The Most Important SAP S/4HANA Trends That You Need to Know [Grow, RISE, AI, 2027 Deadline, etc.]

Summary

In this insightful discussion, Eric Kimberling, CEO of Third Stage Consulting, outlines key trends in the SAP ecosystem, particularly focusing on the S4/HANA implementation. He introduces SAP's 'Grow' and 'RISE' initiatives targeting small to large enterprises for easier S4/HANA adoption. Kimberling also highlights SAP's AI advancements, the importance of integration in their expanding tech stack, and the challenges of tech talent shortages. He raises questions about the future of big system integrators and the realistic approach to SAP's 2027 migration deadline, offering a comprehensive guide for successful S4/HANA implementations and inviting viewers to engage for further insights.

Takeaways

• 😀 Eric Kimberling is the CEO of Third Stage Consulting, an independent consulting firm specializing in digital transformation.
• 🌟 Third Stage Consulting is technology-agnostic and helps clients with digital strategy, software evaluation, and implementation.
• 📈 SAP is focusing on two major initiatives, 'Grow' and 'Rise', to encourage adoption of S4/HANA among small to large enterprises.
• 🛠️ 'Grow' is a program aimed at small and mid-market companies, offering pre-configured technologies to implement S4/HANA with lower cost and risk.
• 🚀 'Rise' targets existing SAP customers, encouraging them to migrate from legacy systems to S4/HANA, especially moving from on-premise to the cloud.
• 🧠 SAP is emphasizing AI with the creation of a Chief AI Officer role, leveraging vast customer data for AI advantages in their product suite.
• 💡 Innovation at SAP includes acquisitions of third-party ERP and enterprise technology providers, expanding their capabilities and offerings.
• 🔄 Integration and interoperability are key as SAP's strategy includes both in-house developed and acquired technologies, requiring seamless system collaboration.
• 🔑 There is a notable skills shortage in the SAP space, particularly for S4/HANA expertise, impacting the implementation capacity and quality.
• 🤔 The role of big system integrators in the S4/HANA ecosystem may be challenged by skills shortage, AI advancements, and customer distrust due to forced migrations.
• ⏰ The 2027 deadline for SAP customers to migrate from ECC/R3 to S4/HANA is unlikely to be met by many, raising questions about SAP's support strategy post-deadline.

Q & A

Who is Eric Kimberling and what is his role in the SAP ecosystem?

Eric Kimberling is the CEO of Third Stage Consulting, an independent consulting firm that assists clients globally in achieving digital transformation success. His company is not affiliated with SAP but frequently helps clients with their SAP implementations, including S/4 HANA.

What is the purpose of Third Stage Consulting's guide to successful S/4 HANA implementations?

The guide is designed to provide best practices, lessons, and tips to enhance the success of an S/4 HANA implementation. It includes insights and advice from clients who have recently undergone the implementation process.

What are the two major initiatives SAP has introduced to encourage the adoption of S/4 HANA?

SAP has introduced 'Grow' and 'Rise'. 'Grow' targets small to mid-sized companies, offering preconfigured technologies tailored to different industries to implement S/4 HANA at a lower cost, risk, and time. 'Rise' is aimed at existing SAP customers, encouraging larger organizations to migrate to S/4 HANA and move from on-premise to the cloud.

How is SAP leveraging artificial intelligence in its strategy?

SAP is focusing on AI as a spearhead of its innovation efforts. They have created a new position, Chief AI Officer, and are integrating AI capabilities into S/4 HANA and their product suite. SAP's large customer base and the data they generate provide an AI advantage for the company.

What role do SAP's acquisitions play in their innovation strategy?

SAP's acquisitions of companies like Ariba, SuccessFactors, Concur, and Business Objects have broadened their technological competencies and driven innovation. These acquisitions have allowed SAP to offer a more comprehensive suite of enterprise technologies.

Why is integration and interoperability becoming a key focus in the SAP space?

With the shift in strategy to acquire external software vendors, SAP and its customers now need to focus on how to effectively integrate these systems. This is crucial for the successful implementation of S/4 HANA alongside other SAP-acquired systems.

What is the impact of the tech talent shortage on SAP projects?

The tech talent shortage, especially for SAP consultants well-versed in S/4 HANA, can lead to challenges in resourcing and finding skilled professionals for implementation projects. This shortage may affect project timelines and the quality of implementation.

What challenges might large system integrators face in the S/4 HANA ecosystem?

Large system integrators may face challenges due to the tech talent shortage, the potential impact of AI on their revenue streams by automating software development and customization, and distrust from customers due to the forced migration to S/4 HANA.

What is the significance of the 2027 deadline for SAP customers migrating from ECC or R/3 to S/4 HANA?

The 2027 deadline is significant as it marks the point by which SAP expects customers to migrate to S/4 HANA. However, it is acknowledged that many organizations may not meet this deadline due to various constraints, potentially leading to a large subset of SAP customers missing it.

What could be the implications for SAP customers who miss the 2027 migration deadline?

The implications for customers missing the 2027 deadline are uncertain. SAP may extend the timeline, cut off support and maintenance for legacy products, or find other solutions to encourage or facilitate the migration to S/4 HANA.

How can interested parties access more information about Third Stage Consulting and its resources?

Interested parties can access more information about Third Stage Consulting and its resources by scanning the provided QR code, which leads to a video describing the company in detail, or by visiting the links included in the video description.

Outlines

00:00

📈 SAP S/4 HANA Implementation Trends

Eric Kimberling, CEO of Third Stage Consulting, discusses the trends to be aware of in the SAP ecosystem for those considering an SAP S/4 HANA implementation. Kimberling emphasizes the importance of understanding the current landscape, including SAP's 'Grow' and 'Rise' initiatives, which aim to facilitate adoption of S/4 HANA by small to midsize companies and existing SAP customers, respectively. He also mentions the availability of resources such as a guide to successful S/4 HANA implementations and invites viewers to engage with Third Stage Consulting for further insights and assistance.

05:00

🤖 SAP's Focus on AI and Innovation

The script highlights SAP's strategic emphasis on artificial intelligence and innovation within the S/4 HANA platform. With the creation of a new position, Chief AI Officer, SAP is leveraging the vast amount of data from its large enterprise customer base to enhance AI capabilities. Additionally, the company's acquisition of third-party ERP and enterprise technology providers like Ariba, SuccessFactors, Concur, and Business Objects is driving innovation and expanding SAP's competencies. The trend also touches on the importance of integration and interoperability as SAP's strategy shifts from in-house developed software to incorporating acquired technologies.

10:01

🔧 Addressing the SAP Skills Shortage and Implementation Challenges

The script addresses the current skills shortage in the SAP market, particularly for S/4 HANA expertise, which is a new skill set distinct from traditional SAP technologies like ECC or R/3. The demand for SAP consultants is high due to a low unemployment rate and a surge in S/4 HANA implementation projects. Furthermore, the script raises concerns about the dominance of large system integrators in the S/4 HANA ecosystem and questions whether their influence will wane due to factors like AI automation and customer distrust stemming from the forced migration to S/4 HANA. Lastly, it acknowledges the inevitability of many customers missing the 2027 deadline for migrating to S/4 HANA, suggesting potential repercussions and adjustments by SAP.

Keywords

💡SAP S4 Implementation

SAP S4 Implementation refers to the process of adopting SAP S/4HANA, a next-generation business suite for real-time enterprise resource planning (ERP). In the video, this concept is central as it discusses trends and considerations for organizations considering this implementation, emphasizing the need to be aware of current and emerging practices in the SAP ecosystem.

💡Digital Transformation

Digital Transformation is the process of integrating digital technology into all areas of a business, fundamentally changing how an organization operates and delivers value to customers. Eric Kimberling, CEO of Third Stage Consulting, positions his firm as helping clients reach the 'third stage' of this transformation, indicating a progression towards advanced digital maturity.

💡Technology Agnostic

Being 'technology agnostic' means not favoring any particular technology or vendor, instead focusing on what is best for the client's needs. Kimberling mentions this to underscore that while they help with SAP implementations, they do not have a vested interest in SAP as a company and can provide unbiased advice.

💡SAP S/4HANA

SAP S/4HANA is an ERP software suite developed by SAP for digital enterprise management. It is mentioned multiple times in the script as the solution that many clients are considering for their digital transformation. The script discusses various trends and initiatives related to this software, such as the 'Grow' and 'Rise' programs.

💡Grow Program

The 'Grow' program is an initiative by SAP aimed at small and mid-market companies, offering preconfigured technologies tailored to different industries. Kimberling explains that the goal of this program is to make it easier for these companies to adopt S/4HANA at a lower cost, risk, and time commitment.

💡Rise Program

The 'Rise' program is designed for existing SAP customers, particularly larger ones, to encourage them to migrate to S/4HANA. Kimberling notes that this program is intended to incentivize the move from on-premise versions to the cloud, aligning with SAP's strategic direction.

💡Artificial Intelligence (AI)

AI is a branch of computer science that aims to create machines capable of intelligent behavior. Kimberling points out that SAP is heavily focused on AI, having created a new position, the Chief AI Officer, and integrating AI capabilities into their products. This is part of SAP's broader innovation strategy.

💡Integration and Interoperability

Integration and interoperability refer to the ability of different systems or components to work together. Kimberling discusses this as a key trend, as SAP's strategy has shifted to include more third-party acquisitions, necessitating a focus on how these systems work together within the SAP ecosystem.

💡Skills Shortage

Skills shortage refers to a gap between the supply and demand for skilled labor in a particular field. Kimberling mentions this as a relevant trend in the SAP space, particularly due to the demand for SAP consultants and experts in S/4HANA, which is a newer skill set compared to older SAP technologies.

💡System Integrators

System integrators are firms that specialize in integrating different software systems to work together. Kimberling raises the question of whether large system integrators will continue to dominate the S/4HANA ecosystem, given the challenges of skills shortages, the advent of AI, and customer distrust due to forced migrations.

💡2027 Deadline

The 2027 deadline is a reference to SAP's announced deadline for existing SAP customers to move to S/4HANA. Kimberling discusses this as a significant trend, suggesting that many customers will inevitably miss this deadline due to various constraints, leading to potential fallout and questions about support for legacy products.

Highlights

Trends in the SAP ecosystem are crucial for those considering an SAP S/4 HANA implementation.

Eric Kimberling, CEO of Third Stage Consulting, discusses the importance of being aware of current SAP trends.

Third Stage Consulting is an independent firm aiding clients in digital transformation, including SAP implementations.

The 'Grow' initiative targets small to mid-market companies, offering preconfigured technologies for easier S/4 HANA adoption.

The 'RISE' program encourages existing SAP customers to migrate to S/4 HANA, especially promoting cloud adoption.

SAP is focusing on artificial intelligence, appointing a Chief AI Officer and integrating AI into their product suite.

Innovation at SAP includes acquisitions of third-party ERP and enterprise technology providers.

Integration and interoperability are key as SAP's strategy involves both in-house and acquired technologies.

A tech talent shortage in the SAP space is impacting the availability of skilled consultants for S/4 HANA.

The role of big system integrators in the S/4 HANA ecosystem may change due to skill shortages and AI advancements.

Small to mid-market system integrators might gain traction as they can offer more personalized service.

Many SAP customers are likely to miss the 2027 deadline for migrating from ECC to S/4 HANA.

SAP's strategy to migrate customers to a common S/4 HANA platform may face challenges due to unrealistic timeframes.

Third Stage Consulting offers a guide to successful S/4 HANA implementations, sharing lessons and advice.

Eric Kimberling encourages reaching out for informal brainstorming sessions regarding S/4 HANA implementation planning.

Transcripts

if you're considering embarking on an

sap S4 implementation there's a number

of Trends to be aware of in the sap

ecosystem what exactly are the trends

you need to be aware of that's what I

want to talk about here

today my name is Eric Kimberling I'm the

CEO of third stage Consulting we're an

independent consulting firm that helps

clients throughout the world reach their

third stage of digital transformation

success and many of our clients are

implementing s4a many of our clients are

considering sap as an option for their

implementations and even though we're

technology agnostic we're not affiliated

with sap as a company we commonly will

help clients through their sap

implementations and help them plan for

it help them evaluate the options and

one of the things we come across are a

number of different trends that are

relevant in the sap World a lot of

nomenclature and things to be aware of

so what I want to do today is dive into

some of the trends that you should be

aware of as you potentially embark on an

S4 Hana implementation now if you're

looking for more S4 Hana best practices

and lessons and tips to make your

project more successful I encourage you

to read our guide to successful s4a

implementations it's packed with

information and lessons and advice on

how to make your s4hana implementation

more successful and we also share a

number of lessons from our clients that

have recently gone through Ashana

implementations you can read that guide

for free by scanning the QR code here in

front of you or you can go to the links

below before we dive too far into

today's content I want to invite you to

learn a little bit more about third

stage Consulting who we are and what we

do I've included a link to a video right

here that describes third stage and a

bit more detail talks about our story

our history our philosophy our clients

our service offerings and that sort of

thing but in general what third stage

Consulting does is we're an independent

and Tech agnostic Consulting provider we

help clients through their entire

digital transformation life cycles

beginning with digital strategy software

evaluation and selection all the way

through and including implementation

planning impl ation Readiness in the

actual implementation itself we're

technology agnostic so we only represent

our clients's best interest we do not

represent software vendors but having

said that we work very closely with

software vendors all the leading players

that you can imagine we've worked with

both in helping clients evaluate and

select them but also in helping clients

Implement those Solutions as well so we

have a very broad objective agnostic

view of the market that is meant to

really represent your interest as you go

through your digital transformation I

also encourage you to scan this QR code

right here to get access to our Resource

Center this Resource Center has a ton of

information ton of ebooks that are free

you have access to top 10 software

rankings playbooks for how to make your

project more successful guides to change

management YouTube videos all kinds of

stuff that are going to help you through

your digital transformation so I

encourage you to scan this QR code to

get access to those resources and please

feel free to reach out to me directly to

brainstorm ideas about your project even

if it's just informally you want to

bounce around some ideas and get some

informal advice I'd be happy to spend

some time with you so feel free to reach

out to me I've included my contact

information below you can also find it

in the description field of this video

as

well the first Trend to be aware of in

the sap space is grow and Rise these are

two initiatives that sap has recently

rolled out to really help more people

adopt the s4a platform in the s4a

technology now these are probably two of

the biggest initiatives that sap is

working on now and it's really a way for

organizations that are either smaller

midsize companies or existing sap

customers to more easily adopt s4hana

Technologies let's start with grow grow

is the program that sap has recently

introduced that's focused on the small

and mid market and the idea here is they

wanted to create an enticing reason an

enticing program to get more of these

small ad midmarket companies to feel

more comfortable with us fora and what

grow is is essentially a set of

preconfigured technologies that are

tailored to different industries that

are specific for small and midsize

companies the whole premise or the whole

hypothesis here is that by following the

grow program small ad mid Market

companies can Implement s4hana at a

lower cost lower risk and in less time

than if they didn't have the grow

program now the jury is still out on

whether or not this will work if this

will help more mid-market companies go

with the S4 platform but we'll see over

time how that works but in the meantime

we know that sap is focused very heavily

on grow similarly rise is a similar kind

of a program but it's actually tailored

or designed for existing sap customers

and larger sap customers the idea being

here that they want to give these larger

organizations that have already been

using sap such as ECC or R3 two of the

Legacy products that sap has had for a

long time they're trying to give those

customers a good reason to move over to

S4 Hana now and so rise is a way to

really promote that adoption it's also

designed for existing S4 customers that

might have implemented an on premise

version of S4 Hana The Rise program is

intended to give them an incentive to

move from on premise to the cloud which

is where ultimately sap wants all their

customers to be is on the cloud so these

two programs are two Trends to be aware

of as you embark on an sap project here

in 2024 and

Beyond sap is really leading the charge

with their artificial intelligence and

overall Innovation initiatives and if

you think about it and back up for a

moment if you look at sap customers sap

customers are historically very large

Enterprises that have lots of data and

not only that but sap has a lot of

customers tens of thousands of customers

so if you think about all that data that

these customers have it really lends

itself to sap having an AI advantage in

that there's a lot of data for the AI

algorithm to work with so artificial

intelligence is something that sap is

very much focused on in fact they've

recently announced that they've created

a new position within sap called the

chief AI officer and so they're really

leading the charge and not only talking

about AI not only building some AI

capabilities in des4 Hana and their

overall product Suite but they've

actually created an organization that's

focused on AI so I think sap has a

definite Advantage here with their AI

initiatives and not only that but

they're also really driving innovation

in a lot of different ways Beyond AI but

really AI is sort of the spearhead of

their Innovation efforts at the moment

some other Innovations sap is pursuing

is in their acquisition of other

third-party Erp and Enterprise

technology providers and I'm going to

come back to this point in a moment but

sap has acquired a lot of Fairly

significant and large systems such as

arba on the procurement side of things

success factors which is an HR

technology concur which is a time and

expense reporting software business

objects there's a lot of different

technologies that sap has acquired over

the years and that's really driving a

lot of the Innovation and the a lot of

increase ing competencies that sap has

at the moment so watch for AI and

Innovation to be really a key

Centerstone of Sap's growth strategy in

the

future integration and interoperability

is another theme or another Trend to

watch for in the sap space the reason

this is so important is because

historically sap has had Legacy products

that were really built from the ground

up for the most part for example you go

back to R3 or even ECC and most of that

technology was built by sap and fully

integrated within the sap platform

however over the years their strategy

has shifted a bit where as they rolled

out S4 Hana and as they were working on

S4 Hana even before it was introduced to

the market they started acquiring other

companies that focus on different parts

of Enterprise Technologies so whereas

sap had always historically had their

own in-house developed software now

they've gone out to the market to

acquire software vendors such as success

factors concur arba business objects Etc

so what that means for sap customers and

sap ecosystem is that now you need to

focus more on integration and

interoperability how do you get all

these systems to work in other words

it's not just about rolling out and

introducing S4 Hana to your organization

chances are it's S4 Hana plus success

factors or Reba or concur one of the

other many systems that sap has acquired

over the years so for that initiative to

be successful sap and sap customers are

going to have to focus more on

integration and interoperability of

multiple systems and for that reason

it's not as simple as rolling out one

technology so watch for this to be

another common Trend and emerging Trend

in the sap

[Music]

space I recently published a video on my

YouTube channel that talks about the

massive Tech Talent shortage you can

find that video right here by the way

and that Tech Talent shortage is

relevant to sap sap has a lot of Demand

right now for sap consultants and people

that know S4 really well and just a

sumarize why this is such a problem

right now first of all unemployment

throughout the world is low in in many

parts of the world you also have a spike

in demand for S4 Honda implementations

right now largely because sap is putting

a deadline of 20127 for existing sap

customers to move to S4 so when you have

a shortage that are existed and then you

add to the fact that now you're creating

more demand for implementations you can

see how there wouldn't be enough skills

to go around and so that's a trend to be

aware of is that there is a skills

shortage in the sap space especially

because people that were well versed in

R3 and ECC and some of the older sap

Technologies don't necessarily translate

into knowing S4 Hana so s4a is a new

skill set S4 Hana is constantly evolving

and changing and so there's just not a

lot of people that have acquired deep

competencies in s4a as may have been the

case with ECC or R3 so all this stuff

adds up to a trend of skill shortages so

you just need to be aware of that as

you're planning for an implementation

and know that things may not go as

planned in terms of resourcing and

finding those outside skills and

[Music]

competencies another Trend to watch that

I'm actually positioning more as a

question not so much as a definitive

trend is whether or not the big system

integrators will continue to dominate

the S4 Hana ecosystem as they may have

in the past in the past big SI like deoy

Accenture PWC Etc really controlled the

market for S4 implementation services

not only the skill shortage that I

talked about a moment ago but you also

have a lot of smaller to midsize sap

system integrators that oftentimes can

provide better service more attention

and just better quality than some of the

big system integrators also I think

another challenge that that the big

system integrators are going to have in

the near future is with the Advent of

artificial intelligence I think that's

going to cut into a big part of their

revenue stream which used to involve a

lot of offshoring of software

development and software customization

so in other words people can start to

use AI instead of paying humans to code

the software to configure the software

to create the Integrations the reports

and all that stuff there's a certain

amount that can be automated with AI so

because that's such a big part of the

big system integrators revenue streams I

think that could be a challenge as well

and then the the next big thing I'll

talk about that I think is a challenge

for the big system integrators is the

fact that they are complicit in this

whole forced migration of Legacy sap

customers to S4 Hana and it's creating a

large amount and large degree of

distrust among the big system

integrators now it's also creating a lot

of distrust with sap as a vendor but the

reality is is that sap customers are

more likely to stay with sap and they're

probably going to move forward with sap

S4 because they have to but with the

system integrators people at least have

a choice they can go a different

direction if they have that distrust so

I would watch for the trends in market

share and the trends with some of the

smaller mid-market sorts of system

integrators to see how they might get

some Traction in the space as

well now the final Trend I'll talk about

here today is the fact that it is

inevitable that customers will miss the

2027 deadline not all of them maybe not

even majority of them but a large subset

of sap customers will miss the deadline

to migrate from eccr R3 over to S4 Hana

now the reason for this is because many

organizations just simply aren't in a

position to go through a big

implementation at the moment maybe they

don't have the time the budget the

resources the risk tolerance or whatever

the case may be and the other Factor

here is that even if they want to and

they haven't started yet it's going to

take many organizations longer than 2027

to fully roll out s4hana and to move off

of ECC and R3 so for that reason it's

inevitable that you're going to have a

large customer base of sap that misses

that 2027 deadline so then the question

becomes what's going to happen to those

customers will sap really cut off

support and maintenance for those Legacy

products will they extend the timeline I

don't know that there's a good answer

for sap there because they really do

want people to get over to the common

s4a platform so they can invest all of

their R&D in that platform and not have

to worry too much about ECC and R3 and

they could ultimately Sunset those older

products so I understand why sap wants

customers to move over but I think

they're doing it in a compressed time

frame that isn't realistic for a lot of

larger organizations so for that reason

let's watch and see what happens with

the potential Fallout from customers

missing that 2027 deadline so I hope

this has giving you some things to think

about as you look to the sap ecosystem

to understand what some of the trends

are to learn more about sap

implementations in general and other sap

Trends I encourage you to read our guide

to successful S4 Hana implementations

it's a guide that covers tons of

information around the strengths and

weaknesses of sap how to be more

successful in your implementation some

of the lessons learned from helping so

many of our clients through their

implementation so I encourage you to

read that you can scan the QR code here

to read it or you can go to the links

below and of course if you'd like to

brainstorm ideas even if just informally

related to your s4a implementation or

the planning for your S4 implementation

I encourage you to reach out I've

included my contact information below

myself and my company are Tech agnostic

and independent so we're not affiliated

with sap however we do have a lot of

experience implementing sap products so

we can give you sort of the honest truth

of what it might take to be successful

in your initiative so I hope you found

this information useful and hope you

have a great

day there's a number of Trends to be

aware of in

the adapt ah gosh let need to start that

whole sentence over so these two

programs are two Trends to watch out so

these two

Trend wow thank you I recently published

video on my YouTube channel that talks

about the

mess