This article will delve into the predictions for 2023 in the world of SAP S/4HANA by David Lowson, Head of Capgemini’s SAP Center of Excellence (COE) Europe. According to Lowson, the adoption of SAP, driven by large organisations’ involvement in SAP programs, will continue to be significant. While some organisations have completed their transition to S/4HANA, others are just beginning. As a result, the market is expected to continue its growth trajectory. Lowson predicts that the S/4HANA wave will continue to rise until at least 2028 before it starts to decline. The article also examines the growing popularity of RISE with SAP, SAP Signavio, selective data transitions, and the increasing demand for SAP professionals in the market.
SAP in 2023 – S/4HANA
The SAP wave will continue to be big, driven by large organisations’ involvement in SAP programmes. However, only some have completed their transition to S/4HANA, and others are just beginning. As a result, the market will continue to expand.
According to a LeanIX survey in July 2022, just 12% of respondents had completed their SAP S/4HANA transformation despite support for its ECC 6.0 scheduled to end in 2027.
RISE with SAP
I think RISE will continue to be a big topic and will increasingly be the solution used by large enterprises as SAP offers more in the RISE bundles. Cloud is very much the norm for everything, and even secure clients will start to move.
RISE with SAP bundles SAP applications, platforms, tools and services into a defined set of cloud-managed services – on a subscription basis. These include:
- Cloud ERP – S/4HANA Cloud
- Business Process Transformation Starter Pack
- SAP Business Technology Platform (SAP BTP) (CPEA credits)
- Business Network Starter Pack
- Outcome-driven services and tools from SAP partners such as AWS, Google Cloud and Microsoft
RISE with SAP S/4HANA Cloud, private edition, is a popular deployment option for customers who need additional flexibility and extensibility options for their SAP S/4HANA solution.
According to an SAPinsider RISE benchmark report, key decision-making factors include RISE’s innovation capabilities, simplified management and operations.
In December 2022, SAP had approximately 2,400 licensed RISE with SAP customers, an 84% increase in uptake since 2021. In addition, RISE continues to gain traction with clients, including Dabur India Limited, Nikon Corporation, Prada, BioNTech and the National Basketball Association (NBA).
Signavio will gain ground and be adopted by more.
Signavio is a cloud-based business process management platform acquired by SAP in 2021 as part of its Business Process Intelligence (BPI) portfolio.
The Signavio Business Transformation Suite is a set of tools that provides companies with a comprehensive solution for process improvement and digital transformation. It includes process modelling, process analysis, collaboration, and governance. With this suite, companies can discover, design, and optimise their business processes and automate and monitor them.
The suite is based on an advanced technology called Signavio Process Intelligence, which uses artificial intelligence and machine learning algorithms to analyse and improve business processes. The technology allows the software to identify inefficiencies or bottlenecks in the processes automatically and provides suggestions for improvement.
SAP Signavio enables companies to gain a deeper understanding of their processes and make more informed decisions about how to optimise them. In addition, the suite provides a centralised platform to manage and track process improvement initiatives, allowing them to measure the impact of their efforts and make data-driven decisions.
Selective Data Transitions
Some large S/4 programmes that have started off Greenfield will change direction and become selective data migrations.
An SAP SDT approach allows for selective data migration to SAP S/4HANA, allowing for a streamlined moving process and a leaner ERP landscape while also making the consolidation of multiple ERP systems more efficient. The approach combines the benefits of a new implementation and a system conversion while minimising constraints such as losing important information or moving all data.
The Demand for SAP Professionals
Rates for SAP staff will continue to be a premium. Great solution owners will be able to name their price.
The demand for SAP professionals is growing in 2023 due to the increasing digitalisation of business operations, the push for environmental sustainability, the need to update existing SAP systems and migrate to cloud-based implementations, and changes in the economic environment. However, there is a shortage of practitioners with the necessary skills to meet this demand. As a result, SAP professionals can expect an increase in compensation and salaries.
Chinese Data Laws
SAP architectures that deal with Chinese data laws etc. will become a large topic.
Chinese laws addressing data privacy and security are raising critical questions for businesses operating inside and outside of China. The Personal Information Protection Law (PIPL), which went into effect in November 2021, gives Chinese data subjects new rights as it seeks to prevent the misuse of personal data. Two months earlier, the Data Security Law (DSL) came into force. It requires business data to be categorised by different levels of importance and puts new restrictions on cross-border transfers. These regulations will significantly impact how companies collect, store, use and transfer data.
I am sure the Indian SAP workforce will continue to grow, but other sourcing strategies will move forward as well, as clients want flexible sourcing models and the cost differentials to reduce.
The number of cloud customers in India has doubled in the last two years, according to Kulmeet Bawa, Managing Director and President of India Subcontinent for SAP. The company has also seen rapid growth in the mid-market and enterprise segments.
India’s contribution to SAP’s cloud revenues in the Asia Pacific and Japan region (APAC) has also doubled in the last two years. Bawa attributes this growth to existing customers moving their digital core and ERP systems to the cloud and adding new solutions as they do so, as well as India being one of the leading markets in the world for adding new customers. The company expects to continue this growth in 2023 by driving digital and cloud adoption and innovation, focusing on the mid-market, and implementing sustainability practices.
Clients will also pursue other sourcing strategies (ways of obtaining or acquiring resources). This is because clients desire flexible sourcing models (the ability to choose from different options for obtaining resources) and want to reduce the cost difference between different options.
SAP Business Technology Platform
BTP low code will grow in popularity, and at least one more BTP product will become hot!
SAP Business Technology Platform (SAP BTP) is a unified environment that combines application development, data and analytics, integration, automation, and AI capabilities. It allows for the creation of personalised experiences across business processes, faster application and analytics building, and the ability to run mission-critical innovation on major cloud providers’ infrastructure fully managed by SAP.
The platform allows easy collaboration and instant access to business-context-rich information from SAP and third-party systems. It is designed to support the unique ways a company operates while growing efficiency and productivity across business processes.
I am fancying SAP CX, sales and service to become recognised as a great solution and dare I say it, win back some work from Salesforce, especially in companies that sell complex or heavily configured products.
In an SAP Executive Interview conducted by AUG, Chief Operating Officer, SAP Customer Experience, North America, Rajeev Gurnani explains his priorities for 2023.
Gurnani describes his focus on helping customers understand and leverage SAP’s customer experience offerings to drive digital transformation and optimise end-to-end business processes. He believes that with the rise of digital and changing customer expectations, it is more important than ever for companies to prioritise the customer experience. In addition, Gurnani plans to ensure that every SAP customer and prospect understands the value of SAP CX and how it can help them acquire, sell and analyse profitability, win customer trust and loyalty, and create a frictionless customer experience.
SAP Industry Solutions
SAP industry solutions will come under pressure and either need to move to the industry cloud or be provided by 3rd parties.
SAP is accelerating its move to the cloud offering new capabilities as modular industry cloud solutions. To maintain a competitive solution portfolio, SAP is collaborating with IP/solution partners. SAP’s own sales force is promoting these partner solutions to customers, intending to have 80% of industry cloud solutions coming from partners in the future. To align with this strategy, channel partners should re-evaluate their solution strategy, make adjustments, or “uplift” their IP to meet SAP’s industry cloud standards and guidelines, and consider leveraging partner-developed industry cloud solutions for their prospects and customers.
Lowson goes on to predict selective data migrations and hybrid will become the new normal, as will reducing bespoke work by 90% during the move to S/4HANA.
Lowson concluded his predictions on a different topic, the EPL.
Arsenal will not win the Premiership but will get into the champions league (I am happy to be proved wrong on this one).
In conclusion, Lowson expects SAP S/4HANA to continue its growth trajectory in 2023, with the adoption of SAP being driven by large organisations’ involvement in SAP programs. The market for S/4HANA is expected to expand as more organisations begin their transition to the platform. RISE with SAP, SAP Signavio, and selective data transitions are also expected to gain popularity in the market. Additionally, the demand for SAP professionals is expected to continue to be high as more businesses digitalise their operations. As the market continues to evolve, organisations will need to stay informed and adapt to the latest trends and developments in the world of SAP S/4HANA to remain competitive.