Much has took place in the SAP international within the beyond few months that were blanketed thru the requisite variety of bulletins ? And a good buy of assessment, which include mine. SAP has
· Released its first release of S/4HANA for Customer Management
· Acquired CallidusCloud, a software company that focuses on sales enablement
· Announced a new ERP licensing model ‚for the Digital Age‘
While those three topics appear to be very superb, blended they provide an remarkable perception into SAP?S technique, and the manner the ERP world ? Sorry, the S/4 worldwide, and the patron dealing with international are going to shape up.
So, permit?S have a short have a look at the ones three bulletins one after the other, and then connect a few dots.
S/4HANA for Customer Management
I have covered the migration of SAP CRM into S/4HANA a couple of times. S/4HANA for Customer Management is the ‘customer orientated’ part of S/4HANA and shall offer the core service- and sales functionalities of SAP CRM, using a unified data model. It is supposed to focus on what SAP calls the ‘heavy lifting customer processes’ and to support comprehensive core processes, thereby providing one central customer database.
In other phrases which means S/4HANA for Customer Management as part of S/4HANA should have a robust recognition on (business enterprise) transaction processing and allowing the logistics that includes fulfilment.
One may additionally want to say that it will become a transaction engine.
Keep that concept in mind.
CallidusCloud Acquisition
CallidusCloud presents fundamental solutions for profits overall performance manage, CPQ, Contract Lifecycle Management, and greater. This portfolio properly plugs a few holes inside the SAP Hybris portfolio and offers SAP alternatives or at least each other view on a way to cope with troubles tackled via modern-day products in any other manner.
I am in particular searching on the CPQ element here. SAP is historically sturdy on the variant configuration thing but lacked a strong cloud based totally CPQ engine. The modern SAP Hybris CPQ is, despite the whole lot, an on premise answer and highly geared towards complicated solution configuration. As such, and specifically with its deep ERP integration it clearly covers a few bases that CallidusCloud?S CPQ does no longer gain ? But.
But then SAP moves into the cloud – and successfully so, as the Q1/2018 financial results announcement proves.
On pinnacle of this, CallidusCloud CPQ comes with an incorporated Contract Lifecycle Management device that permits facilitating the earnings manner of merchandise with complicated settlement negotiations.
New ERP Licensing Model
With this new licensing model SAP reacted to the years lengthy controversy approximately the oblique get right of entry to subject matter. I haven?T blanketed this awesome declaration before; consequently I will write a piece extra approximately it here, as it's also a crucial detail for the connecting of dots that I talked about above.
The underlying problem became ? Strongly simplified ? That an increasing number of SAP ERP customers did no longer choose SAP software while it came to deciding on CRM solutions, e-commerce programs, or unique pieces of organisation software program application that surround their ERP spine and alternate information with it. Of course, those programs needed to be, and had been, integrated into the ERP lower back stop in an effort to allow seamless techniques throughout the price chain.
So some distance, so desirable. Unluckily the customers of the 1/3 party applications do regularly no longer have users within the ERP system. SAP argued that they may be nonetheless the use of the ERP device, even if the records flows via a technical individual.
Customers do now not want to license extra ERP clients for the customers of the 1/3 celebration packages, as they apparently do now not use the ERP machine, but just ship facts back and forth.
Problem. Big problem. And one that was ruled in SAP’s favour in the Diageo lawsuit in early 2017.
Still no longer a ruling that SAP should genuinely use to play hardball. So, some thing needed to exchange.
SAP elegantly solved, or alternatively mitigated, this difficulty via manner of setting it into a bigger context: Outcome based completely pricing.
Instead of customers, the brand new pricing version is built around pricing the creation of commercial employer files and there, in particular the line items.
The thrilling factor right here is that now not the mere opportunity to create rate is priced (clients) however the real cost introduction (industrial organisation files are orders, carrier requests, possibilities, and so on.).
Add the concept that not all commercial enterprise files are created same and that there needs to be some scale pricing, one reaches a matrix that may be adapted resultseasily sufficient to be destiny evidence.
Lastly, an final results based pricing model fits properly into SAP?S narrative of handing over consequences and, in a broader sense, the SaaS story which ultimately has a usage and consequences based totally promise at its center.
My PoV and Advice
Putting the ones three subjects collectively, SAP?S tale about the virtual center becomes extra clean.
The virtual core is S/4HANA that looks after corporation transactions and supplies sensible insights to energy (greater) transactions. Everything else, team of workers engagement, spend manage, supply chain, IoT, and patron engagement/experience surrounds it.
The new licensing model is without a doubt the glue that connects the dots.
So, what does this suggest?
Several things:
1. One can look at S/4HANA as mutating into a transaction engine. The SAP Hybris Revenue Cloud is well geared towards creating correct invoices, based on created ‘documents’.
2. SAP Hybris CPQ is on its way to retirement. It is an engine and not really cloud enabled. For variant configuration it bolts on the digital core. And configuration is not a business document in my books. The order, that holds the BOM that is generated by configuration, is.
3. Callidus is not yet strong in variant configuration but can be bolted on the digital core, too, in order to support variant configuration. SAP needs only one engine. Callidus is intended to be this engine. In case there is a continued need to have a separate variant configuration capability there is still In Mind.
4. There will be continued efforts to put all engagement functionalities – customer, supplier, employee – into cloud based applications that surround the digital core.
5. As a side effect, life might become easier for ISV partners, as there is no indirect access risk anymore.
I assume that this pricing model is a totally clever waft via SAP. It will now be crucial to deliver a calculation tool that helps clients find out whether or not or now not it is better to undertake this model or to stay on their gift pricing for a piece longer. Customers most definitely will need to apprehend what this new version way for them, especially.
Regarding oblique get right of entry to, which is a subject that affects different carriers as plenty because it did affect SAP, nicely, the ball is now squarely of their courtroom. It is probably interesting to see how they react.
Last, but no longer least, it's far on SAP to refine the narrative in a way that much less gray regions remain and that method and its execution is obvious to customers.
Of direction I is probably incorrect with my view on SAP?S method ? However I doubt it. Happy to get corrected, despite the fact that.
Any opinion?
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