2024 Trends Every SAP Customer Needs To Be Ready for

⇨ The SAP S/4HANA transition has been a forcing factor in process transformation and organizations have had to thoroughly evaluate existing customizations as part of their project planning.

⇨ AI continues to dominate the headlines and priority lists of many tech leaders, and our research supports this continuing trend.

⇨ Beyond investments in technology, tech leaders must significantly alter their organizational strategies and prioritize new skillsets to derive full value and ROI from their transformation initiatives.

2024 is ushering in a unique climate of business and technological change for SAP customers. New features and functionality are being introduced at a breakneck pace as IT and business leaders continue to grapple with evolving market conditions and volatile geo-political climates. Leaders are valuing speed, flexibility and visibility as capabilities that enable them to go beyond the ability to just react and respond, so that they can be proactive in their strategies and plans.

Based on the latest SAPinsider research as well as ongoing conversations with CIOs and other tech leaders, we have outlined a few of the biggest trends that are shaping the SAP landscape. Significant activity and focus relate directly to impending projects such as the move to SAP S/4HANA and ongoing migrations to the cloud. However, our research also finds that these technological trends are and will have long lasting impact on organizational strategy, skillsets and the typical role of the SAP professional.

Here is our hot list of the latest trends, along with some practical advice for IT leaders and their teams as they navigate the new year.

Business process transformation is where the rubber meets the road

Technology migrations are a prerequisite to create greater flexibility within your core IT infrastructure. However, when it comes to true ROI and business value, companies and their leaders need to do much more than execute migrations to SAP S/4HANA and the cloud. That is why many executives are looking to business process automation, standardization or redesign to gain optimal value from these projects.

According to our latest executive research “The CIO’s Transformation Report Card”, a majority of respondents (53 percent) characterized the automation, standardization or redesign of business processes as their top transformation project of the past year. This has been a consistent trend in the three years we have been performing this study. “Building a business process library is the first step to excellence,” comments Jamie Lee, CIO of Ecobat, a company leading the charge in the environmentally safe disposal of batteries.

The SAP S/4HANA transition has been a forcing factor in process transformation and organizations have had to thoroughly evaluate existing customizations as part of their project planning. The advent of cloud-based applications has also introduced the idea of “fit to standard”. The sacrifices in having your applications fully tailored to your business requirements are made up for through much easier upgrades and integration.

Measurability has sharpened IT leaders’ focus on processes. You can see if your financial close performs faster, or if reconciliations across your business are quicker. You know how long it takes to download data or create a report and can define benefits accordingly.

Companies speed up to S/4HANA: cloud remains favored deployment option

SAP S/4HANA is the elephant in the room; the massive project that many SAP customers have tried to delay as they assemble business cases and technology roadmaps. While 2027 still seems a long way off, when you consider the significant preparation required to determine ROI and make critical decisions related to deployment strategies, training and partner selection, the deadline for making the move to SAP S/4HANA is fast approaching and SAP customers are responding accordingly.

Our latest research from the CIO’s Transformation Report Card shows that now a majority (55 percent) of leaders in our study have implemented SAP S/4HANA or are in the process of implementing. This is a five percent increase over last year’s study. Only 12 percent of our survey respondents claim to have no plans to upgrade presently and are either holding out for extensions or will attempt to maintain the solution on their own.

Those customers moving forward are seeking to deploy SAP S/4HANA on a cloud of some kind. Over two thirds of the leaders in our research (68 percent) assert that they will run SAP S/4HANA on the cloud. Hyperscalers such as Microsoft and Google are claiming their share of planned investment as over a third (34 percent) of leaders in our survey are planning or have already deployed SAP S/4HANA on this type of platform.

Leaders no longer want to be in the data center game and are favoring the elasticity, scalability, global presence and security that these partners can provide. Very few SAP customers are able or willing to outspend Microsoft, Google or Amazon on hardware, nor can support the ongoing investment required to update and maintain this infrastructure.

Growth in AI and analytics projects are significant

Artificial intelligence continues to dominate the headlines and priority lists of many tech leaders, and our research supports this continuing trend. The percentage of executives in our survey that characterize AI or machine learning initiatives as their top transformation project has more than doubled from 10 percent to 21 percent in our most recent study.

But most companies are early on in their AI experience. Executives talk about CEOs and boards who are pressuring them to show maturity and experience in AI. However, many are still struggling to assemble a business case as well as the right skills and technology to support AI. Often the first project is expensive and requires heavy reliance on a partner.

But others are quickly launching pilot projects to learn from practical experience. They are leveraging partners, the start-up community, and universities to fill their skills gaps. Leading edge executives such as Nick Giannakakis, the CIO of Motor Oil Hellas are assembling AI centers of excellence to help their organizations share best practices and scale AI initiatives.

AI, once implemented within an organization, quickly generates momentum on its own. As lines of business discover the benefits, they are now asking for AI as opposed to having IT force these initiatives upon them. The coverage and buzz that Generative AI solutions such as ChatGPT have created among consumer circles has helped educate and excite business users about the potential of AI and has further sparked its momentum.

Data is the lifeblood of AI and without the proper data management strategies, these projects are fruitless. That’s why many leaders, according to our research, are also prioritizing data and analytics projects solutions as key components of their overall transformation strategy. A third of our executive survey respondents (32 percent) say new analytics and data solutions are part of their top transformation projects vs 22 percent a year ago.

How do SAP customers prepare for these trends?

• Beyond investments in technology, tech leaders must significantly alter their organizational strategies and prioritize new skillsets to derive full value and ROI from their transformation initiatives. This requires in many cases new mindsets, approaches and cultural changes. Here are a few guidelines for success.
• Rethink organizational structure and blend IT and business teams wherever possible. Gone are the days of separate IT and business functions. Technology is evolving at a rapid pace that requires business knowledge and experimentation to uncover true benefits. Put technology in the hands of the business in a safe and secure environment and encourage experimentation and collaboration.
• Get aggressive and be creative in skillset acquisition. Most organizations do not have the current skillsets required to execute AI and other emerging technology-based projects. Training and skills acquisition takes time. To fill gaps, look for partners not just within your traditional hardware and software community but examine startups and universities as options. They not only can fill a temporary need but also can lead to long-lasting partnerships and talent pools.
• Set a path to SAP S/4HANA with detailed understanding of business benefit. Do not just view the move to SAP S/4HANA as a complex technology migration or technical upgrade. It is way too expensive and time consuming to justify at that level. SAP S/4HANA is replete with features and functionality that further automation, improve business intelligence, optimize integration and data visibility. But you must understand these features and how they may be applied to generate significant ROI.
• Launch AI pilots with plans and structure for knowledge sharing and scale. The best way to learn is by doing, and that is no exception when it comes to AI. Establish a few small business cases where there is current need and pain but set up a structure where you can learn and share lessons learned. Communicate results and document processes and missteps so that you can quickly scale and grow from there.