SAP users face cost squeeze, pressure to digitalise

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The clients of software group SAP are enduring severe declines in revenue and earnings while at the same time confronting intensifying pressure to hike IT spending to go digital, a survey has shown.

The poll of SAP’s German-speaking user community discovered that almost three-quarters were experiencing sharp drops in revenue. At the exact same time, over four-fifths stated the coronavirus pandemic made digital transformation much more pressing task.

“At the centre of this crisis is the need for businesses to do more with less,” explained Marco Lenck, chairman of the German-speaking DSAG user group who commissioned the poll.

The DSAG, which signifies 3,700 businesses, is a powerful lobby that has called on SAP to make it easier to upgrade systems traditionally hosted on web site to operate in distant datacentres.

Such cloud hosting makes it easier for companies to scale upward or pare back their business process operations consistent with need. But the initial cost and difficulty of creating that move deters many.

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SAP’s new Chief Executive, Christian Klein, welcomed the DSAG survey’s findings, which he stated were representative of the way the group’s global business was doing.

Klein told a joint briefing with the DSAG that SAP had taken on board calls to improve integration between its four chief processes: sales, procurement, human resources and supply chain management.

Work on developing a common data model, user interface and consistent security and identity management in those four areas was now 57% complete, he said. By the end of the calendar year, 90% of the job is going to be accomplished.

Klein also stated that, given that the price pressures that some customers were facing, for example in the airlines industry, SAP was supplying flexible payment terms to help ride out the economic downturn.

“We are of course offering targeted support to those customers in economic difficulty – we want long-term client relationships”.

The DSAG is holding its annual conference online this week. SAP reports third-quarter leads to October the 26th.

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The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Douglas Busvine. Editing by Kirsten Donovan.

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