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New S/4HANA Release Strategy

The newest S/4HANA release 2023 will be made available in October.

Since the introduction of S/4HANA in 2015, SAP has released a new version each year along with two Feature Package Stacks. From this release, going forward, S/4HANA will be moving to a release cycle of every two years, accompanied by three-feature packages or more.

SAP has said that the newest release will be a “go-to” or “anchor” for both backwards compatibility and innovation. Commenting on the release, SAP stated:

“The SAP S/4HANA 2023 release is a major milestone in the evolution of the system, and it will enable customers to provide even more services, best practices, and business process optimization to existing and new clients, allowing them to reach their full potential of intelligent enterprise.”

The company also said that customers may find it easier to update and maintain their S/4HANA system if they adopt this release because the environment will allow businesses to “innovate continuously without interruption and prepares them to go to the cloud when the time comes”.

New Maintenance Strategy

This time last year SAP announced the change in release and maintenance strategy in order to give customers a chance to adapt to the changing needs of the modern enterprise.

SAP has said that customers on SAP S/4HANA 1709, SAP S/4HANA 1809, or SAP S/4HANA 1909 can opt for extended maintenance for those releases and associated add-ons any time from January 2023 through to December 2025. These customers will also be able to directly upgrade to SAP S/4HANA 2023, skipping all the releases between.

With the newest release the mainstream maintenance duration is extended from 5 to 7 years.

SAP Business Suite currently has optional extended support and SAP has committed to supporting the S/4HANA platform until 2040.

User groups have reacted to SAP’s change in maintenance strategy and the “cloud-ification” of the SAP portfolio with strongly worded statements that on-premise customers will effectively have to pay twice for some features, and that businesses need access to the same features and functionality that they had in on-premise SAP ECC systems.

Sebastian Westphal, a DSAG board member, said in March this year:

“With investments already made in S/4HANA transformations, which quickly resulted in single, double, or even triple-digit million budgets, the anchor release 2023 must above all not mean that innovations and enhancements will only take place in the public cloud.”

A Spike In S/4HANA Migration

Given that maintenance for SAP Business Suite 7 will be discontinued in 2027, this release is likely to be the one that gets most SAP ERP large enterprise customers onboard, because many of those customers will need around two years for system analysis and preparation for migration: meaning that customers waiting until the next release of S/4HANA in 2025 will be cutting it fine to get their systems up and running in time.

Rise Into The Future: Virtual Event

SAP has also announced recently that a virtual event, “Rise Into The Future” will be taking place on September 26 at 5pm CET to showcase new features in SAP S/4HANA Cloud (private edition) and new developments with Rise with SAP, the corporation’s transformation-as-a-service platform with bundled hyperscaler and consultancy deals.

The event will also give SAP an opportunity to demonstrate new AI capabilities and resources like process optimization assessment. The webinar will feature contributions from customers and partners, as well as SAP leaders, including Eric van Rossum (Chief Marketing and Solutions Officer for Cloud ERP), Jan Gilg (President and Chief Product Officer, Cloud ERP), Peter Pluim (President SAP Enterprise Cloud Services SAP Sovereign Cloud Delivery & Operations), and Julia White (Member of the SAP Executive Board and Chief Marketing and Solutions Officer).

SAP customers are invited to register for the event and attend virtually to gain a clear understanding of SAP’s cloud strategy and ERP innovation road map.

SAP Cloud Strategy

SAP S/4HANA Cloud is now central to SAP’s corporate strategy, and the Rise with SAP offering as well as Grow with SAP (which is designed for SMEs) have been created to make it easier for SAP’s existing and new customers to adopt cloud services.

While they have been using incentives like reduced costs for cloud adoption they have also been very firm on not extending support beyond 2027 for some legacy products and services. The cloud portfolio is being expanded and new products are being made available on an almost daily basis through the SAP Business Technology Platform, as well as cloud solutions for specific industries.

SAP Acquired LeanIX

Over the last ten years SAP has been acquiring companies and technologies to become a leader in the cloud services industry. The most recent acquisition, of LeanIX is intended to contribute to SAP’s goal of helping their customers accelerate their cloud transformation.

SAP acquired the German startup LeanIX in September this year for a reported price of $1.2 billion (though the companies did not publicize the purchase price). LeanIX provides a software service that helps companies map their IT architecture, allowing them to modernize aging systems and processes. It is a complimentary technology to Signavio (acquired in March 2021), which analyses and automates business processes.

Together, we can expect these two services to work in conjunction with Rise with SAP and Grow with SAP to make the process of cloud transformation far more simple for SAP customers.

Commenting on the acquisition of LeanIX, SAP CEO Christian Klein, said: “Together with LeanIX, we want to offer a first-of-its-kind transformation suite to provide holistic support to our customers on their business transformation journeys.”

Cloud AI Services

SAP is using cloud technology to provide easier access to cloud AI services, which are not easy to implement on-premise because they require huge computing resources. Their current portfolio of cloud AI services includes SAP Business AI, Industry AI, IT and Platform AI (helping to develop and manage AI applications on SAP BTP), and AI for developers.

These services provide functions for businesses based on specific AI capabilities like Intelligent Robotic Process Automation, Predictive Analytics, Natural Language Processing, SAP Vision (for image based AI processes), and Conversational AI.

This comprehensive portfolio of services is being used to give SAP customers added value and a competitive edge. SAP believes that the need of businesses to access these technologies will drive greater migration to the cloud and encourage SAP customers to buy in more and more to SAP solutions for their entire software services stack.

S/4HANA Cloud AI

SAP S/4HANA Cloud uses AI to help businesses automate tasks, improve decisions, and gain new data insights using Intelligent Process Automation, Predictive Analytics, Natural Language Processing, and Machine Learning. These abilities can help businesses focus on strategic tasks, save time and improve the accuracy of their financial data.

For example, SAP S/4HANA Cloud uses AI to automate the collection, extraction, and verification of financial journal data from emails, and mass uploads the data into SAP S/4HANA. In Sales, the solution can recommend opportunities, create purchase orders and optimum inventory levels. In the area of customer and employee experience S/4HANA Cloud uses Conversational AI to create and deploy chatbots and virtual assistants which can help improve customer service and employee engagement.

Further cloud AI capabilities in S/4HANA Cloud and Rise with SAP will be revealed next week at the Rise Into The Future virtual event so get registered and meanwhile prepare yourself for the release of S/4HANA 2023 in October.

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