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Forrester Study: Cost Savings with SAP HANA

June 19, 2014 by Elisabeth Peternek 4

A study by Forrester Research finds that the SAP HANA platform can save more than 70% on software.

In September 2013, SAP commissioned Forrester Research to conduct a cost analysis based on its Total Economic Impact (TEI) methodology to show how implementing the SAP HANA platform can help enterprises cut both their IT expenditure and their business overhead. Forrester developed the TEI methodology to provide a means for companies to more effectively align technical decisions with business requirements: Commissioned by SAP, the study was designed to give enterprises an idea of how much it will cost to implement SAP HANA and of how much they could save by doing so.

The study was based on two elements: first, interviews with customers that have extensive experience of working with SAP HANA platform, and, second, surveys completed by other SAP users and experts. Forrester used the results of the interviews and surveys to construct a compositive total cost model showing the potential savings and benefits to be gained by replacing a traditional database with SAP HANA in various SAP landscapes: with SAP Business Warehouse (SAP BW) powered by SAP HANA, SAP ERP powered by SAP HANA, or a custom application. For each landscape, Forrester calculated the costs of both a traditional database and of SAP HANA and compared the total cost of ownership.

Software costs reduced by more than 70%

The strength of the SAP HANA platform lies in its ability to simplify. As such, it reduces the need for additional hardware and software and boosts productivity in both development and system maintenance. In fact, as Forrester found, enterprises opting to implement SAP HANA can expect to see their software costs fall by more than 70%, their hardware costs by 15%, and their administration and development costs by 20%.

To construct a financial model using its TEI methodology, Forrester designed a composite organization based on characteristics of the interviewed companies: a manufacturing firm located in the United States with a workforce of 40,000. A company similar to the one represented in Forrester’s financial model could expect to realize the following savings by switching to SAP HANA:

Financial summary Forrester

For the purposes of the cost analysis, the assumption is that the company switches from SAP BW to the SAP HANA platform in the first year and then switches SAP ERP and the custom application in the second and third years respectively.

SAP ERP TCO Summary
SAP HANA platform is strong on simplification

According to the information Forrester gathered during the interviews, businesses that implement the SAP HANA platform can expect to:

  • Cut their hardware costs: SAP HANA compresses large data volumes and hikes performance, thereby reducing server and data storage requirements
  • Reduce their software costs: Enterprises can reduce the use of various data processing, ETL processing, management, and interim products or eliminate them completely. SAP HANA also provides extended analysis capabilities — in the form of text, geospatial, and predictive analytics — for no additional license fee.
  • Accelerate development: All interviewees confirmed that automation and reduced complexity had made their application development processes faster and more efficient.
  • Increase administrator productivity: Thanks to a simplified IT landscape, customers spend less time creating, optimizing, and managing databases and servers.

For more information, find the free Forrester Executive Report here.

 

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