We’re living in exciting times.
The enterprise resource planning (ERP) landscape is rapidly changing. As IT professionals, we are all familiar—even comfortable—with innovations to the enterprise technologies crucial to our work. However, current technology trends are not incremental changes. They are seismic. This is an exciting time for the SAP ecosystem. While there are certainly hurdles to overcome, there are also enormous opportunities to innovate and improve our enterprises.
This notion is exemplified by the results of our 2024 ASUG Pulse of the SAP Customer Research survey. Reflecting the outlook and attitudes of SAP users from all industries and across all business functions, this survey gives us a glimpse of the trends and solutions that are currently top of mind for our member community.
With that data in hand, here are four shifts I believe will define this ecosystem for years to come.
1. SAP S/4HANA Adoption
With SAP set to end mainstream maintenance for SAP Business Suite 7—which includes SAP ERP Central Component (ECC) 6—at the end of 2027, SAP customers are prioritizing adopting SAP S/4HANA. Nearly half (48%) of respondents to the 2024 ASUG Pulse of the SAP Customer Research said moving to SAP S/4HANA is a top focus area in 2024. I’m not surprised. The 2027 deadline is fast-approaching, and I believe SAP is sticking to it.
Respondents understand this as well, with 47% of respondents indicating they are already live on the ERP platform or are starting to move. This is a six-percent increase from last year and a 10% increase from the 2020 Pulse of the SAP Customer Research (the same year SAP moved the SAP Business Suite 7 maintenance deadline from 2025 to 2027). I’d encourage all SAP customers—and ASUG Members—to consider their SAP S/4HANA adoption schedules before vital implementation and integration resources become too scarce in the coming years.
2. Migration to the Cloud
Another major focus for SAP is helping its customers migrate to the cloud. To date, the software company has launched two programs aimed at cloud adoption: RISE with SAP and GROW with SAP. Cloud computing—much like AI—is here to stay. Solution maintenance and upgrading are easier for both SAP and its customers. Additionally, cloud-based solutions lower customers’ total cost of ownership over time while enabling improved scalability.
Cloud usage is growing among ASUG Members. Only 37% of 2024 ASUG Pulse of the SAP Customer Research respondents reported using on-premises landscapes (compared to 53% in 2021). Meanwhile, 26% of respondents are leveraging hybrid solutions, while 22% are on third-party public cloud options and 17% are using private cloud options. Given SAP’s commitment, cloud computing will become the norm, while full on-premises instances will fall out of popularity. Enterprises must take the proper steps to prepare themselves for this inevitability.
3. Growing Workforce and SAP Skills Gaps
Both AI and cloud computing represent significant opportunities for SAP customers. However, enterprises need experienced, educated workforces to enact those implementation projects. The IT ecosystem is seeing a growing skills gap. As more IT professionals retire, there is not enough new talent and expertise to replace them. We’re feeling this in the ASUG community, with 29% of the 2024 ASUG Pulse of the SAP Customer Research respondents indicating that maintaining knowledgeable staff and turnover pose significant challenges for their organizations. Meanwhile, 28% said that building internal skills to manage new products is a challenge.
This gap will only grow as more talent exits the IT world. However, the growth of innovative technologies—like AI and cloud computing—presents incredible opportunities for enterprises to find new talent and bolster the skillsets of current employees. For example, the SAP Veterans to Work program is helping U.S. military service members with ERP experience hone their skills and transition into civilian IT careers.
4. The Emergence of Generative Artificial Intelligence
Artificial intelligence is a generation-defining technology. Unlike other recent flash-in-the-pan solutions, AI is here to stay. It will impact all aspects of our working lives, including how we manage and use ERP platforms.
In the SAP community, generative AI is quickly becoming a pillar. During the recent SAP earnings call focused on fourth-quarter and full-year financial results for 2023, SAP CEO Christian Klein said SAP is positioning itself to become “the no. 1 business AI company.” With that focus in mind, SAP expects to invest approximately €1 billion in AI use cases for customers.
AI is also a growing priority for ASUG Members. According to the 2024 ASUG Pulse of the SAP Customer Research, automation is a top priority among respondents (below only integration and SAP S/4HANA migration), with 34% indicating it is the most important focus area for their organization. About one-third (38%) of respondents also expect AI and ML to greatly affect their organizations’ digital transformation efforts in the next two years.
While we are at the beginning stages of AI development, I believe the technology—if utilized effectively—will be a game changer for many SAP customers.
I am excited to help ASUG Members make the most of these exciting times as they embrace the technologies of tomorrow. While the ERP ecosystem is in a time of great change, there is a significant opportunity for us all to embrace these changes to vastly improve our operations. It’s a great time to be in the SAP community, and ASUG is ready to help you maximize your SAP investments.
Listen as ASUG CEO & Chief Community Champion Geoff Scott digs deeper into the 2024 ASUG Pulse of the SAP Customer Research results in a podcast conversation with ASUG Research Director Marissa Gilbert. Listen on asug.com, Apple Podcasts, or Spotify.