The term "cloud computing" is nothing new. But similar to other technologies, cloud services are constantly moving forward, evolving, offering innovation. The cloud is used by big companies but it is also the state administration's focus – changes in the procurement of cloud services are a part of the proposed amendment to the Public Procurement Act sponsored by Deputy Prime Minister for Digitalization Ivan Bartoš. New developments in cloud services are exactly what we discussed with BiQ Group CEO Marcel Červený and founder of Consulting Company Novasoft (part of BiQ Group) Vladimír Moravec.
Why has SAP been your focus in the cloud services sector?
Marcel Červený: That is a question I used to get quite frequently. And the answer is that SAP essentially went through a full overhaul in terms of cloudification. It started making sense because we found that we have common ground not only in terms of our overall theme but also technology. Furthermore, I feel that SAP currently offers the most comprehensive solution across various sectors.
Vladimír Moravec: In my view, it's a clear choice for international companies with a presence in multiple markets, working in different languages and varied regulatory environments. There's no need to worry about local regulations, revenue authorities, and such. They don't need to deal with a different partner in every country – there's just one who operates a central system, whom they have a contract with, and who guarantees that the system operates across all locations and takes care of all the particulars.
M. Č.: Things actually developed quite nicely over time. When the Group was in its infancy, we merged BOOTIQ with the first company we acquired, which was Novasoft; and the ensuing transformation, based primarily on an all-around SAP product strategy change, ensured that our two worlds would blend seamlessly. We have innovation as well as common projects with a focus on SAP and beyond. We are fully capable of delivering our primary strategy, which is providing solutions with continuous support, development, and naturally meeting all regulatory obligations. With SAP specifically, there is a decrease in dependence on local solutions, lower licensing requirements; the new system introduces dynamic options going forward. Many companies who focused on other things than SAP have now started looking into it. But they are learning from the ground up, they are missing deep knowledge. We do have it, and we are continuously expanding it. Novasoft has been in the SAP environment for 17 years, with the same partner in the same sector, and it remains as such even as part of BiQ Group. But we also maintain other technological capabilities in terms of our group for various types of cooperation.
V. M.: Novasoft is a provider. We're not a producer, that's what SAP is. We merely provide it to Czech businesses. We implement it, maintain it, execute client changes, projects, and so on. We are a one-trick pony in that sense, we don't do any other ERPs. We are a Czech company established in 2006; we have employees who have been with us for as long as 20 years and who remember the days of SAP R/2, for instance. That is a major advantage because they know the processes in and out and are familiar not only with the history of the systems but of our clients as well. That's another major benefit – if a client calls us, say, a year later, they will be dealing with the same people who have helped them before, who have intimate knowledge of their processes, which saves a significant amount of time and money. Of course we have many young people working with us as well, but we have plenty of senior employees, too.
There is a lot of talk about a new SAP cloud solution version called S/4HANA. Why is it such a big topic?
V. M.: Because the current ECC version will only see development and support until 2027, which is when S/4HANA will come into play. So you've got five years. But if you account for having to prepare for the transition, planning the entire process, and naturally the actual implementation, it's high time to get started.
Is it a major change compared to the current version?
M. Č.: From a technological standpoint, there are a lot of commonalities with the current version. The changes come in on the consulting level, for instance. But when they dig a little deeper and set up their own system, even the consultants will see a world they are familiar with. It's certainly not a leap in the sense of switching from a keypad phone to an iPhone.
V. M.: On the other hand, it's a major disruption on the user end. It's a truly radical change that has nothing in common with the former on-premise solution where you had everything stored locally on your servers. The implementation methodology is called Activate, and the name itself hints at the need to activate functions that are native to the cloud. There are pretty clear-cut limits. If you absolutely need to make some changes, you can, but it will only be local to you. And it is necessary to connect the local solution to the cloud via BTP (Business Technology Platform). But that becomes your local solution, it's not SAP's solution.
That might be hard for clients to come to terms with, seeing as they were used to adding in various functionalities up until now...
V. M.: I will admit that the picture I've painted may come across as negative to some people. Because in the past, the process went that you bought your licenses, installed them, called up an implementation consultant, and told them your vision. And then the consultants and programmers would "bend" SAP into the shape you had in mind. The upside was that you got what you wished for with the downside being that when a new version came out, you had to call on the same team to evaluate the extent to which you'd deviated from the standard and set up all of your modifications from scratch. And throughout the years, when things go on like that, the client often loses their process map. But there is a major positive effect in that the system is extremely simple to manage and maintain going forward. Starting with the name, Public Cloud, which hints at the platform being publicly shared with other clients. For SAP, this means cloning the system for each individual customer they host while no longer being forced to do additional development for everyone. So, when a change in legislation comes around, for instance, it gets implemented simultaneously, basically without customer participation; in the background, so to speak. It's kind of similar to owning a Tesla, where you start your car in the morning only to see a notification on your dashboard that tells you a new version of the software for your rear-view mirror has been installed. It requires no effort on your end; the car manufacturer implements the change on its own, for all of its clients, and to everyone's benefit. Though, naturally, you get a detailed breakdown of all the changes. The essential thing is changing how you approach the transformation mentally. But the philosophy where the customer adapts to the system rather than the system adapting to the customer has been around for several years now.
M. Č.: This principle has essentially been around for the past ten years. And reality is setting in now.
V. M.: I'd like to add that we're talking about the differences between SAP ECC, which is the current on-premise version used by roughly 99% of customers. And then there's the other end of the spectrum, SAP Public Cloud, where everything is in the cloud. But in between those two is the Private Cloud version, which essentially means that you take your local solution and "dump" it outside of your business, have it hosted somewhere else. You get rid of your servers and your licenses and basically change the licensing model to SaaS, meaning Software as a Service. That's a sort of transitory version.
How long does the transition from ECC to S/4Hana Cloud take?
V. M.: I would say that it's high time to start getting familiar with the technology because there really isn't a whole lot of time. Considering, of course, that one wants to stay with SAP. But, truth be told, there aren't that many alternatives. SAP essentially suggests that its long-term clients do a full re-implementation. That they learn from how things worked up until now and adopt a whole new approach to their processes. Let the current version run, build a new cloud in parallel, and migrate all the data. That they refrain from trying to make current processes work with the new system. All of that takes time, even a year or two for big businesses. By the way, at this stage we often find out that our clients don't really know their own processes all that well, that they are missing the aforementioned process map. SAP now has a tool that can be deployed in the current version and draw that map for you. It is an extra paid service, but one that is very useful. It shows you in plain view what you actually did with SAP over all those years. It's quite a surprise for many clients, and they often find out that they have no idea why they'd made some of the edits and whether they're even being used anymore. And the people who made them might not even be with the company anymore. So, switching to a new system without being intimately familiar with your own business is essentially impossible. And I'd like to emphasize one more time the work with end users because the experience will be markedly different for them. When you put something new in front of people, their first reaction is mostly negative. Because if something works for you and you're used to it, learning the ins and outs of a new technology is inconvenient. That's why it will never work without management support – they need to find the courage to set off this whole mental process and start getting people to adapt.
Is there a way to implement a new system gradually or does it have to be done in one big leap?
V. M.: Of course you can do it step by step, there's no need to go with a big bang. You could use a hybrid solution, meaning that you have two different technologies, ones that naturally have to communicate with one another. We are working at ČEZ and other big companies, and we can see cloud adoption coming on gradually, in specific areas. There are no companies that decide they're just going all out cloud from one day to the next, it just doesn't work like that.
M. Č.: Either way, you need to respect that final deadline when the core switch has to be made. And as time ticks down, so does the window to implement a transitory, selective, hybrid solution grow narrower.
So you're already working on the new system somewhere?
V. M.: We're in the first stages of an SAP Public Cloud project for a client who, up until recently, was using a different IT system and decided to enter the world of SAP, going for the cloud right off the bat. Besides that, Novasoft has won tenders to provide support to four universities in the Moravian region. They're all working with the current version of SAP, and we're naturally already having very lively talks with them about what's up next.
THE COMPANY
Novasoft is a consulting company providing advisory services in all lifecycles of the SAP business information system.
It is also in the process of establishing an independent SAP Cloud division.
One of its specialist departments is engaged in the development of the NovaVoice® Speech Recognition System.
Novasoft is one of BiQ Group's five subsidiaries, having joined the Group in 2019. The company was founded by Vladimír Moravec alongside several of his colleagues, and it specializes in all things related to the SAP business system used by major companies across all economic sectors.
Its team comprises over 50 consultants, programmers, analysts, and testers who are capable of implementing SAP projects due to their high level of expertise while also being able to potentially bolster the ranks of clients' in-house teams.
More information at www.novasoft.cz .
ECC vs. S/4HANA Cloud
The differences are not only in the process changes but also in the front end, the user interface. "It currently looks similar to a character-based, mainframe type of access. It's been modernized to have more of a tile layout – it's called Fiori, and it presents a major change for the user. Because some people working in accounting or purchasing, for instance, have been using the current system for so long that they're pretty much able to run on autopilot, they could do it blindfolded. Now, they'll be forced to re-learn the controls," says Vladimír Moravec. Marcel Červený adds that the new solution will mean higher mobility. "It can be ported to various devices. The tiles and the visual controls are great for managers, for instance. Because otherwise, you'd never get SAP into your phone. So, it's much more open, even speaking in terms of current workspace requirements, such as working from home, and it does all that without breaching any safety regulations. Next, it means significantly lower infrastructure demands – there's no need to own machines, server rooms, heaps of licenses. And one more thing: it is currently the only certified cloud solution for the state administration."
Marcel Červený
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Vladimír Moravec
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