Cost is often one of the earliest incentives that leads organisations to consider Cloud computing. That incentive is probably even stronger in the current economic circumstance, says Scott Taylor, an independent consultant from Thirdrock, with a long pedigree in SAP projects and stints at companies such as Deloitte and Ernst and Young.
And it isn’t necessarily the IT department that starts the conversation. Instead, says Taylor, business line managers from departments such as Sales, HR or Marketing have started to investigate alternative solutions that lead them to query the business benefits and ROI of current approaches.
But it’s what happens next that really starts the business moving towards the broader issue of transformation, says Taylor.
The subject of the move to Cloud — particularly for business applications like SAP — is covered in depth in a new research report from AWS called Modern Data Architecture.
“Concerns about costs are often a trigger for a wider conversation,” says Taylor.
“Soon the message from the business is ‘I want a strategy. I want a roadmap. I want to know what we’re doing with digital finance. I want to know what we’re doing and I don’t care if it takes two or three or four years. We need a plan.’ It’s really a combination of one or all of those things that drives organisations to look at what their new strategy is going to be.”
So while the cost is a genuine consideration at the start, it is rarely the only one driving the decision once the process is underway. However, Taylor says, the cost savings in people and technology are often appealing enough to get the ball rolling while the organisation considers the wider transformational issues.
Importantly, Taylor also stresses that typically long-term strategic projects tend not to stand on the merits merely from the perspective of cost savings.
For SAP customers, in particular, the shift to running on AWS Cloud offers a path to rationalisation that lessens complexity, makes innovation easier, and helps accelerate new business opportunities.
In the past, says Taylor, many SAP users customised their ERP solutions or other SAP systems — but that made upgrading difficult. Even routine updates could be problematic.
Running SAP on AWS means there is no longer a need to innovate or customise on the core system, he says. Rather, customers who make the transition to SAP on AWS can abstract their innovations and align more closely with SAP’s approach.
This combination of the SAP applications with AWS-native services also accelerates the mobilising of data and the implementation of artificial intelligence and machine learning, which in turn makes automation easier.
Another common business trigger for the shift to SAP on AWS is the need to modernise and move to S/4HANA. That is the point at which companies need to evaluate heavy infrastructure investments if they wish to remain on-premise.
And the key consideration is the need to supercharge analytics in a world where business decision-making is data-driven.
According to Taylor, “Your traditional transactional SAP general ledger probably represents only about 30 per cent of what you really want to report on these days.”
He says systems that can’t deliver the full 360-degree view of the company’s performance are the real roadblock to transformation.
Business leaders want to use analytics to understand what they need to be closer to customers or to better understand their competitors. “I want to understand more about my products, my profitability.”
“The game is how do I free up and release all of the information that sits in my ECC? How do I get access to all the other information that I’m not getting today that’s not in ECC? And how do I get access and disseminate that information and distribute it across the organisation — to the people who need to be able to make smart decisions? That’s the driver.”
The bottom line is that running SAP workloads on AWS frees organisations from slow-to-change and inflexible core business systems, and lets them run the workloads in a modern Cloud-native and agile fashion, he says.
- Download: Modern Data Architecture.