When I first published my first blog on the topic of SAP Cloud Computing, I had no idea what the response might be. I was astounded by the number of viewers and the support that I received from SAP community. It appears that the enterprise cloud revolution is generating significant interest and as a result I’ve opted to follow-up the original post with some additional points to take into consideration as we progress with the enterprise cloud journey.
1. Business drivers are always first
SAP’s cloud portfolio is rapidly evolving from a “nice to have” into a competitive necessity, where business leaders are investing heavily to achieve a wide range of strategic objectives, driven by both top-line revenue and bottom-line cost optimisation factors. Organisational need to expand the IT capability of business cycles through a fast-track approach is spanning capital and operational expenses. To conduct robust economic analysis of these overly complex models, SAP customers need to consider two different drivers – those that substantially affect revenue and those that fundamentally affect costs. A sound enterprise cloud business case should clearly articulate both drivers with careful consideration given to both financial and non-financial benefits creating total cost of ownership model. For example SAP TCO needs to be organisation specific covering all significant components of a SAP environment (hardware, software, and operations) with the complete lifecycle of SAP systems from (plan, purchase, roll-out, operate, maintain, fix, change, and improve). By obtaining the SAP TCO Model to calculate the costs of different scenarios, it is possible to compare the cost in the context of the main business drivers.
2. Consider current and future strategic fit
SAP customers need to adopt the cloud computing strategy based on their specific business requirements. As a result a High-Level SAP strategy should take into consideration the overarching corporate and IT strategies as well as specific business unit strategies and valued driver. Failure to take into consideration the specific business unit strategies and value drivers reduces a sense of ownership/buy-in from the business and is likely to be heavily criticised for not having a clear business case that is linked to business unit value drivers and objectives. According to Gartner’s Top 10 Strategic Technology Trends for 2014, “enterprises should design private cloud services with a hybrid future in mind and ensure that future integration/interoperability is possible.” This requires customer’s adoption of baseline standards for identity, authentication, federation, and encryption. Assessment of application architecture must generate insight for cloud suitability, analysing opportunities based on application requirement’s fit for a cloud environment.
3. Know exactly what you want
If you’re reading this blog, it’s likely that you’ve made the decision to move to the cloud or are perhaps delaying the inevitable. SAP’s portfolio of cloud offerings contains overwhelming selection of options. SAP customers need to understand what they want to achieve, the benefits they can expect from the existing suite of tools and all of the implications associated with a move to a cloud based solution. One way to achieve this is to conduct an end-to-end value chain analysis to identify critical value drivers / capabilities and the key applications used in the delivery of those capabilities. Organisations need to clearly define what goes on the cloud and what doesn’t – otherwise they could end up creating unnecessary complexity. Consider playing it safe by using a cloud based solution for non-production systems (that do not hold sensitive data) thus in turn reducing the initial infrastructure costs and risks associated with operational disruptions and change management.
4. Go for a Test Drive
We have to recognise that growth is a process of trial and error, and in order to grow our enterprise cloud environments organisations need to adopt some trial and error-fast approach when dealing with SAP projects. SAP Cloud Appliance Library – CAL allows you to go through trial and error cycles much faster and at lower costs utilising some of SAP’s rapid-deployment solutions. For example – AWS offers test drive program to provide customers with the ability to quickly and easily deploy and then experience SAP software based solutions on the AWS cloud. These Test Drives have been developed by AWS and SAP partners and are provided free of charge for demonstration and evaluation purposes. These exercises may yield some unrealised benefits providing businesses with more velocity for adoption and more chances for making a difference in their respective industry. The idea of a quick deployment where customers can deploy their system in less than 1 hour was almost unimaginable only a few years ago. This is fast becoming a reality with examples of successful deployments. Barriers to entry are significantly reduced and some of the early adopters will start to rationalise their complex IT scenarios by having an unprecedented functionality while the competitors are still waiting for their business case approval.
5. In managing unforeseen future risks consider ‘Standards’
When we closely examine any piece of technology which offers a new paradigm we must look beyond the immediate need, and consider the standards to which cloud applies to SAP applications. For enterprises, this also introduces the risk of getting locked into specific clouds through the use of proprietary application programming interfaces (APIs). Cloud computing encapsulates the growing market momentum for improved standards which will enable cloud environments to work as a single entity. In terms of Platform-as-a-Service, SAP launched Hana Cloud Platform (HCP) as an enabler of organisation to accelerate IT and business cycles built on open standards offering customers an enterprise-ready environment in the SAP cloud. SAP customers need to ensure that their cloud service providers are going to be around for the long haul and that any unforeseen interruptions are not going to have a material impact on their business operations. By choosing a cloud based solution that leads the development of industry standards and/or is closely mirroring global standards the customer is reducing the risks associated with a forced transition to an alternative provider.