IBM and SAP embrace OneEcosystem™ to drive next-level business value

The IBM and SAP partnership spans more than half a century, and the companies recently announced an expansion of the relationship. The firms will work to deliver new GenAI capabilities and industry-specific cloud solutions, enabling enterprises to gain a competitive advantage and drive transformational value. HFS believes this partnership represents the OneEcosystem^TM model in action when organizations find new sources of value by looking beyond their walls to drive collaboration across like-minded organizations with common objectives.

To that end, HFS’ Saurabh Gupta connected with Jason Kelley (IBM Consulting), Stacy Short (IBM Consulting), and Christine Rhoads (SAP) in our latest edition of HFS Unfiltered Stories to discuss the importance of ecosystems and if this particular partnership really is poised to deliver next-generation business value.

IBM Consulting’s pivot to hybrid cloud and AI opened the doors of the Big Blue partnership

Looking back some years, HFS conducted countless reference calls with IBM clients who told us that navigating IBM’s extensive catalog of offerings could often be a daunting task—and that was before even starting their digital transformation initiative. IBM recognized this and worked to shift its perception from having “everything under the sun” to becoming a hybrid cloud and AI company. This meant increasing its emphasis on nurturing relationships with a critical ecosystem of partners. That heightened focus has paid off: IBM Consulting’s strategic partnerships contributed roughly 40% of its revenue in 2023.

A major driver of this success is the collaboration between IBM and SAP, which continues to evolve as market dynamics change. In May 2024, the companies announced their latest effort—the new Value Generation Partnership initiative—which aims to provide a more prescriptive approach to next-generation business processes by infusing new GenAI capabilities across line of business and industry solutions.

The goal of IBM and SAP’s new initiative is to help businesses become next-generation enterprises and enable new transformation value

As clients seek ways to reach the next generation of business processes, they need more prescriptive roadmaps to make it happen. The latest announcement from IBM and SAP aims to address this by leveraging the strength of both companies, as well as the broader ecosystem, to deliver on four key aims:

• Infusing AI into next-generation line of business processes using AI-prescriptive roadmaps and SAP-IBM co-innovation solutions to enable new capabilities.
• Fueling next-generation industry innovation through close collaboration with SAP business units and clients to co-innovate and deliver next-generation industry processes and develop AI-prescriptive roadmaps and solutions.
• Designing next-generation platform architectures for customer adoption and delivery of a modern, comprehensive data strategy to support optimized AI outcomes.
• Expanding ecosystem partnerships to increase the SAP-experienced consulting workforce and develop next-generation talent, including exploring new ways to collaborate on social impact programs for “greater good” initiatives.

Enterprises must be ready to embrace change and make the most of what they have today

IBM and SAP are keen to monitor the challenge of change. We already know that having the right technologies is only half the battle. In this instance, IBM and SAP have invested heavily in being able to approach clients “arm in arm” with more than just technology and presentations. Instead, the companies can offer tangible solutions that deliver the outcomes enterprises seek.

However, IBM and SAP are not solely responsible for the success of enterprise transformation efforts. Clients must resist the temptation of the latest and greatest emerging technologies; otherwise, they risk never completing existing projects, which will leave value untapped. Secondly, with the support of IBM and SAP, enterprises must combine the pieces of the broader ecosystem puzzle and apply them in the right places to deliver maximum value.

The Bottom Line: Enterprises should look to service providers embracing OneEcosystem to drive transformation value—but those clients must be ready for change.

The IBM-SAP partnership is a good example of HFS’ OneEcosystem in action. The latest iteration of the 52-year partnership seems to be hitting the market at the right time as enterprises amplify the search for competitive advantages in their respective markets. IBM and SAP’s AI and cloud capabilities position them well to satisfy this need. But technology alone isn’t enough—enterprises must also tackle their skills and culture debt, ensuring an organizational mindset to embrace and execute change.