IgniteSAP would like to wish all members of our community a happy, healthy and prosperous 2023.
This week we will take a look at changes to SAP solutions, and some of the long-term trends in the SAP ecosystem impacting our professional lives in the months to come.
The same macro economic events of the last few years will continue to disrupt traditional supply chain models, and these will be compounded by the continuing Ukraine war in particular. Global inflationary trends and a potential recession are now causing enterprises to once again reassess their approach to logistics.
Scott Russell, executive board member and Customer Success lead at SAP summarises:
“Over the last couple of decades, the ‘just in time’ approach traded resiliency for efficiency and lower costs, which in turn made the supply chain fragile. The pandemic and the snowball effect of related disruptions exposed this fragility, which has organisations refocused on resiliency. Still, cost remains a factor, especially in the current economic environment. Technology can help organisations strike the right balance by enabling more real-time collaboration between trading partners.”
The emphasis has shifted from short term reactions to supply chain shocks to sustainable and resilient supply chain networks. Logistics and spend management executives are looking for technological solutions that allow them to share information with trusted partners across these networks so they have the ability to predict breaks and delays before they affect production and distribution.
With 77% of global transactions involving SAP software, SAP Business Network is growing rapidly. In 2022 business activity totalling $4.9 trillion US occurred in the SAP Business Network and this growth trend will continue in 2023.
According to SAP’s Chief Revenue Officer for Intelligent Spend and Business Network, Jeff Collier, transparency and data visualisation are helping business leaders with strategic decisions:
“…dealing with uncertainty does not mean operating our businesses blindly. Digitalised procurement processes, data visualisation, and business networks have ushered in a new era of visibility, collaboration, and strategic decision-making. With the right technology, procurement and supply chain professionals have access to an integrated view of total spend across their enterprise and deep visibility into their supply chain. This enables improved inventory management, predictable lead times, more efficient sourcing of supply, and cost savings.”
Another trend that relies on networks is the development of the flexible workforce. With careful management a pool of temporary external workers can help address skills gaps and control staffing costs, to the extent that 50% of organisations plan to increase their use of external workers this year.
Vish Balinga of SAP Fieldglass says that the combination of vendor management systems like SAP Fieldglass with freelance management systems will lead to the streamlining of recruiting, contracting, onboarding, and security.
While the pandemic has receded to a great extent (keeping in mind a recent resurgence in China), it will continue to affect the strategy for workforce deployment, and hybrid workers will also continue to be a feature of 2023 as attitudes toward working from home have changed. Increased connectivity in the home and cloud-based SAP implementations have made this much more viable for those working with SAP systems.
New government legislation designed to address climate change and persistent inequalities in society, along with changing public and corporate attitudes are leading to root and branch overhauls of ESG policies in businesses and organisations.
These groups are increasingly using SAP solutions like the SAP Business Network and SAP Sustainability Control Tower to address environmental, social and governance concerns. For example, Jose Fernando Galvis Panqueva, CIO of Grupo de Energia de Bogota says:
“With this powerful combination of cloud solutions, our company will manage its overall holistic reporting requirements, including ESG KPIs; reduce time and effort in manual data collection and reporting variation with different regulatory requirements and timelines; standardise processes for subsidiaries; and manage and integrate existing SAP and non-SAP data.”
As the importance of environmentally sustainable business practices increases, along with responsible waste management, we will see the emergence of a new role for SAP consulting services: the SAP sustainability consultant. As the collective international awareness of environmental issues has reached its latest peak with the COP26 and COP27 events, the public and private sector are compelled to make ESG a priority.
SAP introduced its embedded finance product in collaboration with Dediq in 2021, and it is expected to gain traction through 2023 as more banks and financial institutions get on board with the concept. Embedded finance (and insurance) can be used in a business-to-business or business-to-consumer context, reducing friction in global financial transactions.
Vishal Shah, SAP Fioneer’s head of embedded finance explained some use cases:
“As global trade becomes increasingly digitised, and as companies begin to operate through electronic trade networks, the financial industry will be able to truly unlock the power of “instant” payments and “just-in-time” credit. We are seeing use cases such as Buy Now Pay Later and Working Capital Financing, which allows businesses to borrow money to cover day-to-day operations rather than purchasing equipment…imagine a scenario where one simply completes a train journey and the right amount of travel fare is automatically deducted from your digital wallet, without having to pass through fare gates. Similarly, you could park your car without needing any parking tickets and instead get charged directly based on your entry and exit from the car park.”
One of the first areas where embedded finance will be used extensively is within extended supply chain networks like the SAP Business Network. In this scenario supply chain partners can get finance to pay for shipments ahead of time: meaning that there is no need to wait for payment to clear before shipments can move from one stage of a supply chain to the next, so speeding up the process.
You can find an introduction to SAP Fioneer here.
With the increase in customer choice brought about by better communications infrastructure and cloud retail models, customer concerns about the environment are defining new business models and customer experience strategies must address these concerns. A recent SAP study showed that where possible 46% of customers will purchase sustainable brands and 30% from brands with ethical labour and sourcing policies. Overall 78% of customers said they made an effort to purchase the ethical option and this trend was more pronounced among younger consumers.
Developing a relationship with customers through multiple (and integrated) channels will be more important in 2023 in order for businesses to increased the lifetime of each customer relationship beyond single purchases.
Centralised customer data models will be increasingly used by brands to increase scalability and flexibility. The centralised data can then be shared with all points of customer contact to ensure a better experience and extend the lifetime of the customer relationship: ultimately generating more revenue.
While CX has been seen as primarily of central importance to retail applications, other media services and utilities companies will increasingly turn to CX solutions to promote brand loyalty.
Over the last few years IgniteSAP has tracked SAP’s pivot from a provider of on premise systems to a cloud-based Software-as-a-Service (SaaS) company. This somewhat turbulent flight has been dragging some customers behind it kicking and screaming but now a consensus has been reached and those resistant to change have been forced to accept the new reality.
In 2023 we can confidently predict a rush to implement S/4HANA and S/4HANA cloud (as well as hybrid systems). With the fast approach of the support deadline for legacy systems there will be a spike in demand for S/4HANA consulting services.
On the front end of this wave, those who are looking for an easy route to a cloud-based SAP system will be looking for partners who can help them to take advantage of the Rise with SAP cloud transformation package, and the SAP Business Technology Platform.
Consultants with a strong understanding of these new SAP products and how to apply them to best use will certainly have no trouble finding projects to work on.
Based on the SAP BTP platform, SAP recently introduced a modular low-code development solution called SAP Build which allows non-coders to create simple apps and automate processes without the help of coding specialists. At the time Arnal Dayaratna, research vice president of software development for IDC, said:
“Given that the demand for contemporary digital solutions is greater than the ability of professional developers to supply them, IDC envisions that business professionals will become increasingly involved in initiatives to create digital solutions to solve pressing business problems. Worldwide, IDC expects more than 100 million business professionals will become involved in the production of digital solutions over the next ten years as the importance of digitisation continues to achieve increased importance.”
SAP Build has already been released and so we can businesses to already be leveraging the technology through 2023, but this is not expected to lead to any reduction in the demand for professional ABAP developers: rather to address a portion of the ever-increasing demand for bespoke software solutions and extensions.
All those with experience and certification in SAP solutions will find plenty of opportunities for employment through 2023, and the increased demand for their services will cause a corresponding increase in compensation packages and salaries.
As we have discussed previously, the combined effect: of digitalisation of business operations, the need for an environmental revolution of business activity, the need for businesses to update existing SAP systems and migrate to cloud-based implementations of SAP, and recent changes in the economic environment for businesses means that the need for SAP specialists is increasing, but the number of practitioners with the necessary skills is not increasing at the same rate.
While many initiatives are seeking to address the skills gap like free or more accessible learning resources and new technologies like low-code development, businesses will have now pay more for the skills they need.
SAP has redefined itself over the last few years as a provider of cloud-based software solutions for digital enterprises and showed in its financial report for the third quarter of 2022 that it was well on the way to achieving its “revised mid-term ambitions” declared two years previously.
Though these changes in direction were received poorly by investors the company has fulfilled its duties towards other stakeholders in the SAP ecosystems and ensured that there is a vibrant and expanding market for SAP software and services, and for those consultancy partners and freelance consultants that provide them, for many years to come.
Through the course of 2023 IgniteSAP confidently expects the market for SAP service providers to expand at an increasing rate as the need for these services will become more acute with each day that passes.
IT consultants looking to make the most out of the opportunities in 2023 should ensure they are in a position to provide SAP skills in the areas of S/4HANA, S/4HANA Cloud, Rise with SAP and SAP Business Technology Platform, along with related skills in SAP Finance, or alternatively in areas of SAP developer services.
Once again, we wish you all the best of luck and a happy and healthy 2023!
If you would like guidance or representation in finding and negotiating your next role in the SAP ecosystem, join us at IgniteSAP.
