The 2023 ASUG Pulse of the SAP Cus­tomer sur­vey results come at an impor­tant time for ASUG mem­bers. Mem­ber orga­ni­za­tions must nav­i­gate a com­pli­cat­ed glob­al econ­o­my oscil­lat­ing between reces­sion and growth, job loss and job cre­ation, sup­ply chain bot­tle­necks and low­er ship­ping costs, and myr­i­ad oth­er, often con­tra­dic­to­ry, factors.

Mean­while, SAP exerts pres­sure on its cus­tomers to upgrade to SAP S/4HANA, move to a ​“clean core” pub­lic cloud, adopt SAP Busi­ness Tech­nol­o­gy Plat­form (BTP), and embrace SAP’s vision for a sus­tain­able enter­prise. In addi­tion, SAP wants cur­rent and prospec­tive cus­tomers to work exclu­sive­ly with its enter­prise sys­tems and soft­ware to solve busi­ness­es’ prob­lems and chal­lenges — and not suc­cumb to SAP com­peti­tors’ sim­i­lar sales tac­tics and prod­uct positioning. 

An Enter­prise Inno­va­tion Paradox

A look at ASUG mem­bers’ top focus areas in this year’s Pulse sur­vey tells an impor­tant part of this sto­ry and, in doing so, high­lights an essen­tial para­dox that com­pa­nies face on the road to inno­va­tion. (For more infor­ma­tion on the Pulse data, see here.) When asked about their orga­ni­za­tions’ 2023 top focus points, ASUG mem­bers put ​“inte­gra­tion between SAP and non-SAP sys­tems” as their num­ber one choice, with ​“mov­ing to [SAP] S/4HANA” and ​“stan­dard­iz­ing busi­ness process­es” tied for sec­ond place. It seems clear that cus­tomers are look­ing at the com­plex­i­ty — or incom­plete­ness — in their busi­ness process­es as a rea­son to break down silos in their het­ero­ge­neous land­scapes and stan­dard­ize process­es. The moti­va­tions are sim­ple: too many process­es are hard­wired into expen­sive, out­mod­ed cus­tom appli­ca­tions and non-SAP sys­tems that need to be refreshed or retired for the com­pa­ny to trans­form its business. 

To this end, they don’t just need to inte­grate; they need to stan­dard­ize. That process stan­dard­iza­tion — in the form of fit-to-stan­dard indus­try best prac­tices — is best done with­in the con­text of SAP S/4HANA, per SAP’s play­book. So far, so good, until you con­sid­er a para­dox built into that con­cept. The para­dox is that cus­tomers seek to solve major prob­lems and reduce the under­ly­ing com­plex­i­ty of their IT sys­tems and busi­ness process­es, with ini­tia­tives almost guar­an­teed to add a con­sid­er­able amount of com­plex­i­ty to those sys­tems, at least in the short term. Let’s call it ​“recur­sive transformation.” 

Adding Com­plex­i­ty to Reduce Complexity 

This addi­tion­al com­plex­i­ty is due, in part, to the chal­lenges any new tech­nol­o­gy brings. For many SAP cus­tomers, that new tech­nol­o­gy list includes SAP S/4HANA, SAP BTP and its inte­gra­tion tech­nol­o­gy, SAP Sig­navio process min­ing, and the like. 

But only in part.

The oth­er side of the com­plex­i­ty chal­lenge for SAP cus­tomers also can be seen in the Pulse data regard­ing the top chal­lenges orga­ni­za­tions face. Two issues, ​“main­tain knowl­edge­able staff” and ​“bud­get,” dom­i­nat­ed par­tic­i­pant respons­es. ​“Inter­nal skills” and ​“keep­ing up with the pace of tech­nol­o­gy changes” also rose to the top. Inte­gra­tion and ​“mas­ter data main­te­nance and gov­er­nance” — also strong indi­ca­tors of the pre­dom­i­nance of com­plex bar­ri­ers to change — round­ed out the top six chal­lenges in the results. 

Con­front Contradictions

Achiev­ing the goals implied in ASUG mem­bers’ top focus areas will require ratio­nal­iz­ing con­tra­dic­to­ry chal­lenges. For exam­ple, bud­get and peo­ple con­straints make solv­ing any cor­po­rate prob­lem chal­leng­ing; inte­gra­tion and mas­ter data-man­age­ment prob­lems often run head­long into change-man­age­ment pol­i­tics. These are inde­pen­dent of the addi­tion­al chal­lenges — and the relat­ed com­plex­i­ty they help cre­ate — that come with any trans­for­ma­tion­al project, such as imple­men­ta­tion, ser­vice, and support.

Despite the daunt­ing nature of this para­dox, and the macro-eco­nom­ic head­winds they face, the Pulse sta­tis­tics indi­cate that ASUG mem­bers plan to push hard in 2023 to solve these prob­lems. The per­cent­age of respon­dents whose com­pa­nies will pro­ceed with cur­rent ini­tia­tives is large­ly unchanged from last year: 58% of orga­ni­za­tions say they will pro­ceed ​“nor­mal­ly” this year; it was 57% in 2022. The per­cent­age of respon­dent com­pa­nies that have delayed planned ini­tia­tives was also sim­i­lar year over year, with 31% of respon­dents report­ing that their orga­ni­za­tions expect to delay projects in 2023, com­pared to 29% in 2022. 

Way Down & Way Up

But out­right can­cel­la­tions are down by over 50%, and the plan­ning or begin­ning of new ini­tia­tives is up by 60%, strong indi­ca­tors that ASUG mem­bers are push­ing their tech­nol­o­gy plans for­ward regard­less of the over­all eco­nom­ic environment. 

Sim­i­lar­ly, while mem­ber orga­ni­za­tions plan­ning to make more SAP invest­ments dropped from 52% in 2022 to 46% in 2023, the per­cent­age main­tain­ing their cur­rent lev­els of SAP spend­ing rose from 39% in 2022 to 43% in 2023. This rough­ly means that it’s busi­ness as usu­al when it comes to invest­ing in SAP tech­nol­o­gy for most respondents. 

The 2023 ASUG Pulse of the SAP Cus­tomer sur­vey shows a cus­tomer base ful­ly aware of the chal­lenges and ful­ly pre­pared to forge ahead with SAP to meet them, despite the para­dox of hav­ing to endure more com­plex­i­ty to reduce it ulti­mate­ly. Notably, invest­ments in SAP tech­nol­o­gy for 2023 seem sol­id and are hold­ing steady, despite these challenges. 

The tim­ing for ASUG mem­bers’ renewed focus on SAP is good, as the ASUG Mem­ber Pathfind­er offer­ing — curat­ed con­tent assem­bled to help dri­ve suc­cess in adopt­ing key SAP solu­tions, such as SAP S/4HANA and SAP BTP is now avail­able. (For more infor­ma­tion, see here.)

It’s a com­plex, com­pli­cat­ed world out there, and ASUG mem­bers will invest in SAP to stay on top of those chal­lenges. Hav­ing the right resources on hand — new tech­nol­o­gy and help from ASUG on how to best make use of it and obtain the most val­ue — will be essen­tial to suc­cess in 2023 and beyond. 

Joshua Green­baum is Prin­ci­pal at Enter­prise Appli­ca­tion Consulting.