservices to full-blown software such as SAP BusinessObjects Cloud. Again, HCP is a technology that many ASUG members will be using, whether knowingly as a developer or a business user, or unknowingly as an SAP software end-user.”
This study is supposed to focus on HANA and S/4HANA. So why is ASUG bringing up HCP? HCP is a PaaS and is unrelated to either HANA or S/4HANA. Very few companies are using HCP, which I have covered in this article HCP Designed for HANA Washing?
Other parts of the quote move into BusinessObjects Cloud. Again, this is a distraction from the survey on S/4HANA. It makes one wonder about ASUG’s reasoning for including it in the paper.
Top Level Statistics of S/4HANA
“The survey drew 749 respondents, most of whom are ASUG members occupying a mix of roles and coming from a broad range of company and industry backgrounds.”
- 33 percent of respondents have already purchased S/4HANA, and a further 28 percent expect to buy the suite at some point before the end of 2018.
- 8 percent of respondents are live on S/4HANA, while 19 percent are not currently considering a S/4HANA purchase, and 20 percent don’t know or aren’t sure about their organizations’ plans.
- On-premise is the dominant deployment choice for S/4HANA, chosen by 33 percent of respondents; but a further 33 percent don’t know or aren’t sure of their deployment option.
- While finance is the primary area where respondents rolled out or plan to deploy S/4HANA (33 percent), the second largest group (22 percent) are set to implement the suite companywide.
The Number of Respondents
The number of respondents that have purchased S/4HANA is not relevant because SAP included S/4HANA for free for some customers. The definition of a customer is merely in possession of the license. It does not mean the customer paid for it.
The third bullet point does not make any sense. The survey result showed 33% deployed S/4HANA on premises. But then 33 percent did not know how their S/4HANA implementation was deployed. In this case, the response should probably have been removed because it is most likely that a large percentage of the unknowns were on premises. Also, who is filling out the survey if they don’t know how the solution is deployed?
The fourth bullet point is problematic. This is because the S/4HANA Suite or Enterprise Management is not a completed product. ASUG discusses the plans of companies, but plans can be changed depending upon what companies learn about the completeness of S/4HANA outside of the Finance module. And neither SAP nor the vast majority of consulting companies, which are also SAP partners explains how unfinished S/4HANA is. This is likely the reason behind so many of the halted or postponed S/4HANA implementations that I am finding case studies for the S/4HANA Implementation Study that I am currently performing. Therefore the plans for the future of SAP customers are not based on the reality of S/4HANA.
“SAP is reintegrating functionality into the central core of the S/4HANA software, which it previously provided in additional complementary solutions in areas such as supply chain management (SCM), supplier relationship management (SRM) and customer relationship management (CRM).”
Checking if its True
If we look at SRM, SRM is not migrating to S/4HANA. In fact, it is supposed to be replaced by Ariba.
I am not sure about CRM’s direction. I say that I am unsure how much CRM has been or will be migrated. But as you can see from the other examples, it is not so cut and dried.
Here are the currents Fiori apps that are part of the CRM.
- Customer Reports (SAP Business Suite)
- My Accounts (SAP Business Suite – Lower back-end versions)
- My Accounts (SAP Business Suite)
- My Appointments (SAP Business Suite – Lower back-end versions)
- My Appointments (SAP Business Suite)
- My Contacts (CRM) (SAP Business Suite – Lower back-end versions)
- My Contacts (CRM) (SAP Business Suite)
- My Leads (SAP Business Suite – Lower back-end versions)
- My Leads (SAP Business Suite)
- My Notes (SAP Business Suite – Lower back-end versions)
- My Notes (SAP Business Suite)
- My Opportunities (SAP Business Suite – Lower back-end versions)
- My Opportunities (SAP Business Suite)
- My Tasks (SAP Business Suite – Lower back-end versions)
- My Tasks (SAP Business Suite)
- Simulate Sales Pipeline (SAP Business Suite – Lower back-end versions)
- Simulate Sales Pipeline (SAP Business Suite)
- Track Sales Pipeline (SAP Business Suite – Lower back-end versions)
- Track Sales Pipeline (SAP Business Suite)
ASUG Attempts to Normalize the Bumpiness with S/4HANA
“All well and good, but— like any new offering— S/4HANA has undergone some product maturation and repositioning, leaving ASUG members and other SAP customers confused about what different releases of the suite provide and why, how and when they and their organizations might adopt S/4HANA. There has been gradual, ongoing uptake for S/4HANA among SAP’s existing customers, along with purchasing by customers who are net-new to SAP. The latest public figures SAP shared in October 2016 put the number of S/4HANA customers who have licensed the in-memory-based business suite at more than 4,100, 350 of whom are live on S/4HANA. Typically, SAP talks about its ERP customer base being around 37,000, so there’s a long way to go before everyone is live on S/4HANA. We’ve heard both SAP and ASUG members describe S/4HANA as being “a journey.””
It is always interesting to see how ASUG presents negative information.
Not All Offerings Have Problems S/4HANA
First, not all new offerings have had the problems that S/4HANA has had. This is because it is rare for software applications to be released to the market in the state that S/4HANA was released. Therefore, S/4HANA has been far bumpier and has had a much higher failure rate than the typical new application. ASUG will not discuss this of course, but SAP announced S/4HANA too early, and then missed the deadlines for the rest of the overall suite. In this way, S/4HANA has many similarities to Oracle Fusion, which was an overly ambitious program for migrating Oracle applications to SaaS. Over nine years in, the Oracle Fusion program is still having difficulty gaining traction. I do not anticipate it will take S/4HANA as long to gain acceptance — but SAP is repeating many of the same glaring mistakes that plagued the Oracle Fusion program.
A significant difference is that Oracle does not have the partner network that does SAP, and does not have the control over the IT media landscape as does SAP. For this reason, stories around the shortcomings of S/4HANA have been kept under wraps. My research entity, Brightwork Research & Analysis is one of the very few entities that has published the reality on the topic. Another being Vinnie Mirchandani in his book SAP Nation and SAP Nation 2.0.
The Paragraph’s Introduction by ASUG
But overall, this is paragraph’s introduction by ASUG is an attempt to generalize S/4HANA’s problems to all applications. This is inaccurate, though self-serving.
Now the second sentence about SAP customers being confused is certainly correct. But it is not because of rational “repositioning.” SAP has frequently communicated contradictory and inaccurate information about S/4HANA. Again, this is not “normal.” Of all the applications I cover, there is probably the most confusion about S/4HANA, and we are several years into its introduction into the market.
The comment about “gradual uptake” is another sentence from the Soviet University School of Propaganda. Talk about wordsmithing. S/4HANA has seen very low adoption. And there is little reason for surprise.
- S/4HANA is the largest change to SAP’s primary ERP system ever introduced — and it is still not a completed product.
- There is also the necessity switch out the database that was being used for HANA, which is not something customers were clamoring for. Using HANA has some implications that have been significantly oversimplified by both SAP and the major SIs. (I have covered some these in my previous articles) It is not at all a simple analysis to do this.
All of these factors and more have hindered adoption of S/4HANA. As for ASUG’s estimates of usage of S/4HANA, I am quite confident that it is exaggerated.
I will cover this in more detail in the soon to be released S/4HANA Implementation Study.
Losing Focus on the Purpose of the Paper
“When SAP first released S/4HANA in February 2015, the primary functionality focus was financials. The second major on-premise release of the suite, S/4HANA 1511, generally available in November 2015, expanded functionality into areas of logistics such as production planning and inventory management. As of the third major on-premise release, S/4HANA 1610, which debuted in October 2016, all the features of S/4HANA Finance were added into the suite and all future innovation on finance will concentrate on S/4HANA, not a stand-alone finance offering. Of course, companies don’t have to start with finance; they can adopt the latest release of the full on-premise suite, SAP S/4HANA Enterprise Management.
SAP’s approach with S/4HANA, public cloud edition, is somewhat different, offering a suite but also providing modular S/4HANA editions—for instance, S/4HANA Finance Cloud was new in the 1611 November 2016 release of S/4HANA Cloud.”
I have a major complaint with how ASUG is presenting information, and this is a perfect example of what I mean by this.
This paragraph gets into all the details about when different versions of S/4HANA are coming out. They then offer some advice on implementation.
How is any of this relevant to a study of this type?
What ASUG Appears to be Trying
ASUG appears to be trying to do some things with this study, but a lot of the information they are presenting is not relevant to the title of the paper. The title is a S/4HANA Adoption Study. Therefore the information presented in the paper should reflect the title of the paper.
This reminds me when I ask if a task is completed from an IT resource and instead of and answer of “yes” or “no” I get a lengthy explanation of what happened, and what remains to be done. This seems to be the preferred way for many IT resources to answer when the actual answer is no.
Greenfield Versus Upgrade
“For many organizations, determining how they get to S/4HANA is a pressing issue, given that there are a variety of routes to choose from. In talking to early S/4HANA adopters, we’ve heard that a greenfield approach has been more common than a migration.”
Is ASUG seriously not cognizant of why most respondents have gone with a greenfield approach?
This is one of those observations that really can only fall into two categories. Either the people that wrote this paper at ASUG do not know why Greenfield is so common, in which case they are not the right people to write a paper on S/4HANA adoption. The second option is that they know, but decided not to explain why, and in which case they are also not the right people to write the adoption paper.
ECC cannot be upgraded to S/4HANA because the changes from ECC are so dramatic. S/4HANA is a reimplementation. This is critical information, and of course, ASUG leaves it entirely out of the study on S/4HANA adoption.
Pre-existing ECC Customizations
“Another key “how” question we hear S/4HANA adopters frequently debating is their approach to customization. Typically, customers have tended to heavily customize their existing SAP ECC on-premise deployments and, in moving to S/4HANA, organizations can rethink their business processes, which may result in more simplicity and avoid the need for a lot of customization. So, we asked our respondents to describe their organization’s position on customization as it relates to current or planned S/4HANA implementation. Of the 558 respondents to the question, the majority (43 percent) said they would implement S/4HANA with as few customizations as possible, followed by 25 percent who said they would implement S/4HANA with all the customizations required by business and IT, and a further 25 percent who answered they don’t know or aren’t sure. Only five percent of respondents said they would implement S/4HANA with zero customizations.”
Everything written in this quotation is very unlikely to come true. Customizations are created because the functionality in ECC was not what was desired for a particular area. S/4HANA adjusts the functionality in S/4HANA, but SAP has not engaged in a program for greatly enlarging the functionality in SAP’s ERP system to account for a huge number of customizations at customers. In fact, some functionality has been removed, meaning customizations may increase for come customers.
What ASUG is Leaving Out
Think about the implication of this for a moment. Is SAP committing to enlarge its ERP scope to such a degree?
ASUG is leaving out something imperative in its coverage of S/4HANA. And that is that every single customization will break when a company moves to S/4HANA. One primary reason for this is that the table structure and overall database schema of HANA for S/4HANA are different. And customizations have to connect to tables. Why isn’t ASUG explaining this? It is not necessary for ASUG to explain this as the topic of the paper is S/4HANA adoption. But if they are going to bring up the topic of customization, this is probably the number one issue around customizations for S/4HANA, and ASUG strangely does not think it is important enough to include.
Much of the verbiage around simplifying one’s environment by removing customizations is either directly or very close to nonsense. SAP too often uses the term simplify to obscure what are real issues. It is of course SAP’s preference to remove all customizations and for everyone to run standard SAP. That is what the SAP sales process more often than not oversells, but it is not reality. One cannot change the conversation by using the term simplify as a magic wand on these issues.
False Information at End of Quotation
The rest of the quotation gets into the percentage of what customers think they will keep or lose regarding their customizations. I would say that it is highly doubtful that the respondents know enough to answer this question with very much accuracy as to what will eventually happen when they implement S/4HANA.
It is important to note, that this entire paragraph on customizations is the exact position of SAP. Not a similar position, a 100% facsimile to SAP’s position on customization. If ASUG is designed to represent user interests to SAP, But they don’t. As a commenter from ASUG stated on a comment on my previous ASUG article ASUG’s Biased and Inaccurate Coverage of SAP Indirect Access.
If the users/customers and SAP have never seen eye to eye on customization, why is ASUG’s position a facsimile of SAP’s?
Customer Reason for Moving to S/4HANA
“We were eager to find out the number-one driver for organizations moving to S/4HANA. Of the 571 respondents to the question, the largest number (28 percent) chose the statement “S/4HANA is where SAP is making primary investments and innovations.” In second place was “We need a single reliable source of real-time data truth to power decision making,” chosen by 15 percent of respondents, followed by “S/4HANA will enable our digital transformation strategy,” which drew 14 percent of those polled. Next up was “We need an improved user experience so our staff can be more productive” (11 percent), then “We need a simpler data model so we can cut IT costs,” and “We need a simpler landscape so we can consolidate apps and databases” (each option attracted 9 percent of those polled).”
I found this answer genuinely interesting. The first answer seems like it is difficult to take issue with. SAP is making investments into S/4HANA, so the company wants to use the applications that SAP is investing in. It is a reasonable platitude. But the other comments show how misinformed the customers that responded to the survey are.
A Jumble of False Statements
- Single Source of Truth: S/4HANA will not provide a single source of truth any more than ECC did. Also, are we recycling motivations here? SAP sold ECC and R/3 also by promising a single source of truth.
- We Need to Enable Digital Transformation: I have a future article on this, but it is difficult to see “DT” as anything real. It is a strange and insubstantial logic for making such an investment decision. It also brings up the problem with the survey. As it was obviously multiple choice, it is clear that ASUG created this series of options. Therefore, the respondents chose options that were preselected for them.
- Improved User Experience: This leads to Fiori. However, Fiori has a ways to go before it is proven as a usable interface for S/4HANA. There are just not enough people using it yet to say a lot about it.
- Simpler Data Model: HANA’s “simpler data model” is not more straightforward. I cover this in the following article Does HANA Have a Simpler Data Model. But companies must be prepared for higher costs with HANA, not lower costs. Now the benefits side may improve, but the cost side will only increase.
Obstacles to Implementing S/4HANA
“When it comes to the top obstacle to S/4HANA adoption, our survey drew no one clear answer. Of the 550 respondents to the question, 18 percent said it was unclear how S/4HANA benefits their specific organization. In joint second position, at 15 percent apiece, were lack of a clear general-purpose S/4HANA road map and lack of in-house S/4HANA skills. Not far behind, at 14 percent, was not enough live S/4HANA customers, which we’ve heard voiced regularly by ASUG members who would like to see S/4HANA live customer figures in the thousands rather than the hundreds before they commit their organization to moving to the suite. SAP tells us it expects to reach those levels of live S/4HANA customers by SAPPHIRE NOW and ASUG Annual Conference, in May 2017. 13 percent cited no clear understanding of how to get from their current ECC 6.0 to S/4HANA, followed by 12 percent who said there was a lack of clarity of S/4HANA versions and functionality (see Figure 5 ). SAP is endeavoring to address these concerns by publishing regular road maps for the different deployment options and versions of S/4HANA. The vendor is also providing more tools to help customers at each step of their S/4HANA journey, including SAP Value Assurance service packages.”
Interesting that one of the most important reasons which are the fact that S/4HANA is not completed product is not included as an option on the survey. This is why ASUG performing this study is a problem. They lack the objectivity to place interesting and important questions on the survey as they know they would not like the answers and it would not “look good.”
Not Meeting the Numbers of Go Lives
S/4HANA will not meet those number of live customers by May 2017. And I want to bring up a point here that is telling. Notice that ASUG is simply stating what SAP told them regarding the number of live customers on S/4HANA by a certain date. However, ASUG claims to be independent of SAP. If ASUG is independent of SAP, why is ASUG not offering their view on whether the statement by SAP is likely to be true? Let me give you an example. How can you tell that I am not on SAP’s payroll or somehow receive financial consideration from them? Brightwork may be getting lots of money from SAP and lying about it. But the Brightwork media output is a clue, and it significantly diverges from SAP marketing. And it is unlikely that SAP would pay any entity to write objectively about them.
We can all read SAP press releases to find out what SAP thinks. However, the purpose of an entity performing research or writing on SAP is to evaluate statements by SAP independently. Let me restate, the ostensible purpose of ASUG’s study is to determine the adoption of S/4HANA. However, this is not the overall objective. The objective is at least in equal part to promote S/4HANA adoption. That is why so much has been concealed that is negative or problematic about S/4HANA implementations and why so much SAP marketing literature is sprinkled throughout the study.
The Issue with SAP Bias
This issue of SAP bias that extends to the major SAP consulting companies as well, but entities that pose as being independent of SAP, but that simply repeat what SAP says, creates an echo chamber. These entities are abusing the trust of the reader by pretending to be something that they are not. The reality is that these entities are not independent. And by doing this, it makes the SAP proposals seem to be more valid than they are.
I can bring up many examples of this, both present and past were very obvious falsehoods were not questioned in public by any of the entities that are ostensibly independent of SAP. One older example is why not one of them published or discussed the inaccurate marketing around Netweaver as I did years ago in the article I published years ago Did Netweaver Exist?
Did the rest of the entities that wrote on SAP and specifically on Netweaver really not know that it did not exist and was a marketing construct. Did some know but decide not to publish because it would ruffle feathers at SAP? The kindest thing that can be said is that they did not know. But if you don’t know, then why are you authoring articles on topics you don’t understand?
Clarifying S/4HANA Releases?
On the topic of clarification on S/4HANA on the part of SAP. While it sounds like a good thing. The problem with SAP’s attempting to clarify the various releases is that S/4HANA’s releases are themselves grossly confusing. And this is because S/4HANA is being developed incrementally. This has the unfortunate consequence of making everything more complicated. This is the downside with following the incremental development schedule.
In yet another article (see my previous analysis of the ASUG article on indirect access here), ASUG demonstrates that it is a marketing arm for SAP.
I do not know ASUG history all that well, but from speaking with numerous people who have participated in ASUG for many years, ASUG was not always a marketing arm of SAP. At one time they used effectively represent user interests. However, through not having any transparency, it is clear that SAP has taken over ASUG. This should be a concern for all ASUG members, and ASUG members should begin to ask for more of a hand in choosing who ends up in ASUG leadership positions. Obviously, if the leadership is controlled/nominated by SAP, it will reflect SAP’s interests. This is the precise problem with the US FDA or the Food and Drug Administration. The FDA’s senior leadership is essentially a revolving door through which the executives of big Pharma rotate. They are nominated to these positions because pharmaceutical companies are major donors in presidential campaigns. This is why we can no longer have an objective pharmaceutical regulatory body in the US.
ASUG for Moderating Conflicts
In my article on indirect access, I question whether ASUG is still a place to moderate conflicts between customers and SAP. It may be difficult for people that work at ASUG to understand how transparently they are demonstrating their bias in their media output. Pretty soon you just begin to internalize the values of the entity that pays your bills and come up with rationalizations for why it is all good for the users. It is tough to write a clean piece once you come from a particular angle of financial bias.
ASUG, your seams are showing.
This article is part of The S/4HANA Implementation Study. Please see that study for the overall conclusions.
Financial Bias Disclosure
Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.
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Break the Bank for ERP?
Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.
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Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model