On Jan. 3, 2024, SoftwareOne announced its acquisition of Novis Euforia, a Spain-based SAP and cloud services boutique. This special report reflects TBR’s discussion with Pierre-Francis Grillet, SoftwareOne’s global lead for SAP Services, immediately following the announcement, as well as TBR’s ongoing analysis of SoftwareOne and the SAP landscape.
With New Talent and IP, SoftwareOne Extends Into SAP S/4HANA
According to Grillet, SoftwareOne intends to improve its position in the overall SAP ecosystem by moving beyond helping clients with cloud migrations into a more comprehensive SAP S/4HANA transformation role. To meet that aspiration, SoftwareOne’s acquisition of the Spain-based SAP boutique Novis Euforia adds experience and competencies around technically driven SAP S/4HANA migrations and positions SoftwareOne to better address growing client demand for modernization with minimal disruption and transformation through the journey to SAP S/4HANA.
While only a 35-person company, Novis Euforia marks about an 8% increase in SoftwareOne’s SAP practice, which Grillet said would be further bolstered by 15 senior functional data architects who are focused on finance and supply chain as well as ongoing growth in traditional SAP technical areas. Grillet believes the Novis Euforia acquisition and the new hires will significantly improve SoftwareOne’s SAP revenues, adding to his assessment that SAP has high growth potential for SoftwareOne.
Pragmatic Alternative to Complexity
Expanding on clients’ current concerns around SAP, Grillet noted that larger-scale competitors, such as the global systems integrators (GSIs), have increasingly embraced clean core as a means to rein in the rampant customizations often blamed for slowing migration to SAP S/4HANA and limiting innovation on SAP.
In SoftwareOne’s experience, according to Grillet, customizations fall into three categories: unused and therefore nonconsequential; used but no significant remediation required; and used with more complex remediation required. Notably, Grillet added, “a good part of remediations can be automated, further reducing the impact of customizations on the conversion to SAP S/4HANA effort.” A GSI’s greenfield engagement can be relatively expensive, in Grillet’s view, in contrast to SoftwareOne’s focus on preparation prior to a pragmatic and manageable approach to SAP modernization.
Further, Grillet said SoftwareOne has positioned itself well for negotiating a client’s best deal with SAP, given SoftwareOne’s vast experience around licensing and usage. Massive-scale enterprises undoubtedly need GSIs’ capabilities in complex SAP transformations, but many large and most small and midsize enterprises, in SoftwareOne’s view, can be better served through an incremental approach to transformation, framed by a deeper appreciation for customizations’ true hurdles.
Grillet also noted that, “Data, in particular, is relevant in the context of the Novis acquisition, as SNP automates the data transformation and conversion from ECC (ERP Central Component) to SAP S/4HANA, enabling, for example, company code and chart of account rationalization when moving to SAP S/4HANA.”
Gorging on a Massive Pie
The services opportunity around SAP S/4HANA transformations is immeasurable as credible estimates vary widely and, to some degree, do not matter. Services vendors with the available talent and credibility will not lack customers seeking help, especially as SAP’s self-imposed 2027 ECC deadline relentlessly approaches.
SoftwareOne’s latest acquisition helps the company address a larger range of client challenges and expands its footprint in Spain, with expectations of extending into Latin America and South America. While SoftwareOne’s SAP practice, at 500-plus SAP-trained professionals, lacks the scale of the largest GSIs, the vast majority of clients are not dismissing potential services providers because of scale — if you have the talent available now, you are hired. (OK, it is not that dramatic of a seller’s market now, but it will be before the end of 2027.)
Grillet also noted to TBR that one of the company’s “biggest assets is the fact that most of [SoftwareOne’s] professionals are dual-certified and also hold certifications for the three main hyperscalers: Microsoft, AWS and Google. They have a deep understanding not only of the SAP systems but also the platform they run on.”
In TBR’s view, SoftwareOne has consistently played to its own strengths, such as a deep inside view of midsize and large enterprise IT environments, to include spending and actual software usage. This recent acquisition continues that strategy, comes amid a slow-growing rush to add talent around SAP S/4HANA, and should allow SoftwareOne to extend its client base for SAP services over the next few years.
With six successful acquisitions in recent years, SoftwareOne has proven to be adept at integrating capabilities and leveraging IP. This seventh will continue SoftwareOne’s good fortune and make the vendor a must-watch competitor in the SAP space. Success will also depend on SoftwareOne’s ability to use the 15 senior functional data architects it is gaining as a bridge between existing cloud migration capabilities and SAP S/4HANA business transition opportunities, thus helping the company elevate the brand’s permission around SAP, a necessary step to avoid getting stuck in the increasingly commoditized migration services space.
Grillet summed up SoftwareOne’s position by noting that, “The ability to bridge between cloud migration to SAP S/4HANA conversion will depend on more than just these 15 new resources. It will be achieved through the extension of the services portfolio and its [the portfolio’s] underlying tools and IP — including adoption and embedding of the SNP tooling — successfully engaging in the early advisory and preparation engagements, and building an ecosystem of culturally aligned, functionally oriented partners in the various markets where SoftwareOne delivers its SAP services.”