SAP ERP strategies in a time of crisis

More than 80% of decision makers in the DACH region see pressure to reduce IT operations costs as a challenge, while more than 90% view changing customer needs in a digital world as a major issue for their business.


These are results of a survey conducted by PAC in August 2020 among more than 100 decision makers in DACH-based companies and organizations with more than 1,000 employees from the manufacturing and retail industries, as well as from public sector and healthcare institutions.


And these results show perfectly the dilemma that most companies currently face.

On the one hand, not least the Covid-19 crisis requires a strict cost management. On the other hand, the need to invest in digitalization, augmented customer experience, greater automation, etc. has nothing lost in priority. It is thus of even greater importance to strictly evaluate and qualify investments, and to free up resources where possible in order to be able to further invest in innovation.


And for SAP customers, additional decisions have to be made with regard to cloud or SaaS migration, as well as software upgrades towards SAP's new product generation SAP S/4HANA. Some companies already have SAP S/4HANA in productive use. However, the majority of companies are still considering whether, when and how they should migrate their existing – often highly customized – systems to SAP S/4HANA.


New teknowlogy trend study on SAP customers’ migration strategies


In view of this dilemma, Rimini Street, a specialized provider of software support services, asked PAC to analyze the status quo and strategies of companies and public institutions in Germany, Austria and Switzerland regarding their SAP landscapes, including transformation and migration strategies (cloud, software releases, etc.), the general role of external services in the SAP space and the specific targets and challenges of the related software support.


Some key findings from the study


58% of the interviewed companies still have older versions of SAP ERP in use – mostly SAP ECC, in some few cases even still SAP R/3. Some 36% have already implemented the new SAP S/4HANA but by far not all companies finally decided to migrate to the new platform and software in the coming years.


Migration to SAP S/4HANA is not a simple release upgrade. The changeover is more extensive and requires much more planning due to the SAP HANA technology platform, the revised data model, changes in process control and last but not least the user interface. In addition to the investment in software, investments must be made in new hardware or cloud services for the operation of the new technical platform, and/or IT services. Not to forget the training of end users and SAP administrators.


Many SAP customers complement their core software solutions with Software as a Services (SaaS) solutions that support separate processes.


The impact of Covid-19 on migration project


70% of the interviewed companies the Covid-19 crisis led to postponements or short-term stops of SAP cloud migration projects. In more than 50% of the companies, the crisis had this impact on SAP software upgrade projects.


SAP hosting models


Traditional SAP hosting models are more and more enriched by selective public cloud usage, leading to increasingly hybrid architectures. Meanwhile, organizations are even considering a full migration of SAP production systems towards the global public cloud platforms. About one third of the interviewed companies use public or hybrid cloud infrastructures as hosting platforms, and the share of public cloud is expected to increase significantly, particularly for SAP S/4HANA solutions.


Challenges regarding the management of SAP systems


Almost 90% rate the excessive complexity of their SAP landscapes a challenge due to high degree of customization and due to hybrid IT landscapes. Accordingly, almost 80% complain about high costs for maintenance and management.

Awarding selected tasks to external services suppliers is seen as a way to meet these challenges.


SAP-related services


SAP customers are particularly likely to obtain external support when it comes to operational services. In the case of the technical management of the SAP systems or service desk, this share is even close to 90%. Application management and optimization are also among the services that are planned to be awarded more to external partners. These services do not promise differentiation but bind (expensive) resources that could be used for more innovative projects.


Main objectives pursued with SAP support services


83% consider the focus on outcomes and client satisfaction as potential benefit. Another 79% consider the decreased dependence on the software vendor as beneficial, followed by the simplification of the software support through a consolidation of multiple suppliers under one single vendor (77%) and the improvement of the operational productivity by leveraging artificial intelligence and machine learning (72%).


The full report is now available for download.

2 views0 comments