As I read this tweet from blogger Naomi Bloom, I was reminded of various conversations at the recent Sapphire conference about the impact of customization in cloud solutions. Although Bloom’s tweet focused on SaaS, many of my conversations regarding this subject involved the HANA Enterprise Cloud (HEC) – SAP’s Managed Cloud solution. I wanted to take a quick look at this subject.
In describing the transition of OnPremise customers to the newly announced Financials Add-on for SAP Business Suite Powered by SAP HANA, Hasso Plattner depicted the importance of retaining customizations.
We carry everything the customer has deployed on [SAP Business Suite] forward. Just looking at accounts receivables within SAP, we have 44 different layouts in our shared services center. Our users have defined them. We cannot ask customers to redo such customizations only because we want to move them forward to Simplified Finance. Their old transactions work on the simplified data model. That’s the first transition we did. The second transition is that we’ve put in a new application and a new accounts receivable line-item display into the system that carry forward the customizations of existing applications. So when customers go to the new applications, they will still see their layouts and will not lose their customized views. [SOURCE]
Yet in the same interview, Hasso emphasized the importance of a high level of standardization in cloud environments – in this case, the HEC.
Any of the larger ERP system are dedicated — that’s what I call it instead of “hosted” — because they have to be standard systems. That have to be much more standardized, otherwise we do not get economies of scale.
Since the “Financials Add-on for SAP Business Suite” is also available as “SimpleFinance” on the HEC, this inherent conflict between customization and standardization caught my attention.
As the most recent SAP HEC for Projects Service Description Catalog demonstrates, this conflict is not only restricted to the new SimpleFinance offering. There are a variety of other customizations which are possible in this environment – many of which are the responsibility of the customer.
I have no idea about the costs associated with such support but I assume that it is customer-specific and could be relatively high if extensive customization must be supported in the HEC.
Since this HEC-based customization has a financial impact on solutions hosted in this environment, customers have an incentive to respond accordingly. Owen Pettiford describes one strategy to deal with this dilemma: customers must reduce their customization as much as possible when moving to the HEC.
Review all your modifications and custom code and remove as much of this as possible whilst upgrading to the latest enhancement packages and support packs that are required for the switch to Simple Suite (I believe this is EhP 7 for ERP).
Since these customizations are often regarded by customers as representing their differentiating processes in relation to their competition, there is often a reluctance to remove them in response to the provider’s standardization requirements.
If customizations of such HEC-based application are still necessary / desired, what options are present?
HANA Cloud Platform as customization platform
One possibility is the use of HANA Cloud Platform (HCP) as an extensions platform that will allow customers to “personalize your SAP systems”.
There are business blueprints to help customers during the HEC-related migration and on-boarding process move the appropriate customizing to the new platform but the ability of the HCP to cover some of the desired customizations is new and largely unexplored.
The HCP will be useful to personalize Fiori applications using OData streams from HEC-located applications. Despite the understood euphoria associated with this scenario, I’m not sure if the HCP-based applications will be able to cover all the customizations that are possible in the Business Suite. Only time will provide best-practice examples of which HEC-based customizations can be moved to the PaaS.
The ROI of such transitions to HCP will be interesting to watch since the involved increased subscriptions costs if customizations remain in the HEC must be compared to the associated implementation / maintenance costs of a HCP-based solution. SAP must be interested in this shift away from the HEC towards HCP to reduce customization-related friction in the HEC and the promotion of the HCP as extensions platform.