SAP Innovation Trends for 2025
Dragon ERP - SAP Perpetual Motion Innovation
“Helping complex organisations innovate, it’s what we do”
Building upon Christian Klein’s Q3 investor address, joining the SAP dots…..
Here are the top SAP innovation trends predicted for 2025, reflecting the increasing integration of cutting-edge technologies via SAP BTP, AI Foundation and the wider SAP Cloud portfolio.
Remember SAP is not Tech, it’s a best of breed operating model, process always comes first…….
As always our focus is to enhance operations and to drive productivity, Ebidta and liquidity innovation.
1. Bi-modal is back: SAPs new strategy is to focus on revenue generation from its legacy ECC install customer base by upselling the wider SAP cloud product portfolio, BTP, CX, HCM, Business Network, Grow and elements of Rise ! yes Rise.
The pace of business change is accelerating, organisations are seeking shorter innovation cycles that deliver almost immediate tangible benefits, this requires a new approach to SAP delivery.
Dragon ERP believes that this can be achieved by CONTEXTULISING the organisation’s operating model as a meta enterprise, comprising;
the inner composable ERP process core (once implemented will remain relatively static)
Supplemented by an outer meta plug and play layer made up ofcloud interchangeable applications
cloud micro services
AI plug and play
An intelligent data fabric
Meta enterprise transformation will be enabled by the bi-modal delivery model, that is a self funding loop of small change projects in perpetual motion (quarterly release cycle).
The game changer enabling Bi-modal to come of age is the availability of AI tooling which will significantly reduce the dependency upon business resource, enabling the loop to function at pace. To be clear this is not Agile this is still good old waterfall with governance tightly wrapped around.
Bi-modal aligns to organisations that have varying levels of maturity as a whole or within their organisation and are seeking a more modular business domain centric innovation strategy, whilst collectively having to manage what is now termed the “perma crisis” being global events constantly changing the status quo and necessitating rapid changes to strategies and operating models.
We call this continual bi-modal delivery loop “perpetual motion innovation”.
Dragon ERP Phase Zero helps organisations define a low risk future SAP strategy.
2. Meta Enterprise Plug and Play: Building on point 1, its clear that for many organisations the process core does not need to fundamentally change, all of the innovation will be around the process core, cloud bolt on applications, intelligent micro services and AI plug and play all enabled by platforms to the side of the core ERP.
Basically the donut around the jam or the roll around the sausage, or for those that don’t get either the bun around the burger……
3. ECC Upcycling: The S/4 take up data says it all, as does SAPs new joining the dots strategy, its complex out there and for what ever reason at least 10k plus ECC systems will be going well past 31/12/30.
We have coined the phrase digital upcycling, whereby an ECC5 system can be made safe, stuck into a hyper scaler cloud, AI and microservices added as and when necessary, UX can be enhanced as can be analytics with Rimini Street taking support well past 2035.
Dragon ERP work with Rimini Street to deliver a low burn, low risk ECC sunset.
4. Hosting: Cloud IaaS is not the dream boat promised, expensive and with a carbon footprint that will get even hotter when AI gets added, will soon start appearing in ESG reporting, expect to see more organizations going back to on-prem. Sovereign cloud is also on the rise, and we expect to see a wider SAP S/4 PCE concierge footprint forming next year allowing PCE on Prem !!!!!!!
5. Data Alchemy: Its time to tidy up and drive value from the the messy enterprise data architecture most CIO’s inherit. A litany of data warehouses, partly used data tooling, archived data repositories, archived systems and the live estate.
We now see AI enabling an intelligent data fabric that will help drive value from disparate data but also simplify the architecture and take cost out. An example is SAP SAC’s Just Ask AI co-pilot that can help users quickly build analytics from a wide range of data sources across the fabric.
This also makes a case for SAP DataSphere.
6. Joule: Who doesn’t love Joule, now available for PCE (and on prem don’t tell Julia) and now deploying onto mobile devices. Plus the join up with Microsoft’s co-pilot, its really going to improve productivity. Plus Joule works across most of the wider SAP cloud landscape.
Will Joule significantly reduce delivery time and cost, No but it will impact the large offshore SAP SI’s who will need to move from a cheep as chips cast of thousands to a fractional high quality delivery model.
7. Autonomous S/4 Migrations: We predicted in 2022 the rise of AI and how it will help S/4 adoption by taking the risk and resource dependency out of the migration, whether Brown, blue or green. Dragon ERP can migrate and have stood up a highly complex ECC system simplified to S/4 within 7 to 10 days, now that is innovation.
8. Grow - S/4HANA Public : An absolute success story, you can expect to see the numbers sky rocket towards 10k customers and linked to ByD customers that’s nearly 22k mid tier customers, Netsuite will feel threatened.
But organisations are struggling to adopt and gain value from S/4P, Dragon ERP will be launching in January 2025 a fixed price modular deployment model. Building upon a fixed price Finance core we build out the SAP footprint on a quarterly basis, slowly enhancing and enabling the customers operating model
9. S/4 Product Alignment : Its nuts that we have public and private cloud versions, the underlying code is the same but the products are not aligned, the public cloud version is absolutely fantastic so we expect to see:
- Product bath tubbing with the best of public going to PCE and vice versa.
- Expect core PCE product development to slow down massively, the product is now mature with most of the new innovation expected to come via BTP. We have seen this with BTP.
10. Business Network : Silently growing year on year, part of the SAP share price success story, now rebranded and part of RISE, the Business Network now has over $6Trillion dollars worth of trade humming through it. B2B supplier management is now becoming a must have for the mid tier so expect to see it more and more as part of ByD and S/4 Public.
Dragon ERP has now partnered with SAP Platinum B2B partner www.excelerateds2p.com to help join the SAP dots, and speaking of dots Business Network is a key part of SAPs wider strategy to upsell to the legacy base.
11. RISE Commercials: We are doing a lot of work in this space, see our blog. Clearly there are major concerns customers have going from perpetual to SAP aaS vendor lock-in. Christian Klein acknowledged the issue with the current RISE contract and sales organisation in general and is committed to fixing it, so we predict by Sapphire 2025 it will be fixed.
12. S/4HANA HCM (H4S4) : Yes SAP have a second cloud HCM solution, its actually the old ECC HCM solution including payroll “hanafied”, basically SAP were loosing loyal customers to Workday when migrating to SAP S/4HANA as the HCM path was Success Factors and that triggered a decision point for HR, and Workday is more funky…..
You can expect to see lots of ECC customers opting for this.
13. AI-Driven Automation - AI Foundation: Stating the obvious, AI is every where, but its early days and we think the AI Foundation like Leonardo before it (we are showing our age) will continue to morph.
2025 should be a year of perpetual AI motion, focus on small AI wins delivered by standard AI functionality, 80% of AI investment currently is being wasted, so unless you have cash to burn don’t take the AI risk, let the big SAP early adopters define the path to AI success.
14. Knowledge Graphs for Advanced Insights: We love SAP’s Knowledge Graph tech, integrated with SAP HANA Cloud, links structured metadata to advanced AI models. This innovation offers predictive analytics, improved information retrieval, and enhanced data visualization.
We see big wins for IBP and the entire manufacturing and service industry operating models. AI driven MRP and production planning is the wholly grail for manufacturers.
15. AI enthused Micro Services : SAP Build now enthused with Joule for developers, will continue to grow in popularity within the tech community, but we predict the Grow community will be the catalyst for the rise of the citizen developers. We are already seeing the mid tier gobble up Slack like a Greggs Sausage roll, so we can expect the same level of enthusiasm with SAP build, if given half the chance. The hyper scalers are also entering the fray, as an example Google Cloud now has the confusingly named Jules to drive AI in their platform applications.
16. Enhanced Security with AI: SAP’s AI-enhanced security measures provide real-time threat detection and response, safeguarding critical enterprise data against evolving cyber threats.
17. Sustainability, is a constant, SAP Sustainability Control Tower now supplemented by SAP Green Ledger is clearly world class, but take up will be primarily embedded within planning and FP&A functions and will be a slow burn.
In Summary:
We could keep going, but that’s enough, needless to say tech singularity and SAP product singularity are marching together at a pace most organisations can not embrace, so something fundamental needs to happen, and we think perpetual motion is the answer.
Self Funding Perpetual Motion provides CIO’s with the low risk success required to innovate, drive tech as a cost of sale and enhance the stock of tech at board level.
So if your struggling to shape your Future SAP strategy, then our CxO’s survival guid to Future SAP may be of interest. Register on our website for the new edition.
If you need help, then contact a Dragon……
Paul and Alisdair at a SAP Partner day
