Cloud brings the promise of speed, simplicity, savings, and flexibility. But many organizations struggle with their cloud journeys—especially when it comes to existing ERP systems and IT architecture. Increasingly, industry leaders are addressing the challenge through a two-tier approach, strengthening traditional on-premises systems and processes while leveraging public cloud solutions to innovate and scale rapidly. Effective integration between tiers is imperative—essential for real-time data, actionable insights, business agility, operational efficiencies, and other meaningful business outcomes.
Three leaders in cloud transformation discuss what you need to know about a two-tier architecture involving public cloud and digital core solutions.
Cloud as a competitive edge
Jen McDonald, Director for Deloitte Africa sees it, as the world becomes a smaller global community, companies are looking to enable smooth, seamless operations, no matter where in the world they operate. However, many are challenged with finding the right technology, infrastructure and systems to integrate business processes. Those who do, will also find their competitive edge.
She offers Deloitte Africa’s award-winning transformation as a case study on a cloud-first approach. After amalgamating 14 individual practices serving 17 countries across the continent into one member firm, operations faced an uphill battle with disparate on-prem systems, legacy infrastructure and non-standardized processes. Adopting a cloud-first approach where possible, with SAP S/4HANA Cloud as the core ERP, allowed Deloitte Africa to build a two-tier IT landscape. One year after going live on the integrated platform, McDonald views the transformation as a “key differentiator and a real foundation to build on for the future.”
Dr. Uwe Grigoleit is globally responsible for end-to-end Go to Market (GTM) and Solution Management of SAP S/4HANA on-prem and private cloud. He notes how the process standardization Deloitte Africa was able drive into the business in a short time – and ultimately drive out complexity – is the core of SAP S/4HANA as a next generation ERP. “What we're seeing in this project is really a blueprint of what has been SAP’s intention with S/4HANA.”
Public versus private cloud
When weighing whether a two-tier architecture is the right approach, business drivers still need the fundamental consideration, advises Liz Fasciana, Deloitte’s Global SAP Leader and head of the North South Europe SAP practice. “That can mean leveraging public cloud or private cloud to act as an accelerator, or early adopter of the public cloud platform.” Public is fast, efficient and ensures consistency as a standard solution. SAP private cloud, on the other hand, could be used by large, complex enterprises with a long road ahead to reach a consistent and kinetic enterprise-enabling platform. That said, both can be implemented “and with plenty of room to add innovation around the edge,” she says. “Companies can still be unique.”
Grigoleit advises companies to ask what they’d like to do differently, or what they need from software solutions to help them better serve their end customers. Doing so uncovers what’s standing in the way of speed and agility, and blocking low TCO costs. “Don’t spend too much time listening to whether public cloud is the right thing or private cloud is. Figure out how you want to serve your end customers in a better way – then you can really decide what is the best way to do it.”
For McDonald, the bigger question is whether to move to the cloud in the first place, and it’s here that speed and innovation are central considerations. Highly customized on-prem solutions have their place, but in a public cloud environment, companies adopt the software as a service model and never fall behind the curve. “SAP is continually building up the templates, innovating, bringing in robotics and artificial intelligence,” she says. “Companies reap the benefits of that as a user and as a subscriber to the service.”
Outcomes – results – are the truest measures of success, says Grigoleit. “Companies must focus on their business and the success of their customers.” Those outcomes, he continues, must also be multi-faceted, not only solving a problem, but helping companies do business more efficiently, bring in best practices, automating, benchmarking. “Software must be built in such a way that it focuses on outcomes for the whole company.”
McDonald agrees. “What businesses are trying to do around outcome-led achievements – public cloud or private cloud can be part of the solution.”
Want more transformation insights from enterprise leaders? Visit deloitte.com/SAP to download future podcast episodes or listen to previous ones.