ISG Provider Lens™ Report Finds Many Enterprises Still Reluctant to Move to Newer Versions of Sap Products, Despite Plan to Stop Supporting Older Tools

Companies using SAP legacy applications for their enterprise resource planning needs are looking for service providers to help them update their SAP software and balance legacy and customized applications, according to a new report published today by Information Services Group, a leading global technology research and advisory firm.

The 2019 ISG Provider Lens™ SAP S/4HANA Services Archetype Report finds enterprises across the globe taking a customized, business-needs approach to SAP S/4HANA adoption, with most thoroughly evaluating their requirements before updating their ERPs.

S/4HANA can help enterprises “deal with increased complexity, highly customized applications and large databases,” said Jan Erik Aase, director and global leader of ISG Provider Lens Research. “The product helps customers simplify data and applications, and at the same time, offer a rich user experience.”

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Still, many enterprises are reluctant to migrate to newer versions of SAP ERP tools, even as the company plans to sunset support for its ERP Central Component 6.0 by 2025, the report says. Service providers are maintaining and managing these legacy ERPs.

Those enterprises still not ready to migrate to newer versions may eventually need help from service providers to create an SAP roadmap, the report says.

In addition to maintaining legacy installations and assisting with migration roadmaps, many service providers evaluated in the report offer industry-specific templates for SAP S/4HANA, including for the manufacturing, retail, consumer packaged goods and utilities industries. Enterprise customers, the report says, are seeking these targeted tools to help them in their transformation journeys to become intelligence enterprises and to achieve faster time-to-market.

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The 2019 ISG Provider Lens SAP S/4HANA Services Archetype Report examines four different types of clients, or archetypes, that are looking for SAP-related services. The report evaluates the capabilities of 17 providers to deliver services to the four archetypes:

Transactional Users: These customers have SAP ERP Central Component or R/3 as an existing ERP solution and are seeking services to manage those applications. They are reluctant to move to a different ERP, primarily due to resistance to change, lack of investment, inability to manage complex SAP environments and lack of skillsets.

Technical Transitioners: These customers intend to implement SAP S/4HANA and have SAP ERP Central Component as their existing ERP offering. They want to implement SAP S/4HANA through Suites on HANA or brownfield conversions for both on-premises and cloud installations. They want to achieve stability in their business processes and IT application landscapes.

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. Their leadership teams are prepared for an organizational process change and want to work toward a new ERP system to realize the benefits of responsive applications and a rich user interface.

Digital Futurists: These customers seek digital transformation using SAP S/4HANA and emerging technologies such as machine learning, artificial intelligence and blockchain. They intend to move from existing application architecture and leverage the power of emerging technologies to provide value to their customers.

Among the providers ISG evaluated, Capgemini, Cognizant and Infosys were named leaders across all four archetypes. Accenture, DXC Technology and Tech Mahindra were named leaders in three archetypes, while Atos, HCL, IBM, Mindtree and Wipro were named leaders in two. Deloitte and NTT DATA were named leaders in one archetype.

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