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Businesses struggling to migrate SAP to cloud, hamstrung by lack of skills

November 24, 2020

Ensono released new research into the impact that skills shortages are having on SAP applications and their management. While organisations have ambitious plans to migrate to new versions and more powerful public cloud infrastructures, poor skills availability has halted many in their tracks.

The research found that 70% feel migrating SAP to public cloud will provide more benefits than keeping SAP on private cloud or on-premises. As a consequence, 60% of organisations are seeking to go all-in on public cloud. Yet, the majority of SAP applications are still hosted on-premise.

Despite there being a clear desire to migrate, around 35% of respondents in Ensono’s study say that SAP skills would present for their organisations when migrating their SAP portfolio from on-premise. Around 35% say that public cloud skills would present the same barrier. Conversely, 29% report a skills shortage on legacy technology, providing a real conundrum and startling issue for the future of IT.

Just 4% have completed their SAP to public cloud migration strategy with a further 50% yet to start. Of those that have not completed their journey:

  • 80% stated they have either postponed or cancelled their migration plans, and 9% have avoided making plans, due to the SAP skills shortage
  • 74% have either postponed or cancelled their migration plans, and 23% have avoided making them, due to the public cloud skills shortage.

This marries with the findings on security concerns, whereby 43% see security as a barrier.

Oliver Presland, Vice President, Ensono said: “We are in the midst of an IT talent drought that is holding organisations back, constraining their ability to transform, causing business bottlenecks, competitive disadvantage, security issues, and compliance risk.”

Looking specifically at ECC, under one third of organisations using SAP for ERP have moved to S/4H HANA. The remaining two thirds are still running SAP ERP Central Component (ECC). Resistance to push ahead with the migration owes much to the skills shortages that IT leaders are facing. Around one third of those still running ECC cite the lack of appropriate skills as a reason for failing to migrate over the next three years.

More than just the migration itself, organisations worry about how they will support it. In-house SAP skills are expensive and underutilised, and internal resource is generally not geared for mission-critical SAP application support. While, SAP recently announced that it will extend support for ECC for a further two years for customers buying standard support, or until 2030 for those purchasing extended support contracts, but even this might not provide sufficient time.

If the skills gap can’t be plugged – either SAP skills or cloud skills – then there’s a very real risk of organisations abandoning the SAP portfolio altogether. As things currently stand, 14% plan to completely move off the SAP ecosystem over the next three years, with a further 15% planning to reduce their SAP application portfolio. Altogether, almost 1/3rd of businesses have some intention to either reduce or completely abandon the SAP ecosystem.

Simon Ratcliffe, Principal Consultant, Ensono, said: “For many of those two thirds of organisations which plan to continue as SAP houses, skills shortages will continue to present a challenge. Each business will have different methods for managing that challenge depending on their situation. For a large proportion, however, the solution will revolve around a partnership with a Managed Service Provider – acting to support an in-house team.”

As Ensono’s research indicates, under a quarter of organisations currently make use of an MSP to manage their SAP applications. But IT leaders expect this to change. Responses in Ensono’s survey suggest that in just three years, over one third will be making use of an MSP to manage their SAP portfolio. Internal teams are expected to play a slightly reduced role, with professional services firms and individual contractors also anticipated to be taking on reduced responsibility.

With strong partnerships with Microsoft and SAP, as well as significant industry recognition, Ensono has worked with many enterprise organisations – from City & Guilds Group to Arco – to deliver SAP on Azure transformation. Ensono Managed SAP on Azure offers a safe and reliable path for companies to move SAP workloads to Azure. It has over 100 Microsoft qualified technical associates and over 6 partner designations to ensure clients’ migration to Azure meets its goals.

For more information on the research, you can download the full report: https://info.ensono.com/SAP-Azure.html

For more information about Ensono, please visit: https://www.ensono.com/uk.

For media inquiries, please contact Beth Burghgraef at: [email protected].

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