UKISUG 2022: S/4 skills deficit worsens but SAP Rise use increases

The UK and Ireland SAP User Group (UKISUG), at its 2022 Connect conference in Birmingham, has published research indicating that concerns about a skills deficiency in respect of moving from the supplier’s ECC ERP system to its newer S/4 Hana system have deepened over the past year.

The landmark annual member survey found that of those organisations yet to move to S/4 Hana, 92% were concerned that a lack of available skills will slow their migration. That is an increase from 71% in 2021.

And although 89% of organisations are either using or planning to use S/4 compared with 74% in 2021, the 2027 maintenance deadline for ECC 6 is the biggest driver to upgrade, at 70%. This contrasts with new functionality or being part of a wider-scale business transformation (49% and 47%, respectively).

The survey of 114 user organisations revealed that a quarter are currently using S/4. Nearly one-third rated the level of training provided by their partner during the implementation process as poor or very poor, while 36% said SAP doesn’t provide customers with enough technical resources and training to help them manage S/4.

In his opening keynote, Paul Cooper, chairman of the user group, said: “A deeper look at the numbers shows that positive drivers for moving to S/4 Hana lag behind. Improve business productivity – 41%. Simplify business processes – 38%. This highlights the continued need for SAP to help organisations build positive, benefits-driven business cases.”

Cooper added: “If you went to Sapphire [SAP’s annual customer and partner conference] and other events – you will have heard SAP has talked a lot about its Business Technology Platform over the last 12 months.

“My understanding is that it’s a platform that should help us get more out of our data, build integrations, and at TechEd a couple of weeks ago there were announcements about its new low-code capability.

“But it’s still new to me and I’m sure to many of you.”

In the statement accompanying the research, Cooper said: “As our survey indicates, for many organisations, it is a case of when rather than if they move to S/4. However, with rising concerns about the lack of available skills to implement SAP S/4 Hana, there is a risk that the speed and quality of projects will suffer. Schemes such as SAP’s Partner Talent Initiative are a step in the right direction, but it is apparent that more needs to be done to address the skills shortfall.”

In the survey, almost three-quarters (72%) of organisations said existing customisations present a challenge when moving to SAP S/4 Hana, which is a decrease from 92% a year ago. More than a quarter (28%) said they used SAP Business Technology Platform to help with their integrations.

From those respondents who said they had heard of the Rise with SAP service, 73% said their understanding of it had improved over the last 12 months. The service packages managed cloud infrastructure and managed services into one contract, with the aim of getting customers on to S/4 Hana in the cloud more quickly.

Cooper said: “It is clear that organisations have a much better understanding of Rise with SAP than compared to 12 months ago. As a result, more are seeing it as a viable option to accelerate their journey to the cloud and to S/4. However, organisations still need to weigh up the overall impact of moving to the cloud, using Rise with SAP, on their overall SAP running costs. Will they need to upskill or acquire new skills to manage their new SAP environment? These are some of the key questions we hope to address during Connect.”

For the supplier, James Bates, UK & Ireland head of S/4 Hana cloud, Rise with SAP, said: “It’s really encouraging to see such a wholesale shift to SAP S/4 Hana among our customers – a sign that, despite macroeconomic headwinds, digital transformation is still a priority for organisations.

“We want to make sure our customers are maximising the business value of our services and, through Rise with SAP, we take on many of the technical activities associated with the move to the cloud. This allows our customers to focus their teams and skills on the higher-value activities associated with business transformation.”