Here’s why now is the time to explore moving your SAP applications to the public cloud.
The pressure to modernize enterprise resource planning (ERP) such as SAP systems is growing, as organizations become more comfortable with cloud-based deployment models.
ERP in the cloud is widely viewed as essential to digital transformation.
Because ERP systems interconnect with so many cross-organization business processes, they’ve often lagged behind other digital transformation efforts.
While companies have preferred to operate complex business applications primarily from their own data centers or via external hosting offerings, the number of companies using the public cloud for this purpose is rising.
Companies around the world are evaluating public cloud-based SAP hosting and beginning to migrate their business-critical applications to these platforms. The public cloud is also playing a role as organizations switch to the new generation of SAP S/4HANA software.
Top 10 Things You Should Know about SAP in the Public Cloud
Let’s dive into the top 10 things you should know about moving SAP to the public cloud such as Amazon Web Services and Microsoft Azure.
1. Why undertake an SAP ERP cloud migration journey?
Most businesses are looking for agility as they digitalize their processes and services. A cloud migration can relieve the pressure on resource-constrained IT teams.
A 2020 report by the America’s SAP Users’ Group (ASUG) and Syntax found a majority of respondents (85%) will run their new ERP system in the cloud with a nearly even split between the clouds: private cloud (26%), public cloud (23%), and a hybrid of private and public cloud (26%). Many SAP customers appear to be using this ERP transformation as an opportunity to rethink their cloud approach.
The 2020 ASUG and Syntax study shows 81% of respondents already are cloud customers and a majority are using platform-as-a-service offerings (74%) and infrastructure-as-a-service offerings (70%). For SAP customers not in the cloud, 63% are considering a move to the cloud in the future, indicating that the race to the cloud is definitely on.
2. The maturity of the public cloud
More and more companies are considering a public cloud migration for their SAP applications. The reason for this is the maturity of the cloud platforms and the attractiveness of the offerings which companies expect to be able to make the operation of their SAP systems more efficient, more flexible and more modern.
The public cloud provides chief information officers (CIOs) an opportunity to focus on strategic projects that can boost the bottom line.
“Because of this, the public cloud has become the go-to platform for modernizing existing business applications and building new digital products, such as mobile software that delivers new customer experiences and machine learning systems that generate insights.”
Clint Boulton asserts on CIO.com
Most CIOs are managing or participating in a team tasked with creating new revenue-generating initiatives, so offloading non-strategic work by using cloud providers and partners is increasingly important.
Businesses are able to scale cloud resources up or down without having to go through costly and time-consuming capital acquisition processes. They can rely on cloud services providers for much of the overhead required to keep security up to date and can take advantage of business continuity services available via the cloud.
3. Critical considerations
SAP and other ERP systems represent the heart of the modern enterprise, providing key management and financial data, typically interfacing with several other business-critical systems.
Previously, public cloud infrastructures used in the SAP environment were primarily for nonproduction systems, such as development or test environments. But that’s changing, as nearly 70% of SAP customers that use public cloud-based hosting now want to include their production systems.
A successful ERP public cloud deployment must begin with a comprehensive strategic plan that encompasses current use and future expectations. That vision must focus on better business outcomes as key performance indicators (KPIs).
4. A cloud strategy should come first
This starts with a complete assessment of your IT environment and the impact the migration will have on the IT organization and business units. It’s important to remember that your IT environment is more than just your SAP systems. There are a lot of other applications that talk to SAP.
Syntax recommends companies devise a strategy for public cloud-based SAP hosting that defines the objectives of the project such as:
- Cost savings
- Technological transformation
- Increased agility in SAP operations
The strategy should also address the risks and total investment costs for the migration. The long-term transformation strategy for SAP applications, business processes, and IT environment should be the guideline.
The cloud is more than just an alternate operating environment for ERP software. A migration is a complex process, and it is essential to plan for what can go wrong and how to mitigate any adverse impacts.
5. It’s a business strategy not a technology strategy
Interfaces to SAP ERP systems impact virtually all departments across an organization. A successful migration requires IT to accurately inventory all interfaces and their impact on the business.
IT isn’t alone here. It has to work with business stakeholders to ensure that executives and resources are committed to the migration strategy, greatly enhancing the likelihood of success.
The integration and management of both public cloud services and SAP infrastructure can be challenging, especially when multiple cloud providers are involved. Many companies may lack the necessary internal expertise to migrate SAP applications to a public cloud themselves.
In addition, the speed of innovation on the part of hyperscalers is enormous; a positive aspect on the one hand from the customer’s point of view, but on the other hand an additional challenge to keep abreast of developments and conditions.
6. Building a business case
A key aspect of aligning the ERP migration with the business is developing clearly defined objectives and outcomes. CIOs should build the business case on digital transformation not on cost savings. It’s important to understand what companies are going to gain from the migration. CIOs should make sure it is part of the company’s holistic business strategy.
7. The widening skills gap
One of the top issues that must be addressed in a migration to the cloud is staffing and skills. Organizations that have not undertaken large migrations are likely to be unaware of potential pitfalls, and even those that have managed major system upgrades may not be aware of key differences in migrating to a public cloud environment.
It’s unlikely that a company can quickly staff up with new IT team members who are knowledgeable about the intricacies of implementing SAP in the public cloud. It’s important to find a partner that has experience in managing the migration from start to finish, so that all potential risks can be exposed up front. Organizations should decide early whether they want to manage the ERP environment after the migration or rely on a managed services partner.
8. Security in the public cloud
By adding more robust security measures, the perception of public cloud security has changed. Once an area of concern, it is now an area of maturity.
Security in the cloud may expose the internal IT organization to different types of challenges and best practices. Organizations should lean on the skills and expertise of a managed services provider that is experienced with hands-on, day-to-day security management skills and a commitment to stay up to date on new security tools, techniques, and threats.
To avoid common security pitfalls in the cloud, you should understand how to assess and manage the security of a cloud service and hosted application it uses. In addition,
you should know how to identify and close the security gaps between applications and clouds.
The public cloud security models are very strong when implemented. However, a lack of foundational implementation knowledge has led to many embarrassing breaches in the public cloud.
9. Timing decisions
SAP ERP migration projects present an opportunity to fully evaluate a current environment, from hardware to third-party interfaces. Other considerations include data center contract renewals, software licenses, compliance needs, and product development road maps.
Ideally, IT organizations are planning far enough ahead to take advantage of the life cycle of their IT hardware assets, determining what to retire, and what to repurpose to extend the value of the migration effort. Other timing considerations include data center contract renewals, business growth or future growth, compliance, mergers and acquisitions, and ERP conversions such as S/4HANA.
On the software side, use this opportunity to decouple tightly coupled instances and move things in waves of migrations toward the cloud. The migration effort also provides the opportunity to configure the ERP environment for future needs, such as expanding DevOps automation capabilities.
10. Data extensibility and the opportunity to realize tangible business benefits faster
Businesses running SAP are looking for natural extensions to Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), Data Lakes, Business Intelligence, and intelligent autonomous platforms. One of the innovation leaders in the public cloud is AWS. It has one of the most complete set of services to host SAP systems as a platform while allowing you to take advantage of other services which unlock the business value of data. Azure also has innovations with Azure Sentinel and other services.
Bringing it all together
It’s important to determine your optimal hosting strategy. Companies should consider that public cloud services require additional expertise in managing the use of an external IT infrastructure, monitoring service levels, controlling costs, and providing support. Either the user company must possess these skills or collaborate with an external service provider.
Syntax works to assess requirements for IT and the business. Syntax can provide recommendations on an optimal hosting strategy for SAP workloads in the public cloud with a cloud readiness assessment.
To learn more about how you can get more value from your SAP systems in the public cloud, visit our resources page. Or you can contact us today to find out how we can help you maximize your SAP investment in the public cloud.