CAPEX costs in SAP implementation, associated with the physical infrastructure of equipment and hardware, can pose a substantial financial challenge for companies looking to take the first step towards operational excellence and gaining a competitive edge.
These significant costs are associated with the so-called SAP on premise model, which utilizes physical means, housed in an exclusive space, to function as data centers and handle all the information and data traffic of the application.
With this model, significant investments are made in cutting-edge equipment capable of meeting the demands of each company. In addition to the main servers, costs related to all essential peripheral equipment to ensure connection with these servers are added.
In this environment, it is crucial to direct significant technical efforts to resolve any issues that may occur as quickly as possible, thus avoiding any interruption to the operation.
The Reality of CAPEX Costs in SAP On-Premise Implementation
As seen, the implementation of SAP on-premise solutions demands a significant investment in physical hardware. The acquisition of servers, storage systems, network infrastructure, and other essential components implies substantial expenses.
Studies indicate that hardware costs can account for up to 30% of the total initial expenses of an SAP on-premise project. This is a critical point to consider, especially in a business scenario where resource optimization and efficient capital allocation are imperative for success and competitiveness.
For this reason, migrating to cloud-based solutions emerges as a catalyst for optimizing financial resources, capable of drastically reducing CAPEX costs in SAP implementation.
Transformation Facilitated by the Cloud: Redefining Implementation Costs
By adopting cloud infrastructure, companies can eliminate the need for the acquisition and maintenance of physical hardware. This strategic move allows the reallocation of capital expenditures (CAPEX) to the operational expenditure (OPEX) model, freeing up valuable resources for other strategic initiatives.
Studies reveal that companies that migrated to SAP solutions in the cloud observed an average reduction of 30-50% in CAPEX costs related to IT infrastructure. Additionally, the ability to scale resources according to business needs resulted in greater efficiency, avoiding excessive investments in underutilized hardware.
The cloud offers an unparalleled level of scalability and flexibility. Companies can increase or decrease processing power, storage, and other IT resources according to business demands. This means there is no need to invest in excessive infrastructure to meet seasonal peaks or fluctuations in operations.
In addition to direct financial benefits, the cloud also provides a range of intangible advantages. This includes the reduction of maintenance and hardware update costs, which are assumed by cloud providers. This frees up internal resources and allows the IT team to focus on higher-value initiatives such as innovation and digital transformation.
Origen Tech’s SOLaaS Model: Entering the SAP Cloud World Has Never Been Easier
In an increasingly competitive business landscape, optimizing financial resources is a pressing need. According to a survey by Aberdeen, companies that leveraged the advantages of the SAP Partner Managed Cloud program are twice as likely to see reductions in CAPEX costs in SAP implementation.
By redefining CAPEX costs and freeing up resources for strategic investments, companies can drive innovation, competitiveness, and sustainable growth in the current market.
Origen Tech’s SOLaaS SAP S/4HANA offering is a revolutionary approach that helps determine the right solution and configuration for different business requirements. The key advantages of Origen Tech’s SOLaaS SAP S/4HANA model are:
- Simplicity of a single vendor, contract, and point of contact;
- Origen takes care of deployment, application and infrastructure management, continuous maintenance and support, and updates;
- More cost savings by reducing or reallocating internal IT resources for critical internal tasks to manage business more effectively;
- Proven experience from a full-service SAP systems integration company for global corporations with business operations in Latin America;
- Lower TCO and improved cash flow;
- Reduced risk and accelerated time to value;
- Ability to run the most up-to-date software and bring scalability for future needs.
With SOLaaS, you only pay for the software needed to manage the company’s resources. Thus, as business needs change, it is possible to adapt the SAP instance with complementary solutions, specifically developed to meet the specific needs of each company.
