95 Percent want to switch to SAP S/4HANA

Valantic study shows the SAP trends in 2022 95 Percent want to switch to SAP S/4HANA

By Elke Witmer-Goßner

For the fifth time, Valantic has asked SAP user companies for their opinions on the business software. The results show that the signs in the market are clearer than ever before on the transition – even if there is still a need for information on the cloud offer.

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Process mining, the tool-based analysis of business processes in system environments, is considered an interesting future topic.
Process mining, the tool-based analysis of business processes in system environments, is considered an interesting future topic.

The migration to SAP S/4HANA is set for almost all SAP existing customers surveyed: 95 percent of the study participants want to switch to the new business software from SAP or are already implementing it. This is a significant increase compared to 2021, when 82 percent of respondents said that migration was on the agenda. At the same time, the proportion of those who are not planning a switch in the foreseeable future shrank by two-thirds from 18 percent in the previous year to 5 percent now.

A large majority of the companies surveyed (95%) want to switch to SAP S/4HANA or are already implementing the software.
A large majority of the companies surveyed (95%) want to switch to SAP S/4HANA or are already implementing the software.

(Photo by Valantic)

For the majority (81%, previous year: 66.7%), the most important reason for the changeover is the modernization of SAP applications and the technical infrastructure. In second place is the discontinued support for older SAP ERP systems and the pursuit of the SAP product strategy. When it comes to the migration approach, Brownfield System conversion is now the favorite for 41.9 percent, which is more than twice as many as in 2021 (19%). The Bluefield method is in second place with a share of around 37 percent (2021: 50%), a greenfield new implementation is preferred by around 20 percent (2021: 31%) of the respondents.

When it comes to system operation, the majority of respondents continue to prefer the on-premises model, but with a continuously decreasing trend. The demand for this fell from almost 65 percent in 2020 to around 45 percent this year. In second place is hosting in an external data center with about 27 percent, just ahead of SAP’s private cloud offering with about 20 percent. At 6.8 percent, SAP’s public cloud continues to play a subordinate role.

The cloud offer leaves questions unanswered

In principle, SAP’s cloud operating model is still unknown to a fifth of the participating companies. And a quarter of the respondents also do not know the migration offer to the cloud, RISE with SAP. 54 Percent consider it a good way to get to know new functions and tools. However, only around 8 percent can see a clear added value in RISE with SAP. 37.5 Percent see this as just a marketing campaign by SAP. Obviously, there is still a need for information here.

The brownfield approach is currently favored by the companies surveyed for migration.
The brownfield approach is currently favored by the companies surveyed for migration.

(Photo by Valantic)

The pricing of the cloud offer is also not yet sufficiently convincing. Around 57 percent of the respondents expect higher costs than in-house operation. Around 26 percent expect the same high costs, while only around 17 percent expect lower costs. Nevertheless, 80 percent of the companies surveyed find cloud operation interesting.

Rüdiger Hoffmann, Managing Director of the digital solutions, consulting and software company Valantic, explains: “There is a growing awareness in the market that the time for change is pressing. SAP is expected to discontinue support for older SAP ERP systems in 2027, and implementation projects can take up to five years, depending on the approach. From the results of our study, it can be deduced that companies are therefore trying to keep their SAP S/4HANA introductions shorter and to complete the transformation step by step. This is possible with the brownfield and the greenfield approach.“

Process mining is a topic of the future

Business process intelligence plays an important role in the course of digital transformation. Therefore, the SAP S/4HANA study this year focused in more detail on process mining, the tool-supported analysis of business processes in system environments. More than 80 percent of the respondents see this as a clear added value – even if 50 percent are not currently using it, they still consider it interesting. Only for about 18 percent process mining is out of the question.

The participating companies see the greatest added value in the creation of process transparency (80%), almost 70 percent the higher process standardization. Around 51 percent expect support in process digitization and the introduction of SAP S/4HANA. About 48 percent of the companies see the topics of process quality and compliance as an advantage, while cost savings were approved by about 37 percent of the respondents.

The Valantic SAP S/4HANA study
Since 2018, Valantic has been asking SAP user companies annually about Acceptance of SAP S/4HANA. This year, the study took place over a period of five weeks in March and April 2022. 70 SAP user companies from various industries took part in it, mainly from the German-speaking countries, but also from other European and non-European countries. A special thematic focus this time was on the topics of cloud, “Rise with SAP” and process mining.

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