SAP: In the Cloud Head (s)

Many businesses are unwilling to shift their entire IT landscape to the cloud, not because they don’t want to, but because they can’t, which is why the secret to the success of SAP cloud computing is not in the cloud.

COVID-19 has been a gamechanger for many businesses, however frustrating its effects might have been. Working from home, online meetings, data from the cloud, all of a sudden, within a few weeks, these things that seemed impossible a year ago were made possible..

Even after COVID-19 will (hopefully) have become only a distant memory, compliance and data protection concerns will not exert the same pressure on the cloud decision-making process that they once used to.

Cloud computing can only reach its full potential if it is aligned with a company’s digital transformation strategy. And that’s where the rub is: For many organizations, digitalization doesn’t necessarily mean Cloud Only or Cloud First.

Integration problems hinder migration

Integration problems hinder migWhat do I mean by that? Let’s take trade, for example. Many trading companies have devised thorough, actionable strategies to become agile, customer-oriented, intelligent enterprises operating modern IT infrastructures. ration .

However, execution and implementation of most of these strategies is delayed or halted completely because many interfaces and functionalities that are available in traditional ERP systems are not available in S/4 Hana anymore. For example, the module International Trade in S/4 Hana usually requires add-ons and custom code to work as well as its predecessor in ERP/ECC. And this custom code is exactly the reason many companies are hesitating to migrate to the cloud: The fear of even more integration problems is holding them back.

This is a strategy as much as a communication issue. How are IT decision makers supposed to make a convincing case for a comprehensive cloud strategy to management if they need to concede that complex custom code extensions will still need to be operated on premises?

SAP should stay out of the cloud for now

It’s only reasonable for SAP to consider a ‘Cloud First’ strategy in the long term. It needs the cloud’s flexibility and agility to develop and implement innovations and to differentiate itself from competitors. However, CEO Christian Klein should also consider the business reality of his customers.

It sounds like a paradox: For now, SAP’s key to success in cloud computing is not in the cloud. Not only do customers expect changes in the integration of SAP cloud applications with S/4 Hana, but also in the functionality of S/4. Only if seemingly tiny issues have been dealt with will businesses rely on their plans for digitalization. It would also be easier for IT policy makers to express their thoughts to management.