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SAP HANA and LeonardoEcosystem PartnersUK 2020A research reportcomparing providerstrengths, challengesand competitivedifferentiatorsQuadrantReportCustomized report courtesy of:July 2020
ISG Provider Lens Quadrant Report July 2020Section NameAbout this ReportInformation Services Group Inc. is solely responsible for the content of this report. Un-ISG Provider Lens delivers leading-edge and actionable research studies, reportsless otherwise cited, all content, including illustrations, research, conclusions, assertionsand consulting services focused on technology and service providers’ strengths andand positions contained in this report were developed by, and are the sole property ofweaknesses and how they are positioned relative to their peers in the market. TheseInformation Services Group Inc.reports provide influential insights accessed by our large pool of advisors who areThe research and analysis presented in this report includes research from the ISGactively advising outsourcing deals as well as large numbers of ISG enterprise clientsProvider Lens program, ongoing ISG Research programs, interviews with ISG advisors,who are potential outsourcers.briefings with services providers and analysis of publicly available market informationfrom multiple sources. The data collected for this report represents information thatFor more information about our studies, please email ISGLens@isg-one.com,ISG believes to be current as of May 2020, for providers who actively participated ascall 49 (0) 561-50697537, or visit ISG Provider Lens under ISG Provider Lens .well as for providers who did not. ISG recognizes that many mergers and acquisitionshave taken place since that time, but those changes are not reflected in this report.All revenue references are in U.S. dollars ( US) unless noted.The lead author for this report is Akhila Harinarayan. The editors are Grant Gross andJohn Burnell. The enterprise context and global overview analyst is ArulManoj M. Thedata analyst is Vishal Kulkarni. The quality and consistency advisor is Yadu Singh.ISG Research provides subscription research, advisory consulting and executiveevent services focused on market trends and disruptive technologies driving changein business computing. ISG Research delivers guidance that helps businessesaccelerate growth and create more value.For more information about ISG Research subscriptions, please emailcontact@isg-one.com, call 49 (0) 561-50697537 or visit research.isg-one.com.2 2020 Information Services Group, Inc. All Rights Reserved.
1Executive Summary4Introduction15SAP S/4 HANA System Transformation – Large Accounts21SAP S/4 HANA System Transformation – Midmarket25Managed Application Services for SAP ERP31Managed Platform Services for SAP HANA36SAP Cloud Platform and SAP Leonardo Services41Methodology 2020 Information Services Group, Inc. All rights reserved.Reproduction of this publication in any form without priorpermission is strictly prohibited. Information contained in thisreport is based on the best available and reliable resources.Opinions expressed in this report reflect ISG’s judgment at thetime of this report and are subject to change without notice.ISG has no liability for omissions, errors or completeness ofinformation in this report. ISG Research and ISG Provider Lens are trademarks of Information Services Group, Inc.
ISG Provider Lens Quadrant Report July 2020ExecutiveSummaryEXECUTIVESUMMARYSection NameExecutive SummaryVery minimal or negative growth expected for S/4HANA amidst covid crisis and brexit.With high focus on lowering the cost and manual effort, there is an acceleratedincrease in the adoption of digital transformationThe outlook for new SAP adoption in the U.K. market looks bleak. Enterprises are facing anThe majority of service providers have been able to support their clients during theuncertain business environment due to the dual impacts of Brexit and COVID-19. Firms areCOVID-19 crisis by enforcing business continuity plans and finding ways to deliverunsure of the tangible benefits that could be realized from any initiative during these times.essential services. With minimal or negative growth anticipated in the U.K. for SAPIn this uncertain scenario, the complexity, cost and change management required for SAPS/4HANA, specifically among large accounts, it will be prudent for service providers toS/4HANA transformation adds to the enterprises’ reluctance to move to S/4HANA. The firmsfocus on S/4HANA Cloud. Some service providers have already shifted their focus towardthat have not started their migrations have postponed their plans to move to S/4HANA.the healthcare, manufacturing, and utilities industries in addition to delivering COVID-Enterprises are also exploring options with their service providers for price reduction orspecific offerings for specific niche segments. Since cost reduction will be a primarypayment deferment across various SAP outsourcing deals.enterprise focus, the service providers that offer competitive pricing (at less cost) orSAP’s extension until 2027 to continue supporting ECC has not turned the tide for SAPusers to adopt S/4HANA, even among enterprises that are anticipating sustainable returnof investment (ROI) from making the move to S/4HANA. However, cloud adoption isanticipated to increase, as is the use of automation to mitigate the non-availability of skilledan innovative pricing model (such as consumption-based) will have an extra edge overtheir competitors. Managed services will increase for SAP applications because the cliententerprises will want to optimize their cost model and service delivery efficiency formanaging their SAP architecture.workers in the region. The midmarket segment is expected to benefit from cloud adoption.Service providers are focusing on meeting their employees’ remote working needs toEnterprises in that segment are focusing on implementing S/4HANA Cloud because theyensure business continuity and will use data analytics for faster and efficient decisionhave less customization and maintenance requirements than larger firms. There will be anmaking. There is a change in the workplace culture that has changed the dynamics ofoverall increase in digital projects across the region, with enterprises looking for enablingwork because of the increased work-from-home enablement by the service providers.mobile apps for customers and employees using SAP Cloud Platform (SCP).With increased digital adoption and high focus on low-cost/effort requirements, service1 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report JulyJuni 20182020providers are focusing on design thinking tools to deliver digital technologies andExecutive Summary Increased traction across healthcare, manufacturing and utilities: As enterprisesapplications on SAP Cloud Platform. Before embarking on a transformation journey, itare adjusting to the new future, there is a strong focus on improving the IT infrastruc-will be an imperative for service providers to help their clients to envision the benefitsture across the healthcare sector to deliver seamless services while considering thethe transformation will bring, using in-house or third-party tools and accelerators. Whilesocial distancing norms in the U.K. Hence, S/4HANA adoption is anticipated to increaseensuring this, the providers will need to offer clients an outcome-based partnership modelthere. Manufacturing and utilities have been the major industries to adopt in the U.K.to ensure a win-win scenario.Workforce shortages and employees’ inability to be physically present at the workplacehave driven these industries to increase digital technology adoption for supportingSome of the key trends in the U.K. market are presented below. Outcome-based services to increase: As enterprises are navigating through theuncertainty of COVID-19 and bracing for alignment across regulations defined foroperational continuity and services delivery to those they serve. ing from home, service providers’ work culture has undergone a drastic transformation.Brexit completion, they are demanding different types of outcome-based pricingProviders are trying to enable their employees to deliver S/4HANA implementationsand services from their service providers. Some of the pricing models explored areseamlessly. The workforce has been empowered with the necessary tools to developconsumption-based, gainsharing, risk-sharing and shared fixed reward. Shared fixedand deliver the transformation to clients. Productivity measurement is changing alongreward includes a fixed fee amount decided by both the provider and the client, withwith the changing workforce dynamics. The service providers are focusing on tasksany delay in execution resulting in a reduction of the amount and any increase incompleted over a specific period of time instead of measuring the login/logout time ofexecution cost will add to it. Providers are expanding relationships with their existing clients: Serviceproviders are helping their clients with the challenges that have arisen due to thepandemic. Service providers also are proposing digital-based transformations fortheir clients to handle scenarios such as lack of resources, growth sustainability andenabling process continuity.Change in the work culture across service providers: With the majority of staff work-the employees. Increased cloud deployments for S/4HANA: In the U.K., ISG observes that enterprisesare adopting cloud deployments for S/4HANA. These adopters are nimble to IT changesand do not have architectural constraints. There will be increased S/4HANA Cloudadoption resulting from the overall increase in cloud adoption and as a way to handlepost-Brexit, post-COVID situations.2 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report July 2020 Bots, automation, artificial intelligence (AI), machine learning (ML) are reducing Enabling SAP Leonardo by building proof of concepts: Providers are building andresolution time across managed services: Automating Level 1 and Level 2 supportshowcasing proof of concepts (PoCs) for an SAP Leonardo solution that helps addressand resolving incidents in less time have been focus areas for most SAP manageda specific industry issue or empowers enterprises with emerging technologies. Serviceservices providers. The providers are using bots to respond to basic tasks such asproviders demonstrate these solutions to their clients to showcase their capabilities be-logging a ticket, providing ticket status, reducing time to resolution, and preventingfore the client decides to go ahead with the PoC project. This approach helps developany possible delays in resolution. Providers also are automating other services relatedan understanding of how SAP Leonardo can be used within the client’s enterprise, andto L1/L2 support and projects. Tools used across managed services are being infusedallows the service provider to demonstrate its ability to implement the solution for thewith AI and machine learning to learn tasks, resolve incidents and optimize the IT andclient.business processes. ExecutiveSectionSummaryName Managed cloud platform services integrated with end-to-end managed services:AI and ML tools and accelerators are aiding SAP transformation services: Provid-Most enterprises are opting for managed cloud services (including platform anders also are building tools and accelerators that include automation, machine learningsoftware) as part of a unified contract for end-to-end managed services, includingand AI to help provide transformation services. These tools and accelerators may applyinfrastructure, cloud, application or security services. The providers are leveragingto the entire development lifecycle or to any portion of it. Some of these resourcestheir cloud platforms and managed PaaS to deliver the managed platform serviceshave been certified by SAP and are available in SAP App Center, while others are onlyalong with the tools and accelerators used for managed application services.available through the service provider, which integrates them in the services contract.Most of tooling helps assess the existing IT landscape, strategize transformationroadmaps, improve code management, and automate support services.3 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report July 2020IntroductionIntroductionDefinitionSAP has 13,800 licensed customers in more than 180 countries, covering all continents. With more than 100,000 employees and over 18,000 partner companies,SAP – HANA & Leonardo Ecosystem Partners 2020SAP has a significant impact on the IT market, in terms of both innovation andthe global IT spending share. This research study identifies the top SAP partnerSAP S/4 HANA System Transformation –Large AccountsSAP S/4 HANA System Transformation –Mid Marketcompanies that can provide differentiated enterprise client services and deliverthe best results from S/4HANA investments. By working with the best partnersto meet their requirements, enterprise clients can optimize their operatingexpenses and achieve a superior return on their technology investments.Managed Application Services for SAP ERPAlthough SAP is continuously growing in revenue, the company faces resistancefrom current clients to upgrade to S/4HANA — its most modern enterpriseSAP Cloud Platform and SAP LeonardoServicesresource planning (ERP) offering. The solution offers superior performance byManaged Platform Services for SAP HANASource: ISG 2020using in-memory technology, but transformation projects could involve steepcosts. Clients should thus refine their partner selection process and criteria tofind the best performers that can provide higher business value at a lower costof transformation.4 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report July 2020IntroductionDefinition (cont.)To benefit clients that are new to SAP ERP or are hesitant to upgrade to S/4HANA, thisFor support services, AI and machine learning have been incorporated into application mainte-study references case studies and success stories. In 2019, ISG identified the viability ofnance and operations to predict incidents and automate troubleshooting, ticketing processestools and frameworks for large SAP transformations and greenfield S/4HANA implementa-and provisioning, allowing for gains of scale that lower support costs. This study identifies ser-tions that have been delivered in record time. The perfect partner can support clients andvice providers that effectively apply new technologies to support S/4HANA and HANA database.allay fears arising from the end of support for the legacy SAP ERP, which is now scheduledfor 2027.In 2019, ISG studies identified that the major benefits of adopting S/4HANA are its innovation backbone that is offered through SAP Cloud Platform (SCP) and SAP Leonardo, as wellas the novel ways of leveraging APIs and microservices. SAP partners havedemonstrated innovations using artificial intelligence (AI), analytics, Internet of Things (IoT),mobile apps, robotic process automation (RPA) and blockchain to disrupt markets andtransform businesses.For clients that have adopted S/4HANA, this study assesses managed service providersThe ISG Provider Lens study offers IT-decision makers: Transparency on the strengths and weaknesses of relevant providers. A differentiated positioning of providers by segments. Focus on different markets, including the U.S., the U.K., Germany, the Nordics and Brazil.ISG studies serve as an important decision-making basis for positioning, key relationships, andgo-to-market considerations. ISG advisors and enterprise clients use information from thesereports to evaluate their current vendor relationships and potential new engagements.that can contribute to superior application performance, including stability, availability andsecurity. Cloud migrations and technology innovation are also assessed.5 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report July 2020IntroductionDefinition (cont.)Scope of ReportISG studies are intended to anticipate the investigation efforts and buying decisions oftypical enterprise clients. When contemplating a significant strategy transformation,SAP S/4HANA Transformation – Midmarketmaking purchase-versus-rent decisions for infrastructure, implementing agile practicesThis quadrant assesses providers on their ability to offer a rapid turnaround for S/4HANAor incorporating automation into their environments, enterprise clients will benefitimplementations for clients in the midmarket (companies with less than 5,000 SAP users andfrom a study that examines an entire ecosystem for a certain service line.revenues of less than 1 billion). Midmarket clients have fewer complex requirements and lessTherefore, ISG studies comprise multiple quadrants covering the spectrum of servicesthat an enterprise client requires.SAP S/4HANA Transformation – LargeAccountsISG assesses consulting and system integration service providers for developing,deploying and testing enterprise applications using SAP S/4HANA and SAP BusinessSuite with SAP Fiori as the user interface. The transformation includes planning,design and modeling of applications, while considering the service provider’s ability tomanage complexity and scale that are common characteristics across large enterpriseclients. The participating companies are expected to have the frameworks, tools andaccelerators to support the needs of large system transformations.project scale compared to large enterprises. A participating service provider can deploy SAPsolutions using multiple methodologies, including SAP’s packaged solutions for small and mediumbusinesses (SMBs). It should use templates for S/4HANA, including industry-specific templates,to reduce the transformation cycle while leveraging standard processes. Multi-tenant S/4HANAimplementations are included, but not required, for participating in this quadrant assessment.SAP qualified partner-packaged solution providers are appreciated but certification is not requiredfor inclusion in this quadrant.Managed Application Services For SAP ERPThis assessment considers a provider‘s capability to offer managed services, includingmaintenance and support functions that comprise monitoring, remote support and centralizedapplication management for SAP S/4HANA and legacy SAP Business Suites such as ECC 6.0.6 2020 Information Services Group, Inc. All Rights Reserved.
ISG Provider Lens Quadrant Report July 2020IntroductionDefinition (cont.)Managed application services for incidents include troubleshooting, Level 2 and Levelperformance, disaster recovery management, backup, restore, data compliance (retention3 application support, user support, ticket lifecycle management, incident resolution,and access), data breach protective measures at the data center level, job scheduling, batchproblem management, root cause analysis and interface with SAP product supportprocessing, file transfers, archiving and all infrastructure and operations services that are(upon client authorization). Service requests typically include user managementrequired to run SAP ERP or SAP HANA applications. This quadrant analysis privileges providers(add, change of user profile and disablement of users‘ access), performance reports,that demonstrate expertise in maintaining smooth S/4HANA operations, which requiresdatabase services, security (access) monitoring and license compliance. Providersdeep knowledge about the underlying in-memory database technology. Furthermore, strongthat have center of expertise (CoE) certifications receive higher evaluations, but thecapabilities in optimizing this type of application, including data volume management, arecertifications are not a requisite for participating in this quadrant.preferred a
15 SAP S/4 HANA System Transformation – Large Accounts 21 SAP S/4 HANA System Transformation – Midmarket . an understanding of how SAP Leonardo can be used within the client’s enterprise, and allows the service provider to demonstrate its ability to implement the solution for the
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