Rise. Or Rise-up?

June 13, 2024
7:17 pm

This week, I attended the Consumer Goods Forum in Chicago. The networking was great.

My takeaway is a serious concern by attendees on the impact of SAP RISE on global supply chains. Here I share observations and take aways.

Definition: “The RISE with SAP offering includes an AI-powered cloud ERP that’s managed and optimized by SAP. It provides services and tools built on the clean core approach by SAP, so you can migrate on-premise systems, transform business processes, drive continuous innovation, and unlock cloud agility.”
Source: SAP Website

The Discussion Not Held on the Stage

The main event at the Forum was not on the main stage. Instead, it was the discussions behind closed doors and over coffee. On the top of mind for many retail and consumer goods executives is the looming forced upgrade by SAP named RISE. The Consumer Goods Forum follows on the heels of Sapphire.

SAP is the maestro of charging customers for software upgrades. While their customers pay a hefty percentage (my typical client pays 15-22%) of the original licensing cost of the software license for maintenance, these forced upgrades are mandated outside of the maintenance contracts. So, one might think that the evolution of a new product named RISE would be a part of the maintenance agreement. If this is your thought, you are wrong. This forced upgrade follows forced upgrades for R3 to ECC 6.0 and ECC 6.0 to HANA. In the words of one participant, “Each of these upgrades cost us millions of dollars, and we received no incremental value.” He continued, “We just completed the upgrade to HANA. It was painful. And now they want us to migrate again to RISE? I feel like we are being held hostage. What happened to the concept of SAP providing maintenance?”

The industry is a buzz. I listened. Remember, I like my coffee black.

Definition: A software maintenance agreement, or SMA, is a legal contract that obligates the software vendor to provide technical support and updates for an existing software product for their customers. It may also extend the expiration date of certain features, such as new releases or upgrades. Source: AI Query

What To Do?

There are few options:

Change Providers. One of the customers I spoke to is switching to Oracle. They feel burned by the HANA upgrade, and this is a tough decision for most executives.
Stand at the Back of the Line. Another topic was how to delay the inevitable effectively.
Use Third-party Support. Another investigated using a third party to support their current ECC 6.0 environment.

The answer is not easy. My advice for supply chain leaders is to maximize the value of current SAP assets by focusing on improving results through Forecast Value Added (FVA), Schedule Adherence, Analysis of Inventory Health, and Customer Service with a focus on On-time and In-Full Performance. Use simple approaches like Simplement to unlock data from the SAP prison for easy access by the business user.

Simultaneously, focus on lowering your dependency on SAP. While the traditional wisdom is buying more and more SAP applications to have one throat to choke, this assumes that anyone can get their hands around a greedy throat. Consider alternatives.

Market Pull

One of the most valuable advice from a CEO at the forum was an angry comment, “Don’t waste your time looking for value. This is an opportunistic cost play by SAP. There was no value in HANA, nor do we believe there will be in RISE.” This statement is controversial and not uniformly held across the average manufacturing or retail company.

The pull to invest will be decisive for the average supply chain organization. RISE will be a gravy train for the consultants with bench-strength SAP teams. Consultants will knock hard on doors to compete for the windfall of deals. Within an organization, the pull will also come from the SAP experts within their own IT organization. Most companies have hundreds of SAP specialists who will push this agenda.

My Concern

Today’s supply chain technologies investments are primarily a result of obsolescence avoidance. First, it was Y2K, followed by the shift from the mainframe to the client server. This was followed by the client-server to the cloud. In this evolution cycle, the focus is on IT implementing a project. A getting’er done mentality. This obsolescence cycle kills the opportunity to drive innovation. The opportunity cost to drive innovation is high.

My second concern is the lack of resources. Yes, the budgetary costs are high, but my worry is the opportunity cost to other programs due to the lack of trained resources. I would love to see innovation in supply chain planning, investment in networks, a reduction in the environmental impact of supply chains on the planet, and the building of outside-in processes using technology advancements like large language models, ontological frameworks, the graph, Vector DB/RAG and R/F#. RISE will consume capital and resources, delaying these investments. My frustration? We are rearranging the deck chairs and installing yet another forced upgrade to process transactions when we need to innovate.

My third concern is where and when does this cycle end? Forced upgrades and obsolescence outside of maintenance is an art SAP has perfected. My primary question is, “Where does this cycle end? When is enough enough?” Is it time to rise-up? And, if so, how?

I welcome your thoughts.

Navigating Supply Chain Economic Downturns

August 30, 2026 5:28 pm

In 2007, the average company took six months to sense market shifts and adapt its supply chain. My estimate, based on work with clients, is that if a downturn happened today, the average company would take 20-30% more time to adjust than in 2007. Here I give insights on preparedness.

Warning: Sidestep the Narrative of the Misguided Goldiggers

August 10, 2026 4:58 pm

Ten years ago, I started writing a book titled Stories of the Misguided Gold Diggers. The book was a collection of stories from two decades of stories of technology leaders perpetuating the myth of integrated end-to-end supply chain planning.

I dusted off the manuscript on Saturday. I think that we have a new chapter. Companies focused on putting Artificial Intelligence (AI) on top of existing architectures are putting AI Stupid on steroids.

The Myth of End-to-End Planning

July 31, 2026 9:14 pm

Supply chain planning, supply management, supply chain execution, network design, and transportation/logistics management operate in silos. Not much has changed over four decades. The connections flow back through transactional systems: order-to-cash and procure-to-pay. There is a myth that companies can buy an end-to-end supply chain management solution. This is largely a myth. Here we explain.

Lead Time: A Broken Gossamer

July 16, 2026 6:38 pm

If you are struggling with supply chain planning, dancing in the light of shiny objects, and scratching your head, please read on. My goal is to help you.

Please do not AI Stupid. What do I mean? AI Stupid is putting agents and agentics on top of existing architectures believing that making them faster and hands free add value. To me, this is fools play.

I love AI. I am excited about new technologies. To this end, I want to shine a light on how new technologies can help address the black holes and inconsistencies in today’s supply chain, which largely stem from the limitations of the first generation of supply chain planning and execution technologies. In this blog, I give you three places to start.

Do You Need a Supply Chain Coach?

July 9, 2026 5:27 pm

Supply chain is where the rubber hits the road. For a public company, over 40% of market capitalization is tied to the trade-offs between growth, operating margin, inventory management, and Return on Capital Employed.

The road for supply chain improvement is fraught with issues. Here we share some and offer some advice.

Is your Supply Chain AI Ready?

June 11, 2026 2:39 pm

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Supply Chain Shaman