SAP Application Management: New technologies, new dynamics

Conducted by NTT DATA Business Solutions and PAC, the study explores how cloud computing, automation, and artificial intelligence are reshaping the landscape of Application Management, leading to new efficiencies, performance optimizations, and evolving partnership dynamics.

NTT DATA Business Solutions | May 8, 2024 | 5 min read

A person manages applications on a laptop in a futuristic glass pod overlooking a panoramic view of mountains and a coastal city.

Innovative technologies such as cloud computing, automation and artificial intelligence (AI) are transforming SAP operations by introducing new ways to increase efficiency and optimise performance. However, at the same time, these changes also lead to new requirements for SAP users and their service partners.

In order to gain an up-to-date view of both the status quo and future developments in SAP operations, NTT DATA Business Solutions commissioned the analyst firm PAC to conduct a survey among 200 SAP and IT managers in a variety of European countries and the USA and to ask them about the challenges and strategies surrounding this topic.

Among other things, the study addresses the following key issues:

How are the responsibilities between SAP, the user company and the service partner changing in view of SAP S/4HANA Cloud and the corresponding licensing models (RISE with SAP)?
For which areas do SAP users use public IaaS/PaaS (incl. SAP BTP) and AI in SAP operations, and what cost savings potential do they expect?
What new challenges are AI and Cloud ERP bringing to the operation of SAP systems?
Against the backdrop of these technologies being used: What services and competencies do SAP users expect from their SAP partners?

SAP is one of the leading providers of business application software and market leader in enterprise resource planning (ERP). These systems are of critical importance as they form the backbone of key business processes.

Effective SAP operations ensure the systems’ smooth functioning and performance and thus contribute to business continuity. SAP Application Management initially focused on ensuring an application’s availability and stability, while at the same time freeing up internal resources for tasks with a greater degree of innovation. However, with increasing maturity, the value proposition has been changing, so that applications now do not only have to be “in operation” but also require continuous optimization.

SAP’s particular focus currently rests on the topic of cloud ERP. RISE with SAP is a complete offering of cloud solutions and services. At the press conference in July 2023, SAP announced that it would mostly offer important innovations in combination with a RISE contract, which led to some dissatisfaction in the SAP community. SAP responded in January 2024 by further incentivising SAP users to switch to either the Private Cloud or Public Cloud edition.

No. 1 – The integration between SAP and non-SAP applications is becoming ever more important

Many organisations use software products from other leading platform providers alongside their SAP systems. These include suites or individual solutions in the sales, service & marketing, HCM and collaboration areas or even niche solutions. Most notable are the providers Microsoft, Salesforce and Adobe. Rarely, the parallel use of alternative solutions for the finance area has been mentioned.

The range of business applications companies use alongside their core SAP system is wide. Accordingly, it is important to ensure a seamless integration and communication between SAP and non-SAP applications and to be able to operate them in parallel over the long term.

Overall, it is striking that the respondents prefer to seek external help whenever the cloud topic comes into play – from the implementation of a cloud-based application up to the hosting and operation of SaaS solutions. External cloud specialists have experience in the planning, implementation and management of cloud solutions. They know the best practices, tools and migration methods to support, automate and accelerate the migration of SAP systems to the cloud.

Although alternatives to the various SAP BTP components exist, none of the third-party providers offer the full range of functions for SAP-centric application environments in-house. For a seamless integration of customised ERP extensions, it is even more important that SAP BTP provides essential basic services such as a unified interface, unified data and domain models as well as a unified security architecture.

In the foreseeable future, SAP BTP will form the basis for all SAP cloud products as well as for all functional SAP S/4HANA enhancements and innovations. The more companies move to a cloud-based S/4HANA edition, the greater the demand for SAP BTP will be as custom extensions will need to be developed and integrated.

If so, then dive into the transformative landscape of SAP Application Management with our 2024 PAC report. Discover how cloud, AI and SAP BTP innovations are reshaping strategies and operations, offering new opportunities for efficiency and growth in the SAP ecosystem by downloading the report.

Download now the full report