Benefits of ERP cloud migration need reality check

Moving enterprise systems like ERP to the cloud can ease system management and lower costs, but companies need to be strategic in their approach to reap the benefits.

Moving systems to the cloud as a technical upgrade -- known as lift and shift -- can get companies to the cloud fast, but it fails to take full advantage of what a true cloud migration offers, according to Roan Low, SAP solutions architect at Syntax, a Montreal-based managed cloud services provider for SAP and Oracle systems.

Instead, he advises approaching the project as a true system re-implementation that involves reworking business processes to take advantage of the cloud's infrastructure and advanced technologies.

In this Q&A, Low explains what companies need to consider as they plan an enterprise cloud migration.

What makes migrating on-premises systems to the cloud different from other enterprise system projects?

Roan Low: When you go from one data center to the other, your technology stack and your capabilities essentially remain static. You have the ability to re-architect some things, but you still have the same toolbox to use.

Roan Low

When you go from a data center to the cloud, it's an entirely different world. If you don't understand that, you're going to try to run an old model on a new platform. You're not going to see the benefits that you were either promised or you expected based on [vendor] marketing and the general belief that cloud is agile, cheap and secure. And it is. The reality is that nobody's pulling the wool over anybody's eyes -- the cloud is all those things. But you need to take advantage of it. You can go with the analogy that you can buy a Ferrari, but if you put junk tires on it, it's not going to perform like you expect.

So the whole idea of moving to the cloud is not just to move away from the data center, but also to take advantage of new technologies?

Low: Yes. It just sounds simple and like basic common sense, but it's a lot more challenging in practice, primarily because a lot of our [organizational] knowledge comes from people who are experienced in traditional IT -- running bare-metal servers with storage arrays and the like. Companies need to think about and are starting to think about moving away from that model and are retooling their people [to be more cloud-ready].

Do companies need to think more about the post-cloud environment rather than the cloud migration process itself?

Low: This doesn't have to happen before the migration, but it probably should. This is as much of a change in business paradigm as a technological one. In the past, we've talked about an IT operating model, which essentially defines how technology supports a business. [What companies need to think about] is establishing a cloud operating model not just for IT but also for the business.

They also need to change the way they approach strategic goals and business challenges by leveraging these new technologies, particularly the ones enabled by a cloud migration. You have to look at it from both directions; the IT side has to ask how they can support the business, and the business side has to ask how they can leverage all these fancy new tools -- AI, RPA [robotic process automation], machine learning -- to enable their strategic goals and gain business value.

What are some advantages of a cloud migration for companies that are running S/4HANA on premises or are considering a move to S/4HANA?

Low: One of the advantages of the cloud, which your traditional data center doesn't have, is that it offers various locations around the world. So if you're a global company, you can set up cloud data centers in various locations around the world and bring your NetWeaver Gateway or S/4HANA system much closer to your users.

From a technology perspective, S/4HANA runs on SAP HANA, which is an in-memory database, and there are huge benefits to cloud here. If you are scoping out an on-premises S/4HANA environment, you probably want to buy a machine that will last three to five years. You have to buy a machine that has sufficient memory or can grow to sufficient memory to accommodate that three- to five-year time frame. That means a lot of money. Memory is your most expensive storage medium, and if you predict that your machine is going to grow to 2 or 4 terabytes, you have to buy that 2 or 4 terabyte box up front and carry that cost.

Editor's note: This interview has been edited for clarity and conciseness.

Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.