Investment planning mixed

The budget will remain the same for 30% (2024: 36%) and decrease for 24% (2024: 18%). With regard to investments in SAP, 47% (2024: 46%) have seen their budget increase. For 23% (2024: 32%), the SAP budget remains unchanged and for 25% (2024: 19%) it is decreasing. "The decrease in companies with a constant SAP budget and the increase in those with a decreasing budget suggests that some companies are reviewing their SAP expenditure. The reasons could be delays in migrations, savings through consolidation of SAP systems or a general reduction in costs," says Jens Hungershausen, CEO of the German-speaking user association DSAG.

The SAP community is still interested in innovation, AI and digital transformation, but SAP is rarely the "preferred vendor". The Innovation Report 2025 shows sustained skepticism towards the global ERP market leader. The German-speaking SAP user group (DSAG e. V.) asked on the occasion of the current investment report: How do you rate SAP's S/4 Hana cloud strategy for your company or organization? Only 38 percent of existing SAP customers are positive. A full 56 percent of study participants are neutral to very negative. Six percent did not provide any information.

This year, DSAG and SAP jointly surveyed the entire existing customer base in Germany, Austria and Switzerland. The figures therefore appear to be valid and representative, even if the sample is only 243 participants. The willingness to provide information in one's own environment is therefore disproportionately low. In the medium and long term, this weak commitment to its own community could become a problem for SAP. SAP sent out the questionnaire to participants for the first time, meaning that significantly more larger companies were surveyed compared to the Investment Report 2024. For the first time, SAP user companies that are not DSAG members were also included in the panel.

Migration and modernization

From DSAG's perspective, the developments surrounding Rise with SAP and the Rise with SAP Migration and Modernization programme are clear signs that the demand not to leave on-prem customers out in the cold is necessary and correct. "On the one hand, the program takes into account investments that have already been made. In addition, SAP is providing some best practice guidelines, tools and services to facilitate the transition to the cloud. These measures help companies to protect their existing investments while benefiting from the advantages of the cloud," says Jens Hungershausen.

Nevertheless, the DSAG CEO warns: "Some customers feel under pressure from SAP to move to the cloud. The pace that the software manufacturer is setting here is not sustainable for every company. SAP must not pressure customers to make quick decisions for the sake of its own share price. Instead, SAP must ensure that companies have a realistic, economically viable and strategically sensible migration perspective. Freedom of choice, long-term planning security and fair conditions for on-prem customers are still needed." However, even for companies with a high level of IT maturity, the changeover is not a sure-fire success, as a recent study by management consultants Horváth shows, for which 200 top managers from six countries were asked about their S/4 transformation.

According to the results of the Horváth study, a delay in the planned release change is the rule rather than the exception. On average, projects take 30 percent longer than planned. Only in less than one in ten companies that completed the changeover was the schedule not exceeded. The planned budget is also rarely adhered to. In a quarter of the transformed organizations, it was exceeded by a very large margin, in a further 40 percent by a large margin. Despite time and budget overruns, the result does not meet expectations in most cases either: 65% identify strong to very strong quality deficits. The main reasons cited by respondents for deviations from the plan were Expansion of the project scope during the course of the project, weaknesses in project management, underestimated test and data migration phases, revision loops of concepts and processes and a lack of decision-making.

Markus Bierl, DSAG Board Member for Switzerland, explained: "The results of the investment report suggest that the SAP offerings Rise and Grow are becoming more interesting for users in the DACH region. Nevertheless, the figures also show that a substantial proportion of SAP customers are still using on-prem solutions. It must therefore be ensured that SAP continues to make innovations available not only in the cloud, but also for on-prem users. This user group cannot be left behind and forced to make the switch. Instead, the path to the cloud should be paved with incentives - such as the Rise with SAP Migration and Modernization programme." Following the discontinuation of the SAP Migration and Modernization programme last year, an adapted new edition is to be launched in 2025.

Cloud strategy wins

Existing SAP customers were asked what they thought of SAP's S/4 cloud strategy. The first survey in 2024 was conducted before the launch of the new SAP Rise Migration and Modernization programme, which includes incentive measures when moving to the cloud. At the time of the survey for this DSAG Investment Report, the program can be considered established. This time, 40 percent attest to the program's high to medium relevance. "While only 13 percent of those surveyed in the last investment report gave a positive assessment of the S/4 Hana Cloud strategy, this year the figure is 38 percent. The SAP program seems to be bearing fruit," says Jens Hungershausen, Chairman of the DSAG Executive Board. The incentive is also set to continue in 2025, with an official announcement expected in the coming weeks.

Walter Schinnerer, DSAG Board Member for Austria: "When asked about the SAP ERP solutions they use, SAP ERP and SAP Business Suite are still in the lead in 2025 with 51 percent of DACH users. Almost a quarter of respondents also stated that they would continue to invest in the Business Suite. This shows that the solution is not just being kept alive as an 'afterthought', but is being actively used and further developed. Two years before the regular end of maintenance, this is remarkable and underlines the fact that while SAP is rapidly pushing its customers into the cloud, many users still have to make strategic preliminary considerations. First of all, they have to decide how to replace their existing ERP system and build up the necessary expertise.

At the same time, resources on the consulting market are limited and such a transformation project cannot always be mastered with the available in-house capacities. Accordingly, SAP must not misjudge reality, take its foot off the gas and focus on actual user interests. The fact that - despite the considerable user growth in cloud solutions - the proportion of S/4 on-prem users is roughly the same as the previous year at 42% also makes it clear that the cloud offerings are still far from suitable for all users. This is reflected in the Grow with SAP program, among others, which is rejected by 26% of users. Even if there is no way around the cloud in the long term, the message to SAP is: proceed with a sense of proportion."

Study director and Horváth partner Christian Daxböck observes that the foundation for many problems is already laid in the program set-up: Inadequate planning and often insufficient engagement with the transformation approach appropriate for the current situation mean that the organization is bound to be overwhelmed. Project complexity and required resources are underestimated, while organizational competencies are overestimated. "This mismatch leads to enormous discrepancies between plan and result," says the expert. 78% of those surveyed also note themselves that too many topics are integrated into the transformation.

Private cloud hosting

More than two thirds of the companies surveyed by Horváth pursue a company-specific approach and prefer the private cloud or on-prem hosting options. Almost 50 percent of respondents host their SAP system on a private cloud to ensure greater flexibility in the system. "Standardized processes are an essential prerequisite for using the public cloud. The Business Redesign and Catch up the Core transformation approaches are best suited to achieving this," says Horváth Partner Christian Daxböck.

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