Digitization is more than software

What was the motivation for DSAG to decide on the topic of business or digital transformation as the leading theme of the 2016 annual congress?

Marco Lenck: Virtually every management level in companies has already dealt with the topic of digital transformation. And as a result, it has become a top issue at IT management level, with the core question:

What can our IT contribute to business transformation?

Products can be digitized, services, perhaps even markets. Something or other will happen in almost every industry. And it is precisely this something that is driving the management levels.

Up to now, the main focus has been on implementing and effectively supporting efficient core processes - for example, with standard software and ERP systems.

Digitization of information and management goes beyond that.

What does that mean in concrete terms?

Lenck: How are my markets and my business models changing in the market and in my industry.

How can my company differentiate itself there? We are now asking ourselves this core question anew. Because the number of opportunities has increased dramatically.

And: You act completely differently with products, with services or with customers in the market. Digitization is more than just software.

We know that the DSAG community is intensively engaged with digital transformation and has numerous questions about it that go beyond SAP topics or aspects.

What is DSAG doing in detail to help members get on the "digital track," so to speak?

Lenck: There are our working groups, furthermore regular meetings take place, also the exchange of information and knowledge in the DSAGNet, an exclusive exchange platform for DSAG members, is very intensive.

In addition, the members of the Executive Board think about topics. Everything we develop within DSAG is made available to DSAG members - on the topic of SAP, but also on the topic of digital transformation.

Of course, we push the transfer of knowledge among DSAG members.

For the more than 4,500 participants of the annual congress, there was not only a lot of information. They brought many questions from their companies on the subject of digital information to the annual congress. And these are discussed with like-minded people, so to speak, during the coffee breaks - enriched by information obtained in the working groups or forums.

This is how opinions develop or concrete approaches solidify. That is what DSAG can contribute.

That won't be enough here and there, but these are essential building blocks.

Perhaps one more thing: We are currently working on a recommendation for action on digital transformation, which is expected to be available at the end of November.

And: We are intensifying cooperation with various company and industry networks, especially against the backdrop of business transformation.

SAP has described the new S/4 Hana as the "digital core". But at its core, the business suite successor is first and foremost a software package, right?

Lenck: From our perspective, S/4 Hana is primarily a replacement for ERP.

The ballast that the SAP ERP had been dragging around with it was thrown off, so to speak. Be it with the database, be it with the transactions through simplified data models.

It also has a certain claim to be redundancy-free. But just doing things technically differently is not really a big leap forward. We need new functionality as well as reintegration of other systems into S/4 Hana.

That has not yet taken place to date. With the new S/4 version 1610 as a functionally enhanced ERP system compared to the Business Suite we have today, a repositioning is taking place.

Ultimately, you can look at it this way: S/4 is a kind of bet on the future.

Will S/4 make its way, become a success?

Lenck: I think so. It will be an alternative product to the Business Suite for many years.

But: We don't see a quick replacement. We believe that more and more companies want to go to this platform.

But they should think carefully about why they are doing this and be able to answer this question well. Performance alone is not enough. It's not enough for most users.

It is mainly about simplified data models or a new user interface.

Is the upgrade to S/4 currently a topic that many existing SAP customers are already grappling with?

Lenck: There are currently many companies looking at the possible S/4 upgrade. And more and more are doing so.

But an ERP system isn't changed on the spur of the moment. And it's not quite that simple either. When you design a project, you find that there are a number of legacy issues.

At the moment, the majority of SAP's existing customers are engaged in a 1:1 migration.

Is a brown-field approach, in which I take over what I already have piece by piece, or is a green-field approach, in which you practically do everything from scratch, the best thing for my company? Many companies are currently asking themselves this question.

In our view, we will see a significant number of larger customers on the S/4 platform in two to three years. Equally, beyond 2020, however, there will still be a large proportion of business suite customers.

Speaking of business suite support. Could it be that there will be SAP support beyond 2025?

Lenck: SAP has announced that Business Suite maintenance will run until at least 2025.

For us, maintenance means product development until 2025. There is still no successor product for the Business Suite.

S/4 was explicitly positioned as a new product. After all, there are still nine years until 2025. DSAG will think about how to deal with the topic of "Business Suite support until 2025" in good time.

As if out of nowhere, the availability of SAP BW/4 Hana was announced on September 7. What does DSAG think about this?

Lenck: It is a fact that BW on Hana is currently the most installed on-Hana product.

You could almost say that BW on Hana is a kind of go-to release.

Users are practiced in its use. Now, with S/4, an ERP product is added that raises the question: Is a BW system still necessary?

This is a question that should be asked critically anyway. Many companies will answer this with a no, many companies will answer this with a yes. Because they do much more with a BW than just operational reporting.

And those companies that aspire to do so in the future would certainly be well advised to operate stand-alone BW installations.

And it makes a lot of sense to do this with Hana.

Now BW/4 Hana is here, and you ask yourself: what makes a BW/4 Hana different from a BW on Hana?

And users should ask themselves the same question.

SAP explains that we have streamlined the BW system and BW/4 Hana is based on a different architecture. As an SAP BW user, you should certainly think carefully about what a change entails in terms of operation, use case, business case, licenses, and more.

Has the somewhat hesitant attitude of members, which a DSAG survey on cloud computing revealed at the beginning of the year, changed?

Lenck: There is currently little talk of the Hana Enterprise Cloud, or HEC for short, as an operating model. Cloud perception among DSAG members is still very ambivalent.

One part is of the opinion: Okay, my business model has no problem with this; cloud computing is risk-free for me.

Another still does not want to store business-critical data in the cloud. With HCP, the Hana cloud platform, on the other hand, there are effectively two objectives. One is to use a development platform to do software development and use applications on premise. Furthermore, HCP can be used to set up and use cross-company processes. For such processes, it makes perfect sense to also rely on cloud in the context of hybrid cloud computing.

At this corner, awareness of cloud computing has increased a bit.