Clouds Loom as U.K. Firms Weigh SAP Transition Options

SAP’s Business Technology Platform and RISE with SAP proposition are both seen as potential catalysts in the transformation to S/4HANA, ISG Provider Lens™ report says

As the end of support for a legacy SAP system draws closer, U.K. enterprises need to decide whether the next step in their SAP journey should take place on premises or in the cloud, a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, says.

The 2024 ISG Provider Lens™ SAP Ecosystem report for the U.K. finds enterprises planning to move their SAP applications to the cloud are looking to providers for help optimizing their migration to S/4HANA. Enterprises with a strategic focus on digital transformation are opting for a greenfield approach, using the migration as an opportunity to realign with other digital imperatives.

SAP is pushing companies to implement S/4HANA as it ends support for its on-premises ERP Central Component (ECC) system at the end of 2027. SAP’s RISE with SAP program offers tools, services and software to help large enterprises make the transition more easily.

“Providers are well positioned to serve as trusted partners at this critical juncture,” said Anthony Drake, partner and head of ISG in the U.K. and Ireland. “They can offer holistic support and innovative solutions that empower enterprises in their digital transformation journey.”

Over the past few years, SAP has sought to modularize and simplify its solutions landscape, the ISG report says. Their aim has been to keep the core S/4 HANA ERP system clean by using cloud-based services provided by SAP Business Technology Platform (BTP) for additional functionalities, the report says. A growing number of U.K enterprises have recognized the long-term benefits of SAP BTP and consider it a strategic investment to future-proof their operations and enhance scalability, agility and innovation capabilities, ISG says.

Solutions like RISE with SAP can serve as catalysts in the transformation to S/4HANA by offering access to cutting-edge business processes while delivering a secure, future-proof, cloud-based platform, the ISG report says. With RISE, enterprises also can capitalize on the flexibility and agility inherent in a composable architecture, the report says.

Although SAP has tried to make a compelling case for cost-conscious U.K. enterprises to adopt it, many enterprise CFOs are still reluctant to invest in RISE, ISG says. According to the ISG report, this can lead to unsupported systems, resulting in exorbitant maintenance costs and operational inefficiencies.

“U.K. enterprises that opt for strategies such as BTP and RISE are not simply doing it to meet immediate compliance requirements,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “They are actively positioning themselves for sustained growth, resilience and competitiveness in an increasingly digital-centric business landscape.”

The report also examines how the next generation of talent management is being shaped by intelligent and AI technologies.

For more insights into the SAP ecosystem challenges facing enterprises in the U.K., including managing cloud services and spending in a time of economic uncertainty, and ISG’s advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ SAP Ecosystem report for the U.K. evaluates the capabilities of 37 providers across four quadrants: SAP S/4HANA System Transformation, SAP Application Managed Services, Managed Cloud Services for SAP ERP and SAP SuccessFactors HXM Partner Services.

The report names Accenture, Capgemini, Infosys and Wipro as Leaders in all four quadrants, while Cognizant, Deloitte, Eviden (an Atos Business), EY, HCLTech, PwC and TCS are named as Leaders in three quadrants each. Hexaware, IBM, Kyndryl, LTIMindtree, Tech Mahindra and T-Systems are named as Leaders in one quadrant each.

In addition, Kyndryl is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants, while Alight, DXC Technology, Eviden (an Atos Business) and Hexaware are named as Rising Stars in one quadrant each.

In the area of customer experience, Infosys is named the global ISG CX Star Performer for 2024 among SAP Ecosystem partners. The provider earned the highest customer satisfaction scores in ISG’s Voice of the Customer survey, which is part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2024 ISG Provider Lens™ SAP Ecosystem report for the U.K. is available to subscribers or for one-time purchase on this webpage.

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