SAP, which prides itself on serving 25 industry sectors with the broadest coverage of any ERP vendor, has started in recent years to move these vertical applications to the cloud. It uses a modular approach, bolting industry applications onto the back office ERP “core” to create a product line called the SAP Industry Cloud.
SAP industry cloud initiative dates back to 2014, but over the past two years the vendor has taken a step up, using SAP Cloud Platform and S / 4HANA Cloud, the SaaS version of their latest ERP, as their delivery vehicle. See you this year Sapphire now conference, he announced Rise with SAP for Industries, a new offering of his S / 4HANA Cloud deployment service.
Systems integrators (IS) such as Accenture, Capgemini, Deloitte and EY are essential to the SAP Industry Cloud effort. Typically, they bring industry expertise that complements SAP, connect applications and workflows, and develop AI and analytics-heavy applications that leverage the Business Technology Platform, SAP’s collection of emerging technologies for both business and industry. touted “smart business”.
Last November, Deloitte launched industrial software for the automotive, consumer goods, life sciences and retail industries. Its Kinetic Microservices, cloud applications that apply machine learning and robotic process automation critical business processes such as inventory optimization, risk detection and supply chain logistics are key.
Darwin Deano plays a key role in the Deloitte SAP Industry Cloud partnership. As a global leader in the SAP offering, he oversees the entire SAP practice of Deloitte, a $ 4 billion company with 27,000 employees.
In this Q&A, Deano explains Deloitte’s role in SAP Industry Cloud and the role of SAP Cloud Platform and S / 4HANA. It has been edited for length and clarity.
What is new in the SAP Industry Cloud offerings announced at Sapphire?
Darwin Deano: In fgeneral, [there is] greater emphasis on industry-specific value, because as SAP shifts its core ERP – S / 4HANA – towards SaaS, the ability to generate a unique and customer-specific competitive advantage remains increasingly apart from the basic ERP. This is where the SAP Business Technology Platform really plays a vital role in provisioning those industry cloud applications for which the partner ecosystem is mobilized.
Can you give examples of the development work and services that Deloitte adds to these SAP industry offerings?
Deano: SAP is normally only one part of a larger ecosystem. Back office processes are generally dominated by SAP, but it is not the only component.
We have over 70 Kinetic microservices or applications, which we’ve built largely on the SAP business technology platform, along with some of the platform’s capabilities and hyperscaler services. On average, we see two or three deployed, or we create a customer-specific application inspired by one of them, or an entirely customer-specific application that we need to develop to complement standard SAP capabilities.
From an automation perspective, we have over 300 SAP-specific bots in our automation storefront with an average of around eight to 10 bots typically deployed.
Let’s say inventory is the priority of a project. Does Deloitte have an inventory optimization application that goes beyond that of SAP?
Deano: We have this app called Inventory Reimagined that would take inventory data, compare it to industry benchmarks, identify potential opportunities to optimize and reduce inventory, and provide repeatable information so you can do a pulse check. to see how you are doing. This type of application is not standard with S / 4, in large part because much of the information is not necessarily kept in S / 4.
ISs and ERP providers focused on workflows and Process management, with robots that manage the work that goes through the modules. Is this largely what Deloitte is doing for SAP Industry Cloud?
Deano: It is certainly part of it. Any out-of-the-box SAP UX focuses primarily on SAP components. To drive orchestration across the entire ecosystem, including SAP, [requires] a layer above, whether it’s something we’re developing with Business Technology Platform, combined with something from SAP Process Insights, or whether we’re running something like ServiceNow.
If you do something in 2021, it’s a very heterogeneous landscape [that requires] the ability to orchestrate work and the future of work. And then you layer the bots.
Where do the gaps typically lie in S / 4HANA Cloud for an industry like retail or process manufacturing? What kinds of functions is Deloitte adding?
Deano: A company that we have acquired called Keytree had an app that accounted for 15% of total App Center sales by SAP. It’s retail specific and called Keytree In-store Technology. It improves customer engagement, cross-selling and upselling with front-end application and store site resources. SAP does not go that far. That’s why this app has become a standard for all of our retail engagements. Because it is a modular capability, it can also be deployed on SAP ECC.
SAP Cloud Platform appears to be the mechanism that SAP wants people to use to extend cloud and on-premises ERP. What is the role of SAP Cloud Platform in what Deloitte does?
Deano: We have been saying to SAP for a long time that because you shut down ERP and make it more SaaS, your ability to relieve customers with SAP Cloud Platform for cloud application deployment and full ecosystem integration with SAP is extremely critical.
I would say if you go on a SAP journey and don’t include SAP Cloud Platform and Business Technology Platform, it’s incomplete because you [will still need] the same functionalities, orchestration, workflow, UX, HANA enterprise, custom applications, integration and automation… which are already on SCP and BTP. You [would] have to compensate for that somehow by doing too much customization and increasing the technical debt of your ERP or using other components where you have to reinvent the wheel and integrate SAP.
SAP “arms” the ecosystem of partners
How critical is Deloitte’s industry experience for SAP to deliver industrial clouds?
Deano: Very critical. What SAP has done over the years, and now more and more, is truly embracing and arming the partner ecosystem. Think about what happened last year with the pandemic: Supply chains are getting complicated, a shortage of chips leading to higher costs of commodities, a shortage of wood.
Instead of carrying this burden all on your own as SAP, to keep pace with everything that is going on in the world, mobilize your ecosystem of original partners who are facing this situation day in and day out and let them innovate at the same time. above your platform, to provide functionality that will be needed to cope, survive, and thrive.
This is basically what the industry cloud is. All partners publish applications to BTP, which means they can plug in and play any ERP, be it S / 4 or ECC. This means that they are also disposable. So when this threat goes away or grows, I can just unplug that API, plug different apps connected to the same API, and voila.
SAP’s ability to dominate this next era, when S / 4 or ERP shrinks to a very small footprint due to SaaS, and their ability to dominate the value conversation will depend on their ability to arm their ecosystem of partners.
Do APIs and plug-and-play functionality work outside of SAP?
Deano: Yes. We performed an analysis of the API capabilities of major ERP vendors and by far the most mature API granularity and availability is SAP. You can create something for SAP and decide to use this application for others. This is easier to do than the other way around due to the granularity they experience in publishing APIs.
A lot of people, especially SAP veterans, don’t appreciate that since, I would say, R / 3 4.0, you had the option of exposing everything in SAP as an API. It has historically been so long – over 20 years – that the entire underlying data structure was designed for API integration.
How do Kinetic Microservices fit into SAP Industry Cloud?
Deano: Kinetic microservices are modular, cloud-ready applications that deliver discrete natural value beyond ERP. We have more than 70 today and more than 10 more are planned in 2021.
We did an analysis. Today, if you like, at least 70% of the traditional end-to-end and end-to-end SAP perimeter processes can be performed automatically. Many organizations will never go that far. We will have an automation trust problem. There will be compliance considerations. But that’s how capable the software is.
Regarding S / 4HANA Cloud vs S / 4HANA On-Premises: Why would a customer choose one over the other to build industrial applications?
Deano: Let’s kill a myth straight away. Public cloud S / 4 [S/4HANA Cloud], S / 4 on premise and S / 4 private cloud are the three main variants and come from the same codebase. If you think of all the decades of cutting edge ERP knowledge and practices, all the features are there.
Now how much [functionality] is exposed is one of the big questions, and SAP is aggressively addressing this problem. The S / 4 public cloud has traditionally had minimal exposure.
S / 4HANA Cloud Private Edition and S / 4 on-premises have all the features. The S / 4 public cloud has some functionality locked down due to the cloud certification process. SAP is working aggressively to unlock more features, but there will remain gaps over the next 18-24 months. The next release will further narrow the difference between S / 4 and on-premises public cloud.