SAP in the Cloud: The Future of Enterprise Resource Planning

SAP has long been known for the innovation it’s making in ERP solutions to transform customers’ businesses. The breadth and depth of the SAP product portfolio has applications/software tailored to meet the business needs of various industries. Beginning as an ERP provider, including only finance and accounting in 1972, to become the all-inclusive business software giant 50 years later, SAP relied on one core principle, driving customer success. Starting from RF, R/1, R/2, R/3 and SAP ECC or SAP ERP to SAP HANA, S/4 HANA on-premise and cloud offerings, customers seeking to have a streamlined end-to-end business process and resilient business rely on SAP. 

Taking a look into ‘what’, ‘where’, and ‘how’ SAP is delivering to its customers will paint a clear picture of the Future of SAP in 2025 and Beyond. 

What, Where and How? 

SAP is vigorously doubling down efforts more than ever to bring business value to worldwide customers. This was evident in the keynote of the recent SAP Sapphire 2023, a global annual meeting of SAP stakeholders. Events like these help business owners understand shift in consumers’ needs and align their businesses accordingly to be profitable. 

The Cloud Imperative 

SAP holds a track record of delivering regular maintenance upgrades and updates to its product suite. This includes SAP’s current enterprise systems that run on age-old legacy software, either requiring a complete re-engineering or major workarounds. In order to future-proof the customer base, SAP deployed the ‘move to cloud’ strategy to migrate the existing customer base and onboard new customers. This imperative strategy ensures that only customers implementing the future-ready solutions will enjoy the full benefits of its product portfolio. This was also further bolstered by four of the many strategies SAP embraced since the beginning of 2020. 

  • Announcement of End of Maintenance Support to ECC 6.0—EHPs 6,7, and 8, and Business Suite 7 in 2027
  • Release of RISE with SAP, Public Edition in 2021 with an intent of converting the existing customer base (users of other SAP solutions) and large enterprises. 
  • Release of GROW with SAP, Public Edition in 2023, focusing on mid-size customers to rapidly adopt cloud technology. 
  • Recent release of the new and upgraded SAP S/4 HANA in October 2023. 

The Future is Sustainability 

As the world is combating the climate crisis, global enterprises across different industries are pivoting towards sustainable businesses. In this regard, the Intergovernmental Panel on Climate Change (IPCC) has mandated global governments and organizations to report their carbon footprint in an attempt to reduce the carbon emissions of any individual or collective entity. In line with IPCC mandates, SAP has taken an ‘Actuals over Averages’ approach in its Sustainability portfolio. This helps customers record, report, and act on Scope 1, 2, and 3 emissions. 

At the recent SAP Sapphire 2023, SAP launched the Green Ledger initiative, aiming to address the following challenges faced by organizations. 

  • Gap in Environmental, Social, and Governance (ESG) reporting standards as data sourced constitute different formats with inconsistent quality. 
  • Need to connect ESG and financials to drive business efficiently. 
  • Reduce Scope 3 emissions that account for around 80% of overall carbon footprint. 

With this initiative, SAP is now equipped to source data from different modules of an organization to model a template, including digitalization and automation roadmaps, around ESG reporting. This helps customers align their business with global sustainability initiatives and deliver sustainable products to their end users. 

Technology Acquisitions Future-Proofing Customers 

To stay vigilant in an uncertain geopolitical and market environment, technological partnerships and acquisitions prove to be the biggest remedy. Without a definitive integration in place, different end markets face the following challenges among many: 

  • Lack of networking between suppliers and manufacturers resulting in supply/demand imbalance. 
  • Data fragmentation due to multiple siloed enterprise architecture. 

SAP has tried addressing these challenges by acquiring market-leading technology players in data space and entered into partnerships with global technology giants coupling business data with technology.  

  • Intends to acquire LeanIX, a leader in Enterprise Architecture Management, in 2022. 
  • Helps customers develop a comprehensive transformation strategy to seamlessly navigate market disruptions. 
  • Acquired Signavio in 2021. 
  • Helps customers understand, manage, and grow business processes at scale. 
  • Entered into strategic partnership with Microsoft to use Microsoft Copilot 365 and Microsoft Viva Learning
  • Helps customers in HR domain upskill employee base and improve human-centric experience. 
  • Entered into an expanded partnership with Google Cloud to use BigQuery. 
  • Helps supply chain management customers have comprehensive view of data, access business-critical data, and better utilize the power of business data. 

Leveraging these acquisitions, Business Technology Platform (BTP) becomes the single point of access for suppliers and partners by linking features of SAP Ariba, Business Network, and S/4 HANA applications. 

Conclusion 

All in, the future of SAP is unchallenged to continue as the market leader. As in the past, SAP will continue to produce agile, intelligent, and streamlined solutions for governments and enterprises that help them stay resilient. SAP’s wide-blanket approach, covering more than 400,000-plus customers from different industries, proves/will prove to be a success. 

Karan Singh

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