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IBM, Accenture top SAP implementation partner rankings, but smaller SIs strong

IBM and Accenture are the top SAP implementation partners, but smaller SAP SIs can provide deeper industry expertise, flexibility and lower costs, according to Forrester.

While IBM and Accenture are still the leading SAP implementation partners, smaller SAP systems integrators (SIs)...

are proving to be strong alternatives for SAP projects, according to a recent Forrester Research report.

Forrester ranked IBM and Accenture as the top SAP implementation providers in its recent  Wave Report because of their depth of SAP implementation capabilities. Accenture has expertise across strategy and transformation consulting, technical implementation, post-implementation services and ongoing application maintenance and support, according to the report. IBM, as a hardware vendor with a financing arm, can bundle together deals and pricing arrangements for customers.

But companies are increasingly turning to smaller service providers for cost savings realized through lower rate cards and more flexibility on price caps. They're also seeking better working relationships and deeper industry, process or product expertise than the big firms offer, according to Liz Herbert, senior analyst with Cambridge, Mass.-based Forrester. Smaller firms such as Clarkston Consulting offer not only deep expertise in the consumer packaged goods market but can give customers a deep understanding of what their counterparts in their industry are doing, she said.

"There are a lot of companies out there asking … who else is relevant," Herbert said. "A lot of times, clients aren't doing this to save money but to get the right set of skills."

For example, in North America, CGI is a strong supplier of SAP-run services, particularly in industries like telecommunications and defense. And Hexaware is heavily focused on SAP testing.

For more on choosing an SAP implementation partner
Learn why SAP implementation partners fell short in industry know-how, workforce continuity

Read advice on choosing the right SAP systems integrator

That said, there are risks to going with the smaller firms.

Smaller SAP systems integrators have fewer resources to invest in development and future initiatives, according to the report. A smaller staff to choose from also means that there is a greater likelihood that people will leave the organization or be promoted to more strategic areas, depleting the pool of experienced people for projects.

In turn, smaller firms are more likely to be acquisition targets, or fail altogether, the report states. It's important for companies to be aware of the firm's financial performance, number of employees and number of other clients, Herbert said. The more dependent a firm is on a large client or industry sector, the riskier the investment.

Turning to a smaller SAP service provider isn't the only way companies can save money on consulting in 2010.

Increasing the mix of offshore providers and taking a look at the service-level agreements to see whether there's a way to reduce overall costs are two more options, Herbert said. A company may not need 24/7 support, a fast turnaround on all areas of a project, or such high uptime guarantees.

In turn, both sides can benefit from an outcome-based payment model, rather than an hourly rate. For instance, if the implementation provider is used for support, companies could pay the consultants by tickets handled rather than by the hour. In an implementation project, she said, link pay to a business outcome – such as shorter time to close the books.

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