The following guest perspective was authored by Joshua Greenbaum, Principal at Enterprise Applications Consulting. The views and opinions expressed in this perspective are those of the author.
It’s easy to predict some of the challenges SAP customers will face in 2024. That’s because many of last year’s issues remain unresolved, both those endemic to customers’ business and technology requirements and those resulting from the continuing evolution of SAP’s strategy and product plans.
But fear not: 2024 won’t be a rehash of 2023. With a new year comes the promise of new challenges, as well as new opportunities to make the most of the SAP products and technology heading our way in 2024.
It’s clear that any residual confusion around RISE with SAP—what it is, what it isn’t, who it’s best for, and its relationship to cloud migration, innovation, and AI—should be a priority for SAP to address, especially on the heels of SAP adding new “premium-plus” models to the mix of options already available to customers pursuing a move to the cloud.
High on the list of real-world issues is the planning and execution of customers’ migrations to SAP S/4HANA and the cloud—a problem that RISE is intended to help solve, though these are complex initiatives in multiple respects. The problems are less about SAP technology strategy, per se, as the three different modalities for SAP S/4HANA offer customers a significant amount of flexibility in their deployment options. The more salient problems center on the current state of customers’ infrastructure and business requirements. It’s complicated out there on the road to SAP S/4HANA: lots of legacy processes and customizations, lots of substandard and poorly governed data, and lots of conflicting agendas around business transformation.
Rolling the clock over to another year will put even more pressure on SAP customers to move forward with these plans, both to reap the much-needed business and technological benefits of the cloud and to stay ahead of SAP’s deadlines for end of mainstream maintenance.
‘A Clean Data Movement’
For many customers, 2024 will involve figuring out how to navigate the myriad changes in data, process, and technical architecture that need to be settled before pulling the trigger on deploying SAP S/4HANA. Solving a host of insipient data problems will get a boost from the continuing interest—though, in my view, mostly overblown and premature—in deploying generative AI in the enterprise. Indeed, perhaps the best outcome of the hype around generative AI has been that loads of impeccably clean data are needed to build and maintain large language models, and that realization is now driving a much-needed, long-overdue renaissance for SAP S/4HANA and cloud upgrade plans.
This growing “clean data” movement isn’t just for existing SAP customers running complex, hybrid cloud environments. Many net-new customers, particularly those eyeing a move to SAP S/4HANA Cloud, public edition, and its “fit-to-standard” process models, are finding that the age-old problem of data quality doesn’t go away just because a customer is doing a greenfield SAP S/4HANA implementation.
Rounding out the problem set still on the table in 2024 are the people and process issues that have dominated the global economy of late. SAP customers’ challenges with finding, training, and retaining the right person with the right skills for the job at hand, and then deploying them in the most efficient ways possible, won’t be any easier in 2024. The employee experience—and hence the customer experience—that every company wanted to deliver in 2023 still hasn’t reached its apogee, and that means there’s still work to be done to optimize suboptimal processes and experiences.
‘A Watershed Year’ for SAP
But 2024 won’t be just a collection of glass-half-empty scenarios on the way to realizing the potential of customers’ SAP investments. There are some ways in which 2024 has the potential to be a watershed year for implementation and business success in the SAP customer ecosystem.
SAP’s Cloud Application Lifecycle Management (CALM), and its integration with SAP Signavio, LeanIX, SAP Business Technology Platform (BTP), and SAP Datasphere, promises to drive huge efficiencies for the implementation and continuous improvement of SAP systems. This combination of tools, unique to SAP, can help customers and their partners improve how key processes are built and deployed on both the business and technology sides of the equation.
The resulting toolset could yield significantly faster implementations that in turn yield significantly better outcomes, especially in complex, heterogeneous environments where core processes may have to jump between cloud and legacy applications as well as different clouds. As a bonus, this toolset, and the add-ons and integrations coming from CALM partners, will effectively “containerize” SAP implementations and render the question of which hyperscaler to go with largely moot.
In a similar fashion, 2024 will see the further ascendancy of SAP Business Network. Growing adoption of SAP Business Network can help companies thrive in a complex, interconnected world defined by increasing demands on customer service, supply chain excellence, and sustainability. The process efficiencies, the ability to “comply once” and publish that compliance to a network full of prospective trading partners, and the ability to expand customer and partner networks will begin to accrue for a widening set of SAP customers in 2024.
SAP For Industries
Finally, 2024 will be the year in which SAP’s industry-specific capabilities will start making a difference for customers. The irony of SAP’s “clean core” strategy is that a clean core is an undifferentiated core, one that can only deliver standardized processes that don’t support true competitive advantage. But if you add industry-specific capabilities—deployed in SAP S/4HANA Cloud or as part of SAP BTP—the advantages become more clear: adding industry functionality on top of a clean core gives customers the ability to standardize and innovate at the same time.
SAP has always had deep support for industries, since the R/2 days, and this legacy of industry functionality is becoming increasingly important to customers looking to justify the cost of moving to SAP S/4HANA, SAP CX, SAP SuccessFactors, SAP Business Network, and other product lines.
So sit back, buckle up, and get ready for one helluva ride. Hopefully, 2024 will be the year in which some of the messiness we experienced in 2023 starts to make sense for customers still sorting through business complexities and finding the right path forward for their organizations. At a minimum, like every year, the journey promises to be anything but boring.
Joshua Greenbaum is Principal at Enterprise Applications Consulting.