SAP on Azure: 5 Digital Transformation Initiatives to Pursue

5 Top Digital Transformation Initiatives for 2020: SAP Edition

The benefits of migrating SAP to Azure are rather well known – lower TCO, instant access to new/updated SAP software, overall higher performance and reduced reliance on on-premises software. Refreshing your infrastructure alone can give you a major edge. However, to gain even more value from your new investment, we suggest looking into the next top-ranked digital transformation initiatives for the next 12 months.

Legacy Systems Modernization

As we wrote before, legacy systems modernization poses major challenges for CTOs both tactical and monetary – the ROI is delayed; the skills gap is looming, large and overall low digital maturity and cultural resistance further stalls a lot of initiatives.

Indeed, upgrading, reengineering and/or retiring such systems will require a major effort. However, the cost of inaction is even higher. The cost to upgrade or replace any system grows exponentially after 3 years of software neglect. Software nearing the end of support (such as SAP ECC) aggregates the maintenance costs even further, not to mention increased security threats.

Migrating SAP to Azure can help you shift your investment from CAPEX to OPEX and realize significant savings as you do so. According to a Forrester 2019 analysis, four surveyed enterprises that already completed migration achieved over $8.3 million in cost savings for their legacy infrastructure.

The scope of potential savings further extends to:

• Support costs – with fewer SAP products running on-premises, you can reallocate your IT teams to higher-value tasks.
• Data storage costs – reduce the financial burden of maintaining outdated data centers and investing in new hardware.
• Infrastructure management – avoid hardware over-provisioning. With Azure, you can upgrade your capacity on-demand, scale or downgrade rapidly to meet peak demands. This significantly reduces the cost of over-configuring infrastructure.

Last, but not least, comes the ability to bring new SAP releases to market faster. One of the most recent successful digital transformation initiatives examples in this area comes from Daimler. The automotive company replaced a legacy company-wide procurement system (featuring 400,000 global suppliers) with a new SaaS system running in Microsoft Azure in just 3 months.

Thanks to Azure’s rapid resource provisioning and instant scalability, Daimler can now:

• Issue regular updates to their new procurement system.
• Scale usage at an affordable price (the operational costs for managing the new system are 50% lower).
• Seamlessly add AI-infused ICM components, using Microsoft Cognitive Services, Azure Machine Learning services, and Azure Bot Service.

Infopulse has also recently helped Delta Wilmar replace their legacy solutions with an integrated SAP S/4HANA platform and hit all the set KPIs. Check our complete case study that further explains the critical elements in digital transformation initiatives we have accomplished.

Improved Business Continuity

The price of planned downtime is substantial – $9,000 per minute on average. However, if you are operating in one of the following niches, the price tag can go upward of $5 million per hour:

• Banking/Finance
• Healthcare
• Government services
• Retail
• Manufacturing
• Transportation
• Utilities
• Communication and Media

On-premises data centers require 24/7 monitoring and orchestration to maintain high-performance levels. Clearly, that comes at a cost too. Migrating SAP products from on-premises to the cloud environment can help reduce that load. The aforementioned Forrester study says that businesses achieved $1.2 million in savings through a minimized need for on-site IT maintenance teams and effective staff reallocation to other projects.

A recent Avid Technology project further illustrates this point. The company recently started upgrading their legacy SAP software and migrating it to Azure. Already, they have

converted their SAP database platform from Oracle to Microsoft SQL Server on Azure and moved almost 2 terabytes of data.

What they achieved as a result was:

• 99.95% application availability – a standard they could not have previously achieved.
• Greater capacity to support growth through seamless scaling.
• An almost 50% improvement in the application run times that has a significant impact on overall user experience.
• A strong technological foundation and flexibility for the subsequent planned migration to SAP S/4HANA.

End-User Experience Transformations

Some of the most common types of digital transformation initiatives are aimed at improving users’ productivity and empowering them with new tools to do their best work. Running SAP on Azure provides you with access to an array of integration opportunities such as:

• Self-service BI and advanced analytics apps: Power BI, Cognitive Services, Databricks, HoloLens, etc.
• Office and business apps: Office 365, Microsoft Teams, Dynamics 365, Logic Apps, etc.
• Data management tools: Cosmos DB, Azure Data Lake, and Azure Data Factory, HDInsight, etc.

Read more about the full scope of SAP and Azure integration opportunities.

Empower your teams with access to real-time data and self-service analytics for better decision making. Provide them with effective access to new cloud-based tools and the ability to build their own custom apps.

After complete onboarding, the company has recorded a 30% performance boost among their teams, now equipped with seamless access to Microsoft apps. In addition, the organization and its workforce gained the following benefits:

• 60% reduction in storage costs, along with 50% TCO savings with MS Azure Reserved Instances and Azure Hybrid Benefit.
• Increased levels of SAP automation that enables the team to focus on strategic tasks.
• Faster resources provisioning – SAP systems can be scaled up/out/down depending on the workloads – meaning fewer delays and lagging applications.

IoT and Industry 4.0. Projects

What are digital transformation initiatives? For most manufacturers, the answer would be industrial IoT deployments or Industry 4.0. pilots testing the following technologies:

• Real-time big data and predictive analytics
• (Semi)Autonomous robots and cobots
• OPC Unified Architecture (Note: Microsoft is the only cloud provider that uses this model on its IoT platform)
• AR (Augmented Reality)
• Artificial intelligence (AI) and machine learning (ML).

Hosting your SAP implementation on Azure gives you the ability to enable real-time connectivity with a variety of assets – sensors, trucks, gauges, conveyor belts, etc. – and supply it to other line-of-business applications to enhance your operations.

Rio Tinto, a mining company, that recently completed one of the largest implementations of SAP in any public cloud, is also leveraging Azure IoT platform to:

• Collect real-time equipment and facility data and transform it into insights
• Deploy “smart” trucks, trains, drills, and blast systems that improve on-site employee productivity.
• Develop a comprehensive connected-mine IoT solution that will optimize the company’s supply chain and boost operational efficiency.

The following video from SAP further explains the scope of Azure IoT integrations with SAP:

Cognitive Services and AI

Microsoft Cognitive Services suite is positioned among the leaders in the streaming analytics space due to its high availability, relatively easy on-ramp for developers and no code integrations with 15 other Azure services. In essence, cognitive services provide an effective getaway to a number of analytics deployments. Furthermore, SAP is already using Azure Cognitive Services containers for face recognition and text recognition.

Moreover, Azure Machine Learning provides all the tools you need to develop and train custom models. That’s what Carlsberg recently did. The company migrated 80% of their apps (including SAP products) to Azure and leveraged Azure AI services and sensor data to map a flavor fingerprint for each new beer sample and reduce the time it takes to research taste combinations. As a result, they can now get new beers to the market up to 3 times faster.

Kao, a Japanese CPG brand, went even a step further and used Microsoft Azure Synapse Analytics and Microsoft Power BI to develop custom predictive sales models. By combining historical sales data with real-time insights and social media information, the manufacturer can estimate with high precision which detergent, cosmetic, and toiletry products will be in-demand at any given period and adjust their sales strategy accordingly.

To Conclude

SAP and Microsoft have set the course for seamless services consolidation and cross-orchestration. Arguably, this makes the strongest case for SAP to Azure migration and creates solid grounds for new digital transformation initiatives.

As highlighted in this post, running SAP on Azure provides you with access to an array of additional apps, services, and integrations that could be leveraged with little-to-no effort. Top-notch security and proactive account support from the Microsoft Azure team are the other two positive aspects to remember.

Before committing to undertaking any digital transformation initiatives, companies must build a strong business case. Infopulse certified SAP Consultants would be delighted to advise you on your options and suggest the best technical roadmap for implementation. Contact us today!