Ask-the-SAP-Expert: Paul Esherwood, founder and Editor at the print and digital magazine, ERP Today.
Eursap’s Ask-the-SAP-Expert article is a new feature designed to give you up-to-date information on the latest SAP news, featuring key thought leaders in the SAP space, as well as regular interviews with the best SAP consultants in the business.
This month, we feature Paul Esherwood, founder and Editor at the print and digital magazine, ERP Today.
ERP Today is a free to access, independent vendor-neutral media platform read by business leaders at the UK’s largest companies. It offers valuable and insightful views on SAP’s future vision as well as its place in the overall ERP market.
Hi, Paul, thanks for taking the time to chat to us. Firstly, as our readers may not have come across you or your publication before, can you give us a bit of personal background?
PE: My first job was selling advertising in a local newspaper. I fell in love with print, realised I was quite good at selling ads but hated the money – so I started my own publishing company and learned on the job what it was like to be a publisher. I published my first magazines in the late nineties – they were focussed on corporate finance, M&A and private equity.
ERP Today is coming up to its second birthday now. What made you start the magazine originally?
PE: I had worked in the industry for a while and was surprised there wasn’t a good quality trade magazine. My general feeling was that ERP got its fair share of bad press in the mainstream business media – because project failure makes the headlines and it was only the horror stories that got reported. I thought there was an opportunity for an independent publication to look a bit deeper and showcase the best of the ERP world. ERP was also starting to get interesting – if we are honest, it was quite boring and dry until cloud and newer technologies started to breathe life into it. ERP isn’t the be-all and end-all but it is at the centre of an enterprise and underpins the transformation journey.
What would you say has been the biggest challenge to starting up ERP Today?
PE: Cold calling SAP and Oracle.
I can only imagine how painful that was! And how has the covid-19 pandemic affected business at ERP Today?
PE: Commercially it was hard when the pandemic first hit because our customers (ERP vendors and global consultancies) were unsure how it would impact their businesses. But the reality is that COVID has been a good thing for many tech companies because the demands for their services have soared – and that in turn has been a good thing for ERP Today.
And how do you see the big consultancy firms reacting to the challenges of the pandemic?
PE: Well that’s a really interesting question; pre-Covid, if you had asked one of the GSIs what’s their point of differentiation they would have told you that it was their ability to get close to the customer, to understand how they worked and their ability to deliver projects with people on the ground. Many big consulting firms would decry the remote/offshore delivery model as a second-class service to the one they offered which usually involved lots of boots on the ground. Scroll forward a year and every one of them now tells me that all of their projects are delivered remotely with the same level of performance as pre-Covid. I think the old project delivery model suited the implementers a lot better than it did the customers.
The recent year has been tumultuous for SAP, with the departure of two CEOs, rebellious talk from SAP user groups around the world and concerted efforts to eat into their market dominance. How effectively would you say SAP has met these challenges?
PE: The jury is still out as far as I am concerned. Bill [McDermott, former SAP CEO] did a great job with SAP; he took their market value from $40bn to $140bn and that is really the true measure of any CEO’s performance. But he left behind a company that needed a lot of fixes and Christian [Klein, current SAP CEO] is still trying to get a firm grip on some of those issues.
SAP has a pretty dominant position in the ERP market today. With the ongoing move to the Cloud and the explosion of SaaS solutions that we are seeing do you see that changing?
PE: SAP is the #1 ERP vendor and that is a status they are unlikely to lose in the short term. But they have a big challenge around S/4 adoption and the ‘Rise’ proposition needs some time to see if it can persuade customers to make the move. The simple fact is that most SAP customers have an ECC solution that works for them and the time, cost and disruption that an S/4 project would inevitably take just doesn’t stack up. There are pockets of S/4 success, but SAP needs more than isolated cases – it needs a complete shift of its customer base from its legacy solution to its new solution and there isn’t an obvious path for the vast majority of customers.
Let’s talk Cloud. Do you see SaaS solutions such as SAP S/4HANA Cloud as the new default go-to ERP solution and does this herald the death knell for on-premise solutions?
PE: If you were starting from scratch and had a blank piece of paper then SaaS is the only choice. But most companies aren’t starting from scratch – they are carrying decades of technical debt and customisations that can’t always be replicated in the cloud. The challenge that all ERP customers face is to balance what they have developed as customisations and unique processes against the promise of a lower TCO and greater business agility. Some businesses need lots of transformation to survive, others need less. If you operate in a sector that is being disrupted by digital technologies and all your competitors are going digital, then you need to hurry up and move or you will be left behind. But not all sectors are moving at the same pace and not all businesses need wholesale transformation to remain competitive.
You also have to consider that SaaS and cloud isn’t always an option for some organisations due to regulatory or privacy issues and they will need to retain some on-premise infrastructure. A few years ago, everyone thought that SaaS and cloud was the only game in town but today, even the hyperscalers are building on-premise capabilities to support customers with specific needs.
In a recent edition of ERP Today, you compared SAP with the Roman Empire in that the legacy left by both is robust and enduring. Do you think that is SAP’s key strength – its deep and long standing relationships with businesses?
PE: I think SAP’s near-50 year track record and its deep relationships with large enterprises is its major strength. But it could also be seen as a major weakness because SAP can’t rely on its heritage and legacy to persuade customers to follow it. I read a blog that Christian wrote a few months back talking about SAP’s long history and thought it was really poor messaging. Just because you were good at doing something 10 or 20 years ago doesn’t mean you are going to be good at doing it now. There are enough examples of established businesses that have been surpassed by newer more nimble players and SAP can’t rely on its history to deliver its future.
It’s in SAP’s favour that moving from SAP to another ERP vendor is so difficult. If the migration path was easier I think more customers would move but the reality is that if you are a global enterprise with blue running through the core of your organisation it’s virtually impossible to rip SAP out and start with another vendor. The best measure for where SAP is as a company and with its product is how many net new customers is it winning? How many companies are choosing S/4 not because they have to but because it’s the best solution for them?
What are the overriding themes you are seeing in the ERP space for 2021?
PE: One word. Automation. RPA will be the most transformative of all the emerging technologies and businesses of all shapes and sizes must embrace RPA and automation.
In a crowded ERP market, what do you think are going to be the key differentiators for the big ERP players?
PE: ERP vendors would like their products to be front and centre. But the reality is that ERP should almost be invisible and the move towards touchless applications is going to be a key differentiator in the coming years. Users will interact with ERP applications through a workflow platform where the application/system is irrelevant. It will be a big blow to the ego of some ERP vendors when they realise they need to fade into the background rather than take centre stage.
What ERP trends get you really excited at the moment?
PE: ERP vendors are finally coming around to the idea that functionality is just table stakes and they need to switch their sales pitch from product to solution. I am excited by some of the newer ERP vendors that are taking the lessons from the past 30 years and selling ERP differently with a service-orientated approach which is less focussed on applications and more focussed on service and solutions.
What advice would you give SAP professionals who are struggling to come to terms with the new Industry 4.0 nature of the ERP market?
PE: Everyone needs to learn new skills at the moment and SAP professionals are no different. There is a big problem with a skills shortage in the SAP market and the old skills that many contractors would have used for years are in far less demand today. Coding and configuring is almost a thing of the past and all ERP professionals need to ensure that they can work the cloud and automation tools to stay relevant.
What future plans do you have in store for ERP Today?
PE: Our new digital platform launched on 22nd February and that’s a big change for us. We will never turn our back on print but developing our digital offering and moving into interactive broadcasts and webinars on our ERP Today Live! platform is helping us reach more people in more ways. You should check out my interview with Michiel Verhoeven, the new SAP UK MD on ERP Today Live! here.