Executive Roundtable: Enterprises Stay the Course, Executing Strategies to Maximize Platform Flexibility for SAP Modernization in Hybrid Infrastructure Environments
By Lane Cooper, Editorial Director, BizTechReports and Contributing Editor, CIO.com
As IT organizations across the country assess their options for an economically uncertain 2023, one thing appears certain. Progress toward enterprise application rationalization in general -- and SAP modernization in particular -- will continue apace regardless of how the business landscape evolves over the next few months.
Paul McCann and Bharvi Parikh, IBM
Why?
There is a near-universal consensus that SAP will stick to its December 2027 deadline to end regular support and maintenance for SAP Business Suite 7, creating a sense of urgency to hit key transformation milestones as we approach the middle of the decade. It is a situation prompting strategic planners to develop complex roadmaps that integrate brownfield, greenfield and bluefield migration strategies to ensure progress and adaptability.
These were among the conclusions of an executive roundtable held this week by CIO.com and co-hosted by Paul McCann and Bharvi Parikh of IBM. Over a dozen executives from a broad range of industries -- including the manufacturing, financial services, healthcare, telecommunications, hospitality and entertainment sectors -- described the daunting task ahead.
While many of the participating executives expressed concerns about how to address compliance, privacy and risk management issues through complex migration processes over the next few years, all participants reported the presence of multiple SAP instances -- in some cases dozens or more -- that have been tailored over the years to support discrete business processes. They noted that the high level of customization makes it difficult to universally adopt conventional software-as-a-service (SaaS) based models for enterprise resource planning (ERP) applications.
As a result, all enterprise SAP modernization strategies are different.
"Organizations are driven to move their ERP operations toward what SAP calls 'the clean core.' Most IT executives agree that it offers a key to establishing the most flexible and nimble environment to support the long-term needs of the business," explained IBM's Parikh. "That said, every journey is unique and different. Not everyone can afford that kind of migration," he said.
That is why it is important to understand the full range of options available to support SAP modernization initiatives. Brownfield migrations, for instance, provide a path for converting existing SAP environments without reimplementation, minimizing the impact on existing business processes.
"While brownfield strategies are not as immediately disruptive as starting with a clean slate, it does prevent organizations from tapping into the immense amount of business value presented by greenfield implementations of S/4HANA, including advanced analytics and the ability to consolidate and optimize the management multiple ERP systems," observed McCann.
Given the complexity faced by the large organizations represented in the roundtable, many are exploring a middle path between brownfield and greenfield options.
"We are seeing rising interest in bluefield migration strategies for SAP modernization, in which a combination of strategic and tactical decisions are made about migrating specific elements of SAP. This strategy weighs the pros and cons of different instances to determine where the most value can be captured with minimal investments. And then as time passes, decisions can be made to gradually remove customizations from SAP and move into the clean core," said Parikh.
The group agreed that achieving success across these migration strategies will hinge on the competencies of the teams tasked with managing the initiatives' business, technical and change management aspects.
"As the December 2027 deadline approaches, skills and experience will emerge as a critical factor. The good news is that no one needs to do it alone. Fielding the right talent and establishing the most effective business technology partnerships will greatly enhance the chances of modernizing SAP environments to provide the flexibility – and adaptability – needed to meet the short-, mid- and long-term objectives of organizations," concluded McCann.