Digitization is not ready for series production in many companies

Where do SAP user companies stand in the digital transformation? A survey of DSAG members conducted in the summer of 2019 found that increasing the efficiency of existing business processes (62 percent) and developing new business models (40 percent) are among the biggest drivers for digitization projects.

By contrast, changes in the market environment, intensified relationships with customers and partners, an increased level of service, or the desire for greater information transparency trigger less pressure to digitize.

In line with the need for increased efficiency, DSAG members are successfully implementing projects to digitize their processes. In 41 percent of the companies, there are efficiency projects that have been completed or are at least being implemented.

This figure is encouraging. However, it is striking that companies have many ideas, create proofs of concept and prototypes, but do not subsequently turn them into successful projects. "Almost half of the ideas for digitization projects come to nothing.

Hurdles in digitization

The biggest challenges are a lack of human and financial resources (42 percent) and a lack of digital corporate culture (38 percent). In contrast, inadequate support from management (12 percent) and a lack of expertise (11 percent) were hardly mentioned.

In addition to cultural and personnel challenges, there are informational, technical and functional requirements that complicate the digital transformation in the member companies, for example in the creation of hybrid landscapes.

For example, SAP strategy and roadmaps must be plannable and resilient. Only a quarter of DSAG members feel well informed about this by SAP. 45 percent trust the product strategy to some extent, whereas 30 percent of users question this trust.

As far as the SAP solution portfolio is concerned, there are also specific tasks that SAP must solve (better) in order to simplify digitization projects. It is a matter of better integration, uniform master data, expanded, stable functionality, and scalability of solutions and licensing models.

"As companies increasingly rely on hybrid landscapes in digitization, SAP is challenged to make their setup, expansion, and operation, including licensing models, as simple, attractive, and flexible as possible. Otherwise, projects will continue to falter.

warns Marco Lenck. SAP is already working on some points, such as the harmonization of master data.

HCM-S/4 Successes

There are also successes to announce, such as in Human Resources. After intensive discussions, customers will also be able to operate the solution for human resources, SAP Human Capital Management (SAP HCM), integrated in S/4 from 2022.

This success is particularly pleasing for SAP customers who are not yet willing or able to switch to the SuccessFactors software-as-a-service solution in the cloud in the timeframe of 2025.

Assessment of SAP products

In its survey of CIOs and other contacts from member companies, DSAG continued to ascertain the viewpoint of respondents on the use of S/4 compared to Business Suite.

The focus is increasingly on S/4 as the basis for digital transformation. As before, only a few companies can announce completed S/4 projects. However, interest is high.

The situation is more differentiated for SAP solutions for digitizing customer processes such as C/4 or Qualtrics. Although they are used by member companies, they tend to be less well represented than their competitors.

For C/4, it is particularly true that SAP delivers the benefits of integration and harmonization.

"For the new SAP products to catch on with DSAG members, they need a functioning integration. If this is the case, SAP can better leverage its added value as a provider of hybrid solutions."

says Marco Lenck. Flexible scalability and comparable functionality with third-party products are taken for granted by DSAG members.

Not least because of its successes, DSAG is set as a strategic partner. Almost 70 percent of respondents are satisfied with the user association. This puts DSAG ahead of SAP partners (58 percent) and far ahead of SAP itself (37 percent). For Marco Lenck, this is confirmation of the path taken:

"We are the strategic partner SAP customers trust for their digital transformation. We provide orientation and ensure the right information is available."