SAP is ramping up its cloud strategy with the launch of a new ERP solution tailored for the retail industry, part of its ongoing efforts to shift customers from on-premises to cloud-based systems. The company is leveraging migration incentives, generative AI enhancements, and a significant internal restructuring to accelerate cloud adoption ahead of the 2027 end-of-support deadline for SAP ERP Central Component (ECC) on-premises solutions.

Despite cloud revenue overtaking on-premises earnings in Q3 2024, Gartner reported that by mid-2023, nearly two-thirds of SAP ECC customers had not yet moved to SAP S/4HANA. This slow migration pace has prompted SAP to offer additional support, including dedicated enterprise architects for each customer, to help them transition to cloud solutions before the deadline.

SAP’s new retail ERP solution is designed to integrate internal business processes and customer-facing applications, areas increasingly prioritized by CIOs. “We built the cloud-based ERP almost from the ground up that’s specifically designed for retail businesses,” said Howell, addressing the importance of this sector-specific approach.

The retail solution aims to simplify data management across various business functions, including marketing, finance, supply chain, and procurement. By providing easy access to core data, the solution allows retailers to efficiently manage inventory, orchestrate orders, and design targeted marketing campaigns without transferring data out of SAP systems.

For digital-native businesses, the ERP offers a comprehensive retail in a box solution. Existing customers using on-premises or private cloud deployments can integrate this retail solution as part of a broader migration strategy.

“It’s SAP talking to SAP,” Howell emphasized, pointing to the seamless integration within SAP’s ecosystem and the familiar taxonomy, ensuring a smooth transition for retailers adopting the cloud-based solution.