Research released today by HCL Enterprise Application Services (EAS) has revealed that globally large enterprises could save nearly $30 billion in total through consolidating their instances of SAP. The global survey of 225 CIOs focused on their organizations’ current and future usage of SAP, revealing that on average they had five separate instances of SAP operating across their business. In fact, more than a third (39%) stated they were running in excess of six instances. The findings also showed that on average the cost per user, per year of running SAP was $1,518 and by moving to a single instance large enterprises could potentially make savings of up to 25%.
“Many large enterprises have a global SAP footprint, yet have been unable to truly operate in a truly unified manner due to having a fragmented software landscape. For some, there are legitimate reasons for multiple instances such as country-specific requirements. However, for a significant majority it has been a result of mergers and acquisitions or multiple implementations across different areas of the business, which have never been rationalised or consolidated. As the research shows, such an environment can be very costly to support,” said Steve Cardell, President of Enterprise Application Services at HCL. “Whilst it may seem surprising, given the inherent logic and financial business case, there are clearly very 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 so instead 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 just over a third (37%) of organizations, while more are using ECC 5 (54%) and SAP 4.7 (44%). This is a further indication that many enterprises have adopted a piecemeal approach towards upgrading their SAP environments as they have expanded their operations.
The survey went on to find out how large enterprises were planning to use SAP as part of their future operational IT strategy. When asked about their plans to use in-memory computing, more than three-quarters of CIOs said they planned to or had already deployed such technology. Unsurprisingly, considering SAP’s push around SAP HANA, the vast majority (80%) of respondents said that the company’s in-memory technology will play a major role.
An increasing number of large enterprises were also embracing cloud services according to the research. Just under three-quarters (73%) of CIOs said that they had implemented cloud services in some way or form, and 74% said that SAP technology would play a significant role. Mobility was also a big area of focus for the majority of enterprises with 93% of CIOs saying they were planning to or already had a mobility strategy in place. Of those surveyed, more than half (53%) 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.
The global survey of 225 large enterprises with revenues in excess of $1 billion was commissioned by HCL EAS and conducted by independent research company Vanson Bourne.
About HCL Technologies
HCL Technologies is a leading global IT services company, working with clients in the areas that impact and redefine the core of their businesses. Since its inception into the global landscape after its IPO in 1999, HCL focuses on ‘transformational outsourcing’, underlined by innovation and value creation, and offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. HCL leverages its extensive global offshore infrastructure and network of offices in 31 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. HCL takes pride in its philosophy of ‘Employees First, Customers Second’ which empowers our 84,403 transformers to create a real value for the customers. HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 4.5 billion (Rs 24,709 crores), as on 31st March 2013 (on LTM basis). For more information, please visit www.hcltech.com
The Enterprise Application Services (EAS) division of HCL Technologies (HCL), delivers significant value to large, complex organizations through the innovative implementation and support of enterprise applications. EAS has a significant number of the industry’s most experienced professionals specializing in the delivery of sustained business improvement through technology enabled transformation programs. EAS consultants bring in-depth industry expertise alongside best practice functional knowledge to address the strategic, operational, information management and organizational effectiveness challenges faced by organizations today.
EAS is renowned for its global ability to help clients define more ambitious strategies, build more effective organizations and shape more successful futures.
For more information, please visit: www.hcltech.com/enterprise-application-services
About HCL Enterprise
HCL is a $6.2 billion leading global technology and IT enterprise comprising two companies listed in India – HCL Technologies and HCL Infosystems. Founded in 1976, HCL is one of India's original IT garage start-ups. A pioneer of modern computing, HCL is a global transformational enterprise today. Its range of offerings includes product engineering, custom & package applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of information and communications technology (ICT) products across a wide range of focused industry verticals. The HCL team consists of over 90,000 professionals of diverse nationalities, who operate from 31 countries including over 500 points of presence in India. For more information, please visit www.hcl.com
Forward Looking Statements
Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statements of historical fact are statements that could be deemed forward looking statements, including but not limited to the statements containing the words 'planned', 'expects', 'believes', 'strategy', 'opportunity', 'anticipates', 'hopes' or other similar words. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding impact of pending regulatory proceedings, fluctuations in earnings, our ability to manage growth, intense competition in IT services, Business Process Outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, customer acceptances of our services, products and fee structures, our ability to attract and retain highly skilled professionals, our ability to integrate acquired assets in a cost effective and timely manner, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, the success of our brand development efforts, liability for damages on our service contracts, the success of the companies / entities in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property, other risks, uncertainties and general economic conditions affecting our industry. There can be no assurance that the forward looking statements made herein will prove to be accurate, and issuance of such forward looking statements should not be regarded as a representation by the Company, or any other person, that the objective and plans of the Company will be achieved. All forward looking statements made herein are based on information presently available to the management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.
[EG1] The more detailed Executive Briefing written by Steve Cardell will be available for contacts to request a physical hard copy upon providing their contact details in the contact form. This is still in development phase.