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German-speaking SAP user survey sees S4/HANA upgrade projects either sink or swim as coronavirus cuts into revenue
'Train has left the station' for more than half, while 43% delayed indefinitely
SAP users from German-speaking countries are seeing sharp declines in corporate revenue as a result of COVID-19 – but half are still pushing forward with projects to roll out S/4HANA, the ERP vendor's core platform upgrade.
According to an online survey conducted by Deutschsprachige SAP-Anwendergruppe eV (DSAG) in summer 2020, 74 per cent of users have seen company turnover fall as the pandemic bites into the economy while 19 per reported no impact and 7 per cent said revenue grew.
Unsurprisingly, this has hit IT budgets: 22 per cent of users said they expected cuts of more than 20 per cent. Meanwhile, 76 per cent saw budgets heading up or down by 20 per cent, and only 2 per cent anticipated budget growth of more than 20 per cent. It is a pretty crude measure, but the balance is in favour of cuts.
This seems to have split the prospects for S/4HANA projects – a fearsome upgrade to SAP's core ERP system that no self-respecting IT leader would take lightly. Half of those projects are forging ahead or accelerating while 43 per cent are being delayed or pushed back indefinitely.
That vague yet all-encompassing concept of "digitisation" is to blame. Around eight out of 10 users said their company's needs in that department had increased as a result of the pandemic. Only 19 per cent disagreed.
"The train has left the station; companies now see how important digitisation is and are tackling the matter accordingly," said Marco Lenck, DSAG chairman. "However, they are also having to cope with falling revenue and huge decreases in IT budgets at a time when their digitisation needs are growing."
But the wholesale reimagining of the corporate mission was not in the offing. Digitisation instead means improving the efficiency of existing processes, according to 72 per cent of survey respondents. The development of new, digital business models and services was preferred by only 36 per cent.
DSAG conducted the online CIO-level survey among SAP-using companies in Austria, Germany, and Switzerland. The user group has 60,000 members from more than 3,700 companies.
With changes in leadership at SAP, the group has increased its approval of SAP product strategy. Thirty-one per cent said it was completely or mostly resilient and trustworthy, an increase from 24 per cent last year, while the number disagreeing with the statement also fell. ®