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lauren_mccallum
Advisor
Advisor
With Scott Knote from the SAP HANA CoE

 

Last fall, the UK SAP User Group, UKISUG, surveyed its members on RISE. 30% had never heard of it. I’m guessing that number might have been the same in many of SAP’s other markets last year.

This year, the chemical companies I talk to have certainly heard of the offering, and some of them are starting to take advantage of it. But I think there is still quite a bit of confusion over what the offering provides and why chemical companies, in specific, could benefit from it.

Let’s start with WHAT

Simply put, RISE with SAP is a SaaS offering that combines access to S/4HANA Cloud with support and infrastructure management services, all covered by a single contract with SAP and governed by a single Service Level Agreement (SLA). The graphic below shows the difference between the traditional commercial model on the left and the RISE model on the right. Blue shows the scope of the SAP services provided with a RISE contract.


This graphic also clears up a common question about RISE, which is “who does the actual implementation?”. The traditional advisory and implementation services provided by systems integrators complement RISE. While companies can certainly hire SAP to implement S/4HANA, the lion’s share of SAP implementations have been and will continue to be done by partners, many of whom are RISE certified. And partners continue to play a role in providing application management services such as test management and execution. So while a RISE contract doesn’t cover every service you need to install, configure, maintain, and run SAP solutions, it covers substantially more than any previous SAP contracts.

I should also mention that from a software point of view, a RISE contract also includes introductory access to several other SAP Cloud solutions not shown on this graphic:  SAP Business Network (aka Ariba, Logistics Business Network, and Asset Information Network), the SAP Business Technology Platform and Business Process Intelligence (powered by Signavio, now an SAP company).

Now WHY

Why should this offering be worth the consideration of any chemical company? First, because at the heart of RISE is S/4HANA. In the case of most chemical companies, this means S/4HANA private cloud, whose new features relevant for the chemical industry range from expanded product compliance --  including emissions, waste management, and product marketability analysis -- to advanced production planning, to advanced available-to-promise that includes allocation and supply protection capability, to a rearchitected finance module that facilitates granular product costing and margin analysis (M&A anyone?)

Second, because as some of the oldest SAP customers, chemical companies often have ECC systems that have accumulated years of customization that at best make upgrading to the latest release difficult and at worst actually hamper business processes, which may have changed in the 20 years or so since the original systems were implemented. As an aside, when I review the adoption history of SAP R3/ECC, the biggest wave of chemical company implementations was in the years before Y2K, which means these companies have had a good long run with their SAP systems that are now very far from state-of-the-art.

These first two reasons speak to the software “content” of the offering. The remaining reasons address the services that are part of the offering and the commercial model, both of which are something of a departure for SAP.

RISE is a SaaS offering, which means that not only is S/4HANA available as a subscription service, but also that SAP provides supporting services along with the subscription. To be clear, SAP is not the infrastructure provider, but as part of the RISE contract SAP manages that infrastructure in conjunction with the customer’s selected provider, which can be Microsoft, Amazon, or Google. SAP also provides, in addition to software and support, technical managed services.

Just what are “technical managed services” you might ask? This means that SAP will provide a catalog of nearly 1,200 services, but the highlight reel includes:

  • System build & application deployment (basically, SAP provides access to an up and running S/4HANA system with all the applications you have licensed installed on it)

  • SAP system transport management system set up and configuration

  • Setup of RFC connections

  • BASIS Services: Including DB administration, installation, operations, updates, patching and SAP monitoring, Client 000 BASIS support

  • Proactive monitoring and alerting, 24 x 7

  • SAP version upgrades!


Note the last item? This means that SAP services include upgrading S/4HANA and installing service packs/patches AND upgrades and patching across the stack (network, servers, operating system and database layers). Customers selecting the Private Cloud option, as most chemical companies are currently doing, have options about when the upgrades are installed, and are entitled to one upgrade cycle a year. Customers selecting the Public Cloud receive quarterly updates, whose timing is dictated by SAP.

For customers whose systems have undergone “technical upgrades” only for years, this part of the RISE service removes much of the burden of keeping the SAP system current, especially if, as part of the move to S/4HANA, companies have made an effort to stick to standard functionality and strip old, un-needed customization from their system. More frequent upgrades means more opportunity to take advantages of new features of S/4HANA as they become available, which may decrease the need to bolt on third-party applications that complicate the IT landscape. Yes, you will still have to do testing as part of the upgrade cycle, but that testing can be automated with solutions like those by SAP partner Tricentis, whose software is commonly licensed by companies in the industry.

The goal of partnering with hyperscalers on infrastructure management and providing these additional technical managed services is first and foremost to accelerate and de-risk implementations so that customers can more quickly get value from new technology. On the commercial side, the goal is to simplify customers’ contractual landscapes and lower TCO. By virtue of the volume of workload SAP brings to any hyperscaler’s landscape, the infrastructure costs of a RISE contract are often cheaper than companies can negotiate on their own.

At the end of the day, for companies paying millions of dollars a year to hosting partners, database and infrastructure providers, along with millions of dollars to SAP in software maintenance, the costs of a RISE subscription bring substantial savings quickly. In a low margin business like the chemical industry, every dollar saved counts. So while chemical companies work to increase their margins by negotiating favorable raw material contracts and increasing operational efficiency, they should also look at the savings to be had from optimizing their IT infrastructures.

The value of the RISE services SAP provides is amply illustrated by the recent news that Microsoft, who has been an SAP customer since 1995 and has one of the largest and most complicated SAP landscapes, is moving to S/4HANA under a RISE contract with SAP. As CIO magazine reports, “Microsoft is making SAP responsible for the licensing, technical management, hosting and support of its SAP applications under a single SLA”. While I realize that Microsoft is not a chemical company, I know it is a strategic partner of many of the chemical companies I work with. So I suggest, if Microsoft finds RISE valuable, maybe the chemical industry will, too.

For more information on RISE, see https://www.sap.com/products/rise.html
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