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IBM & SAP Expand Partnership to Revamp Business Operations

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International Business Machines Corporation (IBM - Free Report) recently expanded its partnership with SAP SE (SAP - Free Report) to use the latter’s Rise with SAP Solution to transform business operations. According to the terms of the expanded partnership, IBM will now be switching to SAP S/4HANA, SAP’s next-generation ERP software, for centralizing and standardizing data worldwide.

SAP S/4HANA ERP software is a holistic and modular ERP software designed critically to meet the specific and unique requirements of every business. Using the SAP HANA database, data will be shared on a real time basis, and more than 375 TB of data can be moved to IBM Power on Red Hat Enterprise Linux on the IBM cloud.

IBM’s rapid move to this software will come with a consolidated delivery framework from SAP, which will include SAP Value Assurance program and SAP Model Service Company. The enterprise clients will benefit from increased choices, controls and accelerated digital transformations and use the new platform much more swiftly than a traditional deployment plan. This will result in simplification of complex and time-critical business functions, which include real-time planning, execution, reporting, analytics and forecasting drawn from live data. It will ultimately result in improved decision making backed by AI and automated workflows.

Despite the expanded partnership being in the deployment stage, the clients are benefitting from simplified billing and payment systems. An added advantage to the clients is that the global standards will help them secure the SAP applications and data and enable compliance with a regulatory framework.

IBM is poised to benefit from strong demand for hybrid cloud and AI, driving growth in Software and Consulting. The company’s growth is expected to be driven primarily by analytics, cloud computing and security in the long haul. A combination of a better business mix, improving operating leverage through productivity gains and increased investment in growth opportunities will aid profitability.

IBM has lost 7.4% over the past year compared with industry’s decline of 12.2%.

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