Editor’s note: This is a winning concept: Put the customer experience first, make customer interactions seamless and offer a single hand to shake. That’s what is happening at SAP, write analysts from Technology Business Research.

HAMPTON, N.H. – A winning concept: Put the customer experience first, make customer interactions seamless and offer a single hand to shake.

Under the leadership of SAP board member Michael Kleinemeier, SAP is integrating its Service and Support businesses, creating a single contract and offering its largest customers a single point of contact. SAP is migrating its customer base from its R/3 flagship to SAP Business Suite 4 SAP HANA (S/4HANA).

Making that transition as simple and seamless as possible will reduce the adoption challenges associated with the technological, business process and cultural transformation supported by the move to in-memory architectures. With the memories and experiences of difficult implementations of R/3 fresh in customers’ minds, the unified services and support approach is designed to proactively avert, reduce and eliminate as much of the change management issues as possible and focus on rapidly enabling transformative business technologies customers can use to their advantage.

Customers will benefit from a unified approach, a simplified pricing and contract structure, an updated portfolio of service and support offerings, and leveraged use of software tools to reduce points of friction.

The strategy

Kleinemeir said, “Our goal is to run simple, reduce customer time to value, reduce cost, [and] increase customer revenue and competitive advantage.”

Customers considering an upgrade to the new S/4HANA application and platform should embrace the changes in SAP Service & Support. Large enterprise customers in particular will need to hold SAP accountable for the promises it made about ease of integration.

To maximize S/4HANA win rates and speed engagements, consulting and systems integration partners should be certified to use SAP Activate and the operations of the new Service and Support group. Making changes through simplification and orchestration Bernd Welz, executive vice president and head of scale, enablement and transformation, leads the organizational integration and transformation, and seeks to align the extensive SAP portfolio and bring new methodologies to play where needed by the customer. There are several strategies being pursued:

  • SAP MaxAttention is expanding capabilities and simplifying customer experience. SAP improved MaxAttention for its largest and most complex customers, as it is the recommended engagement model. MaxAttention now includes extended scope and additional business transformation experts who can help customers innovate, create road maps and use the operations, mission and innovation control centers to manage the speed.
  • Business Transformation Services are taking a more prominent role in setting the guidelines for how customers can use S/4HANA to achieve competitive advantage and differentiation.
  • SAP Activate for S/4HANA is a new methodology to accelerate deployment from start through continuous innovation, ensuring rapid adoption. The service offers the same tools and methodology as ASAP but a more agile approach over a waterfall. SAP Activate provides one service umbrella for cloud, on-premises and hybrid deployments. It launched at Sapphire Now. SAP MaxAttention is simpler to use and more focused Colleen Speer, global vice president, premium engagements, SAP Service & Support, provided an overview of the new service line.

The new organizational theme for all SAP customers is end-to-end service engagement: one recommendation from one organization. Enterprise support becomes the engagement foundation, and SAP ONE Support works across the product implementation and application life cycle.

SAP MaxAttention is all about agility, providing better service, reducing customization and prototyping to innovation, instead of using a waterfall-to-specification process. SAP aims to align with customers’ readiness and timelines. SAP and customers will use the control centers as a venue to focus engagements: the Operations Control Center (OCC) for running the technology, the Mission Control Center for business process monitoring and KPI attainment, and the Innovation Control Center (ICC) for co-innovation and differentiation through use of SAP technologies.

The ICC and the OCC will also include qualified SAP ecosystem partners, a nod to the importance of having a single control center and management framework to use in connecting technology to innovation. SAP Solution Manager is the core control platform. Customers will build SAP like a factory (ICC), then run SAP like a factory (OCC).

Reducing the overall service-to-software ratio is critical to managing long-term cost of ownership.

TBR believes Solution Manager and the services built on top of the tool are application and business process management differentiators other vendors cannot match. Simplified contracts make it easier to do business SAP simplified its Service and Support contracting to a single worldwide contract. The contract will be offered on top of software license and Support contracts, such as for Enterprise Support, reduces hundreds of service lines and pricing schemas, simplifies pricing, and creates one framework for pricing, based on days.

The once difficult conversions between service lines days can now shift/convert between different types of days with fixed ratios. The ability to convert one pool of service into another as needed provides the flexibility customers need for their new agile IT process.

Business success leads technology upgrades Lars Gollenia, global head of Business Transformation Services and vice president, leads a small (approximately 700 people) group with outsized impact for SAP customers who look to transform their business by tapping into the power of the new S/4HANA platform.

“More than 60% of business transformations fail; 75% of failures [are not from] the technology,” said Gollenia. SAP Business Transformation Services offer a management framework and a strategy process to help SAP’s largest customers realize the innovative capability delivered through the S/4HANA platform.

A value realization scoping, measurement and assessment is the core philosophy for the BTS group. SAP will add the BTS as a Value Partnership Service to the engagement foundation for SAP MaxAttention customers and as a stand-alone service for other clients early in the life cycle of deploying S/4HANA.

The BTS group dances a fine line between strategy consulting — traditionally the purview of SAP’s management consulting partners — and strategic advice around SAP-centric transformation. SAP executives acknowledged the company maintained a constant discussion with its largest partners, such as Deloitte, Accenture and EY, around managing which elements of a strategy engagement fell to which company in the partnership.

Should BTS remain a 700-person, globally deployed strategy consulting shop, the largest C&SI vendors will continue to see more of a collaborator than a competitor. If the attractive consulting margins, steadily growing expertise and proven ability to pull through larger SAP engagements continue to work favorably for BTS, SAP may be tempted to evolve its mandate within the SAP ecosystem.

Transformation to S/4HANA

Andy Stahl, global vice president and head of SAP HANA Services, spoke to the life cycle approach embedded into SAP MaxAttention that will enable SAP’s largest clients to make their transition to S/4HANA more easily.

While SAP has an overall framework, Elvira Wallis, senior vice president of scale, enablement and transformation, reported SAP encourages and supports different entry points, and different work breakdown structures are available for migrations. Prebuilding frameworks, code, methodologies and tools as well as services is critical for SAP to reduce the pain, cost and time to value for customers.

Five-year migrations are not acceptable in 2015. Rather, smaller, www.tbri.com TBR incremental, agile and largely automated migrations are today’s requirement, and SAP has brought more agile engagement and tools for a modern migration. SOURCE: SAP SE SAP Activate is a new consumption experience to deal with the implementation migration and upgrades for S/4HANA. This will be the methodology for future cloud solutions.

SAP Activate includes many tools and methods previously used in the ASAP methodology. The big difference is the shift from waterfall to agile methodology, the inclusion of cloud and on-premises references, and its extensive tooling to reduce customization of deployments. SAP is working to reduce long-term cost of ownership.

The holistic framework will be available to partners, and TBR believes customers should ask partners who do not use Activate to demonstrate why their methodology is better.

HANA Enterprise Cloud Services is the platform to run, integrate and migrate While customers could “lift and shift” their SAP Business Suite to HANA Enterprise Cloud (HEC), in the future customers will migrate from third-party databases to SAP HANA/DB harmonization, then will standardize on a version of SAP HANA to keep their SAP software and data platform up to date. Shifting the customer base from performing configurations on the software is a huge qualitative step for the customer and SAP’s supportability.

TBR heard from customers several times how many customizations were never used or were built at deployment for a single stakeholder as well as how the business no longer can use the customization.

HEC will become the layer for the smaller number of customizations. Stephen David Spears, senior vice president, HANA Enterprise Cloud, showed how customers with customization use the abstraction layer of the HEC plus the HEC Integration components (where customizations will rest). HEC becomes the bridge to S/4 (as a true hybrid deployment across owned and third-party cloud deployment). HEC becomes a stopping point, rather than a designation as other vendor cloud services.

Change management is bigger than customers think. SAP mapped over 500 items that are touched by the move to S/4HANA and are things to take into consideration. Customers can run S/4HANA on HEC as owned, and HEC provides coverage for all 500 items. This convergence and simplification removes adoption barriers as the customer base is not an expert in the transition and, in TBR’s opinion, should not be.

To address the HEC hosting capacity need, SAP announced a Premium Supplier program, of which IBM and HP are suppliers, with additional vendors expected soon. SAP invested in data centers worldwide for Ariba, SuccessFactors, Spyglass and HEC but still could not reach geographies that need data centers. SAP also sold out capacity. Premium suppliers provide infrastructure (cells) to SAP that is identical to HEC cells.

The suppliers use reference architectures but also include integrated support and ticketing out to the suppliers for consistency. Subscription software is sold only through SAP. Customers will still have an SAP-dedicated resource customer service engagement manager and technical landscape owner as part of the model, regardless of where the data center is located.

Event overview

TBR Vice President of Research Stuart Williams and Principal Analyst and Practice Manager Patrick Heffernan were two of 20 analysts invited to participate in the SAP Service & Support Analyst Day. The daylong event was held prior to the larger Sapphire customer event from May 5 to May 7 in Orlando.

Key executives with whom TBR had conversations include:

  • Michael Kleinemeier, executive vice president and member of the global managing board of SAP SE
  • Bernd Welz, executive vice president and head of scale, enablement and transformation
  • Klaus Weber, executive vice president of SAP Custom Development
  • Lars Gollenia, global head of Business Transformation Services and vice president
  • Andy Stahl, global vice president, head of HANA Services
  • Colleen Speer, global vice president, premium engagements, SAP Service & Support
  • Elvira Wallis, senior vice president of scale, enablement and transformation
  • Michael Rieder, senior vice president and head of SAP Global Enterprise Support and Premium Engagements
  • Marianne Heer, senior vice president and head of Service & Support, SAP North America
  • Augusto Abbarchi, senior vice president and head of Global Maintenance GTM
  • Stephen David Spears, senior vice president, HANA Enterprise Cloud
  • Stefan Kaetker, senior vice president and head of set content architecture and methodology
  • Jan Meyer, global vice president and head of learning strategy, business development and delivery channels
  • Richard Campitelli, senior vice president, SAP customer engagement and experience
  • Gianluca Battaglini, global vice president, solution management and business value

TBR also met with chief information officers from four SAP customers:

  • Petrobras Oil and Gas
  • Mercedes AMG
  • La Trobe University

(C) TBR