ERP systems are the core of nearly every mid-sized and large company, and I know from personal experience that ERP downtime can harm the business and even the share price.
Syngenta is a company that had hosted its business-critical applications in what it described as “traditional data centers incurring high costs” and transformed this into what it considers a reliable, future-proof, and scalable environment in the cloud.
Syngenta is one of the world’s largest manufacturers of seeds and crop protection solutions with a presence in more than 90 countries and headquartered in Basel, Switzerland. I recently talked with Christian Bayer, the Global Head of ERP/SAP and Data and Analytics at Syngenta, and partner Infosys, about moving SAP to the public cloud.
A cloud-first strategy
Syngenta has made a strategic decision to adopt a cloud-first IT strategy. Consequently, Syngenta decided to end a long-time data center hosting partnership and move everything possible into the cloud.
The most significant and riskiest part of that migration to Amazon Web Services (AWS) was the ERP platform with over 50 SAP systems, including four core ERP systems and multiple SAP peripheral systems, provide the core IT backbone to run Syngenta’s business.
There were several severe outages on the core ERP systems before Christian Bayer became accountable. Part of the reason was outdated technology with a track record of not keeping up with hardware refreshes. Secondly, hosting in its shared data center environment involved shared components that were complex and tricky for the provider to manage.
Christian Bayer’s cloud-first strategy was to get to a place where he was in control enough to “guarantee that it (ERP) becomes as reliable as water coming out of the tap."That’s a really big goal.
There were other benefits for Syngenta moving to the cloud. First, it had more flexibility and scalability to support the seasonal agriculture business. Syngenta has less than six months in a year that results in 80% of the sales, depending on the hemisphere. In the previous hosting model, the servers ran partly idle during the year's slow season. The flexibility Syngenta could get from the cloud is attractive for a seasonal business.
Additionally, Syngenta can benefit from a cloud provider's technology when moving from existing SAP systems to S/4HANA.
Last but not the least, there was an expectation of cost savings. The SAP move to the cloud-enabled infrastructure resulted in a cost savings of 28% per year, with the ROI achieved in one and a half years. These are impressive savings achieved with essentially a "lift and shift" with some modernization and version upgrades. I was surprised by any notion of saving money in the cloud as this rarely is the reality but made sense as the on-prem infrastructure had to factor in that 80% spike all year long.
The most significant benefit comes from the flexibility in the cloud. The speed to create a new test system allows Syngenta to only deploy a three-tier SAP landscape across development, quality assurance, and production and spin up further test systems as and when needed.
Multi-cloud spreads the risk
Like many companies I talk with, Syngenta runs workloads in both AWS and Microsoft Azure. Azure is used for commercial applications simply because most are Microsoft technology based. AWS hosts ERP, all research and development, and the data lake.
With an understanding of the fully managed cloud infrastructure comes lower risk. Not wholly risk-free, as evidenced by an outage in the Frankfurt region caused by overheating.
But architecting and designing the managed cloud infrastructure best practice with AWS provides future enhancement opportunities such as multi-region setup, layers of extra security, and improved connections with the network architecture. With a highly available ERP environment, the focus is now on network architecture site and cloud data center connections and the network hub. The whole network architecture is equally critical in ensuring resilient IT infrastructure.
AWS Migration – old world to new world
The project took one and a half years to complete, with over 50 applications and over 600TB of business data migrated to the cloud. Several of the systems needed upgrades to the latest versions, and some were retired (e.g., BW BI Accelerator) that were not cloud compatible. Other applications either required discussions with SAP to enable support on AWS (such as Business Objects Financial Consolidation (SBFC)) or are in the process to being migrated to cloud supported versions like Master Data Management (MDM to MDG).
Establishing connectivity with over 300 third parties from the cloud data center was a significant effort involving the migration of FTP servers and VPN tunnels.
Smooth running during transition phase and Modernization of the integration layer with over 1,500 interfaces was a crucial phase of the project. Syngenta said Infosys managed this seamlessly.
The SAP PO environment was modernized and upgraded to the latest version (7.5) and the migrated to AWS with infosys. This initial step was done in three phases: 1) server upgrade and migration to AWS, 2) outbound interfaces migration and validation, and 3) inbound interfaces migration and validation. This phase was the foundation to the rest of the migration project which took over a year but established a platform for success.
The Infosys relationship
Infosys has been a strategic SAP partner for Syngenta for more than 19 years.
The long-lasting partnership has involved many major transformational projects. Christian mentioned that Infosys "will always do everything needed to get you over the finish line and never let you down" – that is a powerful endorsement.
Syngenta worked with Infosys to introduce Agile DevOps into SAP support, the first company to introduce the capability at scale in SAP
Vibhuti Dubey, Senior Vice President and Head of SAP Services at Infosys highlighted that “Our primary aim was to execute this complex transformation in a risk-free manner. We positioned our architects to help the project through wave planning, drawing on our vast experience and leveraging Infosys Cobalt, a set of services, solutions, and platforms that acts as a force multiplier for cloud-powered enterprise transformation”
The Syngenta IT team and Infosys performed systems validation and testing to minimize the need for business involvement.
The Syngenta migration is an impressive story. I talk to many customers, and few have saved money going to the cloud. Syngenta is in a highly seasonal business, so the ability to add and remove compute capacity at will, with no limitation, results in cost savings. Syngenta can ride the demand curves and not always pay for peak utilization.
Syngenta can scale infrastructure to support high season but also the reliability. Christian notes, "when was the last time Netflix, Amazon, and Facebook went down? We should expect availability close to 100% from a hardware perspective.” All sites go down but not a lot.
Syngenta continues to modernize its platforms. Step by step, old systems are being replaced by new technology. The finance department were the first to move with a successful S/4 Hana Central Finance go-live. Each business unit aims at a single global SAP instance. Working with Infosys, the move to S/4HANA has already begun.
Disaster recovery scenarios and the possibility of operating platforms with near-zero downtime are now possible next goals. The goal is for ERP to run, so that production lines anywhere in the world never have to stop - as reliable as water from a tap.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.