Thursday, June 12, 2014

SAP Cloud Integration Strategy and Direction FAQ

SAP customers, who run SAP ERP on-premise, are adopting cloud solutions to take advantage of faster innovation, consumer grade user experience and lower total cost of ownership.

Lines of businesses such as human resources, procurement, finance, sales, service and marketing are adopting the cloud to respond to changing customer expectations faster without having to rely on internal information technology teams and undertake large high-cost, high-risk on-premise software implementations . They are also turning to the cloud because of the superior user experience that engages a newer generation of employees who expect enterprise software to function like consumer apps they use every day. For example, an industry that is struggling to attract and retain new college graduates can implement onboarding solutions that attract and engage a new generation of employees during the critical new-hire onboarding period.

Information technology teams are adopting the cloud because it helps them deliver solutions to their internal customers faster at a lower cost, while freeing up time and money to invest in projects that help the core business of their companies. For example, a banking customer that runs SAP for Banking can move human resource management, procurement and travel management to the cloud while retaining their on-premise software to run their bank.

Executives such as CEOs, CFO and CIOs are moving subsidiaries or newly acquired companies to the cloud and connecting cloud systems with their on-premise ERP to reduce the cost of information technology, gain better insight into the business, reduce the time it takes to integrate systems and culture of newly acquired companies.

When lines of businesses move their software applications to the cloud, they sometimes incorrectly assume that these applications are self-contained and need not talk to other business applications that may be on-premise and other supporting applications that may be in the cloud. Such an assumption is costly and may lead to the failure of cloud implementations. SAP studied thousands of cloud implementations and learned that on an average line-of-business cloud applications are connected to over 15 systems using at least 60 integrations. For large businesses this number could be in the hundreds.

SAP’s cloud integration strategy was developed in response to these challenges, desires and ground realities. While, SAP’s cloud applications are designed to provide complete self-contained functionality, they are also well integrated with a customer’s on-premise SAP systems to support end to end business process. SAP provides the necessary technology and content to connect its cloud applications to 3rd party cloud applications. SAP also provides a set of tools and technologies that enable customers and partners to build their own custom integrations. For customers who may not have the know-how, SAP provides fixed price professional services packages to implement the integrations.

This document, which I co-authored along with multiple product managers, articulates the strategy and direction of SAP and answers frequently asked questions. I am still putting the finishing touches on this document. If you are a colleague, partner or customer and would like to review it before I publish it, please leave a comment or send me an email.

A note about the cover. It is Rio, a beautiful place where you feel you are seeing the sky meet the earth. My tribute to the World Cup starting in Brazil today.

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