U.K. enterprises are delaying plans to adopt SAP’s S/4HANA intelligent ERP system due to continuing questions about the country’s exit from the European Union and the ongoing COVID-19 pandemic, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2020 ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Report for the U.K. finds many enterprises in the country are sticking with SAP’s legacy ECC package instead of upgrading to S/4HANA. They are looking to service providers, however, to help them move their SAP implementations to the cloud and to provide automated services due to a shortage of skilled workers in the region. In many cases, enterprises also are seeking price reductions or payment deferments from providers across their SAP-related contracts.
“U.K. firms are unsure of the tangible benefits from any major SAP initiative during these times,” said Barry Matthews, partner and leader, ISG North Europe. “In this uncertain scenario, the complexity, costs and change management required for a change to S/4HANA adds to the reluctance to upgrade.”
However, many U.K. enterprises in the midmarket are looking to move their SAP functions to the cloud, the report adds. The cloud version of SAP ERP packages allows for less customization than the on-premises version, but also for automatic upgrades and faster implementation.
Some service providers are dealing with the COVID-19 pandemic by focusing on cloud implementations and by shifting their services to the healthcare, manufacturing and utilities industries, the report adds. Service providers are trying to help healthcare organizations deliver seamless services while observing social-distance norms. The report sees manufacturing and utilities as industries where major SAP adoption will happen in the U.K. going forward.
In addition, with cost reduction a major focus at many U.K. enterprises, service providers are focusing on competitive or innovative pricing models. Enterprise customers are demanding new types of outcome-based pricing and services as they react to COVID-19 and Brexit. Enterprises and service providers are looking at several pricing arrangements, including consumption-based, gainsharing, risk-sharing and shared fixed-reward models.
In response, SAP service providers are looking to expand their relationships with clients, the report says. Providers are looking for ways to help customers deal with the pandemic, and they are proposing digital transformations to handle scenarios such as a lack of resources, or to enable sustainable growth and process continuity.
In addition, many service providers are allowing employees to work at home to ensure business continuity. Many are focused on giving employees work-at-home tools to continue working and supporting clients.
The 2020 ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Report for the U.K. evaluates the capabilities of 34 providers across five quadrants: SAP S/4 HANA System Transformation – Large Accounts, SAP S/4 HANA System Transformation – Midmarket, Managed Application Services for SAP ERP, Managed Platform Services for SAP HANA, and SAP Cloud Platform and SAP Leonardo Services.
The report names Accenture, Capgemini, HCL, IBM, NTT DATA and Wipro as leaders in four quadrants and Mindtree and Tech Mahindra as leaders in three. Atos, Hexaware and Keytree are named leaders in two quadrants, and Birlasoft, Cognizant, Infosys, LTI and TCS are named leaders in one.
The 2020 ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners Report for the U.K. is available to subscribers or for one-time purchase on this webpage.