5 misconceptions about SAP in the Cloud

Should your organization move your core ERP platform to the cloud?

That simple question requires many considerations. After all your entire business model depends on the systems like CRM, ERP, SRM and others. If you are SAP-centric organization you are well aware of how complex (or complicated) managing the business systems landscape can become. Updates, upgrades and migrations are the biggest nightmare of IT departments. They require heavy projects distracting you from what is really important - running your business.

Discussions around on-premises vs. off-premises SAP installation are difficult, very often emotional but also necessary. It is hard to ignore shifts on the IT market pretending that cloud-revolution is not happening. Even if for many SAP business suite does not fit the concept of agile, flexible and dynamic cloud platforms ERP market is not standing still. All major ERP providers are gradually moving away from on-premises model. It is not the question "if" but "when" cloud will be the only way of consuming ERP-class systems.

To move this discussion forward I have collected 5 common misconceptions, worries and questions which organizations of various sizes have when entering "ERP in the Cloud discussion". Hopefully some of the concepts will help to move this discussion beyond the basic worries and will allow organizations to focus on business-outcomes driven dialogue.

1. "Will SAP in the cloud be cheaper?"

This is the most favorite question asked by the internal IT departments. No wonder when the cloud is perceived as the biggest threat to the jobs in IT. The best way to defend the status quo is to undermine the commercial aspect of moving to the cloud. But cloud is not ONLY about lowering the costs. Discussion should also focus on:

• flexibility - some questions to consider: how much time is required to create Proof of Concept environment or a new test server? How to accommodate the peaks in computation power? How to prepare for unpredictable growth of the user base? How to dynamically adjust server sizing optimizing the costs?
• predictability - some question to consider: how to predict SAP maintenance costs for the next 5 years? How to prepare for unplanned outages? How to plan IT engagements in regards to maintenance vs. transformational projects?
• service quality - in most of the organizations updates, upgrades and other technical changes are one-time events. As a result every time upgrade project is planned it is like entering the unknown. In managed cloud environment service provider has a dedicated team which deals with such operations across all customer base. Knowledge gained on the projects with other customers can be applied to your system landscape avoiding common pitfalls and shortening the time of overall operation.

Also cost discussion is not straightforward one as it is very difficult to define and compare Total Cost of Ownership for on-prem vs. off-prem solution. Especially when we talk about PaaS scenario where not only infrastructure but also services are in scope. In such TCO is not only about the cost of servers but also skills, experience, staff training, facilities, electricity, know how, self service portals, automation tools and procedures, security, monitoring and many more parts which should be included in the calculation.

2. "Cloud is for new, dynamic and agile platforms. SAP is not fitting the cloud concept"

 It is a common believe that SAP should be a very stable platform. Stable for most means also static. Not many changes, well defined parameters and very little adjustments in order to assure that the business can work without any disruption. But cloud platform also helps with:

• introducing changes - most managed cloud platforms gives your organization a very well defined, standardized process for upgrades, migrations and patching.
• easier testing - thorough its flexibility and automation cloud environment allows for rapid test environments provisioning. Testing in the cloud helps to lower the costs shortening the environment preparation time.
• standardization - cloud environment is all about standards. Moving your SAP to the cloud will assure that your underlying technology platform will be standardized, predictable and efficient. Cloud environment is (most of the times) setup according to the best practices as it helps to lower the number of errors which in turn helps to drive operational costs down.
• connection to the System of Engagements - using cloud platform for your SAP landscape can be also a very good and convenient way how to start with SoE. Mobile, social and other customer facing parts of your systems need to connect to the SAP (System of Records). Cloud will make it easier to create secured integration between SoE and SoR.

3. "SAP contains our most precious business data - why should we trust cloud provider?"

This discussion touches at least 3 aspects:

• security - while considering moving your ERP to the cloud it is important to have a honest and straightforward discussion with your service provider about security. Not always but very often you will find that security measures used in dedicated cloud data centers surpass the ones which your IT can deliver.
• auditability - you should not take the security for granted. Cloud providers need to give you the way how to audit your business platform, check who had access to systems and data and if all management processes are followed according to the agreements.
• trust - very often discussion labeled as a "security concerns" is in fact touching the trust towards cloud provider. No matter what will be in the contract you need to ask yourself a question if you trust your service provider, what history and reputation this cloud provider has and what is the chance that your data will be misused or exposed to the unauthorized people, organizations or governments.

4. "Moving to your cloud will bind us to your services"

 One of the false assumption is that once you migrate your SAP system to the cloud provider data center your organization will be bound to the one service provider. It is not true. Although your SAP infrastructure (and in case of PaaS also your middleware) will be managed by the cloud provider the extensions, changes, application and business support can be delivered by any other vendor. After all it is still your system. Multi-vendor strategy for SAP in the cloud is very natural, reasonable and supported by cloud providers.

5. "Moving to the cloud will make our IT obsolete"

The biggest fear is that the moment organization start moving to the cloud IT department will lost its purpose. In contrary! IT will be even more important in order to setup appropriate cloud brokerage practices, compose enterprise landscape from multiple cloud vendors and finally establish robust hybrid cloud platform. Obviously cloud (as any other technology) requires IT to change and adjust. New roles, capabilities and skills are needed in the cloud-centric IT. But it is sure that IT departments will not disappear.

Hopefully above points did clarify some of the doubts and misconceptions about moving your SAP to the cloud. Now it is time to focus on the business benefits and the hybrid cloud strategy. Good luck!

About the author:

Lukasz Paciorkowski is an Enterprise Architect helping organizations to envision and implement Digital Strategies. He is focusing on emerging technologies such as cloud, mobile, IoT, analytics and social.

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