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Contending with cloud, AI, and ERP modernization – what ASUG has learned from SAP customers

Marissa Gilbert Profile picture for user Marissa Gilbert April 4, 2024
ASUG's Marissa Gilbert breaks down findings from ASUG’s Pulse of the SAP Customer's latest results - providing insights on key topics that include S/4HANA investments, cloud growth, and attitudes to AI.

Focus Group under a magnifying glass © bluebay2014 -
(© bluebay2014 -

All ERP vendors with customers on older releases are facing a modernization turning point. Whether it’s end of maintenance deadlines or the impact of AI, ERP customers are facing crucially important choices on where to invest their modernization budgets. Whatever they decide, addressing skills gaps and integration needs are sure to be high on the list.

For customers to move forward, they need input and insights from their peers. That’s the impetus behind ASUG’s Pulse of the Customer Research.

This is the seventh year ASUG has conducted this research - highlighting the key insights of the attitudes, preferences, and plans of ASUG members as it relates to their SAP technology.

It’s clear this year that SAP customers are preparing for their organizations’ future. There is a sense of urgency as it relates to SAP S/4HANA, cloud, and new technology initiatives, including AI. ASUG members are also sharpening their focus on integration challenges, getting the most from their budgets, and upskilling their workforces.

Here are our top takeaways from the 2024 ASUG Pulse of the SAP Customer Research.

It’s the year 20S/4

2024 is the year that marks SAP S/4HANA’s tipping point – that’s why I’ve dubbed this year 20S/4. It’s been nearly a decade since SAP S/4HANA was first released and 47% of SAP users are either already using or starting their S/4HANA implementation now. Within two years, 69% of survey respondents will have done so.

S/4HANA is the top focus area this year, with 48% agreeing it is most important to their organization in 2024, compared to 42% in 2023. The top skill set missing or lacking at organizations is S/4HANA expertise. As the 2027 deadline approaches resources are expected to tighten extraordinarily as the race to migrate escalates, with 41% of ASUG members still planning to implement SAP S/4HANA.

Members’ S/4HANA focus matches a readiness to increase their SAP spending. 52% of ASUG members are making more investments into SAP, and S/4HANA is the leading reason they are adding to their SAP investments. Other reasons for increased SAP investments include business growth and increased functionality and integrating and consolidating more systems into SAP.

One SAP customer said, “a lot of investments are being made in consulting, software/services acquisition, migration, integration and education,” as the company migrates to S/4HANA. Another said that their company’s expanded use of SAP globally is creating an “opportunity to upgrade the U.S. market to S4/HANA.”

Cloud growth continues to rise

ASUG members see themselves in the cloud – though addressing costs and security is vital.

57% of ASUG Members continue to view migrating to the cloud as having significant impact on their organization’s digital transformation efforts, preceded just by data analytics/dashboards (62%).

The shift away from on-premise continues. This is consistent with SAP instances overall, not just SAP S/4HANA, but S/4HANA migrations are certainly driving the move to the cloud. In 2024, the bulk of respondents run or will run SAP S/4HANA in the cloud, and more specifically a private cloud.

2024 SAP S/4HANA Cloud Environments © ASUG
2024 SAP S/4HANA Cloud Environments © ASUG

Multiple cloud solutions are on the radar for future use – and with the push for innovations accessible only in the cloud, we expect cloud users to continue to increase. There is large growth in future considerations for SAP S/4HANA Cloud, RISE with SAP, SAP Analytics Cloud, SAP HANA Enterprise Cloud and SAP Business Technology Platform compared to 2023.

Among those who currently run their SAP instances on-premises, costs/resources, security and compliance are the top hurdles keeping them from migrating to the cloud – addressing these concerns can move the needle for the on-premises holdouts. There is a notable share of those currently on-premises who are currently migrating or planning to migrate – further signaling the future is cloud.

It's business as usual as the influence of the pandemic is in the rearview

Pandemic-induced business disruptions are no longer on the minds of ASUG members and organizations are moving forward with their technology initiatives.

One  pandemic exacerbated challenge has decreased notably in 2024 – maintaining knowledgeable staff/turnover. Though maintaining knowledgeable staff/turnover is still a notable challenge for organizations, it is no longer THE leading challenge. The leading challenges organizations are facing this year are budgets, integrations, and master data maintenance.

Budgets have risen as the top challenge for organizations. ASUG members told us their organizations are addressing budget challenges by cost reduction – sure - but also through revenue generation and increasing process efficiencies.  One ASUG Member noted:

We are growing as an organization both organically and through acquisitions. We need to spend money on technology to support the growth.

A pre-pandemic reality is reappearing and thus accelerating integration challenges – mergers & acquisitions. As interest rates have risen over the last two years, companies regained some of their traditional leverage in M&A deals compared with the period of ultralow interest rates we saw during the pandemic that favored financial buyers. Integration is a top focus area for organizations in 2024, as well as a leading challenge. An increase in M&As is likely to drive up integration challenges at organizations in the coming year.

It is prime time for the great reskilling

Workforce needs are shifting. While customers still cite maintaining a knowledgeable staff as a top challenge, it has dropped from 37% in 2023 to 29% in 2024. Now, they are turning their attention to upskilling and reorganization so they are better equipped to implement new technologies.

29% of ASUG members are planning to implement new technology this year, and just as many (27%) are struggling to keep up with the pace of technology changes. And to further highlight the need to focus on talent alignment, 28% of organizations struggle to find the right internal candidates with the skills to manage new projects.

ASUG members told us there is a need for more training to tackle this challenge. Skills and training continue to be a necessary priority at organizations and candidates with SAP S/4HANA skills are most in demand, followed by AI and business process management.

Internal skill sets missing or lacking at organizations © ASUG
(© ASUG)

Could we conduct research without asking about AI?

Of course not! A closer look at survey respondents’ attitudes toward AI reveal a belief that AI could  help them overcome some of their most pressing issues. When asked what challenges they’d like to solve with AI, 45% chose dashboards and analytics, while 22% chose customer experience. Transitioning from manual to digital processes and integration between SAP and non-SAP systems each captured 21%.

But data concerns are holding back a fair number of organizations, with only 13% saying they are willing to load data into a generative AI model.

SAP customers’ choices for the top technologies impacting their digital transformation efforts remain similar compared to 2023, in share and ranking - data analytics/dashboards, cloud, and automation. Though, AI/ML did have an impressive jump, with 38% choosing the technology in 2024 vs. 23% in 2023; a finding not surprising given all the attention AI has captured in the last year.

Customer input is vital to the changes afoot

Navigating the changes brought on by cloud migrations, AI, and ERP modernization are difficult to do in isolation. Gathering data and sharing peer information should be year round undertaking. 

We will continue to share more of the 2024 ASUG Pulse of the SAP Customer research throughout this year on ASUG digital channels and in-person at ASUG experiences  We would love to hear your thoughts on this year’s results - join us on LinkedIn and let us know what you think. You can learn more on this research and our findings here at For those who are already ASUG members, join us at one of ASUG’s 39 regional Chapters to meet with others in the SAP ecosystem and to find ways to address skill gaps and other pending issues for S/4 migrations.

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