Journey to the Cloud. SAP CEE report

30 June 2022

The importance of cloud technology in the international business landscape is increasing every day. What is the current level of cloud implementation in Central and Eastern Europe? How far the region’s businesses have progressed on the digitization path to reach the summit? In cooperation with Kantar, a leading data, insights, and consulting company, SAP conducted an international survey among IT and business decision-makers from Austria, the Czech Republic, Hungary, Poland, Romania, and Serbia to look at cloud adoption in the region. According to the report, “Journey to the Cloud. Central and Eastern Europe on the road to digital transformation”, 76% of respondents declare using at least one cloud solution.

Key results:

Billing and transactions, security solutions, and financial planning & analysis are the most popular business areas where companies adopt cloud solutions.
The need for remote working is a key driver of cloud investment in CEE, with 29% of enterprises citing it.
61% of CEE managers plan to implement at least one new cloud solution in the next 12 months.
Data security is the most important benefit among all Central and Eastern European managers. At the same time, it is the biggest source of concern related to cloud technology adoption.

A path that leads to the top

The results of the cloud research show that cloud technologies strongly influence the business landscape in the region. On average, almost 8 in 10 surveyed companies (76%) are already using the cloud for at least one business area. Which countries are currently closest to the summit, and which need to work on the pace of the climb? Hungary demonstrates the highest share of cloud usage in the region, with 86% of managers declaring the use of the cloud in enterprise management. Poland (80%) and Serbia (79%) are the following two countries with cloud usage higher than the region's average. So far, Austria stands out with the lowest result (64%).

Cloud adoption has accelerated in recent times. However, enterprises still have a long climb ahead to reach the top. Fortunately, the prognosis is promising. According to our research, 70% of managers expect an increase in investment in the cloud in the next two years. So business is in for a real revolution in technology used. We're observing right now that the emergence of cloud solutions in a wide variety of business areas raises the need to standardize cloud ERP ecosystems. RISE with SAP is a direct answer for that business need

– says Tom Kindermans, Managing Director for Central and Eastern Europe at SAP.

Cloud investment plans and forecasts

As SAP research shows, more than half of surveyed CEE companies are in the middle of the processes aimed at implementing a more integrated, flexible, and consistent corporate digital ecosystem. 52% of them describe their ERP landscape as oriented to the standard and only one out of four – as entirely standardized. ERP landscape is more often standardized in companies with over 500 employees (28%) than in smaller enterprises (21%). On the other hand, smaller companies more often define themselves as oriented to the standard (54%), which means that digital transformation in smaller companies can accelerate significantly in the upcoming years.

A surge in cloud investment is expected in all CEE countries and all parts of the economy. On average, 61% of CEE managers plan to implement at least one new cloud solution in the next 12 months. The highest results were recorded in Poland (70%) and Hungary (70%). What is more, as many as 7 out of 10 respondents said that they expect an increase in investment in the cloud in the next two years. 73% of companies with 500 employees or more are planning to raise their cloud investment, compared to 66% of smaller enterprises – which still makes cloud the increasingly crucial digital transformation goal for most companies surveyed regardless of the scale of employment.

Cloud investment drivers and benefits

The last two years have proven that the most resilient companies are those most advanced on the digital transformation path. In the light of that learning, it comes as no surprise that the need for remote working is a cloud investment factor with the highest relevance for CEE enterprises (29%, followed by increasing demand for flexibility (27%), company growth (26%), operational efficiency (25%) and reduction of operating costs (24%). What is more, one out of five respondents pointed directly to the COVID-19 pandemic as an investment driver (22%).

SAP research reveals that there is specific cloud investment for the CEE countries. More than every third Czech professional says that the increasing need for remote working is an essential determinant of cloud investment (37% of respondents in this country). This issue was also most important for Serbian companies (30%). Austria stands out, with 38% of managers highlighting the need for flexibility as the most critical cloud driver. More robust than in any other country, company growth fuels cloud investment in Poland (39%). Improvement of operational efficiency was the most crucial factor in Romania (32%). On the other hand, Hungarian companies pay special attention to the reduction of operation costs (30%).

Every company and every country has its reasons for cloud adoption. But the overall trend for the CEE region is clear – the cloud is the future for business transformation in the upcoming years. Companies in our part of the world perceive cloud computing as a resilience and optimization driver and appreciate its benefits, such as data security, high accessibility, and easier software administration. The CEE region is ready for the cloud, and so is SAP

says Tom Kindermans.

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Key findings for the CEE countries

Austria

· Lowest score of cloud use and range in CEE with solid future forecasts.

· COVID-related issues are the leading cloud drivers in Austria.

· Procurement, financial planning, and billing are the top 3 areas of cloud use.

· Security issues are the greatest benefit and fear of cloud investment.

· Austria reports the highest share of companies that lack focus on cloud investment.

Czech Republic

· Exceptional cloud usage in data and warehouse management.

· The highest emphasis in CEE on remote working as a cloud growth driver.

· Security issues as the greatest benefit and fear of cloud investment.

· Average cloud awareness.

· Cloud investment as solid component of the IT budgets.

· Low awareness of the key advantages of cloud as the barrier.

Hungary

· CEE champion in terms of cloud use and range.

· Cost reduction as the specific cloud driver.

· Data security as the greatest benefit and service level agreements as the main concern.

· Unclear legal situation as top 3 investment barrier.

· The highest share of cloud in IT budgets in CEE.

Poland

· The business lines most likely to use cloud solutions are billing and payments, and marketing.

· The key factor driving investment in the cloud in Poland is business growth - indicated by 4 in 10 managers.

· 70% of respondents confirm implementing a new cloud service within the next 12 months.

· Data security is the area respondents identify as both the most powerful benefit and the most significant challenge associated with implementing a cloud environment.

Romania

· High average number of areas with cloud in use.

· Operational efficiency as the specific cloud driver.

· Data security as the greatest benefit, vendor lock-in as the specific Romanian concern.

· Average cloud awareness and an average cloud share in IT budgets, but high growth expectations.

· Unclear legal situation as the main organizational barrier – the highest score in CEE.

Serbia

· The highest average number of areas with cloud in use.

· Remote work as the highest cloud driver.

· Data security as the greatest benefit, being too dependent on one provider as the specific Serbian concern.

· Unequal knowledge of cloud terms.

· Average growth expectations compared to other CEE countries.

· Lack of staff as the main organizational barrier – the highest score in CEE.

About the report

“Journey to the Cloud. Central and Eastern Europe on the road to digital transformation” report is based on the results of an international study conducted by Kantar on behalf of SAP in September and October 2021. Its goal was to measure the current state of use of cloud technologies in Central and Eastern Europe, including investment plans of enterprises and the development potential of the cloud market in the researched locations. The survey was conducted using the CAWI (computer-assisted online interview) method among 1,413 managers deciding on business and IT budgets in companies with over 100 employees. The survey was conducted among respondents from Austria, the Czech Republic, Poland, Romania, Serbia, and Hungary.

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Justyna Kędzierska

Market Unit Lead for Communication at SAP CEE

Monika Sadowska

Senior Consultant at Linkleaders

+48 502 243 620

Paweł Luty

Senior PR Consultant at Linkleaders

+48 533 890 507