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.

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