Can low-code and no-code address the innovation gap for ERP environments? Here’s what our data shows

As organizations work to innovate and incorporate more emerging technologies, ASUG Members are sending us a clear message – their organizations are lacking the skillsets needed to utilize these evolving and emerging technologies.

For several years now, a skills gap is in the top three challenges we hear from SAP users in our annual ASUG Pulse of the SAP Customer research (PDF link).

• 38% of ASUG members’ organizations do not have enough skilled staff to keep up with technology changes.
• 27% are lacking internal skills to manage new products.

This skills gap with new technologies hinders organizations’ abilities to innovate – and also their ability to improve processes and employee experiences.

One of the ways SAP is reacting to this issue is by providing more solutions to address technology challenges organizations are facing. Utilizing technologies – like automation, AI, and ML – can lessen the burden SAP organizations are encountering when trying to fill the skills gap.

Some of these technologies will require learning a new software program – which doesn‘t immediately solve the shortage of in-house staff. Another area that can free-up time for skilled workers to focus on other tasks is by reducing the organization’s reliance on custom code and lean more on low-code, no-code capabilities.

Through recent research ASUG conducted in collaboration with Pillir, we uncovered the benefits low-code, no-code solutions can offer organizations. Here are some key insights: 

This research focused on organizations with custom code experience.  More than one third of organizations currently use custom code that interfaces with SAP software in supply chain, procurement, logistics, and finance. The use of custom code drastically reduces between SAP ECC users (35% currently running custom code written specifically for the system) and SAP S/4HANA users (only 15% currently running custom code written specifically for the system).

As organizations make the move to SAP S/4HANA, 70% are trying to standardize business processes in SAP's software and limit customizations in the future, but a need for custom code remains for 67% of organizations as they move to SAP S/4HANA. Why is it still needed? Nearly half say it is essential for:

• Regulatory requirements (46%)
• Innovation (45%)
• Localization or different geographies (35%)
• To provide organizations with a competitive advantage (32%)

Counter to this, others have different opinions of custom code:

• It is good to have, but could do without it (22%)
• Is important but not necessary (20%)
• A waste that is overly expensive (17%)

When migrating to SAP S/4HANA, half of SAP users indicate they have no plans to migrate their custom code. Two leading reasons drive this stance, either because custom code will remain a part of the system it was developed for (32%) or because the custom code will be retired since its main function is now or will soon be obsolete after migrating to SAP S/4HANA (20%). By eliminating custom code, 67% of IT workers believe they will have more time to dedicate to other tasks/efforts as they are no longer maintaining the most valuable custom code at the organizations. Organizations also have the potential to redirect savings toward other technology initiatives, as on average organizations are spending more than $1.4 million on custom code per year according to ASUG research.

SAP has been expanding low-code, no-code capabilities, especially with SAP BTP, to help organizations when developing applications, but also to assist when integrating business processes.

There are three specific low-code, no-code solutions that were announced last year during the SAP TechEd 2021 keynote. These solutions include:

1. SAP AppGyver, a no-code app development platform that allows citizen and professional developers to build custom, enterprise-ready software without writing code.
2. SAP Business Application Studio, that provides tailor made development environments for various development scenarios where developers can create different types of applications.
3. SAP Process Automation, a new RPA-based no-code solution that enables everyone at an organization to automate business processes, regardless of coding skill levels.

Improving process efficiency using low-code, no-code solutions can also improve the employee and user experience of SAP users. By offloading tasks like maintaining custom code, employees have more time to expand other skillsets and to focus on other, potentially more innovative, tasks. The deadline for the end of maintenance for SAP ECC is approaching, and custom code is a barrier for 63% of organizations that are upgrading or migrating to a new SAP offering.

As organizations do more to keep up with emerging technologies (or want to do more, but are facing barriers, 54% plan to use low-code, no-code solutions for strategic or high-level innovation. The goal? To  free up significant cost burdens, and alleviate struggles like maintaining and enhancing existing custom code, maintaining good security practices, and reducing excessive maintenance costs.

However, even with the promise of no-code and low-code, there is a learning curve – and a lack of mature organizational examples using the latest iterations of these technologies. To help organizations with this, ASUG held a member-only event on April 5, 2022, to further discuss streamlining transformation with custom code migration tools and RISE with SAP. To learn more, ASUG members can view the on-demand version of the webcast online.