How Accurate Was ASUG on its S/HANA Poll?

Executive Summary

  • ASUG produced a poll called the 2019 State of the SAP Community which covered S/4HANA topics.
  • How accurate was this poll?

Introduction

The first thing to note about the ASUG poll is that ASUG provided no numbers about who took the poll. Nothing. No numbers about how many participants there were, industry the customers were from, nothing.

But something else to mention is that ASUG has no independence from SAP. Therefore they are an entirely non-credible source of information on SAP, and we find falsehoods presented by ASUG in their publications as a normal course of reading ASUG material. In fact, ASUG’s material is essentially copied and pasted directly from SAP marketing literature.

ASUG’s Infographics

These graphics are the only real detail from the poll. We will highlight some of the curious observations listed in these graphics.

In June of 2016, Nucleus Research published a very different type of result from polling SAP customers.

But again, ASUG exists primarily to promote SAP, therefore they are required to report that the vast majority of customers see SAP as central to their innovation. 

Business Self Identify as Innovators?

Being an innovator has a positive connotation. This does not prove that the respondents are innovators, only that they think they are.

Who is Moving to S/4HAAN and When?

This is a problematic reporting of the percentages that fall into each category. If we look at just the percent of customers already live, which is reported as 16% and multiply this by the number of ERP customers. First, let us review the estimate of the SAP ERP customers.

Potential S/4HANA Customers from SAP ERP Installed Base

SAP has the following ERP systems.

Customers Using SAP ERP

 
SAP ERP Product
Number of Live Customers
1SAP ECC14,964
2SAP R/323,903
3SAP R/2986
4SAP Business One13,065
5SAP ByDesign1,052
6Number of Net New S/4HANA Customers (non previous SAP ERP customers)Not relevant for the evaluation of the ASUG poll.
7Total SAP ERP Live Customers53,970
9Total Adjusted (Estimated) Potential S/4HANA Customers40,591

Applying a S/4HANA Conversion Probability per ERP Product

ECC and R/3 customers are natural candidates for S/4HANA. Although it is interesting that most of SAP’s ERP customers are still using R/3 and not ECC. This is made even more interesting by observing that ECC was introduced in 2016. This means that most of the SAP customers on R/3 did not migrate to ECC.

*The raw data for this table was provided by HG Insights. Something to observe is that there are not truly reliable source for the number of customers actively using the various SAP products. We cover this topic in the article Does SAP EWM Have Close to 2,000 Live Customers?  

To arrive at an estimate for the potential installed base ERP customers that are the potential overall market for S/4HANA, we used the following logic.

  • 100% of ECC customers
  • 100% of R/3 customers
  • R/3 was released in 1992. If these R/2 customers have not upgraded to R/3 from this time, they are unlikely to be candidates for S/4HANA.  We estimate 5% of R/2 customers would be a potential market for S/4HANA.
  • As Business One is the SMB market and is quite distinct from the rest of SAP, we estimated only 10% of Business One customers are potential customers for S/4HANA, and this would only be for S/4HANA Cloud
  • ByDesign is aging and many SAP customers need a replacement. We estimated 35% of current ByDesign customers to be potential customers for S/4HANA, and this would again be S/4HANA Cloud.

This is how we arrived at we arrived 40,591 potential S/4HANA customer conversions from the current installed base. The poll is of current SAP customers, so we did not add an estimate for net new SAP customers.

If we apply the 16% provide by ASUG by 40,591, we arrive at 6,495 customers already live on S/4HANA. However, as recently as a month ago at SAPPHIRE, Hasso Plattner estimated only 3,500, which according to our study is extremely exaggerated.

The Implications of the ASUG Poll Versus Our SAP ERP Customer Estimate

This means that ASUG’s poll shows more than 1.85x or almost 2x the number of live instance of S/4HANA of even the rosiest projections. It also proposes that another 6,495 (roughly) S/4HANA projects are currently being implemented. If this were true, this would be an enormous number of S/4HANA consulting jobs and job listings (that we do not observe) and an overall “buzz” around the S/4HANA application. It would also mean many tickets being opened on S/4HANA topics.

This brings up a question as to representativeness of the poll group or the sample to the population. But ASUG has no adherence to any research rules. In fact, they don’t even report any of the details around the underlying information. Polling has to attempt to represent the population or the poll is worse than useless.

Conclusion

When ASUG reports these numbers, and when they are repeated through various media and consulting channels, these number will be quoted without observing that..

  • No information about the poll respondents was provided, not even the number that took the poll.
  • The lack of representativeness of the poll.
  • The impact of this poll will simply be to have readers overestimate the growth of S/4HANA.

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References

https://discovery.hgdata.com/product/sap-erp-central-component-ecc

http://blog.asug.com/asugs-2019-state-of-the-community-study-reveals-sap-customer-insights-challenges-and-opportunities

https://www.riministreet.com/Documents/Collateral/Nucleus_6-out-of-10-customers-wouldnt-buy-SAP-again_June-2016.pdf