For SAP shops, cloud migration is essential – pandemic or not

Even before the pandemic, enterprises with traditional on-prem IT infrastructures faced investment optimization challenges: high capital expenditures to maintain legacy hardware and software, real-time data and systems availability shortcomings, scalability challenges and digital strategy blind spots.

As the prolonged economic pause threatens to undermine top- and bottom-line performance of organizations across industries and the globe, continued investment in legacy systems can exacerbate most business-technology challenges. 

SAP on-prem shops are particularly vulnerable. Because SAP was a latecomer to the cloud world, some customers are now saddled with prohibitively expensive IT operations and a vendor mandate to migrate to the ERP vendor’s latest enterprise software, S/4HANA, by 2027 (with extended maintenance until 2030).

These twin challenges come as many organizations struggle to stay viable in today’s capital-constrained COVID economy. Complicating this is that many organizations:

• Lack a scalable, agile and flexible platform for SAP hosting.
• Are still in search of a roadmap for S/4HANA adoption.
• Need assistance with rapid SAP deployment.
• Remain unfamiliar with a true consumption-based pricing model.

Given that many SAP shops are suffering reduced IT budgets, the challenges of running applications during a lockdown, and supply chain, logistics and other operational bottlenecks, many see SAP’s cloud modernization mandate a steep hill to climb.  

App migration motivations

Despite the opposition, moving business-critical applications to the cloud can not only save time and money on application maintenance and extension activities, but it can also free cash and shift strategic focus to other business priorities to survive the pandemic – and beyond.

Take a world-leading reinsurer, SwissRe. Pre-COVID, the organization was running its critical SAP S/4HANA financial system within an on-prem data center. It faced severe challenges, such as scalability issues, heavy Cap-Ex investment, missed high-availability solutions, reduced infrastructure resilience and no consumption-based pricing model.  

In-addition to these challenges, the company was planning an enterprise consolidation roadmap for which it sought a modern IT platform with advanced financial planning and execution capabilities. To achieve this, the company needed an end-to-end solution provider to help move the financial operations to S/4HANA, which provided a more scalable, agile and flexible platform.

We worked with SwissRe (and other partners) in 2019 to ensure a smooth S/4HANA migration from on-premise to Azure, which delivered greater operational flexibility during the company’s peak financial closing period. The new environment also provided real-time data via enhanced storage scalability, maximum system availability for its SAP financial system and a consumption-based pricing model.

We created an extensible platform to enable future enterprise application consolidation (i.e., moving Oracle Financials to SAP S/4HANA). This has allowed the organization to focus on business priorities like operational readiness by planning for prototypes, evaluation and testing new features during the pandemic.

Stepping up to the SAP Cloud

Many SAP on-prem users tell us they’re hesitant to make the shift to the cloud. They worry about SAP cloud migration costs, ROI, security, compliance, etc. However, the value of cloud-based SAP is its ability to help companies withstand unforeseen business pressures, such as those inflicted during a crisis like COVID-19.

Our clients that have moved to the SAP cloud tell us they’re better able to meet both business and employee priorities during the pandemic because their SAP IT infrastructure and application management is handled on-demand, with greater flexibility and cost efficiency.

They find our cloud framework, Cloud Assessment and Transformation, helpful. It builds off the rich technological and business process optimization experience we’ve gained in helping SAP shops move to the cloud. This framework covers standard operating procedures, best practices, automation, tools and accelerators that speed and smooth SAP cloud adoption. Importantly, our framework automates more than 60% of the migration process and has been shown to avoid 95% errors typically experienced during a migration. And it covers the full lifecycle, including.

• Evaluate: It identifies the client’s business and technical requirements from an SAP perspective and connects the system details, required system availability, expected planned downtime and IT budget, etc. Based on these details, we evaluate the target cloud platform using our “SAP Cloud Evaluation Grid” to compare the pros and cons of each target cloud environment and recommend the one that best suits the client’s specific requirement.
• Design: Once the target cloud is selected, it’s critical to design the cloud infrastructure architecture and SAP architecture. During this exercise (based on the system availability requirement), a high availability and disaster recovery solution is determined with expected RPO (recovery point objective) and RTO (recovery time objective). Based on the industry, each customer typically has its own compliance/security requirement. Therefore, a relevant cloud security solution is designed during this phase. SAP sizing is then finalized, and a target BoM (bill of material) is fine-tuned according to the SAP landscape requirements.
• Execute: We next consider various SAP migration techniques. The end state is then reached based on several parameters, including target SAP versions, operating system, database and budget for network bandwidth and customer approval for the planned downtime duration. Using a best-practice approach, starting with sandbox migration, we then simulate the entire landscape move before the production SAP migration takes place. This helps us fine-tune our planned downtime based on the lessons learned.
• Optimize: It’s still critical to ensure proper utilization of the cloud features in the post-production environment in order to implement many SAP-specific use-cases on a cloud orchestration layer for greater operational efficiency. Examples include rapid provisioning, auto scaling and fetching real-time data. All of these SAP use-cases will be useful to ensure better efficiency and significant operational cost savings.

SAP applications deployed on the cloud provide on-demand scalability and consumption-based pricing not only for infrastructure but also for SAP applications and databases. They also offer rapid provisioning, real-time data analytics using scalable data storage, security compliance and maximum system availability. 

Proof in the pudding

Take the case of a global pharmaceutical company that migrated its SAP ERP Central Component (SAP ECC) to an on-premises environment, which had resulted in rising costs and sub-par support. In addition, the SAP system had extensive periods of downtime and received only limited security patch updates.

We helped the company improve the flexibility and scalability of its SAP system while lowering costs by delivering an end-to-end highly-available cloud environment in four and a half months during 2018. We’re also providing managed services support for the client’s SAP Basis landscape, along with AWS infrastructure and security. The entire migration had zero issues during deployment, and the infrastructure is now 99.99% available.

Even better, because the SAP application is hosted on the cloud and managed remotely, the pharma now has additional resources to fund products developed to fight COVID-19.