5 Key Drivers Shaping SAP Estates in 2024 and Beyond

⇨ From an increased focus on automation for efficiency and UX for customer satisfaction to significant changes in cloud infrastructures, such as the move to hyperscalers to take a step up in ease and performance, next year promises a whole host of technological changes.

⇨ Core systems will finally get a taste of the limelight in 2024 and businesses will realize core systems need to be firing on all cylinders to get the most out of newly onboarded technology.

⇨ CTOs, in conjunction with their IT and product teams, will need to ramp up the information they provide to the rest of the C-Suite on their organization's current tech environment.

Digital transformation has moved far beyond a buzzword, now symbolizing the constant and critical pursuit of smarter, more effective, and tech-led ways of competing in today’s modern business landscape. It is truly remarkable how far businesses have come, from a tentative toe-dipping into the idea of moving hardware off-premise, to full-blown cloud migration, embracing the rise of automation, new cloud functionality, and, most recently, the AI boom.

That said, the concept of ‘digital transformation’ is so varied, relative, and oftentimes confusing, that enterprises need to focus on the key drivers of change for 2024 and beyond. More often than not, the most impactful change relies on optimization of core systems, notably those on SAP.

1. Emerging tech integration and vendor-driven timelines

With vendors quickly rolling out significant upgrades to products and services, technological innovation has sparked significant change for even the most agile of enterprises. From an increased focus on automation for efficiency and UX for customer satisfaction to significant changes in cloud infrastructures, such as the move to hyperscalers to take a step up in ease and performance, next year promises a whole host of technological changes.

To provide structure and clarity around the onboarding of new or significantly updated technology, vendors may implement set timelines, or mandatory deadlines, which businesses will need to strategically plan for.

While deadline-based product integrations may become more common, it’s important to recognize they aren’t a new precedent. SAP, as an example, provided users with a mandatory deadline date to migrate to SAP S/4HANA, aiming to move clients to a simplified and unified version of SAP ECC, which has become increasingly difficult to integrate modern, cloud-based capabilities.

While initial resistance resulted in a two-year deadline delay to 2027, businesses now acknowledge technological advancements to core systems are key to taking their ‘next step’.

Catalyzed by the need to form longer-term plans around tech integration, core system vendors elsewhere in the IT estate may also install mandatory innovation deadlines or put processes in place to incrementally help businesses onboard essential new systems.

We see this as a positive for businesses, guiding digital transformation projects, and ensuring more accurate budget and resource allocation.

2. Digital skills gaps face a fork in the road

According to Forbes’ 2023 IT Skills Gap Report, 93% of UK businesses are seeing a skills shortage in finding talent in IT fields.

In the worst case, a lack of qualified talent will lead businesses to stagger, delay, or completely skip digital transformation projects. If these projects concern core systems, such as SAP, severe losses to efficiency may follow, as well as being outperformed by competitors.

Businesses can take a proactive stance toward upskilling talent in the years to come. Equally, they can leverage automation to do more of the heavy lifting. Although by no means a complete fix to the skills gap concerns, the businesses that identify areas where automation can be used to make tasks more efficient, particularly when human intervention is not required, won’t have to scramble to source appropriately skilled individuals. Equally, automation will free up time for SAP experts to focus on the tasks that matter, enabling organizations to embrace digital transformation and remain competitive.

Outside of automation, we still expect to see an increase in initiatives designed to bring talent into industries and an uptick in skilling existing employees, with budgets allocated to facilitate this.

3. Core systems will get the recognition they deserve

Often flying under the radar, core systems will finally get a taste of the limelight in 2024. Businesses will realize core systems need to be firing on all cylinders to get the most out of newly onboarded technology. As we like to say at Basis, businesses are only as fast as their slowest system! Once C-Suites understand that core systems directly impact the efficacy of new, flashier technology, we’ll see a greater prioritization of upgrading, optimizing, and innovating parts of the IT estate that form the backbone of transformation.

Businesses have often underappreciated the changeable nature of core systems. With this in mind, diligent management of these systems will hopefully improve, particularly in light of research from 2023 which found that 59% of enterprises still manage SAP using rudimentary Excel spreadsheets.

4. Automation and AI will continue to skyrocket

AI and automation will continue to steamroll, and the last few years have laid the groundwork for this success; Accenture’s 2023 study saw 73% of C-Suites prioritizing AI over all other digital investments. This year, the success of SAP’s Joule, an AI assistant that works as a copilot providing instant feedback and smart insights to help effective SAP change management, is just one example of an AI integration well-met by global enterprises.

From our perspective, we have seen our clients fully acknowledge the power of automation in 2023, a trend we expect to continue next year while everyone still gets their heads around AI.  New technologies around SAP change and management have successfully delivered tangible ways to work smarter, not harder, and do so with greater precision, efficiency, and lower risk.

While AI is still tentatively considered in some aspects, automation is underpinning transformation and will only become more imperative to businesses seeking these benefits. We will see automated products and services continually evolve in line with customer demands. Equally, it is reasonable to predict some watershed moments into just how effective automation can be at increasing speed to market and accurately managing critical IT systems.

5. C-Suites will need to think tech-first

Businesses can no longer consider technology as a part of their business but as a thread linking all departments together. C-suites will have to gain greater oversight of the tech functions within their business, where they can be improved, and where budgets can be best allocated in the new year. Only by doing so can the right decisions be made.

CTOs, in conjunction with their IT and product teams, will need to ramp up the information they provide to the rest of the C-Suite on their organization’s current tech environment. A key part of this will be advising on the why, when, and how of onboarding new technologies to meet immediate and long-term goals with a far greater level of understanding.

Although hardly a giant leap for a CTO, it’s the other members of the C-Suite that will see their roles change in the immediate future. From the CFO to the CRO, the tech-led business landscape means C-Suites will need to get familiar with donning their tech-first hat. Should this happen, far better business alignment can be achieved and clear use cases for new technology, or optimizing existing systems, can be directly tied to core business objectives. This is the vital transition from considering technology as an important, yet ultimately siloed factor, towards viewing it as a pillar propping up all other business functions.