While the majority of companies are still running SAP software either on-premise or in a hosted (private) cloud, in recent years software vendor SAP has been embracing cloud based solutions more and more; resulting in a steady growth of its portfolio of cloud applications. SAP Integrated Business Planning (SAP IBP) is an example of a cloud application and offered by SAP as a SaaS-solution (software as a service). SaaS removes the need for organizations to install and run applications on their own computers or in their own data centers. This eliminates the expense of hardware acquisition, provisioning and maintenance, as well as software licensing, installation and support.
But what is the impact of switching to a SaaS-environment? Based on my recent SAP IBP projects I would like to spotlight 7 habits of the SAP (public) cloud.
1. Time to deployment -> Go? 1 2 3 ……. Go!
SAP IBP is ready to run within days. No time consuming hardware selections and installation activities needed. The software is delivered through one provisioning email resulting in a jump start of the implementation and process redesign phase. A ‘Go’ for the project is followed by a quick start.
2. Anywhere access
SAP IBP, as a SaaS application, is delivered over the Internet. Users can access IBP from any Internet-enabled device and location. However, for the Excel frontend a local installation of an EPM based Add-on is required.
One remark: the access to the SAP public cloud solutions – such as IBP – but also Cloud for Customer and S4Hana Cloud, is controlled by SAP Identity Management (another SaaS). In the last 6 months we have experienced some down time of SAP Identity Management. Recently I have learned from SAP that accessibility of SAP Cloud Identity is labelled as priority 1 at SAP board level.
3. Increase speed of change
The true benefit of a SaaS is the increase of the speed of change. SAP follows a three-month schedule in upgrading the IBP solution. In case of the IBP world: the system is shut down for the upgrade on Friday night and the upgraded system is up and running on Sunday morning with a working guarantee of the existing solution. SAP is very transparent in their future roadmap that lists all new functionalities for a one-year window (the next 4 releases). Recently a customer influence program has been started by SAP that aims for collaboration and co-innovation on cloud solutions.
4. No custom development, maximize configuration
A change of mind set that lies beneath the SAP public cloud, comparing to classic on premise SAP solutions, is the limited custom development that IBP allows. So no customer enhancements, no ABAP development and thus … no extensive - and in most cases rigid - custom made solutions. The IBP application is highly configurable in terms of data and process modelling, planning views, analytics in order to meet the specific business needs. This results in my opinion in a more volatile system that is prepared to adopt changes quickly, as any IBP system should be.
The custom development needed for integrating the IBP supply chain planning processes within the overall landscape is covered within the SAP Cloud Platform (also delivered as a SaaS, together with the IBP solution).
5. SAP IBP as a technical black box
SAP as a SaaS is technically not in your hands, and feels like driving a car with a limited dashboard compared to your old car. You have no insights in detailed user statistics, limited insight in job logging, no traceability possibilities in case of bad performance. I know that the SAP cloud world is working on a cloud based support and monitoring system that should provide more insight. The existing basis / infrastructural staff of the company is less involved compared to any on premise of private cloud solution.
6. SAP IBP collaboration with technical expertise
All contacts with the SAP cloud support staff is ticket based. The threshold of putting a ticket in is low compared to the on premise SAP solutions. A moment of human contact in case of blocking issues or in case of a performance issue where functional (the configured solution) and the technical world must meet, is not yet foreseen. SAP local account management, more focused on selling solutions, should in my opinion be extended with a dedicated delivery manager. He/she should be working in the same time zone, and should be responsible for the delivery of the cloud solutions at the customer site. If not, the support of cloud solutions could result in a kind of internet provider help desk nightmare, where is hard to get the correct person working on issues. Especially when more and more customers are choosing a SaaS solution.
7. SaaS for life?
A SAP IBP agreement comes with an initial subscription term of 3 years. So, for at least 3 years the IBP solution is configured, reconfigured, upgraded (12x), made better and made more fit to meet your business needs.
The question pops up ‘what is the situation after those 3 years?’ A renewal could lead to significantly higher pricing in case this renewal pricing was not included in the initial deal. Operational expenses could increase significantly!
Assume you would like to end the cloud agreement. You cannot resign from the SaaS service and continue the solution as-is without support and maintenance, as you would be able to do with any on premise SAP solution.
And if you would terminate the SaaS service, would it be possible to make a solution switch, transferring your solution and your data to another solution? Will the SaaS service for highly configurable business solutions as IBP be a potential long term cash cow for SaaS service providers?