Enterprises are running on average at least five instances of SAP and should be using the introduction of HANA as a catalyst to consolidate into one global platform and save billions of dollars, according to the latest research from HCL Technologies.
HCL interviewed 225 CIOs at enterprises that achieve in excess of $1 billion (€767 million) in revenues every year.
The main findings showed that on average the enterprises had five separate instances of SAP operating across their business, with more than a third (39%) running in excess of six instances. It also found that on average the cost per user, per year of running SAP was $1,518 (€1,165) and by moving to a single instance enterprises could make savings of up to 25%.
HCL believes that globally large enterprises could save nearly $30 billion (€23 billion) in total from consolidating their instances of SAP.
James Riley, global head of innovation at HCL EAS, said that consolidating into a single global instance of SAP is not as expensive a programme to deliver as it used to be.
"I would say that three years ago a large global company looking to do an instance consolidation, you were talking a multi-year deployment that cost probably $75 million to $100 million (€57 million to €76 million). What we are seeing now in the market is that those programmes can be achieved for a much lower sum of money, typically around $20 million to $25 million (€15.3 million to €19.1 million)," said Riley.
"Part of that is maturity in terms of the industry and the solutions. Also, in the past where a lot of the time taken to do an implementation was around change management, achieving consensus on what the current business processes looked like and how those translated into a system, whereas organisations are now looking at the business processes and saying 80% of them are not the key business processes that drive differentiation in individual markets."
He added: "They are common back office processes and we will standardise. We will worry about the 20% if there is a business case in a country to justify deviation."
Riley said that projects such as these are typically taking between 18 and 24 months and instead of taking a serialised approach to deployment (one country after another), enterprises are adopting a more advanced approach by running multiple, parallel deployments in different regions of the world.
HCL also found that there is a prevalence of legacy SAP versions still being used as core operating platforms. The latest version of SAP (ECC 6) is only being used by just over a third (37%) of organisations, while more are using ECC5 (54%) and SAP 4.7 (44%).
More than three-quarters of CIOs, however, said that they planned to or had already deployed SAP’s in-memory technology HANA. Some 80% of respondents said that HANA will play a major role going forward.
HCL said clients should use SAP’s HANA push as a driver to get their licenses in order and consolidate into a global instance, particularly when looking at a hardware refresh.
"SAP has made a significant bet on its future in terms of HANA and in-memory, they are very keen to migrate customers from the old licences onto licences running on HANA. The strategy for SAP is to release all new applications and functionality on HANA," said Riley.
"If a client is coming up to a hardware refresh, it either has the choice to stick with their existing landscape for the next five or seven years, or take the leap to HANA now and use it as a catalyst for consolidation."
He added: "Knowing that SAP is very keen to migrate customers onto HANA, and it will help migrate existing licences onto a single consolidated stack, it might be the right time for an organisation to consider this."
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