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DSAG: Digital Transformation Is Unavoidable

A sharp drop in revenue and shrinking IT budgets are the most immediate consequences of the COVID-19 crisis for companies. This was one of the findings of a survey conducted by German-speaking SAP user group DSAG among its members in Germany, Austria, and Switzerland.

Nevertheless, 81 percent of DSAG survey participants said digital transformation is unavoidable, even if the requirements around it are changing. The most important use cases are increasing efficiency in existing processes as well as developing new, digital business models and services.

In business terms, planning for the long-term future is more important than ever in the times of COVID-19. How is this unprecedented global pandemic affecting companies? What is its impact on IT budgets? And what are firms’ current needs when it comes to digitalization?

Fig. 1: Effects of the corona crisis and requirements regarding digitization.
Fig. 1: Effects of the corona crisis and requirements regarding digitization. © DSAG

Companies forge ahead with digitalization

According to an online survey conducted by DSAG during the summer 2020, 74 percent of participants have seen their revenue decrease or decrease significantly while just 19 percent have not seen any impact on revenue. 7 percent state that they’ve seen their revenue improve or improve significantly. In terms of the impacts of COVID-19 on IT budgets, 22 percent of those surveyed are expecting a decrease of more than 20 percent.

However, it is clear that companies’ digitalization needs have also increased as a result of the pandemic. 81 percent of those surveyed either completely agree or partly agree with this statement. This is also reflected by the progress companies are making in their digitalization efforts: 61 percent are making good or rapid progress on this front, while 34 percent are making slow progress. This paints a much more positive picture than reported in the 2020 DSAG Investment Report, where just 35 percent considered themselves to be far along or very far along in their digitalization journey.

Fig. 2: Change in S/4 Hana projects due to corona crisis.
Fig. 2: Change in S/4 Hana projects due to corona crisis. © DSAG

The increased focus on digitalization is also benefiting DSAG members’ S/4 Hana projects. 50 percent of respondents are forging ahead with and/or accelerating their S/4 projects. 43 percent are delaying them or pushing them back indefinitely. “Companies have realized how important digitalization is and are ready to tackle this challenge. However, they also have to deal with falling revenue and huge decreases in IT budgets at the same time,” says Marco Lenck, Chairman of DSAG.

Small increase in approval of SAP product strategy

Fig. 3: Evaluation of the SAP product strategy and roadmaps.
Fig. 3: Evaluation of the SAP product strategy and roadmaps. © DSAG

There was only a small change in DSAG members’ perception of SAP’s product strategy compared to last year: 31 percent rate the SAP product strategy and roadmaps as completely or mostly resilient and trustworthy, which is up 7 percent from 2019. 42 percent partially agree with the statement, which is a decrease of 3 percent compared to last year. Meanwhile, 27 percent of respondents said they do not agree or agree a little. “This is a small improvement on last year.  It shows that something’s been done and we’re headed in the right direction. However, SAP still needs to communicate its roadmaps more effectively,” comments Marco Lenck.

Improvements needed in process efficiency

Fig. 4: Need for action due to corona crisis.
Fig. 4: Need for action due to corona crisis. © DSAG

When asked about the biggest digitalization need arising from the COVID-19 crisis in the context of SAP, 72 percent cited improving the efficiency of existing processes. When asked about the areas most affected by digital transformation as part of last year’s DSAG Annual Conference survey, increases in efficiency came out on top, with 62 percent citing it. Meanwhile, the development of new, digital business models and services remains in second place this year, selected by 36 percent of respondents.

Only 24 percent viewed it as important to have a flexible relationship with customers and partners as part of a platform strategy. “It’s understandable that efficiency improvements remain a top priority. I see it as a clear reaction to falling revenue and shrinking IT budgets,” explains Marco Lenck. Nevertheless, DSAG indicated that companies who want to safeguard their future success should not only digitalize their business processes, but also change their business models.

Lenck seemed disappointed that only a few respondents consider the flexibilization of customer and partner relationships to be important. “COVID-19 has shown that it is incredibly important to be able to respond rapidly to new requirements. But this doesn’t seem to have hit home with everyone. We see it as our responsibility, as well as SAP’s, to continue to educate our members,” he says.

Platform strategies gain ground

Even if the flexibilization of customer and partner relationships does not seem to play a huge role for many companies, most recognized the importance of a platform strategy. 58 percent of respondents are forging ahead or accelerating their efforts in this area; 24 percent are delaying it or rethinking a related project. Just 19 percent don’t see it as an issue or are pushing it back indefinitely. “It’s good to see that, despite different priorities, a majority of companies are still pursuing a platform strategy. This is a step in the right direction, because issues such as integration, capability for expansion, the development of new business models, and driving innovation can give companies a decisive competitive edge,” notes Lenck.

Fig. 5: Relevance of providers for digitization of core processes.
Fig. 5: Relevance of providers for digitization of core processes. © DSAG

Those who do tackle a platform strategy are spoiled for choice when it comes to providers. In terms of collaboration with customers and suppliers, 72 percent of respondents consider SAP very or extremely relevant, followed by Microsoft at 37 percent and other providers at 22 percent.  When it comes to the flexibilization of supply chains, 65 percent rate SAP as very or extremely relevant, followed by Microsoft at 19 percent and others at 15 percent.

“I find the high approval of SAP and Microsoft in these areas, with just 22 percent rating other providers, to be remarkable. I would have expected other providers to be further ahead when it comes to collaboration with customers. It shows that SAP can differentiate itself from its main competitors in these areas,” comments Marco Lenck.

SAP unchallenged in product development

In product development, 33 percent of customers selected SAP, followed by Microsoft at 26 percent and other providers at 23 percent. 77 percent of respondents consider SAP very or extremely relevant for financial and payment processing, followed by other providers at 17 percent and Microsoft trailing far behind at 6 percent.

“Financial processes have been one of SAP’s core competencies for decades now. Many companies have embedded these processes in their businesses,” explains Marco Lenck. However, SAP missed out on the top spot for environment and sustainability: 16 percent of respondents consider other providers very or extremely relevant here, followed by SAP at 14 percent and Microsoft at 11 percent.

Huge progress thanks to reliable planning

SAP is also once again in pole position when it comes to HR processes,  with 66 percent of respondents citing SAP, ahead of Microsoft with 9 percent and Google with 3 percent. “The fact that customers can run the on-premises solutions Human Capital Management (SAP HCM) for HR and Travel Management for travel expense management integrated in S/4 Hana guarantees planning reliability and definitely plays a role in the high percentage of respondents who selected SAP,” says Lenck.


Sustainably winning, in terms of SAP, means that a product is only as good as the way it can be implemented in the company, ideally quickly and easily. The facts are on the table, now SAP has to show what it has fundamentally changed. In many areas, SAP enjoys a high level of trust among DSAG members. DSAG still sees potential in SAP’s product strategy and a major communication hurdle to overcome. With the SAP Roadmap Explorer and a comprehensive integration strategy, the software company is taking important steps to give customers orientation, concludes DSAG.


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