Demand for SAP cloud migration and transformation services on the rise in the U.S., ISG Provider Lens™ report says

A growing number of enterprises in the U.S. are engaging with SAP services providers for cloud migration and digital transformation projects, 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.S. finds the number of transformation projects involving SAP has risen since ISG’s 2021 assessment, though many enterprises have not yet decided how to upgrade their ERP systems and are struggling to calculate the potential return on investment of migrating to SAP S/4HANA. Those pursing a hybrid or brownfield migration rather than a brand-new greenfield implementation are taking a wait-and-watch approach.

“The U.S. is home to SAP’s largest client base, and demand for SAP services here is growing,” said Bill Huber, partner, digital platforms and solutions, for ISG. “SAP S/4HANA adoption and related digital transformation slowed during the pandemic but are on the rise again, particularly among midmarket companies embracing the RISE with SAP offering.”

RISE with SAP is the ERP giant’s subscription-based offering that bundles existing SAP tools, technologies and intelligence into a holistic Business Transformation as a Service model. Many midsize companies with greenfield implementations are opting for this all-in-one service, while larger enterprises often choose SAP Business Technology Platform (BTP) to transform their more complex legacy environments.

Service providers and their U.S. clients remain focused on cost as they migrate business-critical SAP applications to the cloud, the report says. In most of the 500 use cases ISG analyzed, enterprises aimed to improve operational efficiency and worked with consultants to handle the complex requirements of business model transformation and organizational change management.

Over the last 12 months, automation and AI have become increasingly important in SAP transformation projects and managed services, ISG says. Clients see automation as making transformations faster, services more predictable and measurable results easier to demonstrate. In addition, more enterprises are seeking industry-specific solutions and preconfigured industry processes to accelerate SAP implementations. Many providers are creating roadmaps to help clients overcome industry-specific challenges.

Large enterprises in the U.S. typically turn to global SAP service providers, while medium-sized companies continue to favor domestic players that can provide experienced local resources, the report says. For both, access to certified SAP experts is a major factor in choosing a provider.

“There is a talent war going on in the SAP services market,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Providers have been highly focused on staff development to ensure the market can keep growing.”

The report also examines other trends in the U.S. SAP ecosystem, including continued investment in SAP-powered sustainability solutions and the growing use of SAP application management services.

For more insights into enterprise challenges around SAP and advice to companies considering a major SAP project with a provider, see the ISG Provider Lens™ Focal Points briefing here.

The 2023 ISG Provider Lens™ SAP Ecosystem report for the U.S. evaluates the capabilities of 42 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, Cognizant, HCLTech, Infosys, TCS and Wipro as Leaders in three quadrants each. It names IBM as a Leader in two quadrants. Birlasoft, Deloitte, DXC Technology, Eviden (Atos), Hexaware, Kyndryl, LTIMindtree, Navisite, NTT DATA and Tech Mahindra are named as Leaders in one quadrant each.

In addition, Tech Mahindra is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. Eviden (Atos), Softtek and UST are named as Rising Stars in one quadrant each.

Customized versions of the report are available from Hexaware, Kellton and Kyndryl.

The 2023 ISG Provider Lens™ SAP Ecosystem report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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