4 Key Considerations for Making Sense of SAP RISE

When trying to make sense of SAP RISE, here’s what CIOs should keep in mind as they evaluate RISE and its implications ahead of SAP’s 2027 deadline to move off SAP ECC, including the key tactics SAP will use to push them toward RISE.

After two years on the market, SAP RISE is becoming increasingly positioned by SAP as a solution for customers looking to move to the cloud. With the 2027 deadline to move off SAP ECC looming, SAP customers need to understand what SAP’s RISE offering is and have a comprehensive evaluation strategy for when SAP inevitably positions it at the negotiation table.

Despite SAP pushing RISE as an ideal option for customers, it is still important to evaluate your options against your own goals and objectives. Here, we will discuss what SAP RISE is as it currently stands in the market, the levers SAP is using to sell it, how to properly evaluate it, and the key decisions you must make if you choose RISE for your transformation in order to help you make sense of SAP RISE.

Understanding SAP RISE

SAP RISE is a bundled offering of SAP S/4HANA cloud ERP software as well as SAP infrastructure/cloud services to move your current ERP data to the cloud with less risk to your data. Unlike SAP’s previous HEC (HANA Enterprise Cloud) offering for S/4HANA, SAP RISE offers a bundled set of products meant to accelerate your move to the cloud that can be used on a hyperscaler of your choice, such as AWS, Azure, or Google Cloud Platform (GCP).

Since it first hit the market in 2021, RISE’s biggest selling point has been its single contract model that enables customers to negotiate software, services, and infrastructure in one deal. But with this new model came the need for customers to move away from the traditional, serial approach to cloud migrations. In addition to this change in approach, SAP has also increased the levers it is using to push customers to adopt RISE, regardless of whether it is the right fit for them.

Key Tactics Being Used to Drive Adoption

Part of the challenge when making sense of SAP RISE is understanding how SAP is pushing it on customers. SAP is pulling several levers to paint RISE as the best option for all customers. These levers include:

• Non-competitive perpetual license proposals: SAP has started to leave perpetual models off the table, opting only to give RISE proposals to customers. This is especially the case for net-new customers. In the cases where SAP does present a perpetual proposal, they often provide less favorable discounting or reduced commercial term flexibility to drive customers towards RISE.
• Top-down commitments and audits: Knowing high-level executives are focused on moving to the cloud, SAP will target your CIOs, chief transformation officers, and any other executives who may find RISE to be an attractive way to accelerate their goals. Additionally, SAP has used audit findings or the threat of audits to position RISE as an easy way to solve these matters.
• Leveraging hyperscalers and SIs: SAP is strategically partnering with prominent hyperscaler cloud service providers and systems integrators (SIs) to further drive customers towards RISE. Behind the scenes in certain client programs, it is evident that the hyperscalers and SIs are in talks with SAP and echo recommendations for RISE.

How to know whether RISE is right for you

Whether SAP RISE will be a good fit for your organization depends largely on the complexity of your current SAP setup, how it fits into your greater IT strategy, and the involvement of any third-party partners.

Where RISE is a Good Fit

SAP RISE is a good fit for companies in the following situations:

1. Antiquated technology platforms: Companies that need to bring their environments to the present see RISE as a “quick win” to getting their data onto the cloud. Deploying RISE on a greenfield environment allows them to make this leap in one big step, eliminating the complexity of moving their technology forward several years.
2. Existing SAP ECC customers: ECC customers with disparate systems may benefit from deploying RISE because it allows them to avoid consolidating their system in an SAP on-prem model and then making the move from ECC to S/4HANA in the cloud.
3. Outsourced SMEs: RISE gives customers who do not want to invest in subject matter experts (SMEs) for S/4 the ability to outsource key roles for SAP BASIS and infrastructure support while still efficiently moving forward in their transformation journey.

Where RISE is Not a Good Fit

Companies in the following circumstances should be weary of SAP’s claim that RISE is the most viable option:

1. Highly customized environments: If you have a highly customized ECC or S/4 environment, you may have issues implementing RISE because it is not designed to expand outside of a clean core environment. As a result, customers with high customizations or complex integrations will notice application and operational inefficiencies.
2. An established IaaS strategy: RISE would create an unappealing island around the cloud strategy of customers who have their own infrastructure-as-a-service (IaaS) strategy.
3. Reliant on third-party providers: Now that we better understand how RISE affects existing vendor relationships (e.g., application management services providers), we know that implementing it in certain cases may add complexity, diminish commercial benefits, and negatively affect your operating model.

Key Decisions and Risks

During your evaluation, it will be critical for your company to make the right decisions early on in your evaluation process. RISE is notoriously complex to negotiate, so having a firm grasp on the key decisions and risks that need to be considered at the outset is crucial to securing a competitive deal.

1. RISE vs. S/4HANA on-prem: The first key decision your company must make is whether to go RISE or S/4 on-prem for your move to the cloud. You must know the inherent risks involved if you have a highly customized environment, an established IaaS strategy, or strong relationships with third-party providers, and determine whether you are well equipped to handle these challenges.
2. Long-term financial commitment: RISE also involves moving from the traditional CapEx model to an all OpEx model, meaning customers may be more averse to transitioning from a cost perspective. You must determine whether you are willing and able to take on a complete re-integration or transformation. Your company needs to make decisions around the long-term financial impacts, as well as assess the capability within your team to switch from your perpetual model.
3. Commercial terms to negotiate: On top of the commercial and financial aspects of these deals, customers will have to navigate SAP’s extensive services and operation RACI to understand what services are in and out of scope for the project. Customers need a comprehensive strategy that accounts for all the nuances of these deals. Renewals, swap rights, price protections, and other previously negotiated terms may not be applicable under the RISE model, so your company must determine what terms need to be negotiated into your agreement.
4. Giving up the right to revert to perpetual: Lastly, the right to revert to a perpetual model is often revoked when customers opt for RISE. If you choose this route, you are committed to moving forward. That’s why it is so crucial to be honest about where your company stands and whether you are ready for this type of environment.

Utilizing an Integrated Sourcing Strategy

Vendor go-to-market strategies and new support models have created a need for companies to shift the way they approach their vendor evaluation and negotiations. Forward-thinking IT leaders are taking a holistic and integrated approach to sourcing, evaluating, and negotiating SAP software, IaaS, SI, and managed services relationships.

Taking this integrated approach to your evaluation and negotiations will help you make sense of SAP RISE by building a comprehensive RISE strategy and establishing these key decisions as part of your overall negotiation strategy.

At UpperEdge, our SAP experts can help you achieve a more competitive deal and meet your project goals and objectives through this holistic, integrated approach. Browse our SAP advisory services to learn more about how we can help. 

Reprinted with permission. © IDG Communications, Inc., 2023.  All rights reserved.