Key components of an effective SAP to cloud strategy
1. Get everyone on board by focusing on business centric outcomes
Moving SAP to the cloud will require cooperation across the organization, from leadership to line of business owners to the IT teams having to carry out the work. While it’s generally understood and accepted that cloud provides agility, commercial flexibility and the potential to transform, these benefits will only resonate – and inspire cooperation - when you can make them directly relevant to the business areas that are affected.
To achieve this, ensure your SAP to cloud strategy talks the language of business and correlates to the overall corporate strategy. Think beyond the benefits to the IT team and budget. Demonstrate how this migration will help achieve organizational goals.
For the executive team, outline the cost optimization opportunities as well as how increased agility and scalability will help the organization stay ahead of competition and achieve the overarching vision and strategy. For the line of business owners, show how their ability to work daily will be improved, demonstrating the art of the possible as well as the potential pitfalls if you do not modernize. For the IT team, this may seem like a challenging project, but outline how it will relieve current pressures and open new opportunities for innovation going forward.
2. Be clear on the cloud end state
Once you know what business outcomes you want your cloud-based SAP system to achieve, you need to clearly outline the characteristics of the end state design. This is not to be confused with the technical architectural design complete with specified solutions. The end state design considers things like:
- The level of cost control needed versus agile development requirements
- What kind of support model will be required
- The broad architectural design considering departmental and geographic interdependencies
- Potential future needs like upgrading to S/4HANA
Keeping the cloud end state objectives front of mind will help support critical decision-making steps when the strategy is up and running.
3. One cloud, multi-cloud or hybrid cloud?
In the absence of an over-arching strategy and clarity on what the end state looks like, you may end up choosing one cloud provider for a particular project, a different provider for another, and opt to keep an on-premises solution for yet another. If these decisions are taken in isolation, you can end up with an over allocation of resources and complexity that defeats the original aims of moving to the cloud, namely cost savings, reduced complexity and improved agility.
While there is not a universally accepted “right” cloud deployment model - whether it be single cloud, multi-cloud or even a hybrid model - it’s important that the approach chosen meets the characteristics of your end state and success criteria. Your cloud strategy should provide the framework as to how the decision-making process plays out in selecting the right solutions and/or deployment model.
4. Define scope
Your SAP to cloud strategy should cover the scope of business solutions it supports. In simple terms this will refer to the specific systems you intend to move to the cloud. However, the strategy should also reference the impact the migration of each system will have on adjacent business and technology services. Examples of this include whether a change in operation support model post migration is included in the cloud move, or from a technology perspective, the impact on existing technical solutions such as backup processes, security standards or integration.
Factoring in the knock-on effect on supporting systems in the strategy will help to better understand the true scope, change impact and ultimately cost, time and resource allocation early.
5. Approach
In broad terms moving to the cloud can be defined by the “6Rs”: Re-host, Re-platform, Re-factor/Re-Architect, Re-Purchase, Retire, and Retain. Depending on the stage you are at in developing your strategy, you may still be considering which approach is best.
Several factors will ultimately determine the right approach or approaches to adopt, from technical and budget considerations to the business agenda for transformation. You might opt for an ‘as is’ lift and shift of SAP ECC to the cloud, or you might want to modernize and move to S/4HANA, or possibly both. The strategy should remain agile and able to evolve with control, as more information comes to hand. The key is that the strategy and the underlying delivery plans can adapt to changing business goals and priorities, innovative solutions and the ever-evolving cloud.
6. Control measures should be part of the cloud migration strategy
Business strategies are meant to achieve business outcomes and there is no reason SAP cloud initiatives should be exempt from this rule. Setting measurement standards in the strategy ingrains a mindset that the adoption of cloud solutions goes hand in hand with business accountability. Measurement examples to be included in your strategy include:
- Monitoring progression towards the stated goals or key milestones
- Knowing that you’ve reached an end point or target
- Measurement of the realization of benefits
- Providing objective evidence to support changes in strategy
