SAP Pivots To New Future Of ‘Strategic Transformation’

SAP’s recent announcement of a company-wide restructure and cost-cutting exercise, including the loss of 8000 jobs globally, comes with a silver lining as the company reports significant take-up for the cloud-based platforms that have quickly become its key focus.

It’s not known how many of the approximately 1200 employees of SAP Australia will be impacted by the restructure. However, SAP said it plans to continue to re-invest in “strategic growth areas”, and expects to exit 2024 with a headcount similar to current levels.

“The global macroeconomic landscape remains volatile, with AI driving seismic change in the technology sector,” an SAP spokesperson said. “Consequently, SAP will increase focus on strategic growth areas, especially the accelerated development and implementation of business AI [artificial intelligence] technology and scenarios.”

The restructure announcement came as SAP announced a 6% lift in total global revenue for the full year 2023, including a 20% boost to cloud revenue. That was driven by a 67% jump in revenue for the cloud-based S/4HANA package, whilst on-premise software licenses fell by 14%.

Meanwhile, in the Asia Pacific Japan (APJ) region that includes Australia and New Zealand, cloud revenue in Q4 alone was up by 28%, and full-year APJ revenue rose by 21%. According to SAP, these results were driven by some significant cloud-based transformation projects by ANZ companies including Australia’s Coles Group, AusNet and Airservices Australia, and New Zealand’s Foodstuffs North Island and Christchurch City Council.

SAP said its RISE with SAP platform was helping to underpin the shift to the cloud of many businesses including AusNet, Christchurch City Council and Coles Group. The latter also completed a successful transition to SAP SuccessFactors that has created a single “source of truth” for hiring and managing up to 60,000 new employees each year.

“Across Asia Pacific and Japan, we see forward-thinking businesses recognising and acting on the need for ongoing strategic transformation supported by SAP,” said President of SAP APJ, Paul Marriott. “Once organisations are able to create a solid foundation in the cloud they can then explore new avenues of growth in areas like artificial intelligence, data analytics, and sustainability.”

With the exponential growth in AI-led technologies and a major shift to replace on-premise licenses with cloud-based platforms, expect SAP to continue to focus on building expertise at the cutting edge of software-as-a-service (SaaS) and platform-as-a-service (PaaS) technologies. It will also invest heavily in convincing existing customers with legacy systems to migrate across to cloud-based platforms such as S/4HANA.

“We’re embarking on the next chapter of growth to make SAP No.1 in Business AI,” said SAP Australia and New Zealand President and Managing Director, Angela Colantuono. “We’re laser-focused on bringing our customers new innovations to help them drive efficiencies and set themselves up for future success.”