SAP AMS Market Overview

Last Updated: 25.10.2019

SAP AMS Market Overview

Around 355.000 companies are using SAP as a central software to cover their business processes. Each day millions of business user are working with SAP systems and each day users create routine incidents related to SAP software.

Companies are trying to optimize their IT budgets and application maintenance service is part of this optimization.

SAP Application Management Services in each company can be organized in a different way, companies can have an agreement with Service Provider or they can have an in-house team.

According to Gartner Magic Quadrant of SAP Application Management Services we have next major players on this market: Accenture (market leader), Atos, Capgemini, Cognizant, CSC, Deloitte, Fujitsu, HCL Technology, HP, IBM, Infosys, L&T Infotech, NTT Data, Softtek, TCS, Tech Mahindra, Wipro. All this companies presented in all regions — North America, Latin America, Europe the Middle East and Africa, Asia Pacific.

There are other thousands of service providers in different local markets.

Opportunity to replace SAP Consultants in SAP AMS by cognitive computing systems

Technology potential

Cognitive computing systems will help companies adopt their IT and business process according to the new technology (Artificial Intelligence, smart machines etc.) and today this is near 450$ million market, however, it will grow for more than 100% each year and in 2021 market size will be near 30$ billion according to Gartner.

Cognitive computing technology is still in the early stage, but even now all big IT companies spending millions of dollars on the research and development of AI technology.

Worldwide consulting and system integration (implementation) for cognitive computing systems (millions of dollars) according to Gartner:

Automation Potential and Wages for US Jobs

This statistics is for US market, but it also can somehow apply to Europe market, at least this statistics is showing us real potentates for automation. Information was published by McKinsey

Automation potential

We have tried to calculate the total amount of SAP consultants that working in SAP AMS, this analysis was build based on Gartner reports and include statistics only for market leaders:

The total number of SAP Consultants that working in SAP AMS is around 82.000 people.

But there are also people that working in smaller companies or in in-house teams that support business users. So overall quantity of people in SAP AMS is around 200.000 people.

Analysis of market leaders in SAP AMS and their ability to move forward expert systems (cognitive computing systems, smart machines etc.)

Strengths

All major competitors provides have full spectrum of SAP services across all industries with huge experience in service integration. The delivery networks are covering all regions and able to propose clients local support (together with nearshore and offshore support).

Many years on the market gave them huge network of existing clients, this is also related to the spectrum of the services and products they have.

Mostly all of the players has differentiated their services and products. Technology trends vision and investment in R&D. Some players has announced this year partnerships with technology companies to bring new business value to the market, not only in SAP area.

Weaknesses

New technology especially cognitive computing is able to reduce huge quantity of workers that is working in AMS, in this case they should make some kind of transformation for all those workers (give them new skills, knowledge etc.) and give them new role in the company.

When the predominant model is labor-based, it is not in service providers` interest to employ automation that reduce labour hours and hence revenue.

Another concern in organization management, the main interests of managers is to bring to the client their workers by using model “as much as possible” because all this activity connected to their KPI, in this case companies also should change their management models.

One of the biggest power of the cognitive computing is ability to scale solution across all companies.

Pricing model should be changed according to the technology and market needs. For the current moment, the price for such kind of solution is really high, providers are trying to put old pricing model and make big money during implementation process. Service providers need to change their mindset from maximizing short-term revenue to protecting their installed base by proactively bringing intelligent automation to clients.

Prediction for next 5 years

I think that during next five years cognitive computing systems will replace at least 30% of SAP Consultants in SAP Application Management services.

During the next few years we will build and extend knowledge of cognitive computing systems and probably we will not be able to replace even 1% of all these people.

But after this percentage of replacement will grow significantly because scalability of such systems has huge potential, and if will be created enough knowledge and skills for the machine to work with SAP it will be easy to extend the number of clients that will use those machines.

This is also will be possible because part of this 200.000 SAP consultants in SAP AMS are doing a similar job but in different companies. While smart machine will do the same job at the same time for all clients.

Andrii Rudchuk, CEO of Hala.ai