Transformations in 2023 – how are ERP customers addressing cloud migrations?

(© LightSpectrum - Shutterstock)

2023 brings its share of economic challenges, but it hasn’t changed customers’ transformation agendas. At ASUG, we see our members prioritizing projects ranging from business continuity and employee engagement to customer experience.

How do ERP upgrades and cloud migrations fit in? For many SAP customers, S/4HANA plans factor in heavily. But how you address S/4HANA impacts your transformation goals – and vice versa. For Abiomed, which did a big bang transformation to S/4HANA during the pandemic, it was about taking the time to create a holistic migration plan, and reducing silos. For Sempra, a collaborative approach between Finance and IT was the key to achieving value in their S/4HANA upgrade. In the process, they moved layers of past customizations, emerging with a simplified, business-focused ERP architecture.

But how does this play out across the SAP customer base?

In research we conducted in 2022 on digital transformations, we learned that almost one third of companies are already live on SAP S/4HANA. A combined 54% of companies are planning the migration or are in the process of moving. When it comes to their digital transformation plans, upgrading to SAP S/4HANA and migrating SAP applications to the cloud are of high importance. 

Cloud migrations play an important role for almost 80% of respondents. Earlier this year, we wrote more on why SAP customers are doubling down on the cloud – you can read more about this here.

We dug further into the topic of SAP S/4HANA migrations, and other topics, at the end of 2022 with our annual Pulse of the SAP Customer survey. This year, more than 800 ASUG members (and over 200 non-ASUG members) shared feedback on how technology teams are changing and what challenges are most prevalent. They told us about investments in technology and shared more information on SAP S/4HANA migrations and cloud journeys.

We are embracing this feedback in 2023 by focusing on topics and areas that have been identified as most relevant by the 1,000+ SAP users who responded to our annual Pulse of the SAP Customer survey. We shared this research in an upcoming Pulse of the SAP Customer webcast on January 25th, but if you haven’t seen the webinar yet, there are a few things from the research that I want to highlight.

The number of organizations using ECC continues to decline while the share of organizations using SAP S/4HANA continues to rise (or should I say RISE). To help organizations navigate these complex migrations, we created a Member Pathfinder specific to SAP S/4HANA adoption. This tool supports organizations that are planning implementations, or that are currently implementing SAP S/4HANA by streamlining relevant content so organizations can chart their course, learn at their own pace, and track their progress.

We are also hearing from our research that SAP S/4HANA is not the only priority for organizations. Organizations are focused on integrating SAP and non-SAP products while also looking for ways to standardize business processes. Our Pulse of the SAP Customer research shows that while only 40% of organizations currently use SAP BTP, another 32% are considering using this solution in the future. That is a lot of organizations seeking a unified, business centric, and open platform for the entire SAP ecosystem. To help organizations better understand this technology, and how organizations are using it, we have an upcoming event planned in March 7-9, 2023 in Phoenix, AZ that will focus on SAP S/4HANA and SAP BTP.

My last item to highlight is one survey statistic that surprised me more than most. This statistic relates to innovation strategies/cycles at organizations. Data shows that over the past three years innovation strategies/cycles have not changed (comparable data was from a survey that fielded before the pandemic). Let me reiterate: The same share of organizations make incremental improvements and continuous enhancements over time (and the largest share of organizations – 56%) now as did before the pandemic. Only 21% of organizations consider themselves to be innovating ahead of others in their industry, while 22% consider themselves to be behind others in their industry.

At ASUG, we would love to help move the needle on this statistic. How can we help SAP customers innovate more? What is stopping SAP customers from innovating? Those who are innovating, where are they focusing those innovation efforts? Those will be major questions we’ll help our members with this year – and we will definitely share what we’ve learned with diginomica readers. We plan to dig further into the results this year. I recommend you attend one of our local chapter meetings, or larger in-person events in 2023 to connect with us at with others in the SAP Community. Connecting with your community is one of the most powerful ways to network, to learn from one another, and to grow your organizational and personal skillsets. If you have follow-up questions, or require further information, please contact me at [email protected].