Enterprises Hesitate to Upgrade to SAP’s S/4HANA Intelligent ERP
According to a report by Information Services Group (III), many enterprises may delay large-scale SAP S/4HANA transformations due to economic uncertainty. Instead of upgrading, businesses are likely to maintain their existing SAP ERP systems for cost management. The report emphasizes the growing client base hesitant to transition to S/4HANA due to concerns over cost and complexity. However, some enterprises may still adopt S/4HANA for its efficiency and management solutions. Leading service providers are enhancing support for the migration process, leveraging AI and agile practices to facilitate smoother transitions.
- Enhanced conversion and migration services from SAP-related providers.
- Growing focus on AI and machine learning technologies among service providers.
- Economic uncertainty leading to delays in SAP S/4HANA transformations.
- Concerns over cost and complexity making enterprises reluctant to transition.
STAMFORD, Conn., Sept. 10, 2020 (GLOBE NEWSWIRE) -- Many enterprises across the globe may delay large-scale SAP S/4HANA transformation and implementations due to economic uncertainty, even as the company is pushing the benefits of its intelligent ERP system, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Archetype Report finds that instead of upgrading or adopting SAP’s S/4HANA, some enterprises may continue their existing SAP ERP setup and maintenance arrangements to meet short-term goals such as cost management and agile delivery. Enterprises may also look to move their SAP functions to the cloud as a way to rein in costs, the report says.
There is a large base of enterprise clients across the globe that have not made the decision about whether to move to S/4HANA, the report says. In many cases, these enterprises are concerned about the cost, complexity and manageability of a transition. Service providers are assuring these enterprises that they will continue to support older systems.
Still, some enterprises may turn to S/4HANA because of project speed, simplicity, cost and solution management needs, the report says. SAP’s evolution to S/4HANA has come in response to changing enterprise needs and IT requirements.
“SAP launched S/4HANA to address enterprise needs centered around growing IT complexity, legacy applications and customizations, database migration and maintenance,” said Jan Erik Aase, director and global leader, ISG Provider Lens Research. “S/4HANA helps simplify data and applications while providing a rich user experience.”
To help ease the transition to S/4HANA, SAP-related service providers have enhanced their conversion and migration services. They have added industry-focused preconfigured templates for speedy implementations to tap the large market of enterprises seeking to take the brownfield implementation route, the report says. Service providers continue to strengthen their portfolios to meet enterprise requirements for landscape transformation, intelligent enterprise-led transformation, conversions and implementations and for managing existing legacy SAP ERP offerings.
The report sees service providers developing new tools and accelerators using artificial intelligence, machine learning and other technologies. Service providers are also integrating agile and DevOps practices for rapid development, prototyping, deployment and faster release cycles.
The ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Archetype Report examines four different types of clients, or archetypes, that are looking for SAP-related services. The report evaluates the capabilities of 18 providers to deliver services to the four archetypes:
Transactional users: These clients have SAP ERP Central Component (ECC) or R/3 as an existing ERP solution and are seeking services to manage those applications. The client is reluctant to move to a different ERP system, primarily due to resistance to change, lack of investment ability, inability to manage more complex SAP environments and lack of skillsets.
Technical transitioners and cloud adopters: These clients have SAP ECC as their existing ERP and intend to implement SAP S/4HANA. They want to implement SAP S/4HANA through Suites on HANA or conversions for both on-premises and the cloud, or they want to implement SAP S/4HANA Cloud and, in the process, achieve stability in their business process and IT application landscape.
Landscape transformers: These companies want to realize the benefits of S/4HANA and are ready to invest in an integrated ERP system as soon as possible. Leadership is prepared for organizational process changes and wants to work toward a new ERP system to realize the benefits from responsive applications and a rich user interface.
Digital futurists: These companies want to embrace digital transformation using SAP S/4HANA and emerging technologies such as machine learning, artificial intelligence and blockchain. These clients intend to move from their existing application architecture and leverage the power of these emerging technologies to provide value to their customers.
Among the providers ISG evaluated, Capgemini, Cognizant, HCL and Infosys were named leaders across all four archetypes, and Accenture, DXC Technology, Mindtree, Tech Mahindra and Wipro were named leaders across three. The report names Atos and IBM leaders across two archetypes and Deloitte, NTT DATA and TCS as leaders in one.
The ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Archetype Report is available to subscribers or for immediate, one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe and Latin America, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
The series is a complement to the ISG Provider Lens Archetype reports, which offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
Starting this year, each ISG Provider Lens™ study will include a Global Summary to help enterprise subscribers better understand provider capabilities across all geographic markets covered by that study. All ISG Provider Lens™ reports also will now include an Enterprise Context feature to help executives quickly identify key insights related to their roles and responsibilities.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
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Will Thoretz Information Services Group, Inc. +1 203 517 3119 Will.Thoretz@isg-one.com Jim Baptiste Matter Communications for ISG +1 978 518 4527 jbaptiste@matternow.com
FAQ
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