IT Forecast: Mostly Cloudy

IT Forecast: Mostly Cloudy

Increased agility and resilience, short deployment times, reduced IT efforts, risk, and in-house administrative work, flexibility and scalability to support changing business needs: the advantages of cloud computing are gripping.

The economic and business challenges posed by the pandemic have served as a catalyst for establishing the value of cloud computing and encouraged companies to accelerate their cloud journey. Be it remote working, disrupted supply chains, or the need to shift to a virtual business — companies were forced to step up their efforts to enable seamless online collaboration and agile work processes, adapt supply chains with real-time insights into their business and those of their ecosystems, and digitize key business processes.

Additionally, sustainability has become a business imperative to protect the planet and stay successful. Studies show that up to 70% of profits can be at risk when companies are not running sustainably, and a company’s responsibility toward the planet has become key for customers, employees, investors, and governments. Cloud solutions enable organizations to transform their business through environmental, social, and governance (ESG) capabilities.

It is no wonder that cloud computing has turned into one of the most compelling IT options for companies of all sizes and in all industries.

Gartner predicts that enterprise IT spending on public cloud computing will overtake spending on traditional IT in 2025. While the writing about the dominance of cloud over traditional IT is clearly on the wall, many customers I exchange with still are hesitant when it comes to moving to the cloud.

Here are the top four obstacles I encounter when talking to our customers — and how to solve them:

1. Legacy Applications and Process Standardization

When moving to the cloud, applications must be modified or rewritten and data must be cleaned up — and this takes time and resources. Many customers I talk to are running complex and highly customized legacy systems with years-old applications and thousands of lines of custom code. These systems might still meet current business needs, but they hinder the ability to adapt to changing business needs and market requirements. It prevents companies from being able to innovate, grow, and scale. At the same time, many companies consider these customized applications as their competitive advantage, which they fear losing when moving to a “standardized” cloud solution.

The solution: Our cloud journeys are exactly tailored to our customers situations, and we are with them during every step of the way. We start with their unique innovation needs and evaluate their existing landscape and core business processes, pinpoint the best place to start, and prioritize the steps we need to take. The SAP Signavio portfolio helps customers to analyze their current processes, benchmark them against best practices, and then reconfigure future processes as needed. Our tools and those of our partners facilitate and automate code, data migration, or application lifecycle management, among other things. Across all solutions, we provide a huge collection of applications built by both SAP and our global partner ecosystem, and all these solutions are integrated through the SAP Business Technology Platform (SAP BTP) and can be easily extended to enable customizations.

2. Security Concerns and Trust

Security remains among the top concerns for many companies when considering moving to the cloud. Studies show that data loss/leakage is the biggest concern, with issues regarding data privacy and confidentiality, as well as accidental exposure of credentials coming in second and third. Also, with data oftentimes being a company’s biggest asset, many fear a loss of control when handing things over to a third party.

The solution: Interestingly enough, 70% of all security breaches originate from on-premise systems, only 24% originate from the cloud. Software security is part of our core business, and data security and protection are part of our DNA. We have 50 years’ experience in managing customer data, and today’s cloud customers are benefiting from this. We place the highest priority on security while taking a service-driven, agile, and cloud-centric approach, and we will always act in the best interest our customers.

3. Integration

Many IT landscapes have been expanded over the years with point solutions to solve specific business needs, resulting in fragmented stacks, poorly integrated software, disconnected duplicate master data, and inconsistent user experience (UX) — all of which both frustrate users and slow down innovation. Turning data into meaningful insight to get the complete picture in real time and make decisions with knowledge of all inter-dependencies within the organization, however, requires companies to integrate all their functions and processes based on a harmonized data model.

The solution: Only integrated enterprises are intelligent enterprises, as we are very well aware. In core processes like HR, payroll, or procurement, we have harmonized and standardized the data models and user interfaces for SAP S/4HANA and our acquired solutions, and our integration road map is fully loaded with many valuable business scenarios. We also offer integration for hybrid landscapes between our cloud solutions and SAP S/4HANA on premise. SAP API Business Hub has more than 3,000 APIs, around 2,500 ready-made integrations, and 240 connectors for every application, and SAP BTP is the platform to build, extend, and integrate. No other vendor can deliver this deep business process integration across the entire value chain, which goes far beyond a solely technical integration.

4. Organizational Change

A cloud transformation is not just about changing technology. It not only fundamentally changes how IT departments are structured and run, it affects the entire organization and it is changing skills, roles, and processes. Even though they clearly see the benefits of moving to the cloud, many companies try to avoid this organizational change for as long as possible.

The solution: The technology aspect of a cloud transformation is a huge change, but if companies only focus on that aspect, they will not see the full range of benefits that the cloud can deliver. Every transformation starts and ends with people, and a business cannot transform unless – or until – its people transform. Such a transformation needs everyone within the company — from the executive board to each individual employee across lines of business and across organizations. Based on our very own transformation, we are ready to share our insights and best practices with our customers.

There is no doubt that moving from an on-premise landscape to the cloud is a complex technical and organizational transformation for any company. However, in SAP, you have a trusted partner to accompany you on your journey and together, we will lead your transformation to success.

Thomas Bamberger is president of SAP Customer Evolution.

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