ERP systems are the core of almost every medium and large company, and I know from personal experience that ERP downtime can hurt the business and even the stock price.
Syngenta is a company that has taken its business-critical applications out of what it describes as “traditional, high-cost data centers” and transformed them into what it sees as a reliable, scalable, future-proof cloud environment.
Syngenta is one of the world’s largest producers of seeds and plant protection solutions with a presence in more than 90 countries and is headquartered in Basel, Switzerland. I recently spoke with Christian Bayer, Global Head of ERP/SAP and Data & Analytics at Syngenta, and partner Infosys, about moving SAP to the public cloud.
A cloud-first strategy
Syngenta made a strategic decision to adopt a cloud-first IT strategy. Consequently, Syngenta decided to end a long-standing data center hosting partnership and move everything possible to the cloud.
The most significant and risky part of that migration to Amazon Web Services (AWS) was the ERP platform with over 50 SAP systems, including four core ERP systems and several SAP peripheral systems, which represent the basic IT backbone for running Syngenta’s business.
There were several serious outages of core ERP systems before Christian Bayer became responsible. Part of the reason was outdated technology with a track record of not keeping up with hardware updates. Second, hosting in its shared data center environment involved shared components that the provider found complex and difficult to manage.
Christian Bayer’s first strategy was to get to a place where he had enough control to “guarantee that (ERP) becomes as reliable as the water coming out of the tap.” That’s a really big goal.
There were other benefits to Sygenta’s move to the cloud. First, it had more flexibility and scalability to support seasonal farming operations. Syngenta has less than six months of the year that result in 80% of sales, depending on the hemisphere. In the previous hosting model, the servers were partially down during the slow season. The flexibility Syngenta can get from the cloud is attractive for seasonal business.
In addition, Syngenta can benefit from the provider’s cloud technology when migrating from existing SAP systems to S/4HANA.
Last but not least was the expectation of cost savings. SAP’s move to a cloud-enabled infrastructure resulted in cost savings of 28% per year, with an ROI realized in a year and a half. These are impressive savings achieved by essentially “lifting and switching” with some modernization and version upgrades. I was surprised by any idea of saving money in the cloud because that’s rarely a reality, but it made sense because the premium infrastructure had to factor in that 80% year-over-year jump.
The most significant benefit comes from cloud flexibility. The speed of creating the new test system allows Syngenta to implement only a three-tier SAP landscape through development, quality assurance and production and develop further test systems as needed.
More clouds spread the risk
Like many companies I speak with, Syngenta runs workloads on both AWS and Microsoft Azure. Azure is used for commercial applications simply because most of them are based on Microsoft technology. AWS hosts the ERP, all R&D and the data lake.
With an understanding of fully managed cloud infrastructure comes less risk. It is not entirely without risk, as evidenced by the outage in the Frankfurt region caused by overheating.
But architecting and designing a best-practice managed cloud infrastructure with AWS provides future enhancements such as multi-region tuning, layers of additional security, and improved connections to the network architecture. With a highly available ERP environment, the focus is now on the network architecture of the site and the connection of the cloud data center and the network hub. The entire network architecture is equally critical in ensuring a resilient IT infrastructure.
AWS migration – old world to new world
The project took a year and a half to complete, with over 50 applications and over 600 TB of business data migrating to the cloud. Several systems needed to be upgraded to the latest versions, and some were retired (eg BW BI Accelerator) that were not compatible with the cloud. Other applications have either required discussions with SAP to enable support on AWS (such as business facility financial consolidation (SBFC)) or are in the process of migrating to cloud-enabled versions such as master data management (MDM in MDG).
Establishing connectivity to over 300 third parties from a cloud data center was a significant effort that included migrating FTP servers and VPN tunnels.
Smooth operation during the transition phase and modernization of the integration layer with over 1,500 interfaces was a key phase of the project. Syngenta said Infosys managed to do this without any problems.
SAP PO environment modernized and upgraded to latest version (7.5) and migrated to AWS with infosys. This initial step was done in three phases: 1) server upgrade and migration to AWS, 2) migration and validation of outbound interfaces, and 3) migration and validation of inbound interfaces. This phase was the foundation for the rest of the migration project which took more than a year, but established the platform for success.
Infosys has been a strategic SAP partner for Syngenta for over 19 years.
The long-term partnership included many major transformational projects. Christian mentioned that Infosys will “always do whatever it takes to get you over the line and never let you down” – a powerful endorsement.
Syngenta worked with Infosys to introduce Agile DevOps to SAP support, the first company to introduce this capability in SAP
Vibhuti Dubey, senior vice president and head of SAP services at Infosys, pointed out that “Our primary goal 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 act as a force multiplier for enterprise cloud transformation.”
Syngenta’s IT team and Infosys performed system validation and testing to minimize the need for business engagement.
The Syngenta migration is an impressive story. I talk to a lot of clients, and few have saved money by going to the cloud. Syngenta is in a highly seasonal business, so the ability to add and remove computing capacity at will, without restrictions, results in savings. Syngenta can move along demand curves and does not always pay for maximum usage.
Syngenta can increase infrastructure to support peak season but also 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 are shutting down, but not many.
Syngenta continues to modernize its platforms. Step by step, old systems are being replaced by new technology. The Finance Department was the first to initiate the successful activation of S/4 Hana Central Finance. Each business unit targets one global SAP instance. Working with Infosys, the transition to S/4HANA has already started.
Disaster recovery scenarios and the ability to operate platforms with near-zero downtime are now possible next goals. The goal is to make ERP work, so that production lines anywhere in the world never have to stop – as reliable as tap water.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.
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Founder, CEO and Principal Analyst of Moor Insights & Strategy Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Dreamium Labs, Groq, Luminar Technologies, MemryX and Movand