INTELLIGENT BRANDS // Cloud

Companies face pressure to modernize SAP as tax reform, regulatory changes drive demand for advanced technologies, ISG Provider Lens report says.

The 2025 ISG Provider Lens SAP Ecosystem report for Brazil finds that the impending end of support for legacy systems is the central challenge for SAP customers in the country. Though SAP offers extended maintenance for ERP Central Component( ECC) until 2030, official technical support is set to end in 2027. Companies are carefully evaluating alternatives to ensure business continuity, regulatory compliance and operations modernization. These include migrating to SAP S / 4HANA or adopting the RISE with

SAP or GROW with SAP programs, which the company says are designed to streamline business operations.

“ Brazilian SAP customers face a reckoning with the end of ECC support and the need to comply with new regulations and tax reforms,” said Bill Huber, partner, digital platforms and solutions, for ISG.

“ Service providers are integrating AI and automation to meet the needs of different types of organizations.”

Large enterprises in Brazil continue to resist the RISE model, preferring to preserve budgets for internal improvements and prepare for the impact of new tax laws, the report says. However, some are adopting GROW with SAP to streamline operations, especially following mergers and acquisitions.

GROW combines several components for cloud transformation, including technology solutions and rapid implementation services, and is designed primarily for midsize businesses, ISG says. Some companies believe GROW lacks maturity, especially in its localization capabilities, but some service providers in Brazil report significant revenue from it, which may demonstrate that it meets a wide range of client needs when well executed, ISG says.

The use of SAP managed application services in Brazil has declined with the emergence of new AI and automation technologies, the report says. Providers are expected to align their solutions with the new technologies, with the services evolving into a more agile and intelligent model that includes automation and real-time monitoring to cut costs and increase productivity.

Interest in SAP SuccessFactors HXM has grown in Brazil as enterprises seek to customize recruitment, onboarding and performance evaluation through AI, ISG says. There is strong demand for solutions that enable compliance with Brazilian legislation on issues such as payroll administration, time management and taxes.

“ Brazil’ s changing regulatory and tax landscape requires constant enterprise attention,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.“ SAP users should partner with providers that remain up to date and agile to ensure continued compliance.”

The report also examines other SAP ecosystem trends affecting enterprises in Brazil, including SAP’ s extensions to its Joule AI copilot and the continued importance of managed cloud services for SAP ERP. p

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