SAP users face cost squeeze, pressure to digitalise: survey
By Douglas Busvine
BERLIN (Reuters) - The customers of software group SAP <SAPG.DE> are suffering severe declines in revenue and earnings while at the same time facing intensifying pressure to hike IT spending to go digital, a survey showed on Monday.
The poll of SAP's German-speaking user community found that nearly three-quarters were experiencing sharp drops in revenue. At the same time, over four-fifths said the coronavirus pandemic made digital transformation a more pressing task.
"At the centre of this crisis is the need for businesses to do more with less," said Marco Lenck, chairman of the German-speaking DSAG user group that commissioned the survey.
The DSAG, which represents 3,700 businesses, is an influential lobby that has called on SAP to make it easier to upgrade systems traditionally hosted on site to run in remote datacentres.
Such cloud hosting makes it easier for firms to scale up or pare back their business process operations in line with need. But the initial cost and difficulty of making that move deters many.
SAP's new CEO, Christian Klein, welcomed the DSAG survey's findings, which he said were representative of how the group's global business was performing.
Klein told a joint briefing with the DSAG that SAP had taken on board calls to improve integration between its four main processes: sales, procurement, human resources and supply chain management.
Work on creating a common data model, user interface and consistent security and identity management in these four areas was now 57% complete, he said. By the end of the year, 90% of the job will be done.
Klein also said that, given the cost pressures that some clients were facing, for example in the airlines sector, SAP was offering flexible payment terms to help ride out the economic slump.
"We expect the transformation in the IT and technology sectors to gather pace and that demand will rise," he said. "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 results on Oct. 26.
(Reporting by Douglas Busvine; Editing by Kirsten Donovan)