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Building an Effective Cloud Migration Strategy

In building a cloud migration strategy, technology executives are often confronted with tradeoffs when deciding which applications are most beneficial to move to a cloud solution. With trends in the life sciences and consumer products industries demanding organizations enable greater agility and flexibility, it’s now mission-critical for organizations to move to the cloud. However, there are several considerations impacting the decision – business and IT strategy, short- and long-term costs, and solution capabilities, to name a few.

An effective cloud migration strategy requires a holistic view of the enterprise business and technology landscapes, both present and future. Analyzing the business strategy, IT strategy, and solution capabilities through a cloud migration lens highlights the areas within each that can and will impact your roadmap to the cloud.

Business Strategy – Should We Invest?

Both the business strategy and vision are supported by the core needs of the company and distinguished by the long-term value propositions to customers and partners. The cloud solution itself, coupled with time and resources, must be aligned to those long-term needs and expected value proposition.

Certain business and IT requirements may not necessarily align to core competencies and therefore should be weighted lower when analyzing the gaps identified within a solution. In this instance, a company should be willing to adjust their processes rather than accommodate the gaps.

Meanwhile, certain key value propositions such as greater customer intimacy, the need to support higher call volumes, and efficient customer service would require higher weighting on quick customization and optimization.

A thorough assessment would determine if there are capabilities and a sound business case to support a need for customization. As we look at business functions such as warehouse management, finance, inventory management, materials handling, and supply planning amongst others, most cloud solutions will provide standard options as well as SaaS alternatives. In the case of critical business needs not covered by standard functionality, whether cloud or SaaS, a bidirectional analysis must be done, to decide whether to customize the technical solution or to adopt more standard business practices; at the end of the day it’s all about tradeoffs.

Cloud Migration Strategy – Does this Fit with the Enterprise Strategy?

One of the objectives of the IT organization is to support and enable the business strategy. As part of that process, an assessment of current state systems, software and resource capabilities, and an evaluation of the future state fit into the IT investment strategy should be performed. The maturity of the organization may influence the cloud solution decision based upon the ability and agility of the IT organization.

Some organizations have the resources available to support the optimization of various aspects of a solution deployment. Larger SaaS (Software as a Service) companies will remove many requirements for infrastructure support for any solution (e.g., operating system, database administration basic app support, etc.).

However, a SaaS environment allows the focus of optimization to be on business processes. With a SaaS solution, IT doesn’t need the various application skill sets, i.e. operating systems or database administration, thus a potential reduction in head count requirements. The SaaS solution can also provide quick scalability to cover changing business needs. An on-premise solution would require not only the business process experts, but also the core IT resources to grow the solution.

Another consideration is speed to deploy. With a cloud solution, no internal systems need to be procured and built, the applications do not require optimization. The knowledge ramp-up timeline is reduced to support the system.

SaaS Solutions Capabilities – Can We Make the Move?

An assessment should occur with any software procurement. The key concept of this type of assessment is identifying the gaps and understanding the impact of installing a solution which cannot support unique business needs.

Most common processes are covered by a SaaS solution. However, companies may find gaps between current processes and SaaS solutions. These gaps could be a result of business value proposition, legacy system requirements, or “that’s how we have always done it” concepts.

The next step would be to understand the underlying ability to customize, extend, or change core process logic. For instance, does the cloud solution provide exits in the code for customization, APIs, or the ability to add additional fields or columns to tables? These questions will need to be evaluated in assessing the gaps and understanding the hard limits in the ability to meet the gap requirements.

When building their cloud migration strategy, IT organizations need to constantly look at how the current solution will meet future business needs. Is information readily available and accessible to the business? Can it integrate with other solutions to create greater value? The better defined the road map, the more an organization can determine if the solution will be able to compatible and align with short-and long-term goals.

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Coauthor and contributions by Steve Barrett and Caryn Hecht

Tags: IT Strategy, SAP, SAP S/4HANA