Accenture acquires NZ firm to bolster SAP practice

Global IT services and consulting firm Accenture has acquired New Zealand-based SAP and cloud solutions technology firm Zag to bolster its SAP practice as more enterprises migrate to the cloud and SAP's next-generation products.

Zag has offices in Auckland, Wellington, Sydney and Melbourne with a team of more than 200 professionals. The company is an SAP specialist that offers services including consulting, development, support, testing and cloud migration.

Its clients include the New Zealand farmer-owned cooperative Ballance and Australian energy provider Hydro Tasmania.

Ben Morgan, Accenture's New Zealand managing director, said by pairing Accenture’s global expertise with Zag's local talent and insight, the acquisition will strengthen the firm's ability to help clients accelerate their transformation using SAP and cloud technologies. The terms of the transaction were not disclosed.

Nick Mulcahy, CEO of Zag, said there has been growing demand from both current SAP customers and new customers who wish to migrate to SAP S/4 Hana, the enterprise resourcing planning (ERP) business suite based on the SAP Hana in-memory database.

“As there are now several successful implementations of S/4 Hana that our customers can reference, we believe there are now greater levels of confidence in the market towards embarking on such a migration,” he told Computer Weekly.

With completed or current projects that are on-premise or hosted by one of the hyper-scale cloud providers, Mulcahy said Zag will be commencing its first “pure cloud S/4 Hana project”.

Even though Zag is focused on cloud, Mulcahy many of its customers have on-premise implementations of SAP and it has ongoing support contracts with most of them.

“We are very well set up to support any of our customers during and after their migration to S/4 Hana, no matter which deployment model they choose,” he added.

A survey of 300 SAP customers conducted by IDC in 2019 showed that 73% of businesses were planning to deploy S/4 Hana and 18% were currently deploying the next-generation business applications suite.

In the study, 9% said they already had S/4 Hana in production, and when asked about the planned timeline for their transition to the software, 54% of SAP customers said they would switch within three years.

Earlier this year, Australia's finance department said it would deploy S/4 Hana to provide common financial and HR services across government, starting with a prototype platform to be trialled across internal service providers.

Accenture's acquisition of Zag follows a slew of other acquisitions – such as Analytics8 and BCT Solutions – across Australia and New Zealand in the past 18 months. It recently announced the formation of Accenture Cloud First – a-multi-service group of 70,000 cloud professionals – with a $3bn investment over three years to help its clients across all industries to become “cloud-first” businesses.