Save $30 billion through SAP consolidation

by CXOtoday News Desk    May 10, 2013

ERP

Globally, large enterprises could save nearly $30 billion through consolidating their instances of SAP. A survey conducted by HCL Enterprise Application Services (EAS), revealed that on an average, CIOs are running five separate instances of SAP across their business. In fact, 39 percent said they were running in excess of six instances. The study also showed that the average cost per user, per year for running SAP was $1,518 and by moving to a single instance, large enterprises could potentially save up to 25 percent.

“Many large enterprises are yet to operate SAP in a unified manner due to fragmented software landscape. For some it could be a country-specific requirement. However, for most of them it has been a result of mergers and acquisitions or multiple implementations across different areas of the business that have never been rationalized or consolidated. Such an environment can be very costly to support,” said Steve Cardell, President of Enterprise Application Services at HCL. “There are substantial political and operational hurdles that can stand in the way of companies achieving a single instance.  So, we are now seeing large companies either making top-down decisions to drive through such changes or deciding it is the wrong battle to fight. Hence, they are looking to improve integration between systems.”

The research also highlighted the prevalence of legacy SAP versions still being used as core operating platforms. The latest version of SAP (ECC 6) is only being used by 37 percent of organizations, while 54 percent are using ECC 5 and SAP 4.7 44 percent. This is a further indication that many enterprises have adopted a piecemeal approach towards upgrading their SAP environments as they have expanded their operations.

When asked about their plans to use in-memory computing, more than three-quarters of CIOs said they planned to or had already deployed it. Unsurprisingly, considering SAP’s push around SAP HANA, 80 percent of respondents said that the company’s in-memory technology will play a major role.

More large enterprises were also embracing cloud services. About 73 percent CIOs said that they had implemented cloud services in some way or form, and 74 percent said that SAP technology would play a significant role.

When it comes to mobility, 93 percent of the CIOs said they were planning to or already had a mobility strategy in place.  Of those surveyed, 53 percent stated that SAP technology would be the cornerstone of their strategy.

“Trends such as mobility, cloud and Big Data are increasingly becoming catalysts for change at many organizations. Consequently, we are starting to see the evolution of traditional enterprise environments with users accessing the SAP technology on-premise, on-demand and on-device. At the same time in-memory computing promises to be a real game changer for many large enterprises. Products such as SAP Business Suite on HANA promise to reduce TCO and deliver efficiency savings to users by enabling them to do things faster and at a greater volume. Certainly, having fewer instances of SAP will make this journey a lot smoother for many organizations,” said James Riley, Global Head of Innovation at HCL EAS.