Supply chains and order shortages

At the end of this year, the world, and Germany in particular, is in a different situation: supply chains have been largely optimized and orchestrated. The international movement of goods is working again. Many warehouses are full. Nobody seems to want to buy and consume.
The latest ifo economic survey from the beginning of November 2024 paints a disillusioning picture, as the lack of orders continues to worsen, according to ifo. The German economy is suffering more and more from a lack of orders. In October, 41.5% of companies reported a lack of orders, compared to 39.4% in July. This is the highest figure since the financial crisis in 2009. "The lack of orders continues to hamper economic development in Germany," says Klaus Wohlrabe, head of ifo surveys. "Hardly any industry is spared."

Many CIOs have already been affected by the fact that companies are cutting back. The economic development has put a lasting damper on IT budget negotiations this fall. The SAP community will be eagerly awaiting the annual investment survey by the user association DSAG e. V. at the beginning of next year. The results of this year's negotiations will then become visible. A flash survey of selected CIOs conducted by E3 magazine does not bode well for the SAP budgets of existing customers.

In the midst of the S/4 conversion with numerous construction sites such as Clean Core, Abap modifications, Business Technology Platform and Hana database platform, more resources are needed, but DSAG CEO Jens Hungershausen and SAP Executive Board member Thomas Saueressig already criticized the slow and sluggish "digital transformation" in their respective keynotes at this year's DSAG Annual Congress in Leipzig. Waiting is no solution, said both speakers. In many cases, however, CIOs are not given the necessary resources to advance S/4 conversion and transformation to the required extent.

According to the ifo economic survey, almost every second company in industry reported a lack of orders. The core sectors of mechanical engineering, metal and electrical engineering are particularly worried. "The increase in order backlogs in September may be a sign of hope. But there is still a long way to go before the books are full again," says Klaus Wohlrabe.

The proportion of service providers rose slightly from 31.2% to 32.1%. The transportation sector in particular has been affected by the poor industrial economy. Due to the weak demand for labor, around two thirds of recruitment agencies are reporting a lack of orders. "Temporary workers are less in demand in the current situation," says Klaus Wohlrabe. Just over a third of catering businesses have too few guests. In the events industry, the proportion of companies complaining about too few orders is 48.5 percent, compared to 38.5 percent in July. "The major events have certainly taken some purchasing power away from smaller concerts and events," says Klaus Wohlrabe. Legal and tax consultants as well as auditors are less concerned about their order situation at the moment. High levels of bureaucracy and regulation are creating a high demand for advice.