At this year’s SAP Sapphire conference in Orlando, IBM (IBM) shared its experience moving to SAP S/4HANA on IBM Power Virtual Server. Ann Funai, IBM’s CIO and VP of Business Platform Transformation, explained that the shift to SAP’s (SAP) cloud ERP system cut infrastructure costs by 30% since the migration was completed in July. The move also sped up contract registration, made billing and payment processes more accurate, and improved how quickly IBM handles accounts receivable, saving both time and money.
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Interestingly, IBM started the project in 2022 by moving away from several smaller and outdated ERP systems to a single standardized platform. Funai said that this clean, cloud-based setup makes IBM more flexible for future technology needs, especially with AI. She admitted that switching core systems like finance and supply chain can be scary, but said IBM’s successful migration shows that it can be done. She also said that other CIOs she talks to have the same worries, and IBM’s experience can help show them how to plan, test, and set up their teams in order to make the change work.
As a result of the upgrade, IBM has been able to smoothly handle recent acquisitions like Red Hat, Apptio, and HashiCorp by making it easier to merge their systems. In addition, analysts such as Forrester’s Akshara Naik Lopez now recognize IBM as a top SAP consulting provider. While some businesses are still unsure about using SAP’s bundled cloud service, RISE, Funai believes that IBM made the right move early by saying that it has led to higher cash flow, better productivity, and freed up teams to focus on higher-value work.
What Is the Target Price for IBM?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on eight Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $260.62 per share implies 0.2% downside risk.
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