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I often meet with and advise CTOs and CIOs running big IT operations, many of whom use SAP enterprise resource planning (ERP) systems. Quite justifiably, they rely on them as the systems of record and engagement.
However, these decision makers are facing the reality of ERPs: the total cost of ownership of such systems, complex environments that may not be able to scale quickly, long lead times for getting new SAP applications running and a shortage of specialized skills.
They’re right to be wary. Old-school, on-premises ERPs can spark long debates among lines of business and corporate departments. Who should have first priority on time and resources? Who pays for what and when? ERPs can even affect mergers and acquisitions because of the long time frames required to merge SAP environments and data.
Many IT leaders are responding to these challenges by moving their SAP applications to a managed cloud infrastructure. This is, of course, a big step, and to mitigate risks an IT leader should carefully look at providers before moving SAP ERPs to a managed cloud environment.
For example, a provider should give business leaders the ability to speed and simplify adoption of SAP S/4HANA software, along with other solutions powered by SAP HANA. It should take a modular approach, with different levels of managed service according to specific needs. This allows leaders to focus on innovation and transformation while the vendor manages the operating system, databases and SAP applications.
Leaders should also determine whether an ERP partner can set up and run scalable SAP software landscapes on the cloud. This ability alone could potentially deliver cost savings of 20 to 25 percent over five years versus traditional self-management and operation of SAP software.
Other provider capabilities should include:
- An IT Infrastructure Library (ITIL)-based management of the infrastructure, platform and databases
- End-to-end management of the environment from governance through disaster recovery
- A service portal for on-demand provisioning of SAP service requests based on virtualized resources
- An SAP service catalog, including a wide range of predefined SAP managed services with more transparent pricing options designed for flexibility
- Around-the-clock support from a highly trained, worldwide service staff
- Flexible pricing options that help consolidate virtually all operating system and system management licenses and services into a single monthly charge
Already, forward-thinking enterprises are making the most of cloud-managed SAP services.
Specialty-materials company Celanese wanted to decrease annual SAP operational costs, adopt a more flexible model for delivery of the SAP platform and operations, and reduce the need for niche skillsets to manage IT infrastructure. Working with IBM, Celanese migrated its SAP data center to a hosted cloud solution with IBM. It reduced annual SAP operational cost by more than 50 percent, increased flexibility to address evolving business, and achieved equal or superior service levels for its managed infrastructure.
To keep its business running smoothly, Italy’s digital printer Pasqui S.r.l. needed a reliable hosting infrastructure for its critical SAP operations in accounting, logistics, sales and purchasing. With guidance from IBM and its business partner Beltos, Pasqui moved its SAP environment to a virtual server infrastructure. In addition to reducing its maintenance and management costs by 30 percent, Pasqui enhanced availability, boosted performance and improved the stability of its SAP environment.
After a divestiture, PeroxyChem had only 12 months to migrate its mission-critical business systems to a new platform or face enormous hosting fees. It didn’t want the cost or risk of buying hardware or setting up a large in-house IT department. Instead, PeroxyChem migrated its SAP environment to the IBM cloud infrastructure in just four-and-a-half months with no disruption to its operations. By having everything from its help desk to email managed by IBM, PeroxyChem was able to focus on its core competencies and reduce risk throughout its divestment process.
These companies and many like them are making the leap into the cloud and reaping significant cost savings, flexibility and competitive advantage. It’s one of the benefits of the digital revolution, and IT decision makers are making the most of it.
Learn more about how to manage SAP in the cloud.