2018 DSAG Investment Report

Budgets feel the impact of digitalization

Walldorf, Germany, 01.24.2018

The German-speaking SAP User Group (DSAG) has published its 2018 Investment Report. In total, almost half of DSAG members surveyed saw their investment budgets grow. When it comes to digital transformation, 44 percent of companies feel they are on the right track. The digitalization ambitions of those surveyed have also had an impact on investment behavior. In terms of SAP products, the survey found that awareness of SAP Leonardo is gradually increasing, while S/4HANA remains just as relevant as last year.

Overall, the budget numbers in the 2018 Investment Report of the German-speaking SAP User Group (DSAG) are pleasing. 40 percent of those surveyed have seen their IT budgets grow by an average of 17 percent over the last year, while SAP investments rose by an average of 37 percent among 40 percent of survey participants. For almost 50 percent of DSAG members surveyed, IT budgets for and investments in SAP products and services remain unchanged.

Digitalization: awareness on the rise
In an upwards trend, digital transformation continues to gain significance. Just 31 percent said their company had made good or very good progress with this in the summer of 2017, but that number has risen to 44 percent in the most recent survey. This seems to suggest that DSAG members’ increasing investments are connected to their digitalization plans and ambitions. Nevertheless, more than half think that their company has not yet made enough progress with digitalization. The DSAG therefore needs to continue to raise awareness by providing practical examples and information events, and continuing dialog with and among members.

Digitalization of existing business processes
A further finding of the 2018 DSAG Investment Report was that digitalization is not all about starting from scratch. In fact, 85 percent of DSAG members surveyed are investing in existing business processes. “85 percent of those surveyed are focusing on improving the efficiency of existing business processes through digitalization. This represents an increase of more than 30 percent over the last year,” says DSAG Chairman Marco Lenck, summarizing the findings. “For DSAG members, the digitization of existing business processes continues to be more important than investing in new business models, although both have seen growth.” Two-thirds of those surveyed consider investments in new business models as important or very important.

Knowledge of SAP Leonardo increases
The survey also covered the extent to which SAP Leonardo – a portfolio of technologies, applications and services for the Internet of Things – is on the radar of DSAG members. While it was still relatively unknown among members in fall 2017, the new survey shows a clear increase in awareness. Almost half of participants expressed an interest in Leonardo; however, there are few related projects underway in companies. Currently, only 2 percent are using selected technologies, applications or services as part of Leonardo, while 10 percent are planning to deploy it in 2018. Right now, around 40 percent still don’t know about the portfolio or don’t understand it. “Although DSAG members are showing an increasing interest in SAP Leonardo, there is still a huge information gap,” explains Marco Lenck. “SAP Leonardo connects digital services, applications and technologies to help drive forward digitalization in businesses. SAP customers must decide for themselves how suitable it is for them.” DSAG members are also looking at alternative solutions from other providers to help them bring their digitalization plans to fruition.

Business Suite and S/4HANA remain relevant
Just like last year, DSAG members were also asked about the relevance of Business Suite and S/4HANA, both on-premise and in the cloud. The survey found that there has been no further shift towards S/4HANA. In fact, main and mid-size investments in Business Suite fell by around 10 percent (from fall 2017) to 48 percent. However, this did not affect investments in S/4HANA projects, which remained almost constant. But there is a noticeable increase in the use of S/4HANA as a cloud solution (up 4 percent). Marco Lenck remarked: “Companies continue to invest in both products. But what we can clearly see is that Business Suite remains relevant. Only one-fifth of the DSAG members surveyed aren’t planning any projects with it.”

S/4HANA migration: the big question
The survey also found that DSAG members’ plans on when to migrate to S/4HANA remained unchanged from last year, although 3 percent of members are already using S/4HANA (up 1 percent). 5 percent of those surveyed plan to migrate to S/4HANA this year, and one-third plan to do so in three years. A quarter of survey participants have not yet decided when to migrate and 13 percent plan to stay on Business Suite. For Marco Lenck, this is a noteworthy finding. He says: “The growth of 4 percent migration to S/4HANA that was forecast last year wasn’t realized.” And despite a large of number of projects, the number of migrations hasn’t significantly grown. Marco Lenck continues: “This could be because the transition is more complex than expected, meaning S/4HANA projects couldn’t yet be completed.”

Top five add-on cloud solutions
The DSAG Investment Report also uncovered some interesting findings when it came to cloud solutions. The most popular add-on products, as opposed to core solutions, were SucessFactors (14 percent, up 2 percent) and Hybris (13 percent, up 1 percent). These were followed by:

  • Ariba at 7 percent
  • SAP Cloud Platform at 6 percent
  • HANA Enterprise Cloud at just under 6 percent.

Marco Lenck comments: “SuccessFactors and Hybris are solutions which meet customers’ needs in HR management and sales quite well and are therefore being deployed. Despite this, SAP’s on-premise HR management solution remains solid with our members.” (Link to HCM press release: https://www.dsag.de/pressemitteilungen/sap-provides-clarity-hr-management.

Service integration: which platform to use?
With service integration becoming increasingly important for companies in this era of digitalization, the 2018 DSAG Investment Report put forward a new question: Which platform do you favor right now (i.e. for the fast and agile integration of services)? In response, 31 percent said the SAP Cloud Platform, with Microsoft Azure coming in second at 22 percent. Amazon Web Services are used by 7 percent of those surveyed, while more than 40 percent use other platforms other than those mentioned. As Marco Lenck summarizes: “Alternative platforms are widely used, even among SAP users. That’s why interoperability is such a priority for DSAG members.”

Summary
DSAG members continue to press ahead with digitalization. Awareness of SAP Leonardo has grown once again, but the DSAG, working together with SAP, will continue to drive forward the information campaigns already underway, explaining the benefits by means of practical examples. The migration rate to S/4HANA is not very high at present, with completed projects a rarity: “We’re seeing lots of companies work on S/4HANA. I’m intrigued to see when the breakthrough will happen with these projects in German-speaking countries. Business Suite remains a firm fixture for our members, which is why its ongoing development must be ensured,” says Marco Lenck, highlighting the key findings from the survey.

Survey scope
In total, 334 CIOs and company representatives from DSAG member firms in German-speaking countries took part in the online survey between November 2017 and January 2018. One contact was surveyed per company. Nearly 60 percent of those surveyed come from companies with between 1,000 and 4,999 employees, and nearly 30 percent come from companies with over 5,000 employees. 52 companies in Switzerland took part and 37 in Austria.

About DSAG
The German-speaking SAP User Group (Deutschsprachige SAP-Anwendergruppe) e. V. of Walldorf, Germany, is an independent special interest group that represents all SAP users in Germany, Austria, and Switzerland. The group’s mission is to encourage the realization of SAP solutions that meet members’ needs and to promote the exchange of experiences and information both among SAP customers as well as with SAP. Founded in 1997, DSAG is a registered association (eingetragener Verein) with more than 3,300 companies with more than 60.000 registered DSAG-members. DSAG is currently one of the largest SAP user groups and influencing channels worldwide.

www.dsag.de, www.dsag.at, www.dsag-ev.ch

Über DSAG

Die Deutschsprachige SAP-Anwendergruppe e. V. (DSAG) ist einer der einflussreichsten Anwenderverbände der Welt. Mehr als 60.000 Mitglieder aus über 3.500 Unternehmen bilden ein starkes Netzwerk, das sich vom Mittelstand bis zum DAX-Konzern und über alle wirtschaftlichen Branchen in Deutschland, Österreich und der Schweiz (DACH) erstreckt. Auf Basis dieser Reichweite lassen sich fundierte Einblicke in die digitalen Herausforderungen im DACH-Markt gewinnen. Die DSAG nutzt diesen Wissensvorsprung, um die Interessen der SAP-Anwender zu vertreten und ihren Mitgliedern den Weg in die Digitalisierung zu ebnen. Weitere Informationen finden Sie unter:

www.dsag.de, www.dsag.at, www.dsag-ev.ch