Eursap’s “Ask the SAP Expert” is 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 have a treat for you. We feature Derek Prior, a seasoned veteran of many an SAP campaign and a long-time expert and adviser in the SAP roadmap. Derek has a superb track record analysing SAP strategy for important SAP players, such as Gartner and Hewlett-Packard.
Hi Derek, thanks for taking the time to talk to us. To begin with, would you be able to give our readers some information on yourself?
Sure – and thanks for inviting me. A Chemical Engineer by training, I somehow got lost in my career path and ended up in IT! For the last twenty years I have been a Research Analyst, specialising in SAP customer challenges and best practices. I spent seventeen of those years in the Gartner ERP team, but I also specialise in Sustainability research aswell.
Going back to your education days, you have a PhD in Air Pollution – what made you choose that subject, way before such concerns were in the mainstream?
Well as a stroppy student I got so angry reading books about environmental pollution and the mess we have made of our planet. So, a PhD in minimising air pollution from combustion seemed like a practical response. As well as watching The Who and Lez Zeppelin in concert, of course.
If we could ask yourself to cast your mind back all those years – can you remember when you first encountered SAP as a software?
Sure can! I was managing a team of talented ERP consultants on Hewlett-Packard (HP) business applications in 1990 when I got a phone call from HP Palo Alto – politely telling me they were dropping these superb applications. “Why would we do that”? I asked. “Well, we have a new ERP partner, called SAP”, they said. “Who the £*$% is SAP?” I replied. As a result, HP got into SAP R/3 way before all the other hardware vendors.
And how did you manage to get into SAP as a career?
Back to HP in the UK. I cross-trained my ERP team on to SAP Basis and SAP Applications in 1991 and was responsible for all R/3 hardware sizing and technical presales. Together with Chris Chittock in Marketing, our team knew R/3 so well that we forged close ties with SAP UK. This resulted in a 70% hardware market share of all R/3 deals here in the UK. Teamwork really pays off. I then got head-hunted to join the ERP research team at Gartner.
If we can pick out some highlights in your career – you spent a long time managing an SAP team for Hewlett Packard. Which version of SAP was that using? Presumably the world of SAP was a very different place back then.
Well, it was SAP R/3 version 1.0! Even in those days it was a very resource-hungry beast! But my team knew all the difficult business questions to ask customers when sizing R/3 – we were even able to give performance guarantees, if needed. SAP R/3 sold like hot cakes. SAP Sales Reps drove Porsches! The SAP ecosystem was ramping up, it was very exciting times.
You worked as an analyst for Gartner, an organisation which has strong SAP knowledge and is widely respected as an expert in the field of ERP. What was your brief for Gartner?
In the ERP team I spoke to hundreds of SAP customers all around the world, who all had some sort of problem. It fascinated me how some were so much more successful than others. So I identified best practices for Gartner clients in areas like Basis operations, customer COEs, Solution Manager, licensing and support issues, etc. But the big area that worried me the most was the relationship between business/IT and the difficulty of measuring actual business benefits from huge SAP investments.
And how did that role morph into what you are doing now, for the consulting firm Resulting? Can you tell us a little bit about them?
I tried hard to retire from Gartner in 2017 – but I made a complete mess of it! I knew Stuart from Resulting IT a long time and he asked me to become a Non-Executive Director (NED) with Resulting. It’s such fun working with the Resulting team and I have been able to do much more focused SAP research there. I am very proud of our SAP Customer Success model, plus our SAP COE toolkit for customers. We’re doing so much interactive research with customers about S/4HANA, which triggered our development of a graphical software tool called FusionGraph. This helps business people visualise S/4 functionality and then build roadmaps, plus measurable business cases for it.
What does a typical day look like for you now, and how has it changed as a result of the pandemic?
Good question! As a NED with Resulting I now work part-time(ish). I am engaged in all sorts of leading-edge SAP research with Resulting, plus participating in webinars/presentations and writing articles. Our latest research project examines the evolution of ERP strategy and the current plans for SAP ECC and S/4HANA customers. The pandemic has shown us that, work-wise, we can do nearly everything from home over Zoom and Slack. In my spare time I love DIY, crashing drones and looking after my family. I’m also trying to establish a local Repair Café for our community.
You spoke at an event in January of this year, entitled “SAP: the final countdown 2022-2027″. Can you tell us a little bit about what that was all about?
Would you believe that exactly one hundred SAP customers attended that Webinar? We carried out interactive research on the current plans of existing ECC customers to migrate to SAP S/4HANA in the five short years before the 2027 deadline. We also reviewed changes in ERP strategy of SAP customers. All of our research culminates in easy-to-digest colour graphic reports on our website.
Let’s talk a little bit about SAP S/4HANA. Are you seeing organisations moving – or planning their moves – to SAP S/4HANA in line with SAP’s goals? Or do you think that the uptake is slower than expected and hoped for?
I have been tracking the uptake of S/4 since it was released in 2015 and there is no doubt that the uptake by the huge ECC6 installed base in upgrading to it has been sluggish. Quite simply this is down to the huge investment in getting ECC to enable complex ERP projects that customers have made. So, for many ECC customers, custom code and large data volumes make the upgrade very challenging. Worse than that though is the fact that it can be so difficult to build a compelling business case to justify the upgrade expenditure. But our latest research shows that the ECC installed base are becoming more confident that they will be able to get that business case signed off soon.
What are the main advantages you can see of migrating to SAP S/4HANA for firms now?
Well, SAP S/4HANA On Premise has now had 7 years of development, so there is a vast amount of new functionality in S/4 compared to ECC, especially in the logistics ERP business processes. On top of that, S/4 offers a big range of what I like to call “The clever stuff” i.e. predictive analytics, IoT integration, AI/ML and RPA technologies. This can enable streamlined business processes and new Systems of Differentiation within that business case. That is pretty compelling, but I find it hard to find examples of live S/4 customers actually exploiting that clever stuff.
And what about the SAP cloud offerings? SAP are facing stiffer than usual competition from the other players in the ERP field – the likes of Oracle, Infor and Microsoft. Can you see SAP Cloud playing a strong part in retaining the ERP crown for SAP?
The competitors you mention are all doing incredibly well with their cloud software. SAP’s overall cloud revenues are also doing well, but mainly for their SaaS acquisitions. Life is much harder for them in Cloud ERP, i.e. S/4HANA Cloud, where there is a big gap in functionality compared to ECC and S/4 On Prem. I’m not sure that complex or large ECC customers are ready to hand over the keys to their application configuration control to any cloud vendor just yet. Running S/4 on IaaS is popular, but right now ERP SaaS is something else.
Look ahead twenty years. Will anyone still be using on-premise ERP systems or is the future Software-as-a-Service (SaaS)?
In twenty years time most ERP systems will be running as SaaS. But it will take time, because if you are what I call a “Large ERP” customer of full ERP footprint there’s so much complexity to deal with. It’s so much easier for “Small ERP” customers, who just run finance and procurement, to move to a SaaS world.
When you think of all the innovations in the SAP space now – the likes of embedded and predictive analytics, SAP BTP, Fiori UX, machine learning, RPA, blockchain, AI, etc – what do you think is the game changer?
Yes, it’s that clever stuff again. I think it will be predictive analytics, where SAP is well-positioned, with HANA. Imagine being able to predict order fulfilment for your top 5 customers over the next 6 months and proactively fix underlying problems. I challenge SAP to make this a reality. I also think that ML has huge potential for enabling smarter ERP processes. But SAP must watch out, because the hyperscalers have very clever technology of their own here.
And you have another passion I understand – Sustainability. How have you managed to marry your two interests – SAP and Sustainability – in your career?
We touched on the environment and Sustainability right at the start of this interview. We all know that Sustainability is the greatest challenge ever faced by mankind on Planet Earth. But I am passionate about the business opportunities for rising to this challenge right here in the UK – if we can mobilise our smartest scientists and engineers. The best-run organisations have been quietly minimising their environmental footprint – for decades! There are so many examples I could give. SAP has developed a useful range of new Sustainability software tools which have great potential. Back to ERP, it will evolve to play a key role here too, check out my article: https://www.computerweekly.com/feature/Use-ERP-modernisation-to-drive-efficiency-and-sustainability
Finally, a question we like to ask our interviewees. Given your long history and expertise with SAP, what would you say would be sound advice for consultants just starting out in the industry?
“If I knew then what I know now…”. I would say that you should always try to speak the language of business, not just IT. Business people always value consultants and people who can speak business language when it comes to IT, and this is especially true in the wonderful world of SAP.