That’s why, increasingly, companies are going digital. Housed in the cloud, an enterprise resource planning (ERP) software system is essentially the brain of the business, where a company’s information and data are stored and ready to be leveraged for specific business tasks.
ERP software enables companies to optimize their processes and automate where possible, enabling employees to focus on the customer experience and the future of business growth. Most recently, technologies such as the internet of things (IoT), artificial intelligence (AI), radio frequency identification (RFID), and robotics have become more relevant realities due to the rising popularity of cloud ERP.
Historically, companies stored data on-premises, in physical servers located at the office or a data center. Today’s businesses have largely moved to digital environments and opt for the cloud to house data, due to its improved ability to support innovation and keep companies ahead of the competition. In fact, Gartner predicts that over half of enterprises will be using industry cloud platforms by 2028, making cloud a business necessity.
Companies are ready to leverage cloud capabilities to tackle complex business challenges. In the results of the 2024 ASUG Pulse of the SAP Customer Research survey, which annually surveys ASUG members from the SAP user community to gauge their attitudes and outlooks on SAP technology trends, respondents indicated that they foresee their businesses leveraging AI to enable and improve dashboards/analytics (42%) and customer experience (22%), in addition to a slew of other business functions.
But to make this happen, SAP customers must shift to cloud and the next-generation ERP suite, SAP S/4HANA, and they need to do it soon. SAP will cease mainstream maintenance of SAP Business Suite 7, including SAP ERP Central Component (ECC), in 2027. More than half (52%) of ASUG members indicated they’re making more investments into SAP this year, up from 46% the year prior, and only 4% have no plans to use SAP S/4HANA; indeed, 69% of ASUG members are already live on SAP S/4HANA or starting to move within the next two years.
But to make this happen, SAP customers must shift to cloud and the next-generation ERP suite, SAP S/4HANA, and they need to do it soon. SAP will cease mainstream maintenance of SAP Business Suite 7, including SAP ERP Central Component (ECC), in 2027. More than half (52%) of ASUG members indicated they’re making more investments into SAP this year, up from 46% the year prior, and only 4% have no plans to use SAP S/4HANA; indeed, 69% of ASUG members are already live on SAP S/4HANA or starting to move within the next two years.
Not all of these organizations will use the same type of cloud implementation. When asked which system their organization uses or will use to run its SAP S/4HANA environment, the majority opted for a private, managed, or public cloud environment (62%), with others selecting hybrid cloud (18%) and others opting for on-premises bare metal or basic virtualized systems (21%).
With SAP S/4HANA the preferred option for digital transformation at SAP, ASUG members are choosing the cloud in growing numbers to reduce the total cost of ownership (TCO), increase the speed of processes, and simplify ERP environments.
With business AI fast-becoming a reality for the modern enterprise, organizations increasingly anticipate that generative AI and its business implications will influence their digital transformation efforts. In fact, in 2024, 38% of respondents to the ASUG Pulse of the SAP Customer Research survey reported that they expect AI to reshape their digital transformation initiatives; the year prior, only 23% of members indicated the same, reflecting the increasing priority that this innovation holds to the business landscape.
But before automation or AI is available for organizations to leverage, their systems need to be informed by clean, accurate, accessible data. An immense amount of information is required to train the large language models (LLMs) and deep neural networks (DNNs) that underpin automation and AI technology. Supply chains, especially, require mobile data collection in order to actively track inventory and automate business processes from initiation to completion.
Companies still dealing with manual inventory processes are falling behind. The manual data entry required to update information, submit order tickets, and fill orders takes an immense amount of time and is prone to errors at every step. But digitizing inventory can streamline production processes, speed up business, and improve accuracy.
One cement and concrete manufacturer, Grupo Cementos de Chihuahua (GCC), was using a manual, paper-based ordering process to manage their spare parts inventory. In case important warehouse equipment broke, they needed parts on hand to avoid a work stoppage. This is a standard practice, but it wasn’t optimized; over ordering cut into the bottom line.
Partnering with RFgen, which provides high-reliability mobile barcoding software that directly integrates with enterprise software to help organizations reduce cost while increasing efficiency, GCC implemented a mobile barcoding solution that reduced safety stock by 50% and overall stock by 15%, saving money, improving accuracy, and setting the organization up for further automation with SAP-tested, customizable apps. RFgen supported mobile data collection during GCC’s upgrade to SAP S/4HANA, enabling the automation of 95% of its warehouse transactions.