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My first thought was – “What a question.”

I was with a client recently and we were discussing the merits of the various Enhancement Packages and it was mentioned that there might not be the need for a new ERP platform. This was something that I had not considered and this got me thinking.  On my journey back from the client my mind went back to this conversation and I started to work out why I had not considered this before.

 

Firstly let’s start to where I was in my mind regarding this point prior to the conversation. All of the collateral I have read, and comments I have seen indicate that there will (in time) be a new ERP version for SAP.

 

History of ERP 6

 

ERP 6 was delivered around 2006 and it is now the most used version of ERP within the various SAP versions. Added to this, SAP have released 4 Enhancement Packages between 2007 and 2010 and the latest Pack has been slightly delayed but it will come.  The key to the SAP message regarding ERP is the support of ERP 6. The story here is simple, the support dates keep getting extended, currently mainstream maintenance will end December 2015.

 https://websmp101.sap-ag.de/~form/sapnet?_FRAME=CONTAINER&_OBJECT=011000358700000847152007E

I also feel between 2011 and 2015 SAP will be delivering more enhancement packages, so when will SAP start to release a new ERP version?

 

Enhancement Packages

 

OK, I admit it, I love Enhancement Packages. Within my main focus area of ERP (SAP FSCM), SAP have utilised the Enhancement Packages to deliver some great new functionality that is exceptionally easy to add to an existing ERP system. Some of the functionality is nearly plug and play with a bit of testing and training thrown in prior to the go live. When you measure that against the effort to upgrade say a 4.6c to ERP 6 the system and business effort is not comparable in the slightest. I believe they are a great success and the success of the Enhancement Packages may have installed a bit of doubt in SAP’s mind regarding a future ERP release.

 

 

Where options do SAP have?

 

Can SAP plan a major release when the majority of their ERP clients are on ERP6 or will be on ERP 6 within the next 18 months? Can SAP say that ERP 7, is the same as ERP6 with Enhancement Packages 5 or 6? The answer is a simple no?

Can SAP ask their clients to go through the pain of a main upgrade again when they are used to smaller delivery of new functionality that is specific to certain processes? Clients can for example say their Sales process is stable and not release any Enhancement Packages in that area, but say utilise some but not all of the functionality within Finance and HR. A new release of ERP for SAP would mean that all of the new functionality in the various enhancement packages would become available across all modules increasing the testing and training effort to move to the new ERP version.

Lastly could SAP stop Enhancement Packages being delivered to its clients? Well this is probably their only real option, but it is not client friendly.

 

Summary:

 

SAP in my opinion have managed to manoeuvre themselves into a tight spot. The success of Enhancement Packages has lead clients seeing the benefit in releasing small chunks of relevant functionality independently.  Trying to ask clients to move away from their current process of small regular new functionality to a larger release will not go down well and will stop clients moving to a newer ERP platform. I look forward to the next few years to learn and utilise the new functionality within the next Enhancement Packages. I also look forward to keeping an eye what SAP do next and what their views are.

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11 Comments

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    1. Mark Chalfen Post author
      Hi Sergio,

      yes I remember it well.

      I thought the point you were making is that there will be loads of upgrades in the next 18 months, and then after that potential upgrade customers would just wait and see if there was a new version.

      My mind has now changed.

      I dont believe SAP will provide a brand new ERP release, and therefore all clients will need ERP 6 as a base and pick and chose the relevant Enhancement Packages.

      I believe this is a major shift.

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      1. Sergio Ferrari
        It’s interesting Mark, and just to be sure, do you believe that the end-of-maintenance of SAP ERP 6.0 will be postponed in the same time one of the next EhP will be released in General Availability (GA)?
        To be honest, I hope that will happen together with EhP5.
        Sergio
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        1. Mark Chalfen Post author
          that is the bit I dont get.

          I am not sure if they will extend this, or they will bolt other products with ERP

          What I can see happening is a new ERP version, as you would need to either include all Enhancement Packs as standard and build new non Enhancement Pack functionality, or have a new version of ERP, and then apply old ERP Enhancement Packages.

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        2. Mark Chalfen Post author
          This is the question I cannot answer.

          I presume a new release will come out, I am not sure how they will market it, to make customers buy it (move to it)

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  1. Markus Doehr
    …basically all EHPs are “upgrades” in themselves, technically as well as concerning the content.

    I think the whole EHP strategy is only a naming thing, EHP4 could as well have been named “ERP 7” – which would have been much more logical concerning the fact, that all other Business Suite products are also named “7”. I think (I may be wrong) that the reason for this was the fact, that there was a promise to customers (and shareholders) to not deliver a “new” ERP system before 2013/2014 (can’t recall the exact year). To not stick without innovation till then, EHPs were invented which makes customers think that it’s just an extension and not a new release.

    The whole procedure of implementing EHPs is exactly identical to a normal upgrade, even more, the tools to do those “installations” are listed under “Upgrade tools”, the procedure ist the same, 99 % of the technical phases are identical to an ‘upgrade’, pre- and postprocessing and necessary project scope is the same.

    Note, I’m not bashing the technology, I just think, that using the term “EHP Installation” vs. “Release upgrade” is false labling because effectively you upgrade your full system.

    Just my EUR 0.02

    Markus

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    1. Mark Chalfen Post author
      It is not entirely true that all enhancement packages are like an upgrade.

      An Upgrade as was, affected the whole of the ERP system, where as a client can pick and choose the functionality to activate.

      There when SAP want to release a new ERP version, of a new licence structure for support what will they offer?

      Support on ERP 6? Support on ERP 6 plus certain enhancement packages.

      How will they define ERP 7? Will it be ERP 6 – with all of the current Enhancement Packages activated? Will it be ERP 6, with the ability to select certain pieces of functionality from the enhancement packages?

      I am sure you would agree there is some confusion, as to how SAP can market a new product, or charge for a new licence structure.

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      1. Markus Doehr
        > It is not entirely true that all enhancement packages are like an upgrade.

        Well – I have to disagree, they are. You update all the main packages (SAP_BASIS, SAP_ABA), the only difference is, that another application (MOPZ) is necessary to “choose” which other components you intend to ‘upgrade’. This could as well have been done much easier by offering the possibility of adding those manually to the upgrade, as it was done all other releases before.

        > An Upgrade as was, affected the whole of the ERP system, where as a client can pick and choose the functionality to activate.

        This is true – but it would also have been true if the switch framework was offered as a new functionality in an “ERP 7.0”. You neverless have to upgrade the full system, it’s not possible to upgrade “only MM” or “only PP” – so this is an upgrade and has to be treated as such in a context of an upgrade project.

        The difference is the “tool” to be used (EHP Installer) and the (IMHO questionable) necessity of using additional overly complex tools like Maintenance Optimizer in SolMan vs. “SAPup” and a manually addition of AddOns. Different methods to prepare and run the upgrade, result is the same.

        The switch framework is part of the new SAP Basis and not part of the Enhancement pack itself.

        But yes, I agree with your other statements. 

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        1. Mark Chalfen Post author
          thanks for the technical bit.

          I was looking at what the customer saw, and that is around the functionality they can utilise.

          How do you see SAP releasing a new ERP version?

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    1. Mark Chalfen Post author
      That is just a rebranding.

      ERP 6 Enhancement Pack 4 is the start of Business Suite 7, as is CRM 7 etc.

      If you upgrade to ERP 6 – Enhancement Pack 4, you support agreement with SAP is exactly the same as if you were on ERP 6 by itself.

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