SAP Cloud Migration Gathers Momentum in Brazil

More large and midsize companies are modernizing ERP with cloud-based SAP S/4HANA and the RISE with SAP program, ISG Provider Lens report says

Brazilian enterprises are moving their SAP implementations to the cloud at an accelerating pace, according to a new research report published today by Information Services Group (ISG), a leading global technology research and advisory firm.

“Larger firms that already have infrastructure partners prefer not to add one more.”

The 2022 ISG Provider Lens™ SAP Ecosystem report for Brazil finds most organizations in Brazil still run their SAP ERP applications on-premises or in third-party data centers, but a growing number are migrating them to the cloud. Large and midsize enterprises take different approaches to this transition.

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“SAP’s strategy of encouraging clients to move to the cloud is paying dividends in Brazil,” said Bill Huber, ISG partner, Digital Platforms and Solutions. “With the help of service providers, many companies are able to modernize their SAP environments.”

Most SAP clients in Brazil are not considering other ERP solutions, but instead deciding whether to upgrade to S/4HANA, use the RISE with SAP program or not upgrade at this time, the report says.

Many large enterprises have resisted upgrading to the cloud for fear of the complexity involved, ISG says. However, a growing number of service providers offer automated tools to carry out the transition. Typical ERP upgrades to S/4HANA in the cloud can take just nine months using tools that convert legacy code and data and identify custom applications that need to change, the report says.

Most large companies in Brazil that do upgrade choose to implement SAP S/4HANA on a public cloud they already use, continuing to work with a cloud provider and service partners they know and trust, the report says. Midmarket enterprises are more likely to choose the RISE with SAP transformation-as-a-service program, usually for its simplicity.

“SAP can be a good infrastructure service partner for smaller companies,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Larger firms that already have infrastructure partners prefer not to add one more.”

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The number of SAP certified partners in Brazil has fallen from 165 in 2019 to 114 in 2022 because SAP is demanding more partner investments to develop industry-specific expertise, ISG says. The top 40 partners grew an average of 22 percent in 2021, partly by investing in training and education.

The report also explores other trends in the SAP ecosystem in Brazil, including growing concerns about environmental, social and governance (ESG) compliance and the emergence of the SAP Business Technology Platform for integrating SAP with client and partner cloud-native applications.

The 2022 ISG Provider Lens™ SAP Ecosystem report for Brazil evaluates the capabilities of 40 providers across five quadrants: SAP S/4HANA System Transformation — Large Accounts, SAP S/4HANA System Transformation — Midmarket, Managed Application Services for SAP ERP, Managed Platform and Cloud Services for SAP ERP, and SAP Business Technology Platform.

The report names Accenture, Capgemini, T-Systems and Wipro as Leaders in four quadrants each. It names Atos, Infosys, NTT DATA, Softtek and Tech Mahindra as Leaders in three quadrants each. BCI Consulting, Engineering, essence, IBM, Megawork, Seidor, Stefanini and TIVIT are named as Leaders in one quadrant each.

In addition, Engineering, Megawork and Numen are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

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