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German Enterprises Inch Toward S/4HANA, Cloud Migrations As SAP, Service Providers Roll Out Support Programs

ISG Provider Lens™ report sees potential in SAP’s RISE and MOVE programs to help Germany’s traditionally conservative companies transform architectures and ERP systems

Many German companies are cautiously exploring migrations to SAP S/4HANA and cloud-based operating models, maintaining a historically slow pace even as SAP introduces programs to better support transformations, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

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The 2021 ISG Provider Lens™ SAP HANA Ecosystem Services report for Germany finds the migration rate from older SAP ERP systems to S/4HANA failed to meet SAP’s expectations even before the start of the COVID-19 crisis in early 2020 caused many companies to shut down or delay major projects. Customers are moving slowly because of both the complexity of digital transformation—especially for large enterprises—and uncertainties arising from rapid changes in the S/4HANA framework and products, the report says.

“German companies’ reluctance to adopt S/4HANA and the cloud predate the pandemic and reflect a fundamentally conservative approach to digital transformation,” said Andrea Spiegelhoff, EMEA partner based in Germany. “New programs from SAP, with service providers’ support, could help some customers make successful transitions.”

The RISE with SAP program, which SAP introduced this year, is designed to make cloud transformations easier with bundled licenses and cloud migration and operation services. While there are no significant success stories or evidence of acceptance in the market yet, RISE with SAP appears to be an interesting offering for Germany’s large midmarket segment, ISG says. Many service providers in Germany are already qualified to participate in the program.

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SAP also recently rolled out the MOVE program to provide better support and guidance for conversions from existing SAP ERP Central Component (ECC) systems to S/4HANA. However, many companies are still taking conversions one step at a time, the report says. In addition to the inherent complexity of such projects, some enterprises are concerned about uncertainty following the rapid development of S/4HANA products in recent years.

Many enterprises are beginning with preliminary projects to find the right strategy and are planning programs to address these uncertainties, according to the report. They are asking whether to upgrade existing systems or change system architectures to take full advantage of HANA, whether to migrate to cloud-based infrastructure as part of their S/4HANA transformation and whether to carry out their cloud and S/4HANA moves at the same time.

Service providers can help clients answer these questions and undertake the massive changes such projects require, but to do so they need strong expertise in developing system strategy and roadmaps suited to each company, ISG says.

The 2021 ISG Provider Lens™ SAP HANA Ecosystem Services report for Germany evaluates the capabilities of 39 providers across five quadrants: SAP S/4HANA System Transformation – Large Accounts, SAP S/4HANA System Transformation – Midmarket, Managed Application Services for SAP ERP, SAP Business Technology Platform (BTP) and Intelligent Technologies, and Managed Cloud Services for SAP HANA.

The report names Accenture, All For One Group, Atos, Capgemini and T-Systems as Leaders in four quadrants each. It names Infosys and NTT DATA as Leaders in three quadrants each and Camelot IT Lab, Fujitsu, Scheer and TCS as Leaders in two quadrants each. Arvato Systems, CANCOM, DATAGROUP, Devoteam, DXC Technology, Innovabee, Syntax and Wipro are named as Leaders in one quadrant each.

In addition, Wipro is named as a Rising Star—a company with a “promising portfolio” and “high future potential” by ISG’s definition—in two quadrants. Cognizant is named as a Rising Star in one quadrant.

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