Dive Brief:
- SAP pledged to provide additional ERP migration assistance as part of its RISE with SAP program Monday during the company’s Q2 2024 earnings call. “The evolution of RISE will include one dedicated enterprise architect for each customer,” CEO Christian Klein said.
- The software company is doubling down on in-house enterprise architecture skills as part of a broad restructuring announced in January. “The hiring machine is on,” said Klein. “We will further increase the coverage of our RISE customer base in the next month.”
- SAP expects the transformation to impact between 1,000 and 2,000 jobs in addition to the 8,000 previously forecasted. CFO Dominik Asam said the company will spend approximately 3 billion euros ($3.25 billion) on the restructure this year, adding 800 million euro ($867 million) to the projected costs.
Dive Insight:
SAP is racing against the clock to shift customers to its modernized ERP suite before on-prem system support deadlines begin taking effect next year. The company is also bolstering its army of technical experts to head off an impending migration bottleneck.
Klein highlighted how the strategy has impacted the company’s approach to customer outreach and internal processes.
“SAP has now more skin in the game when it comes to the transformation,” he said. “We are not sitting anymore on the sideline — we are actively helping.”
Access to skills and product transformation are central to the restructure. The company is engaged in extensive reskilling to supplement external hiring and anticipates overall to remain stable, according to Klein.
“We see higher attrition in places where we don't need the skills anymore,” Klein said. Reskilled enterprise architects are moving to the RISE program, he added.
To spur cloud adoption, the company has sweetened migration incentives through the RISE with SAP and GROW with SAP programs and continues to add modular enhancements to its ERP suite and embed AI capabilities throughout its Business Technology Platform analytics hub.
“Our genAI hub on BTP is buzzing with activity,” Klein said. “Over 90 partner use cases are now in co-innovation, including use cases with big systems integrators.”
The efforts were reflected in earnings.
SAP increased cloud revenue by 25% year over year, as cloud ERP suite revenues increased by 33%. In lock step with the transformation plan, software license revenue decreased by 27% year over year, as customers shifted to SaaS.
“We are guiding the customer on how to build a semantic layer with SAP, on how to connect the dots on the business processes and how to infuse workflow automation,” Klein said. The additional technical guidance has helped motivate customer migrations, he added.
