18 April 2024
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SAP Managed Service Providers Illustration (Image by Freepik @videoflow)

An SAP managed service provider is responsible for the daily operations and maintenance of an organization’s SAP environment.

The rising adoption of SAP is a significant shift in how companies approach their digital infrastructure.

Therefore, an SAP managed service provider (MSP) becomes the bridge between companies and the SAP ecosystem.

2022 insights from Business Wire reveal a compelling trajectory, with cloud ERP adoption skyrocketing and the global market projected to almost double from $64.7 billion in 2022 to $130 billion by 2027​​.

This surge underscores an undeniable fact: businesses increasingly turn to SAP for its promise of enhanced performance, productivity, and growth.

And, 2024 Techreport says The SAP System Handles 77% of the World’s Transaction Revenue. This is a testament to SAP’s efficiency as one of the leading global Enterprise Resource Planning (ERP) services with efficient solutions.

So, let’s discover why the demand for expert SAP management and support services is growing with its adoption.

What are SAP Managed Services?

SAP Managed Services are a lifeline for businesses navigating the complex SAP ecosystem.

They provide comprehensive support and management for SAP environments, ensuring that applications run smoothly, efficiently, and without interruption.

This includes everything from day-to-day operations and maintenance to updates, security, and compliance.

Think of it as having a team of SAP experts dedicated to optimizing your SAP landscape at your beck and call. At the same time, you focus on driving business growth.

With SAP Managed Services, you’re not just maintaining the status quo; you’re leveraging deep expertise to enhance and innovate your business processes, setting the stage for sustained success in a competitive digital world.

Importance of SAP Managed Services

Let’s be honest, running a business is hard, and managing SAP shouldn’t add to the headache. 

As businesses increasingly adopt SAP systems to enhance their operational efficiency, the complexity and scale of managing these systems have escalated.

The shift towards digital transformation and the intricate nature of SAP environments underscores the need for specialized expertise to navigate these challenges effectively.

One key factor driving this demand is the significant cost savings associated with third-party SAP managed services.

Unlike direct support from SAP, which can be costly and increase annually, third-party providers offer a more cost-effective solution, often reducing support fees substantially.

Moreover, the shift towards SAP S/4HANA is a critical driver. As the 2027 deadline approaches for companies to transition from SAP ECC to S/4HANA, the demand for consultants with the necessary expertise is spiking.

This transition is a simple upgrade and a complete system overhaul, requiring deep knowledge of the new platform.

The shortage of consultants skilled in S/4HANA is intensifying, making it imperative for businesses to seek external SAP managed services to ensure a smooth and efficient migration process​​.

Another contributing factor is third-party SAP managed services’ personalized and immediate support.

Unlike the often impersonal and delayed support from SAP, managed service providers offer dedicated support teams that respond promptly to issues, ensuring minimal disruption to business operations.

Furthermore, SAP managed services extend beyond mere system maintenance to include strategic initiatives such as cloud migration, security management, and custom code support.

These services are becoming increasingly important as businesses seek to leverage the full potential of their SAP systems while ensuring they remain secure and compliant with industry standards​​.

Lastly, the broader range of services offered by SAP managed service providers, from infrastructure hosting to application management, provides businesses with a comprehensive solution that addresses all aspects of their SAP environment. 

The Impact of SAP MSPs on Your Business Operational Efficiency

As we move further into 2024, the role of SAP MSPs will undoubtedly become even more critical in shaping the digital future of businesses across industries. Here’s how SAP MSPs shaping your business future:

Cloud Transformation and Operational Efficiency

Businesses leverage SAP MSPs to transition to cloud-based solutions like SAP S/4HANA Cloud.

This move simplifies IT infrastructure and significantly enhances data transparency and operational efficiency across global regions.

Companies like Lenovo and Grupo La Moderna have seen firsthand the benefits of such transitions, which include faster, more productive work environments and streamlined business operations​​.

Strategic Growth and AI Integration

SAP’s focus on strategic growth areas, notably Business AI, is a testament to the evolving digital landscape.

Integrating AI into business operations is expected to drive efficiencies and create new opportunities for innovation.

This strategic direction aims to prepare companies for scalable future growth, highlighting the importance of adapting to technological advancements​​.

AI and Digital Transformation Trends

The adoption of AI continues to be a significant trend, with its application spanning various business functions, from product development to operational efficiency.

Despite challenges such as ethical concerns and legal battles over generative AI, the benefits of AI, like generative design and augmented reality tools, continue to drive its adoption.

This underscores the evolving role of SAP MSPs in facilitating the integration of AI into business processes, ensuring companies can leverage AI’s full potential responsibly​​.

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SAP Managed Service Providers (Image by Fortycloud)

How To Choose The Right SAP Managed Service Provider 

Choosing the right SAP MSP is crucial, as the wrong choice could increase risks to your business.

A good MSP will work closely with your in-house IT team, providing the technical expertise to keep your SAP applications running smoothly and efficiently.

Here are key insights and tips drawn from several sources to guide you through the selection process:

Comprehensive Service Offering

Look for an MSP capable of providing a broad range of SAP services. Your business needs might evolve, requiring different services at different stages of your SAP journey.

An ideal MSP should offer consulting, implementation, application management, and data analytics services​​.

Proven Experience and Expertise

Ensure the SAP MSP has certified professionals with extensive experience in SAP and cloud technologies.

It’s beneficial if the MSP has industry-specific knowledge to better align with your business processes and goals​​.

High Availability and Disaster Recovery

Business continuity is non-negotiable. Opt for an MSP with high system availability (above 99.9%) and robust data recovery and backup solutions.

Their ability to quickly respond to incidents and restore services is vital for minimizing downtime​​.

Cost-Effectiveness

An ideal MSP helps reduce the Total Cost of Ownership (TCO) and operational costs.

A good SAP MSP should offer flexibility in their service packages, allowing you to pay only for what you need. Assessing how an MSP can align with your company’s cost goals and budget is essential​​.

SAP Certification and Expertise

Verifying the MSP’s SAP certifications can give you confidence in their ability to manage your SAP systems effectively.

An SAP Center of Excellence (SAP CoE) indicates you’ll receive support from the industry’s best​​.

Flexibility and Understanding of Your Business

The SAP MSP should understand the technical side of SAP and how it applies to your specific business needs.

They should be flexible enough to tailor their services to your requirements​​​​.

Service Level Agreement (SLA)

Ensure a clear SLA outlines the services, performance metrics, and outcomes the MSP commits to delivering.

This agreement is your safeguard to ensure the MSP meets your business objectives​​​​.

Utilizing Octobits

Octobits offers a unified dashboard that simplifies IT management workflows, including services, billing, and reporting. This tool is handy for MSPs dealing with complex cloud environments like SAP.

Therefore, Octobits is also beneficial for a Kubernetes managed service provider or even an Office 365 MSP.

Moreover, Octobit’s capacity to proactively identify and address IT issues before they escalate can significantly enhance operational efficiency.

With Octobits, SAP MSP gains a comprehensive view of your IT ecosystem, allowing for better decision-making and resource allocation. 

Conclusion

In wrapping up, we’ve seen how they bridge the gap between complex SAP ecosystems and the operational efficiency businesses strive for.

With the undeniable surge in SAP and cloud ERP adoption, the expertise and support offered by MSPs have become indispensable.

They ensure smooth, efficient SAP operations, unlocking cost savings and strategic innovations.

But please be aware of how to select the right MSP. The selection process involves considerations like service range, expertise, flexibility, and tools like Octobits for transparent management.

This choice can play a significant role for SAP Managed Service Providers (MSPs) in your business growth journey.