ASUG Pulse of the SAP Customer 2024

The Americas' SAP Users' Group (ASUG) conducts the ASUG Pulse of the SAP Customer Survey each year. This survey serves as a barometer, gauging the attitudes, preferences, and investment plans of SAP customers about their current and future use of SAP technology. Reviewing the results, we can see the evolving needs of organizations in the SAP ecosystem.

This post from IgniteSAP looks at the findings of the 2024 ASUG Pulse survey, and what they mean for the performance of the SAP services market for SAP consultants, and consultancies. We'll explore the top priorities for SAP customers, the challenges they face, and the skillsets most in demand.

The S/4HANA Imperative

The 2024 ASUG Pulse survey reveals a clear tipping point in S/4HANA adoption. Nearly half (47%) of respondents are already using or actively implementing S/4HANA, and 69% expect to be on board within the next two years.

This shows S/4HANA's growing importance for SAP customers. In 2024, 48% identified S/4HANA migration as their top initiative, a significant increase from 2023. This follows SAP's own strategic push towards S/4HANA adoption, with the company ending mainstream maintenance support for ECC 6 in 2027 (or 2030 for customers with Extended Support). As the deadline approaches, organizations face higher pressure to migrate to S/4HANA.

The increase in S/4HANA adoption creates a vast pool of potential projects for consultancies specializing in S/4HANA implementations and migrations. However, the time left is severely limited, and the survey also highlights a growing demand for S/4HANA expertise, potentially leading to resource constraints for consultancies.

The ASUG survey also reveals a corresponding increase in SAP spend, driven by S/4HANA migration. Respondents cited several reasons for this, including the need to support business growth, leverage the capabilities of S/4HANA, and consolidate various systems onto a single platform.

Cloud Adoption

A growing trend towards cloud deployments of S/4HANA is revealed in the survey. While a significant portion (40%) of respondents still favor private cloud solutions, a combined 22% are considering managed (16%) or public cloud (6%) environments for their S/4HANA implementations.

This aligns with SAP's own strategic focus on cloud innovation. This push towards cloud-based solutions is due the benefits of scalability, agility, and reduced IT infrastructure management for businesses, and reflects a wider IT industry cloud shift.

The survey highlights various options available to customers; SAP S/4HANA Cloud for a fully managed, multi-tenant cloud with a pre-configured S/4HANA environment, the RISE with SAP bundle to combine S/4HANA Cloud, SAP Business Technology Platform (BTP), and additional services like migration and managed services, or a separate ownership of the SAP BTP platform to extend and integrate SAP and non-SAP applications, for innovation and transformation.

While the survey reveals an openness to cloud adoption, cost and security concerns remain the primary hurdles for current on-premise customers, and many are still holding back despite intentions to migrate.

New Priorities and Challenges

The ASUG Pulse 2024 survey reveals a shift in focus for SAP customers compared to the height of the pandemic. Disruptions related to COVID-19 have been replaced by a new set of priorities and challenges.

The primary concern is the pressure on budgets, which the survey identifies as the top challenge faced by organizations in 2024. Businesses are seeking ways to optimize their existing SAP deployments and extract maximum value from their investments.

Another trend highlighted in the survey is the higher level of M&A activity. As the global economy recovers, many organizations are pursuing mergers and acquisitions to expand their market reach or acquire new capabilities. This creates a new set of challenges, particularly regarding system integration. Integrating disparate data and processes from acquired companies into an existing SAP landscape can be complex and costly.

The ASUG survey also suggests that automation and machine learning can play a crucial role in addressing integration challenges and improving process efficiency.

The Evolving Workforce

The ASUG Pulse 2024 survey reveals a shift in talent management priorities for SAP customers. While concerns around staff turnover were raised in previous surveys (29% in 2023), the focus has now moved towards upskilling and reorganizing the existing workforce: to address rapid changes in the SAP industry, with S/4HANA adoption and the emergence of AI.

The survey clearly identifies S/4HANA expertise as the most sought-after skillset. SAP consultants with a deep understanding of S/4HANA's architecture and capabilities will be in high demand for migration and implementation projects for the period leading to the 2027 support deadline and beyond

The skills gap extends beyond S/4HANA. The survey also indicates a growing need for expertise in business process management (BPM), RPA and ML. These skills are needed to optimize SAP deployments, automate workflows, and generate insights for better decision-making.

The survey highlights that 28% of organizations face difficulties in finding internal candidates with the necessary skills for upcoming projects. This talent gap underscores the need for organizations to encourage engagement by internal talent with training programs and certifications focused on S/4HANA, AI, and other relevant technologies.

The Rise of AI in SAP

AI is growing in stature as a potential solution for addressing business challenges. A significant portion of respondents expressed belief in AI's ability to improve dashboards and analytics capabilities, while others see its potential in enhancing customer experience.

However, integrating AI functionalities within SAP systems has its own challenges. Legacy systems often involve complex workflows and manual processes that can be difficult to translate into machine-readable models. Integrating AI with non-SAP systems can also create compatibility issues and data silos. These are some of many reasons why consultancy teams need continued AI training.

The ASUG survey also highlights data security concerns as a barrier to wider AI adoption, and only 13% of respondents expressed a willingness to utilize generative AI models, which often require access to vast amounts of data, so generally require cloud deployments. These anxieties are understandable, as businesses need to ensure that their data is protected from unauthorized access and misuse.

Addressing these concerns requires ensuring compliance with data privacy regulations like GDPR (for the EU) and CCPA (for America). While organizations must prioritize strong cybersecurity measures to safeguard sensitive data, a culture of data transparency and building trust in AI models through Explainable AI (XAI) is essential.

XAI is a growing field within AI development that focuses on making models more interpretable. By providing insights into the reasoning behind AI decisions, XAI helps businesses understand how AI arrives at its conclusions, to encourage trust and confidence.

Contextualizing the Findings

The ASUG survey provides valuable insights into the needs and concerns of SAP customers. To gain a deeper understanding of these trends, let's compare the findings with past surveys and reports from other SAP user groups like DSAG (German SAP User Group) and UKISUG (UK & Ireland SAP User Group).

The 2023 ASUG survey showed 42% of respondents planning a migration, while the 2024 survey indicates a jump to 48%. Reports from DSAG and UKISUG echo these trends, but planning is not doing. Customers must follow through on their intentions to avoid future problems.

The ASUG Pulse survey highlights the key drivers of the SAP services market: namely, the previously mentioned S/4HANA Adoption, Cloud Migration, and use of emerging tech like AI.

These trends collectively point towards a future where SAP consultants with a blend of technical expertise, business skills, and industry knowledge will be most successful. Expertise in S/4HANA remains the foundation, but the ability to integrate AI, automation, and cloud technologies will be a key value proposition for consultants.

As the SAP ecosystem adopts these advancements, career paths for SAP consultants will diversify. Here are some SAP roles that will experience higher demand based on insights from the SAP community: S/4HANA migration and implementation specialists, cloud architects and integration specialists, data scientists and AI developers.

When viewed in the context of SAP's overall corporate strategy and product roadmap, the ASUG research suggests a future where the SAP industry requires far greater levels of innovation. SAP's focus on cloud solutions, AI integration, and a user-centric experience is intended to meet the evolving needs of its customers, so by catering for these trends and continuously developing their skills, SAP consultants can take advantage of emerging markets for their services.

The SAP Services Market Is Changing

The ASUG Pulse of the SAP Customer Survey 2024 paints a clear picture of an SAP landscape in transition. While core priorities like the ECC support deadline, cost reduction, and process optimization remain central, the survey reveals a growing focus on cloud adoption, S/4HANA migration, and the integration of AI and automation, as a means to meet the expectations of SAP customers in commercial and industrial sectors, as well as society as a whole.

Understanding the needs of SAP customers, as captured in surveys like the ASUG Pulse, is crucial for consultants navigating this transformation. By developing expertise in S/4HANA, cloud solutions, AI, and automation, consultants can align themselves with the needs of the market, and ride a wave of change towards a more prosperous future.

If you are an SAP professional looking for a new role in the SAP ecosystem our team of dedicated recruitment consultants can match you with your ideal employer and negotiate a competitive compensation package for your extremely valuable skills, so join our exclusive community at IgniteSAP .