SAP customers say migration is eating their budgets—and AI is next in line

SAP has unveiled its most ambitious AI vision yet at Sapphire 2026 this week: more than 50 Joule Assistants, 200 specialized agents, and a new “Autonomous Enterprise” framework. But for many SAP customers, who are still navigating costly migrations to SAP’s S/4HANA cloud ERP, the more pressing question isn’t what AI can do. It’s whether they can get there from here.

Budget constraints are now the top challenge facing SAP customers, cited by 61% of respondents in the Americas’ SAP Users’ Group (ASUG) 2026 Pulse of the SAP Customer survey, 7 percentage points higher than last year. And the culprit isn’t macroeconomic pressure, according to ASUG. It’s the migrations themselves.

“From our research, it’s more so that S/4HANA projects are creating the budget pressures,” said ASUG’s research director Marissa Gilbert. “And we’ll see AI impacting them next.”

Stuck in pilot mode

Separate ASUG research on AI adoption, conducted in February 2026 in collaboration with Microsoft and Intel, revealed just how far most organizations are from SAP’s autonomous vision. The survey of 142 ASUG members found that while 41% are actively piloting AI and 39% are building foundational knowledge, only 24% have moved to active deployment. Just 10% have achieved enterprise-scale rollout.

“AI adoption is advancing, but turning pilots into enterprise deployment remains the key challenge,” the ASUG 2026 SAP AI Research stated. “The largest drop-off occurs when moving from pilot activity into operational rollout.”

The barriers are familiar: security, privacy, and governance concerns (32%), budget constraints (27%), and lack of internal AI skills (27%). What organizations say they need to move forward is equally telling: clear governance frameworks (40%), alignment with business processes (39%), and compelling use cases (39%).

Even among organizations that are evaluating AI’s business impact, few do so rigorously. While 56% say they assess AI ROI, only 18% use formal frameworks; the rest do so informally or on a case-by-case basis. And there’s a significant gap between ambition and accountability: 61% of organizations aim for AI to drive cost reduction, but only 31% consistently measure whether it’s happening.

As one survey respondent put it: “There is not enough focus on delivering value via AI rather than just using AI. Investment is currently not justifying the outcomes.”

A matter of perspective

Not everyone is worried. Mickey North Rizza, group vice president of enterprise software at IDC, paints a more optimistic picture. “More than half of organizations have AI agents embedded in core workflows; 20.5% are scaling to agents gradually,” she said. “The point is, companies are moving and moving fast. SAP’s AI vision is a north star for their clients to move successfully into the AI world.”

But Maribel Lopez, founder of Lopez Research, sees it differently. AI capabilities may be available, she said, but adoption lags far behind. “SAP customers are very cautious because the SAP workloads are at the heart of running the business,” she said.

Chase Christensen, segment CIO at St. Petersburg, Florida-based manufacturing services company Jabil, offered a more tempered view. “It feels like SAP is moving faster than in the past,” he said. “It’s still bumpy. But I’m seeing a path where this doesn’t require multi-year transformations to get value out of innovation.”

Christensen was candid about what SAP still needs to deliver: support. “Give us the support rather than have us deal with a mix of systems integrators to figure it out,” he said.

Migration progress, at a cost

ASUG data shows that 56% of customers are either live on S/4HANA or have begun their migration, up from 45% in 2024. The percentage of them who are planning to wait more than two years to make the move dropped from 22% in 2023 to just 9% in 2025. And S/4HANA as a top challenge has “stabilized compared to last year,” Gilbert said.

But that momentum comes at a cost. Reports of budget pressure jumped seven points year-over-year. Data challenges are intensifying; the percentage of respondents struggling to gain actionable insights from data rose eight points year-over-year to 35%. And nearly half (48%) cited integration as a challenge.

Hybrid environments also appear to be here to stay. While on-premises deployments are declining sharply, 28% of customers remain in hybrid scenarios. “Based on our historical data, I think we can expect hybrid scenarios to remain,” Gilbert said.

SAP’s answer: decentralize

Jonathan von Rüeden, SAP’s chief AI officer, acknowledged the adoption gap at Sapphire. “We may have over-indexed as an industry on centralization,” he said.

His pitch: give AI tools directly to business users through the new Joule Desktop, launching this week, and let adoption flow back to IT organically. “If you get it in people’s hands, that needs to flow back into IT eventually,” von Rüden said. “Now is the time to do that.”

That approach may find a receptive audience. The ASUG research shows that Microsoft dominates current AI tool adoption (72% of respondents use Copilot), but SAP is positioned for growth; more than half of respondents said they plan to use the embedded AI features in SAP applications and Joule agents.

However, whether budget-constrained IT organizations can absorb another wave of change remains an open question.