Rapid growth in SAP ERP adoption has led to a corresponding increase in outsourcing for managed application services, ISG Provider Lens™ report says
Demand for SAP services in the U.K. has grown steadily in the last 12 months, as more enterprises look to move their ERP systems to the cloud, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2023 ISG Provider Lens™ SAP Ecosystem report for the U.K. finds the growth of large SAP S/4HANA transformation projects in the United Kingdom is being driven by SAP’s looming discontinuation of support for SAP ERP Central Component (ECC) 6.0 and by increasing interest in the company’s cloud-based RISE with SAP program as a means of improving operational efficiency and speed. Service providers have responded by expanding their offerings and developing solutions that deliver end-to-end services for SAP S/4HANA transformation.
“U.K. service providers are keenly aware of changes in the SAP market,” said Yadu Singh, ISG EMEA lead, digital platforms and solutions. “In response, they’ve stepped up to act as full-fledged business partners for their clients.”
According to the ISG report, providers have adopted a variety of approaches to take advantage of the growing SAP market and to differentiate themselves from their competition – including through development and use of proprietary tools, accelerators and solutions. Leveraging their nearshore and offshore resources, many providers for the midmarket segment have used automation to quickly transform their SAP services. Providers are also building roadmaps specific to each industry they serve, taking into account the nuances and challenges of each sector, ISG says.
Meanwhile, consulting firms have sought to increase their own footprint in the SAP market by leveraging their niche expertise in tax advisory and finance transformations, the ISG report says. These firms have reaped the benefits of global and regional acquisitions that have enhanced their capabilities in SAP S/4HANA transformations. Despite these efforts, they still have a long way to go in expanding their product portfolios and increasing their competitive strength, ISG says.
“Large-scale transformation projects can be incredibly complex,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Enterprises are seeking providers that can offer end-to-end services.”
The report also examines how providers are investing in skills development and increasing the number of SAP-certified staff to meet enterprise demand for skilled business partners.
The 2023 ISG Provider Lens™ SAP Ecosystem report for the U.K. evaluates the capabilities of 32 providers across four quadrants: SAP S/4HANA System Transformation – Large Accounts, SAP S/4HANA System Transformation – Midmarket, Managed Application Services for SAP ERP and Managed Platform and Cloud Services for SAP ERP.
The report names Accenture, Capgemini, Eviden (Atos), Infosys, TCS and Wipro as Leaders in three quadrants each, while HCLTech, IBM and LTIMindtree are named as Leaders in two quadrants each. Birlasoft, Hexaware, Kyndryl, Tech Mahindra and T-Systems are named as Leaders in one quadrant each.
In addition, LTIMindtree is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. PwC is named as a Rising Star in one quadrant.
The 2023 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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