Digitization is maturing among DSAG (German-speaking SAP user group) members, but S/4HANA and SAP Leonardo still have plenty of room to grow, according to a survey of 334 DSAG member companies released this week. The examination of IT investments found that 40 percent of surveyed companies are investing more in technology, with IT budgets at those organizations rising 17 percent on average. SAP collected a nice chunk of that money, with 37 percent of new spending heading to the German-based software vendor. 

DSAG members in the study are farther along in their digitization journeys, with 44 percent saying they have made good or very good progress. That’s up from 31 percent in a summer 2017 survey. That digitization isn’t necessarily digital transformation, however, as 85 percent of those surveyed said their companies are investing in digitizing existing business processes. That number represents a 30 percent rise from one year ago.  

“For DSAG members, the digitization of existing business processes continues to be more important than investing in new business models, although both have seen growth,” said DSAG Chairman Marco Lenck in a press release.  

All is not lost on the transformation front. Two-thirds of those surveyed consider investments in new business models as important or very important.  

SAP S/4HANA and SAP Leonardo: Plenty of Room to Grow

At SAP TechEd 2017 in Las Vegas, SAP celebrated the 1000-live customer milestone for SAP S/4HANA, but DSAG’s survey results reveal that at least among its membership, installations are still hard to find. Just three percent indicated having already implemented SAP S/4HANA, a one percent rise from the year prior. Looking ahead, five percent of those surveyed said they will implement SAP S/4HANA in the next year while one-third will implement it in the next three years.  

Check out this ASUG webcast on a startup’s 14-week S/4HANA implementation.  

SAP bills SAP S/4HANA as its “digital core" and the vendor’s marketed path to digital transformation and implementing new technologies is SAP Leonardo. The product, which is a set of services and software, was launched one year ago and is just starting to pick up steam with the SAP customer base—largely because SAP is only now starting to hone the message around it. Still, there is a long way to go, as just two percent of those surveyed are using SAP Leonardo services and technologies. Another 10 percent say they plan to deploy SAP Leonardo in 2018.  

The good news for SAP is that almost half of those companies surveyed indicated they are expressing interested in SAP Leonardo. The marketing push is working at least in terms of building awareness, now it will be up to SAP to provide concrete customer stories to convert that awareness to sales.    

See what SAP Leonardo is doing in the manufacturing space in this ASUG webcast.  

SAP Business Suite Investment Declining

The predecessor to SAP S/4HANA, SAP Business Suite, still vastly outnumbers the new kid on the block in installations. With relatively few SAP S/4HANA customers live, it should come as no surprise that SAP Business Suite is still relevant—even with the current 2025 end of mainstream maintenance date looming for SAP’s legacy ERP.

Almost half—48 percent—of DSAG respondents are still investing in SAP Business Suite. However, that is a 10 percent drop from a similar survey in Fall of 2017. Interestingly, SAP S/4HANA investment stayed flat.  

Perhaps DSAG members aren’t ready just yet to migrate to SAP S/4HANA (or an SAP competitor), but they know change is on the horizon and fewer companies are seeing a need to invest further capital into SAP Business Suite.

Hear from ASUG member Snohomish PUD about its Business Suite on HANA implementation.  

Bottom Line for ASUG Members  

It’s not prudent to take numbers from DSAG and project them onto ASUG’s membership—the two markets are different in the way they invest enterprise software budgets, particularly in the area of cloud. However, SAP customers all around the world are still using the same software, and it is interesting to see where trends are heading.  

ASUG members may feel the pinch from SAP when it comes to moving to SAP S/4HANA—that 2025 date is creeping ever closer. They may find some relief when looking at results like this, knowing that SAP S/4HANA adoption is still years off at most companies, and some have only begun preparing by limiting their investment in legacy software. 

As for SAP Leonardo, it seems like DSAG’s membership aligns well with ASUG—they know it exists, they are curious about it, but adoption is still not on the table for most companies.