With end of mainstream maintenance for SAP Business Suite 7, which includes SAP ECC, beginning to take effect at the end of next year for those on earlier versions of the core ERP system, SAP customers are increasingly focused on moving to SAP S/4HANA effectively and efficiently.
As customers progress in their SAP S/4HANA migration and implementation projects, they are increasingly evaluating different business process management solutions to reduce the complexity and ease the burden of large-scale business transformation, according to recent ASUG research.
As SAP continues to drive its on-premises ERP customer base to migrate to the cloud via its modernized SAP S/4HANA suite, the company has also doubled down on innovations for its cloud-ERP customer base, including through embedding generative-AI capabilities across its core suite of cloud solutions.
Correspondingly, customers are navigating the complexity of cloud migration and the greater business transformation it involves; most are also focused on designing, analyzing, and improving business processes while managing process changes that will ultimately allow them to fully harness the capabilities of cloud ERP. To do so, SAP users are leveraging SAP Signavio, as well as more recently integrated solutions like SAP LeanIX and the newly acquired WalkMe, to transform business processes—and selecting transformation-as-a-service offerings like RISE with SAP or GROW with SAP to accelerate their cloud migrations.
For the second year in a row, ASUG has partnered with SAP Signavio to gain insights into ASUG Members’ insights and attitudes toward business transformation. The research was undertaken to understand the role AI plays in digital transformation projects, how the ASUG community leverages business transformation solutions, how enterprises strategize change management, and what motivations and challenges they associate with business transformation.
Here are the key highlights from the research, conducted in August and reflecting the insights of 148 respondents in the ASUG community.
The State of Transformation Projects
In the ASUG community, SAP users are moving ahead with SAP S/4HANA transformation initiatives — and nearly half have already gone live on the ERP platform.
The research found 41% of respondents are live on SAP S/4HANA, marking a 5% increase from last year; meanwhile, 27% had started their migration projects, and another 26% stated they have plans to move.
While the research shows ASUG Members are generally moving toward SAP S/4HANA implementations, respondents also indicated these projects are distinct—and more complex—than other business transformation undertakings. 50% of the respondents indicated that SAP transformation initiatives are different from other transformation projects due to their sheer scale of change.
SAP Signavio Usage
Among ASUG Members, familiarity with and usage of SAP Signavio remains on par with last year’s results. Specifically, respondents indicated they are using—or intend to use—SAP Signavio at a rate consistent with the 2023 research.
The breakdown of SAP Signavio usage is as follows:
- Currently using the solution (8%)
- Planning to use in the next year (12%)
- Planning to use in the future (27%)
- Not planning to use (29%)
- Don’t know or are not sure about their usage (25%)
Over half (52%) of respondents indicated they see the benefits in using SAP solutions—including SAP Signavio and SAP LeanIX—more broadly across their IT landscapes.
The Role of AI in Business Transformation
Throughout 2024, SAP has underlined its commitment to delivering AI solutions across its suite of solutions, stating it will invest approximately €1 billion in AI use cases. The recent ASUG and SAP Signavio research examined how enterprises are approaching AI initiatives, including integrating AI-equipped solutions in their strategies and preparing their data for AI usage.
The majority of respondents (61%) are in the exploration phase with AI, taking the initial steps to identify how AI fits into their business strategy. Meanwhile, 17% of respondents have partially integrated AI into parts of their business strategy, and two percent indicated that AI is already critical to their business strategy and daily operations.
However, before enterprises can effectively leverage AI solutions, company leaders must work to ensure the integrity of their organizational data—and adopt a “clean core” approach. The research found that 35% of respondents have defined data governance practices in place, while 32% said they are currently working to define those critical governance practices.
Challenges Hindering Effective Business Transformation Projects
Core challenges enterprises face during digital transformation projects were also evaluated in the research, with the following five challenges most cited by respondents:
- Competing business priorities (59%)
- Change management (46%)
- Budget challenges (43%)
- Lack of internal skill needed to make a change (37%)
- Disruptions to the workforce (23%)
Respondents also reported the internal skills their employees are lacking. The three most cited skills were:
- SAP S/4HANA expertise (62%)
- Optimizing emerging technologies (57%)
- Business process transformation (55%)
Keys to Optimizing Business Transformation and Change Management Processes
Despite the noted challenges, enterprises can take steps today to accelerate their future digital transformations. When asked how they are addressing business transformation challenges, respondents indicated they are focusing on the following areas:
- Gaining support from leadership (57%)
- Business process optimization and collaboration (56%)
- Change management efforts (50%)
As organizations implement new solutions and technologies into their IT stacks, it is vital to incorporate thorough change management strategies and ensure employees understand how to use new solutions correctly. When rolling out new technology—such as SAP S/4HANA—respondents cited the following as challenges:
- Resistance to change (62%)
- Risk of business disruption (59%)
- High costs (50%)
However, well-facilitated change management strategies can help enterprises overcome these hurdles. When asked to evaluate change management processes and rollouts of SAP S/4HANA, 16% of respondents indicated their processes are “great as-is.” Of that section of respondents, 74% indicated well-planned processes were critical to change management success, while 70% cited buy-in from leadership and 48% cited effective change leadership as key factors.
Change management, for other SAP users, is an ongoing challenge; 61% of respondents indicated their change management strategies for SAP S/4HANA could be improved. Of those respondents, 56% cited communication as an area to improve, while others pointed to the need for better planning and preparation (46%) and more thorough training and onboarding (45%).
It is important that enterprises prioritize—and budget for—change management early on, and that they devote the necessary resources to ensure their workforces are equipped with the knowledge and skills to leverage new technologies.
