A systems integrator (or system integrator) is a person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as a system integrator. They also solve the problems of automation.
The system integrator is a company that specializes in bringing together various hardware and software products from multiple vendors and ensuring those components seamlessly work together. During an enterprise resource planning (ERP) implementation, this is especially important.
SAP hosted the “Rise with SAP” event this week where the SAP leadership team launched a new offering and also took direct questions from the audience. I also attended the and here are my key takeaways from the perspective of various stakeholders. Please add your feedback in the comments:
- SAP is pushing to increase annual recurring revenue (ARR) as a % of its total revenue. The answer to why is clear when you look at the revenue and valuation comparison of SAP and Salesforce.
- SAP is pushing for process standardisation by including S/4 HANA Cloud in the offering ahead of S/4 HANA on-premise.
- SAP wants to simplify the migration from ECC to S/4 HANA for its customers by minimising the parties involved in the migration process.
- SAP wants to have an ongoing and closer relationship with its customers, rather than relying on the System Integrators (SI).
- SAP wants to be seen as a strategic vendor (and not a legacy on-premise vendor) by its customers.
- SAP professional services are generally seen as an expensive alternative by SAP customers. It remains to be seen how RISE can be delivered by SAP while promising reduced cost.
- The role of SIs is not very clear in this offering. SAP has promised that partners will play a major role, but how that reconciles with one single contract for the customer is not very clear.
- SAP has mentioned that this offering will fit all customer sizes from small to large, however, it remains to be seen how this can be done.
- Like most of the big announcements from large vendors, the devil will be in the detail and how this translates into T&Cs in the contracts.
- Customers should explore SAP Store for standard S/4 extensions from SAP and Partners before committing to any new custom development.
System Integrator (SI) perspective
- It is controversial, but to some extent, SI’s revenue depends on SAP system customisations. Customisations also result in a more sticky relationship with the customer.
- SAP is asking partners to build their IP, however, building an IP is not easy as it may sound and needs a completely different mindset compared with billing-focused services mindset.
- SIs should build relationships with specialist SAP extension partners and offer non-custom solutions to customer requirements. This may even help SIs generate a recurring revenue stream through royalty, which can only please their CFOs.