The biggest challenge in 2023: companies lack time and resources to pursue digital transformation

Natuvion, a leading digital transformation consulting firm, is seeing companies at a crossroads heading into 2023. A dramatic shortage of skilled personnel and an increasingly competitive market for transformation professionals have companies questioning their ability to achieve their goals. Holger Strotmann, Managing Director at Natuvion, explains what is at stake: "SAP customers who have not yet started their SAP S/4HANA transformation will soon lag their competition. System modernization will become drastically more expensive and time-consuming than for those who already started or have even completed their transformation."

Many are willing, some are ready, and few are successful

In a recent study, Natuvion documented the experience of companies that have already completed their technical transformation. The alarming result: 50 percent of those surveyed admitted not having achieved all of their transformation goals. Half of those companies belong to core industry sectors: Automotive, Life Science, and Energy. In order to improve this situation, 2023 transformation projects must increase their efforts for planning, preparation, and implementation. The number of transformation projects will continue to rise sharply in the coming years while the demand in the market for IT professionals has outpaced the supply. The majority of transformation consultants are fully booked for the entire next year. This fact immensely increases the pressure: Strotmann continues this thought: "Many companies will be hit hard by these challenges. Their worries will make them compromise on quality. Both are hardly justifiable in regard to the market outlook and considering the competitive international conditions."

The regular chaos, times two

Due to government and political intervention, some sectors will particularly be urged to innovate and transform in 2023. Energy suppliers are confronted with a dynamic environment with disrupting regulations introduced on short-term. Examples are ad-hoc measurements to decelerate gas prices as well as a cap on energy prices which force transformation projects into switching gears to manage corresponding system changes and adjustments.
Additionally, unexpected and serious changes jeopardize running transformation projects, turn these upside down, put them on hold, or even may call them off. The Natuvion CEO predicts that "in 2023, regulated industries must pay attention to reassessing the situation enforced upon them and incorporate any changes into their transformation projects. If you consider that such projects have a planning and lead time of up to two years or more, it becomes obvious that flexibility and agility is key for companies to live up to the challenge."

No time to lose

The evolution of the global economy does not allow companies to count on a sufficient time window to transition comfortably or being able to even permit putting business on hold. Today's business runs 24/7 with very little to no time at all for system changes. That is why near-zero downtime migration concepts are in high demand enabling the modernization of an entire platform during normal business operations.
To address this challenge, SAP selected three of its very experienced global partners as part of the SAP S/4HANA Transition Enablement Community. Together they jointly develop migration solutions that can be characterized as fast, seamless, and disruption-free.

Resource and workforce shortage

The lack of resources and qualified professionals has been raised as an issue in the past. However, voices are getting louder, claiming that 2023 will see the situation dramatically worsen. New projects, together with the aftermath of less than well-executed transformation projects, changes initiated by legislation and politics, complemented by national and international pressure becomes a recipe for disaster in the year ahead for the already overloaded internal resources. At the same time, transformation service providers have been facing an overwhelming demand for two years, struggling to fill their own openings for qualified personnel.

Strotmann summarizes: "Probably the biggest challenges for both companies and service providers will be the shortage of qualified personnel. Service providers may have a certain advantage since they have been able to offer talents an attractive work environment with a diversity of exciting assignments. Larger firms even build their organization on internationally sourced teams. In contrast to the industry, service providers efficiently deploy resources across transformation projects in an agile way."

"The year 2023 has the potential to be the most exciting of the last 25 years," continues Managing Director Strotmann. "We at Natuvion are well-prepared for what is coming our way. We manage a continuously growing number of inquiries for transformation projects. While facing uncertainties, enormous pressure, and the geo-political impact, we never settle for compromized quality. Such projects consume a considerable amount of resources and time but there is no other option to a successful migration. Success is the only destination companies should have in mind to justify the effort and realize the benefits."