Demystifying the real-world cost considerations
For a mid-size enterprise, the pivotal choice of where to host your SAP estate holds the power to shape costs, potentially soaring up to a staggering £100M over the solution’s lifespan. However, right hosting decision is key to unlocking immense business value that can be derived from an SAP ERP solution. With the experience of co-strategising SAP transformation initiatives for multiple mid to large scale businesses, KPMG has modeled the cost of SAP hosting and this blog summarises some of our key lessons learned.
Market for SAP ERP cloud services is expected to grow at 17% per year, from $9.4 billion in 2020 to $19.4 billion in 2027. The advent of cloud offerings has effectuated a transformational shift in the way SAP workloads are hosted. While private cloud for SAP workload provides dedicated infrastructure and effective data governance, public cloud offers high flexibility and scalability. SAP with RISE on the other hand is a fully SaaS model providing software, infrastructure & management, all bundled in the same package.
While it has become imperative for businesses to adopt cloud for their SAP applications, it is important to understand that without meticulous planning, expenses can easily spiral out of control. It has often been observed that although a decision has been made to adopt cloud, businesses face formidable financial dilemma including but not restricted to:
- What are the financial implications of undertaking an SAP to cloud migration initiative?
- What are the various cost components involved if I undertake the transformation?
- I have diverse options for migrating SAP to cloud. Which among those is financially best fit for me?
- Is there a strong business case for migration? What is the magnitude of additional cost owing to migration bubble during the process?
In practical terms, there is no straight answer to the above questions. Each business and its corresponding SAP estate is unique in terms of its implementation, future strategy, and focus areas. While no one-size-fits-all solution exists, the intricacies involved in each estate necessitate a thorough cost analysis to effectively understand the real-world cost of the options at hand.
KPMG’s “SAP on cloud pricing simulator”
KPMG’s “SAP on cloud pricing simulator” is designed to de-mystify costs associated with an SAP transformation initiative, helping our clients take informed decisions. Our three-step approach of data collection, estimation and reporting serves as a one-stop solution for our clients to gauge the financial impact of hosting SAP workloads on cloud. The simulator considers various cost dimensions such as one-time infrastructure & data migration cost, other costs for hosting, licensing, and on-going management.
The impact of having a holistic and transparent cost view of an SAP transformation initiative is manifold. Leveraging KPMG’s “SAP on cloud pricing simulator,” coupled with our profound expertise on both SAP and cloud, we can deliver immense value for our clients including:
- Consolidated single pane of glass view of various cost components along with veritable insights.
- Key financial indicators such as ROI and payback period on your fingertips.
- Comprehensive scenario analysis based on constraints on duration & resources.
- Financial data backed recommendation on the right fit option for migration.
KPMG’s SAP on cloud pricing simulator can help our clients gain comprehensive understanding of the cost components of various SAP transformation options, helping them pick the most cost-effective one. KPMG can act as a powerful ally to our clients in their SAP transformation journey and help them unlock the true potential of their cloud investment. Stay tuned for our comprehensive SAP on cloud pricing simulator, which dissects each option and equips you with the knowledge to embark on your SAP hosting journey confidently.
