The disruption caused by COVID-19 made one thing very clear. Organizations that made significant advances on their cloud first journeys were more resilient. The reason? The agility, flexibility and scalability that cloud provides. But many organizations have yet to realize the same gains.
On average, enterprises still have only about 20-40 percent of their workloads in the cloud. And most of these are the simpler ones1. What’s more, our research shows that nearly two-thirds say that, so far, they haven’t achieved the results they’d hoped for from their cloud initiatives.
It’s no longer a case of companies deciding whether they need to move to the cloud. It’s now a case of ‘how?’ and ‘how fast?’. Whether they’re on SAP ECC and have yet to make the move to SAP S/4HANA or are seeking to migrate S/4HANA to a new cloud environment, companies running SAP applications need to make some key decisions so they can migrate to the cloud with confidence. That means not only realizing the cost benefits that cloud offers, but just as important the agility, innovation and sustainability that cloud can provide combined with a highly efficient operating model supported by automated and industrialized processes.
Migrating to cloud is step one on the journey to SAP S/4HANA
Every company’s journey will be different. It all depends on each organization’s immediate priorities and longer-term objectives. Some may still believe they have to operate on-premise systems for control and compliance reasons. But nowadays those concerns are increasingly wide of the mark. The hyperscalers’ operating model, with datacenters distributed globally, means that compliance with local data regulations is baked in. Likewise, with security. The hyperscalers’ massive and ongoing investments in securing their cloud environments, and the data they host, dwarf what an individual company would be able to support.
At the other end of the spectrum are organizations that have already moved their SAP applications to the public cloud, and even moved their S/4HANA system as well. It’s easy to see why they have done so. This route offers a modern ERP solution, with the benefits of public cloud: a faster path to innovation, lower total cost of ownership and the opportunity to reinvent business processes for the digital era.
A phased path opens
In an ideal world, every company would move to SAP S/4HANA in a pure cloud environment and, in doing so, quickly reap the full benefits of becoming an intelligent enterprise. But for most, that’s not a realistic option.
Given the need to balance the requirements of current SAP systems, business timetables, and resource availability, each company needs to find its own path to manage the transition. And there’s no “one-size-fits-all” approach. For many, a hybrid approach will make most sense. So what does that entail?
It’s a phased path where organizations can seek to combine the best of both worlds. By moving their legacy SAP workloads to one of the hyperscalers (AWS, Microsoft, Google) they can create a cloud environment that offers a rapid conversion of their existing SAP ECC to a modern cloud-based architecture and best position to move further from there. This combines the control of an on-premise application with the benefits of subscription-based cloud economic models. What’s more, in adopting this approach, they will have created a path to gradually transform and scale digital innovation – all at their own pace.
As set out above, the rationale for selecting this middle path is clear. But to make the most of this opportunity, organizations will need to take a few key considerations into account. First, identify and build the right SAP technology and cloud skills. These will be critically important in creating a cohesive team that can work across both SAP and hyperscaler environments. Second is the need for integrated and automated operations that can align IT objectives with critical business needs. Finally, careful attention must be given to cybersecurity.
To help organizations address these issues and accelerate their cloud journeys, Accenture has developed an SAP-based offering that combines an unrivalled understanding of SAP’s intelligent technologies with in-depth experience and leading partnerships with all the hyperscalers. Our myNav platform helps organizations navigate the complex cloud landscape and select the best cloud architecture and solution for their needs.
What’s more, Accenture brings the deep experience that comes from helping more than 125 organizations running SAP to make the move to cloud. As a cloud first business on S/4HANA ourselves, we have the platforms, expertise and capabilities to help companies move forward with speed and confidence.
That means we can help them to capture the cost savings and efficiency gains that cloud provides. And that’s just the start of the journey. With the migration to cloud well underway, organizations can turn their attention to advancing their cloud first journeys to S/4HANA and reaping the rewards of operating as a truly intelligent enterprise.
1. Accenture research. 451 Research. Cloud, Hosting Managed Services, Workloads and Key Projects, Q1 2019.