Why the SAP “Clean Core” message is proving problematic
Dragon ERP, Europe’s fastest growing Boutique
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The SAP Clean Core concept is becoming a growing theme when shaping the move to SAP Cloud.
So why problematic ?
Well for customers, it adds a further level of complexity (Adopting a new standard target operating model across the organisation is a major organisational change undertaking and will need significant business sponsorship and resource, leading to a reluctance to commit to SAP S/4HANA and RISE as for many this will be seen as an unnecessary and disruptive activity at a time when the global economy is rocking.
For SAP, well it means adoption of SAP Cloud and RISE will continue to be sluggish.
Firstly we should be thinking clean core for the whole SAP footprint not just ERP !!! the SAP Cloud encompasses the entire SAP product footprint…..
The pressure to migrate to S/4 is growing, with over 60% of ECC customers yet to commit, this means a lot of late last minute brownfield migrations, where you take all the dirt into the SAP Cloud (or hyper scaler if you don’t fancy RISE) , totally opposite to a clean core!! Plus migrating a whole load of other applications such as BPC, BPC, PO etc....
Most ECC customers have a heavily bespoke core, contri to consulting industry hype that isn’t a bad thing !
Why ? Well its a sign of a healthy well embedded digital kaizen culture, with the benefits well outstripping the TCO
What does a heavily bespoke system tell us ? Well the organisation will be people and process optimised and heavily automated essentially improving an organisation's productivity.
So lets look a little bit deeper into the subject:-
What’s the impact of going clean ?
Well firstly the organisation will loose all of that automation, with a cost whammy
lost productivity = costs go up / ebidta goes down
Cost of the reimplementation will go through the roof - cost of new micro services / reports - cost of change management as S4 is not ECC and many of the stop gap paper crack fillers no longer apply (continuity packs) Plus the need for significant business resource backfill to sustain the project !!!!
Writing off a large investment that is still adding value.
Some additional comments
All the good innovation sits in SAP BTP and the GenAI road map is in its infancy, so moving to a clean core from a process orchestration perspective can be a backwards step,.
Most legacy ECC systems come with a complex SAP BW / BPC / analytics architecture much of it coming to the end of the line, this has to be addressed as again the business will end up with limited analytics
The notion that TCO goes down when moving to the cloud is a erroneous, moving to the cloud is a real ICT service true up, we see many organisations struggle to support the migration to SAP cloud, with the need for a basis team (PCE), which most CIOs believed would disappear.
A further point to discuss is the obvious observation that as 🤖 AI becomes more prevalent the need for a clean core will dissipate as AI will be able to manage and mitigate patching and upgrades
But lets be less negative, as in an ideal world the clean core concept makes sense, and at Dragon we have defined a more nuanced approach to SAP Cloud first and the Clean Core, there is lots that can be done to take the legacy SAP estate and give it a polish…..
We ❤️ love SAP BTP, its where all the good stuff sits, in advance of your move to SAP S/4 PCE you can deploy BTP for your legacy SAP ECC system and migrate the enhancements you still use into SAP Cloud PaaS. This a) future proofs the enhancements you need b) it will also enable you to migrate from SAP PO to SAP CPI on BTP for your interfaces as this is also going out of support. This will enable a selective S/4 migration taking what you need into the SAP cloud opposed to a lift and shift brown migration. c) you continue to sweet your SAP investment.
Moving to SAP BTP on SAP Cloud also helps the ICT organisation do a whole load of techy proving long before your migration.
You don’t have to move to S/4 in one go, a great way to adopt a clean core and mitigate operational impact is to move by line of business using a two tier ERP architecture. Slow but sure what’s the rush, focusing on the processes that really need a clean up? A great example is SAP subscription billing in S/4
Look at the business processes / operating models that would benefit from SAP cloud bolt on solutions, such as IBP or commerce cloud, a steady low impact migration to clean core reducing the ERP footprint.
Start to look at SAP Build or similar low code solutions from your hyper scaler of choice to start to define the AI 🤖 driven micro services that could replace your legacy enhancements.
Is the clean core the right approach ?
Yes as part of a long term strategy to clean up the process and analytics layer as part of a controlled bite size chunk roadmap, but a big bang must be avoided at all cost as it will add cost and disrupt the organisation.
Plus a more nuanced approach will enable the customer to sweat its core ERP enhancement investment.
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Dragon ERP, A SAP Target Operating model Innovation Integrator , changing the way organisations unlock the value of their SAP investment.
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About the Author:
Alisdair Bach, Dragon ERP Co-founder is a SAP mentor and influencer with over
33 years’ experience in shaping the SAP journey for the global 2,000.