ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners - Archetype Report 2020
SAP S/4HANA SERVICES
SAP’s ERP portfolio has undergone several transformations in the past few years. From serving manufacturing-related functions, it has evolved to cover a gamut of enterprise functions in finance and other domains. The evolution over the years can be traced to changing enterprise needs and resulting changes in IT requirements. SAP launched S/4HANA to address these changes centered around growing IT complexity, legacy applications and customizations, database migration and maintenance. The SAP S/4HANA offering helps in simplifying data and applications while at the same time providing a rich user experience, among other benefits to the enterprise buyer.
SAP S/4HANA has been adopted across different size enterprises in industries such as manufacturing, consumer packaged goods, retail, energy, automotive and utilities, to name a few. The company offers several versions of S/4HANA to meet different business needs, ranging from on-premise, cloud, single-tenant and multi-tenant cloud editions.
ISG observes that enterprises might delay their decision making for large-scale SAP S/4HANA transformation and implementations due to the existing macroeconomic uncertainty. Enterprises could contemplate continuing with their existing SAP ERP setup and maintenance services arrangements that help them meet short term objectives such as cost management and agile delivery. To rein in costs, enterprises could seek to derive benefits from cloud through migrations, which in turn could create opportunities for providers of database services and related functions. Enterprises with basic S/4HANA requirements could show an inclination towards S/4HANA Cloud because of its project speed, simplicity, cost and solution management attributes.
Service providers have tuned their conversion and migration portfolios. They have added industry-focused preconfigured templates for speedy implementations to prepare themselves to tap the large market of enterprises seeking to take the brownfield implementation route. Service providers continue to strengthen their portfolios to meet enterprise requirements for landscape transformation, intelligent enterprise-led transformation, conversions and implementations (greenfield and brownfield) and for managing existing legacy SAP ERP offerings.
Here are some of the other important conditions and trends we observe in the market.
- Legacy SAP ERP manageability: There is a large base of enterprise clients that have not made the decision whether to move to SAP S/4HANA. These enterprises are reluctant to migrate to newer versions of SAP and would like to defer the move to S/4HANA because of concerns led by cost, complexity and manageability. Their legacy ERP environments are being maintained and managed by enterprise IT service providers or third-party enterprise software support providers that give assurance they will provide services to keep the ERP systems running through support for SAP issues. However, to reap the digital-enabled ERP benefits, customers will eventually need to prepare themselves for a transition to a more recent version of SAP ERP. They will need to plan their future engagement roadmap with either SAP service providers or thirdparty software support providers for this transition.
- Framework, tools and accelerators for SAP S/4HANA implementation continue to improve: Providers are developing new tools and accelerators and enhancing the existing ones in their repositories by introducing artificial intelligence (AI), machine learning (ML) and other technologies. They continue to leverage frameworks and methodologies to deliver S/4HANA implementations to transform clients into intelligent enterprises.
- Agile and DevOps in focus: Service providers are integrating agile and DevOps practices such as such as Scaled Agile Framework (SAFe) for rapid development, prototyping, deployment and faster release cycles to achieve agility, faster delivery and shortened release. Design thinking is also prevalent.
- Expanding industry-specific offerings for transformation: Service providers continue to focus on creating industry-specific templates for SAP S/4HANA. They are also exploring niche industries for S/4HANA to gain a first mover advantage using these templates. Manufacturing, retail, consumer packaged goods and utilities are some of the industries for which service providers have created industry templates.
Access to the full report requires a subscription to ISG Research. Please contact us for subscription inquiries.