With SAP’s red-hot S/4HANA Cloud ERP suite growing almost 100% since January 2022, I recently asked S/4HANA president and chief product officer Jan Gilg to share some stories from among SAP’s largest cloud ERP customers.
Throughout 2022, SAP reported quarterly growth for the S/4HANA Cloud ERP solution of 90% to 100%, and for Q1 of this year it was up 77% to $788 million, meaning SAP has a very good chance to top $3.5 billion in cloud ERP revenue this year and perhaps approach $4 billion.
Before we get to those customer overviews, let me offer a few points to set the proper context:
- SAP has about 20,000 on-prem ERP customers yet to move to the cloud, and archrival Oracle would dearly love to peel away chunks of that installed base. So S/4HANA Cloud is not only a vital new product in its own right; it is also the profoundly strategic migration path for those traditional customers.
- SAP has done a superb job at helping to ensure those 20,000 on-prem customers decide to stick with SAP because of its RISE “business transformation as a service” program. So it’s not just building a better mousetrap — it is also, if I may extend the muroid analogy, following the advice outlined in the book To Catch A Mouse, Make A Noise Like A Cheese: SAP RISE puts the business case out front and lets the technology stuff follow.
- SAP is also trying to capture the massive net-new market of midmarket firms that don’t use SAP via a program called GROW, which is broadly patterned after RISE. The goals: build clear and non-techy business cases focused on speed of installation, simplicity, agility, and predictable cost.
- As noted above, Oracle is competing intensely for that huge set of SAP customers that have not yet moved to the cloud, and while Oracle’s Fusion ERP applications and its NetSuite solutions for SMBs are doing very well in the market, S/4HANA Cloud’s powerful growth is more than holding its own. But SAP cannot afford to let up, or Oracle will pounce.
So far, SAP’s showing no signs of letting up — quite the contrary. So in that spirit, I asked Gilg if SAP could share an overview of some of the larger S/4HANA Cloud installations. SAP provided me with about 10 customer profiles, and these six are the most compelling.
German automotive manufacturer: Using S/4HANA Cloud Private Edition, with go-live in 2021
This customer currently is running more than 100 SAP ERP systems. With the first S/4HANA system, they introduced the “Future Sales Model” to invoice directly to the end customer, which was not possible before.
The customer has five major SAP transformation initiatives:
- S/4HANA template for logistics & manufacturing: 25 product instances for every plant — first rollout in August 2023 — 45,000 users
- S/4HANA template for Central Finance: rollout to all markets has begun
- S/4HANA for Aftersales: project to be started in October 2023
- S/4HANA for Procurement: SRM successor — project is planned
- RISE + conversions of 11 ECC systems to S/4HANA
As the customer looks to scale its deployment, it is planning on:
- Harmonization of processes in all areas
- Increased usage of the SAP standard which ensures the upgradeability of the systems
- Innovations in several areas, including Advanced Shipping & Receiving, and Network Planning for Aftersales.
Japanese high-tech company: Using S/4HANA Cloud Private Edition, with go-live in 2023
The customer kicked off its cloud ERP effort via RISE with SAP in December of 2021, and the project will include more than 100 locations under the RISE program.
Worldwide professional services company: Using S/4HANA Cloud Public Edition with go-live in 2021
One of the largest S/4HANA Cloud installations with more than 26,000 users, this customers has deployed solutions including the Professional Services Edition of S/4HANA Cloud; Finance Solution; Extended SAP Suite; Concur; and various third-party solutions.
The company has also placed the cloud ERP project at the center of various transformation initiatives, including:
- The opportunity to rethink and redesign processes to boost standardization
- The ability to benefit from continuous innovation cycles
- Boosting efficiency by breaking up sequential process steps and adopting parallelization as well as process automatization
- Becoming more flexible by migrating from its heavily customized system landscape
- Generating the ability to pursue and execute upon sustainability strategy
American consumer-products company: Using S/4HANA Cloud Public Edition with go-live in 2021
The scope was around 100 users in two instances for their wine businesses focused on core financials reporting back to their core S/4 on-prem system in the US. The project was successul and the customer was able to fully modernize its financial functions.
American media company: Using S/4HANA Cloud Public Edition with an early go-live in 2019
After starting with Core Financials and Indirect Procurement, this customer expanded the to Direct Procurement, Inventory Management, MRP, Maintenance Management, Manufacturing & Warehouse Management. Along the way, the number of users increased from 600 to 1,100, and the customer has experienced a seamless process flow between procurement, inventory management, vehicle management, and finance.
A significant benefit has been better inventory visibility and accuracy.
Japanese manufacturing company: Using S/4HANA Cloud Public Edition with go-live in 2023
Looking to move its overseas subsidiaries to the public cloud to create seamless alignment and execution with those subsidiaries, this customers has just gone live with its pilot country and will complete add more countries over the next two years.
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