To say the adoption of SAP S/4HANA continues to accelerate in the public sector is an understatement–what I am seeing is a mass adoption cycle at the federal, state, county, and even city levels. Explorations are well under way, RFPs are circulating, designs are in development, and organizations are seeking to identify the critical expertise that will help them bring their transformations to life. While this cycle of innovation follows a similar pattern that the ECC adoption cycle did, with commercial enterprises leading and the public sector following, there is one critical difference between what is happening with S/4HANA now and what happened 20 years ago: the innovation lag is extremely narrow.
One reason for this is that many large enterprises delayed their innovation cycles due to economic pressures, while the public sector has been far faster to adopt S/4HANA than they did ECC. Interestingly, this pattern is not exclusive to S/4HANA adoption: I am seeing parallel enterprise and public sector adoption of Oracle cloud programs as well. Whether the technology at hand is SAP or Oracle-based, I have said it before, and I will say it again: both groups need to buckle up for massive labor compression.
Small to medium-size businesses (SMBs), however, and smaller public sector agencies that are willing and able to leverage GROW with SAP public cloud edition, may have an opportunity here to accelerate their adoption, and perhaps gain a competitive advantage.
GROW with SAP: Best-in-Class Business Processes, Rapid Adoption, and Consistent, Repeatable Expertise
Simply put, enterprises have larger, far more complex environments than SMBs typically do, and they often have specialized use cases that necessitate brownfield and bluefield implementations. In addition, they are far more likely to want or need to take advantage of emerging technologies. Large, federal public agencies are similarly positioned, with the added layers of complexity that FedRAMP and other regulations bring. As a result, these are long innovation cycles, measured in years, and identifying specialized expertise for these edge use cases can be challenging—they are difficult to staff on demand.
SMBs and smaller public sector agencies, by contrast, are better positioned to act nimbly. Relative to enterprise adoption, these can be micro-implementations. If they take a greenfield approach, decommissioning existing systems and leveraging SAP’s best-in-class-business processes, rapid adoption tools and innovations driven by SAP Business Technology Platform (BTP), they can completely transform their business processes in a matter of months. The innovation cycle is far shorter and less complex, there are fewer variables, and the skillsets needed to realize the transition are more consistent, so there will be more people with the right expertise to work on these programs, and they will be more readily available to engage.
The Flexera 2023 State of the Cloud Report had some relevant statistics that reinforce my point: first, among SMBs that participated in the survey have 67% of workloads and 63% of data in public cloud compared to enterprises which have 50% of workloads and 48% of data in public cloud. Further, the report indicates that 80% of enterprises cite lack of expertise as a top cloud challenge, while only 47% of SMBs do. The reasons behind this? I would hazard that it has to do with complexity and ability and willingness to house workloads and data in public cloud.
While I anticipate that there will be an unprecedented number of organizations making the transition to S/4HANA public cloud edition in the coming months and years, and there will be some accompanying labor compression, I don’t think it will be as severe do to the accelerated innovation and consistency in necessary skills. However, in my point of view, any organization that can take advantage of GROW—and wanting to sidestep the emerging massive labor compression—would be well served by doing so.
The Right Expertise, at the Right Time, for the Appropriate Investment
Of course, as an enterprise performance partner, we are doing our best to plan for every upcoming contingency. We have been and continue to be proactively cultivating relationships with proven expertise to support both large enterprises and public sector agencies with their highly specialized needs. In parallel, we are exploring the skillsets necessary to support organizations who choose GROW with SAP as their path forward.
Whatever path you choose, we’re here for you.
About Baer
Unlike typical technology staffing companies, Baer is a true enterprise performance partner. We have a deep understanding of the scope of enterprise technology transformation initiatives and the highly specialized skillsets you will need at different stages of the process.
To learn more about how Baer can make a positive impact on your enterprise transformation, please reach out to Brian Trout, btrout@baergroup.com, Executive Vice President, Sales, or John Wilson, Vice President of Strategic Accounts, at jwilson@baergroup.com.
We look forward to speaking with you and learning about your specific challenges.