Will public cloud make SAP agile?

Utilisation of public cloud (Azure, AWS, GCP etc) as the SAP platform and an ecosystem grows more than 150% annually. This rapid growth began in late 2015, when enterprises started to seriously plan the future of their ERP, especially after the announcement of mandatory S/4HANA utilisation.

One way to cut transition costs was to change the platform to a more agile and cost-efficient option. Public cloud certainly makes migrating, transferring, transforming, and running SAP more cost-efficient. If the original question refers to financial agility, there is no doubt that the answer is yes. Another advantage gained during this process is that the organisation utilising SAP as their key business supporting and running application maintains the authority to make most of the decisions regarding their business-critical environment.

But when people talk about agility and more specifically agile IT, they usually mean more than just the capability to scale and optimise costs. Agility means (by definition) collaborative effort of self-organising and cross-functional teams, adaptive planning, evolutionary development, early delivery, continual improvement, and flexible responses to changes in requirements, capacity, and understanding of the problems to be solved. Merely changing the SAP operating platform will not ensure that you accomplish these things.

What happens – or at least what should happen after the platform change – is what will make SAP agile. It does not matter if your S/4HANA journey is a Green-/Blue-/Brownfield or whatever you want to call it. What really matters is what happens afterwards.

The first step is to build everything on a proven, SAP supported architecture that is as cloud native as possible. This should be based on best practice reference architecture, supported automation, required expertise and proven processes and operating models. Correct architecture enables the platform to support the evolving ecosystem. Evolving means transformation to cloud-native – where possible. Transformation has its limits. It cannot change the core SAP principles, like how applications are built, or how the licensing works. It will, however, create broader possibilities for making decisions and new options.

What changes when you move SAP to public cloud? For one, you can plan and execute in shorter cycles and with more precise data. You know what your business needs and how it reflects to the ERP. Even though the licensing is fixed for several years, the infrastructure is not, and it can change on demand. You can right-size, you do not need to over-size just in case. An even bigger change comes from the possibility of choosing the best tools (whatever it means in your own requirements). You can choose cloud native databases, serverless integrations, utilise Cloud DevOps in your application development, apply SecDevOps – and you have significant freedom to make the future-proof choices for your own organisation. Essentially, your SAP will become agile, in several ways.