3 Key Areas to Optimize SAP Costs and Value in 2021

Cost optimisation, calculate, assess, business case
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The start of a new calendar year can bring a new sense of optimism, energy, and focus. In many organizations, it also brings a new financial year with new business objectives and goals, along with a new budget. In the current economic climate, the ability to deliver these objectives may be more challenging than previously. This, along with reduced money and resources to invest, can be a threat to the success of even the best-laid plans.

For companies operating SAP systems who are looking to do more with less, there are 3 key areas we recommend focusing on in 2021:

  • Modernizing your infrastructure in order to reduce capital and operating costs
  • Adapting SAP cost management in order to proactively control budgets, costs, and billing
  • Adopting a DevOps approach in order to accelerate and automate processes

Let’s look at each of these in turn:

Modernizing your infrastructure in order to reduce capital and operating costs

Enterprise SAP represents a significant—though often overlooked—opportunity for cost optimization at a time when organizations are under immense pressure to reduce spending. Forward-facing businesses stand to cut SAP operational costs by up to 50%, extract greater value from their SAP data and facilitate continuous innovation.

Exiting data centers and embracing an Infrastructure-as-a-Service (IaaS) model delivers metered cost plans so businesses only pay for what they use. Enterprises will also enjoy cost savings as a direct result of reduced need for operational support, licensing, improved business availability, and faster project cycle times.

While the complexity and criticality of SAP systems can make organizations concerned over high costs and business disruption, the benefits of migration far exceed any potential risk when you enlist the help of a qualified partner. AWS has been running SAP workloads since 2008, meaningfully longer than any other Cloud provider. With 5,000+ SAP customers currently running on the platform, AWS is the Cloud provider of choice for SAP.

Lemongrass has helped customers realize ongoing cost savings of up to 50% through low cost, near-zero downtime SAP migrations. One hundred percent of our customers see monthly cost optimizations from platform tuning, innovation and new releases post-migration. For many of our clients, the investment in migration pays for itself within the first full year of migration.

Adapting SAP cost management in order to proactively control budgets, costs, and billing

Finance teams are a critical player in helping organizations understand the value of cloud technology to protect the business and its customers from potential risks. They enable the evolution of financial practices, and, sometimes, break down barriers in the organization to fully realize the value of adopting these technologies.

Managing Cloud spend is a different exercise than managing spend for traditional IT. Cloud has changed how organizations can budget and plan for technology investments. On-demand pricing means organizations can scale resources up and down on an ongoing basis, resulting in variability in spend month over month, or even day over day. This is accomplished by taking advantage of the breadth of AWS Cloud pricing models and a variety of other saving practices to power cloud projects with much lower unit costs. It also makes it possible for any approved end-user, in any line of business, to acquire technology resources independently and almost instantly. The benefit of additional speed, agility, and control gives these organizations significant advantage.

The new ways of working also bring:

  • Improved financial forecasting
  • Greater cost oversight
  • Potential new savings through resource and pricing recommendations

The change of mindset and working practices from intermittent management to continuous improvement will enable better, faster and cheaper compute for your organization, and the potential to reinvest those savings into other value-generating activities.

Adopting a DevOps approach in order to accelerate and automate processes

DevOps for SAP drives true business value by enabling faster innovation through SAP on AWS. As with Cloud financial management, it requires a new way of thinking and working. This is often a challenge and why Lemongrass offers this in a ‘DevOps as a Service’ model. Organizations can get started quickly and, when ready, take full control.

Getting the full benefits from running SAP on AWS requires a lot more than just an infrastructure migration. True, 40 – 70% of infrastructure, operation and maintenance cost savings can be achieved by simply migrating but, almost all of Lemongrass’s migrations projects go beyond “just lift and shift” and include migrating to a different database and O/S as well as re-designing SAP in an optimized way for AWS.

A significant percentage of organizations spend in excess of 50% of their IT budget on “keeping the lights on”. Add in the fact that the majority of systems are non-production and used on an ad-hoc basis and you quickly see that a lot of time and money is consumed on maintaining something which adds no value to the organization. Moving to a DevOps for SAP landscape enables organizations to build systems and system landscapes in just hours. And as a result of the ‘near infinite’ capacity of the AWS Cloud, this does not require weeks or months of planning. Also, as the system build can be fully automated, it can be started by any authorized personnel, which releases immediate benefits.

Taking the first step

Nothing happens in an enterprise without a clear cost-benefit. While the potential cost savings of SAP in the Cloud are impressive, convincing leadership that it’s possible to migrate business-critical software without major disruption and risk is not easy. The principle of ‘show, don’t tell’ is applicable here, and a solid PoC can go a long way to winning stakeholder buy-in.

Migration to the Cloud requires experience and expertise to avoid unnecessary cost and disruption. Simply ‘lifting and shifting’ SAP systems will preclude some of the most valuable benefits available in the Cloud. For example, insights gathered during this discovery phase will reveal what legacy applications can be archived during migration, though doing so can be an immensely complicated process.

That’s where a qualified partner like Lemongrass can help, delivering a low-cost, near-zero downtime migration from initial assessment, through to migration and post-migration operational tasks like SAP upgrades and re-platforming. But that’s not all, Lemongrass can also help you automate and innovate your way to ongoing cost optimization.

Find out more on Optimizing Costs by Migrating and Operating Your SAP Systems on AWS.

To learn more about our approach to SAP on AWS Cost Optimization, download our new eBook which has details of how your organization can make significant cost savings by migrating and operating on AWS.

You can also join our Lemongrass Live Q&A on Friday, February 19 where Lemongrass’s Ben Lingwood and Mark Hirst, along with AWS’s Jonathan Lake, will be available to answer any of your questions on “Quantifying the business case for SAP on AWS”.

To attend our Lemongrass Live session, please register here.

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