By Seth Henry, Executive Chairman
If you spend a lot of time in the SAP ecosystem, you’ve probably heard the news that SAP is extending support for its traditional, non-S/4HANA ERP application for an additional five years, providing customers an option to run these systems through 2030. This is spurring a decent amount of discussion about what the announcement means and why it matters. My perspective, informed through speaking with customers and strategic partners, is that this announcement is a bit of a ‘nothing burger,’ as I believe software upgrades are not the primary motivation to spend money on enterprise technology in today’s world.
The smartShift Technologies team was fortunate to spend time last week with Dr. Chris Nokkentved, Senior Director and Global CTO for DXC’s Enterprise & Cloud Applications Division. He clearly articulated that owners of large complex ERP systems have to transform their monolithic, single-platform systems into agile, cloud native architectures if they want to compete in a market in which the rate of change is continuously accelerating. The benefits of this approach are primarily rooted in the speed of innovation and agility, as business owners will no longer need to wait months for required changes to make it into the next major release. Instead, the new architecture allows for continuous delivery of changes, native to the most successful digital businesses around the globe. ERP systems going forward will need to ensure optimal performance and maximum agility. This can be achieved by combining a variety of technologies with your ERP systems. For example:
- Standard ERP functions embedded in SAP S/4HANA or S/4HANA for Public Cloud
- Simple, custom functions unique to your ERP system, implemented as In-App extensions or pushed down to the database layer for optimal performance at scale
- Complex custom functions shared across multiple systems (SAP and otherwise), implemented as microservices or side-by-side extensions on the SAP Cloud Platform (SCP) or any other microservice platform of your choice (CloudFoundry, OpenShift, etc.)
During the course of our conversation with Dr. Nokkentved, which we now refer to as ‘breaking the monolith,’ we realized that smartShift has already delivered Intelligent Automation for individual customers who are doing all of these things, albeit not all at once and for differing business reasons. There are, however, two common factors we see across all of them. First, all of our customers experimenting with new architectures are doing it because of external pressures demanding speed and agility, such as M&A activity, product or market requirements, and competitive business pressures. Second, the customers we are working with are starting with relatively small, lean proof projects as opposed to large long-term programs.
We are now collaborating with DXC to formalize our Intelligent Automation use cases and finalize a standard service into the broad marketplace. Our initial approach is to identify a small set of SAP custom objects and demonstrate an automated migration to SCP, cloud-based microservices. Migrations will be performed with our Intelligent Automation platform while leveraging public cloud infrastructure. Our platform efficiently produces a detailed understanding of the software components that benefit most from the advantages of agile microservices. The advantages include a high rate of change, an independent life cycle, scalability requirements for individual components, etc. The customer’s commitment is limited to identifying the target functions and objects maximizing the benefit of the agile microservices. Using this approach, we will deliver proof in two to four weeks.
Proving this level of portability and agility at a small scale shows how ‘breaking the monolith’ can be a progressive, ongoing and efficient initiative that can begin today with low risk and high reward. Approaching the program decouples achieving innovation and speed from the requirement to undertake a massive migration or transformation before realizing benefits. Finally, thinking about innovation in this framework allows a customer to start an interesting S/4 journey today, whether the end is before 2025 or closer to 2030.
smartShift is ready to help your business start, continue and complete your S/4 journey, and we have the tools and expertise to make it happen in a way that’s efficient and cost effective. Reach out to us today so we can start you on the path to a successful transformation.