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Why Moving SAP Workloads to Google Cloud is Beneficial for the Consumer Goods Industry

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The consumer packaged goods (CPG) industry running on SAP systems can leverage Google Cloud to unlock its data analytics capabilities to reduce Opex, drive innovation, business outcomes and meet consumer expectations. Learn how!

Even before the COVID-19 pandemic struck, the consumer packaged goods (CPG) industry was facing disruption. Consumers have come to expect personalized and seamless experiences at every point in their relationship with a brand. Additionally, consumers are expecting CPG brands to meet rising standards for sustainability, social responsibility, and transparency. Business models are shifting as well. Direct-to-consumer and subscription models have been gaining ground on traditional business models. Add in the CPG industry’s ever-present pressure for wider profit margins and the effects of the global pandemic, and you get a perfect storm of disruption. 

Leading CPG companies are responding to these changes by capitalizing on the potential of emerging technologies and leveraging the power of the cloud to create digital enterprises. In doing so, they can unlock value through reduced operational costs, faster innovation, improved marketing ROI, and greater transparency and sustainability—among other benefits. For businesses that run on SAP, accessing these benefits requires creating a digital enterprise with SAP at its heart. 

What CPG can expect from SAP on Google Cloud

SAP drives core business processes across most enterprise functions in CPG companies, and modernizing these operations is step one in unlocking next-level data and analytics capabilities. Creating a digital enterprise with SAP at the core requires establishing a digital foundation on a cloud platform capable of supporting and optimizing SAP workloads well into the future. From there, CPG companies can leverage the combination of SAP data and additional data signals to support high-value use cases utilizing the advanced analytics capabilities of the cloud

For CPG companies, running a successful digital enterprise in this climate depends on the power of the cloud because of the unmatched agility, security, scale, and flexibility offered by cloud technologies. More and more, consumer brands are turning to Google Cloud to host their applications—including core enterprise applications such as SAP—to drive business agility and maximize the value of data through smart analytics and machine learning. Google Cloud establishes a digital foundation for SAP customers by simplifying SAP deployments and offering  a suite of applications that integrates with and enhances SAP functionality. A Forrester study on the total economic value of Google Cloud for SAP customers found an average payback of less than six months and a total ROI of over 160%. By turning to Google Cloud to run their SAP systems, companies are able to: 

  • Maximize insights 
    CPG enterprise data is often fragmented across disparate systems. Google’s analytics tools including BigQuery and Looker allow businesses to connect customer, operational and business data at scale by unifying data from SAP systems with other Google data signals such as Ads, Maps, Shopping or Google Marketing Platform. This precious data is fully democratized, allowing for complex queries to be completed rapidly so companies can uncover and analyze insights and create an end-to-end view of the consumer and the business.
  • Create an intelligent organization
    Google’s AI and machine learning capabilities allow businesses to create built-in intelligence. Instead of reacting to trends, they can accurately predict them. For marketing teams, this could be the ability to evaluate promotions and effectiveness of marketing spend. For forecasting, product quantities and restock timing can be better planned. Supply chain optimization can include external data sources to closely monitor inventory and eliminate stock outs. 
  • Future-proof your business
    Running SAP systems on Google Cloud creates an agile, secure and highly available environment that scales quickly as a business grows and as the CPG market evolves. A recent study conducted by IDC showed that SAP on Google Cloud deployments resulted in a 46% lower three-year cost of operations with 83% less frequent unplanned downtime and 56% more efficient IT teams. This frees IT resources to drive innovation and customer centricity. 
  • Deliver on sustainability 
    Around the globe, consumers are becoming more and more demanding regarding sustainability. The impact of climate change and the abundance of plastic waste is only fueling this trend. Consumers are leaning into social signalling, and CPG companies are taking note. Sustainable IT is step #1, significantly advanced by  moving applications to Google Cloud, the cleanest cloud in the industry. We’ve neutralized all of our carbon emissions since our founding in 1998 and matched 100% of our electricity consumption with renewable energy purchases since 2017. Google Cloud allows SAP enterprises to further drive sustainability compliance and business objectives with AI and ML tools that can drive down waste and provide real-time decision making power to support proactive green initiatives. 

Rémy Cointreau is in high spirits after deploying SAP in the Google Cloud

Rémy Cointreau, a family-owned international maker of fine spirits, has products that can take up to one-hundred years to produce. But this long production cycle presents some unique challenges in today’s hyper-competitive premium beverage brands market. Since 1724, the company has been consumed with putting its customers first. In 2020, the company realized it was failing to capitalize on the benefits that the cloud can provide and began searching for a business partner that could help with this transformation.  

Rémy Cointreau made the move to Google Cloud for many reasons. First, the company could connect its SAP backbone to key SaaS applications like Salesforce. This enabled the creation of a 360-view of data among its ecommerce platform, SAP, and Salesforce to deliver sophisticated customer experiences that reflect the heart of the brand. The Rémy Cointreau team quickly realized they now had the ability to be more agile in their finance, manufacturing, and supply chain functions with easy access to valuable SAP system data that drives decision-making. Sebastien Huet, the company’s CTO, explains: “Now that we’re fully deployed on Google Cloud Platform, anything is possible. We can pull data in from multiple sources via integration and analyze it in a matter of days. We don’t need a three-month project to see value.”  

In today’s on-demand, omnichannel world, it’s not enough for CPG brands to understand their consumers. For companies like Rémy Cointreau, it is mission-critical that they anticipate consumer preferences and deliver personalized experiences. The winners will be the companies that can reduce time to insights by treating all their data as strategic assets, breaking down data silos to enable real-time business intelligence. With SAP on Google Cloud, CPGs are transforming consumer relationships and business outcomes.

Are you ready to change how your CPG brand operates? Check out this video and read the Google Cloud for SAP CPG customer white paper and ebook.  Learn more about how your peers are leveraging SAP on Google Cloud to evolve their businesses.

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Case Study

HSBC Leverages Google Cloud to Deliver Exceptional Cx for 37 Million Customers

HSBC is the world’s largest international bank that has been in existence for 150 years. HSBC is present in 70 countries, has 37 million customers and is the number one bank in trade finance or cross-border finance. HSBC is a systemically important financial institution that is heavily regulated.

Rapid growth in data and aggressive adoption of digital channels by customers drove HSBC to make a significant transformation in their existing IT infrastructure.

The existing IT infrastructure at HSBC has been around for 30 to 40 years and with the growing need to analyze, store and process massive amounts of data it gradually became redundant. To overcome these challenges and balloon the organizations’ compute capacity HSBC decided to adopt a cloud-first strategy.

“Our existing systems are robust, scalable and can do a great job, but they do not have the database structure that allows us to run analytics and machine learning,” says Darryl West, Group CIO, HSBC.

“We are a bank at the core of our business, but we also have a significant technology company embedded within the organization. I asked the management team do we really want to compete with cloud providers, like Google, are we really going to try and do what they do, as well as they do it? Our conclusion was it was better for our business if we do a cloud-first strategy,” says West.

HSBC has been working with Google on some of the most critical business problems. The initial uses cases are typically characterized by business problems that have very large data sets and require very intense computing capability in short bursts. These include anti-money laundering, finance liquidity reporting, risk analytics, risk reporting, valuation services and more.

Watch the full video to understand how HSBC is leveraging Google Cloud Platform to enhance customer experience and deliver continuous innovations.

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Webinar

Journey to Transformation and Modernization with Google’s Distributed Cloud

Google Cloud has been leading the way of helping businesses make most from their cloud investments to drive digital transformation through modern application platforms that cater to today’s customer needs. Watch the video from the Next ’21 to explore three areas where companies are supported by Google Cloud throughout their cloud evolution journey–cloud migration and modernization, extension of services and engineering practices to hybrid and multicloud environments, and delivery of high performance with planet scale distributed infrastructure. Also, learn how Google Cloud is equipped for more complex and unique use cases, from datacenter to the edge. Hear the strategies and customer stories that can help your business modernize people, processes, and applications to fully leverage Google’s distributed cloud!

Whitepaper

Google Cloud: Lowering Migration Risks for Indian Firms

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A common perception is that migrating existing workloads to the public cloud—especially those with a lot of data—is complex, time consuming, and risky. But with the right planning, organizations can rapidly establish the right practices to accelerate migrations, lower risk, and succeed in the cloud.

Whitepaper

Microservices: An Application Architecture Optimized for the Cloud

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The need for agility and flexibility in the face of accelerating innovation and disruptions from competitors is the primary driver for cloud adoption across businesses both big and small. However, simply moving and shifting legacy system to the cloud does not sufficiently meet enterprise needs.

The systems and applications running in production environment that are built with a monolithic architecture are often not the best fit for complex cloud­-based systems and are holding the companies back from realizing their goals.

What is needed is a cloud-native approach with microservices that helps in migrating a working monolithic system and transform it for the cloud world to derive the true business benefits that organizations truly desire.

Download this whitepaper and understand why a different architecture is needed to maximize the cloud investments and how this new architecture is better suited for the cloud.

Case Study

How Companies can Improve Scalability, Flexibility, and Reliability While Reducing Costs: Tips from Route4Me

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Route4Me improved scalability, flexibility, reliability, and reduced costs by moving its core routing optimization algorithms and clusters to Google Cloud.

Google Cloud Results

  • Improves application performance by 8x to 12x; customers can create increasingly complex optimized driving routes in single-digit seconds
  • Improves customer satisfaction via increased reliability and greater application performance
  • Focuses on adding value to customers by improving software and algorithms, not infrastructure management
  • Saves 5x in infrastructure costs

In 2009, Dan Khasis needed to rent an apartment. His search had him driving around the greater New York City area in unfamiliar areas, scattershot-style, often ending up where he started. The frustrating experience led the serial entrepreneur to launch Route4Me, a smartphone navigation app to help consumers create driving routes optimized for multiple stops.

Soon, business users recognized Route4Me’s value and requested enhancements specifically for them. While route optimization apps for big businesses already existed, they were almost exclusively offline desktop programs that were expensive to purchase, deploy, and get trained on. Recognizing the opportunity, Route4Me developed an affordable route optimization solution across various devices, such as smartphones, smartwatches, and telematics devices. The software was tailored to logistics-intensive businesses such as last-mile delivery services and business units conducting field sales, field service, and field marketing functions.

As Route4Me grew its user base, it became clear that its infrastructure of rented, dedicated servers from various providers wasn’t sustainable. “The hardware costs seemed low, but there were many risks and hidden costs,” says Dan Khasis, Co-founder and CEO at Route4Me. For example, “Multi-zone disaster recovery, high availability, automated failover, and on-demand surging of many nodes was simply impossible,“ he adds.

Because under the hood Route4Me’s routing optimization platform requires complex computations, the company needed a globally scalable infrastructure capable of delivering low latency and high throughput. Route4Me also needed to stay competitive by developing and delivering new services as quickly and efficiently as possible.

For these and other reasons, Route4Me moved 100% into the cloud. “Like many entrepreneurial software companies, we test all the latest technologies we can find before upgrading. Typically we go with the fastest technology, with a strong bias towards open source and open standards,” Khasis says. Based on extensive testing, Route4Me selected Google Cloud Platform (GCP). Along with the scalability, flexibility, reliability, and low-cost structure of GCP, Route4Me had already migrated its entire platform to containerized microservices, which Khasis says “are extremely stable and reliable” on Google Kubernetes Engine. While Route4Me has proprietary routing and route optimization engines, it uses Google Maps for high-precision geocoding and as the frontend.

With GCP, Route4Me has reduced its IT infrastructure costs while delivering faster route optimizations and more reliable service to customers. Because of GCP, the company is also planning to add services that will deliver the fastest possible routing simulations and calculations to customers at a price that Khasis says is “impossible without a mature cloud-based platform like GCP.”

Unexpected savings, pleasant surprises

The migration to GCP and Kubernetes Engine required Route4Me to revamp its Service-Oriented Architecture (SOA) and convert millions of lines of code into containerized microservices running on Kubernetes Engine. With more than 150 microservices and thousands of add-on modules and features offered on the Route4Me platform, the migration took several months. But the transition, which began in May 2017 and concluded toward year’s end, went smoothly. “Thanks to the reliability and open source portability of Google Kubernetes Engine, Route4Me experienced one-tenth of the problems that we’ve had when onboarding to other cloud providers,” says Khasis.

Halfway into the migration, Route4Me engineers discovered an unexpected cost savings. The ability to run preemptible virtual machine (VM) instances with Kubernetes Engine resulted in a 90% savings in infrastructure costs, according to Khasis.

The engineering team was also pleasantly surprised by the improved intra-system latency and performance between the Google network and those of third-party systems and other data centers that Route4Me connects to. Overall latency dropped from 8x to 12x. “Where it used to take 8 to 14 seconds to plan a complicated route, now it takes as little as 2 seconds,” Khasis says. Route4Me is also running most of its transactional and operational data through Google BigQuery for a variety of business use cases, including complex machine learning tasks such as geospatial analytics, geospatial pattern detection, and synthetic density.

Scaling while delivering great performance

Route4Me algorithms take into account such data as driving distance, driving time, who’s driving, the day of the week, the vehicle being used, weather conditions, and dozens of other attributes. “All those scenarios and data have to be run in near real time,” Khasis explains. The Route4Me system must access multiple internal and external databases, aggregate all the information in parallel, and deliver it using a high-speed infrastructure platform.

“Our core services and algorithms work much faster on a Google architecture, bringing the total time to solve a complex route problem down to single-digit seconds.” “Many of those steps are resource-intensive,” Khasis adds. “With Kubernetes Engine clusters, we can do much more, scaling up and down as needed, and still deliver great performance to customers around the world.”

Because of its scale, Route4Me built its own automation system for marketing, support, and communications with its customers. “Since we moved our proprietary marketing automation system to GCP, we began delivering our omni-channel marketing communications more reliably, and the correct message reached customers faster and at just the right moment,” says Khasis. “That’s translated to happier customers and increased revenue.”

Customer satisfaction has increased, too, because Route4Me’s users experience far fewer slowdowns than before due to the reliability of GCP. The reliability also means the company spends less time worrying about certain clusters or servers going down for extended periods of time. “We have zero sysadmins, which was the Achilles heel of some of my previous startups,” says Khasis. “So we can focus on software development rather than infrastructure management.”

In order to scale as needed and develop new features, Khasis had expected the company would need to hire more SysAdmin, DevOps, and SecOps staff. “But once we migrated to the modern GCP environment, we didn’t have to make those hires. We saved a lot of money by not having to hire, train, and manage more people,” explains Khasis.

Flexible GCP pricing, in which customers only pay for what they use, has saved Route4Me money on its IT infrastructure. “Preemptible server pricing on GCP is so aggressive,” Khasis says. “If servers are automatically shut off for a certain time period, we don’t pay for them for that period. And if servers are on for a certain amount of time, we get an automatic 30% discount. We’re saving money on the platform with fixed and dynamic workloads.”

Per-second billing with GCP also helps Route4Me cut costs. “If it only takes 25 seconds to do something, we only pay for those 25 seconds,” Khasis says. For the same 25 seconds, other cloud providers might charge for 10 minutes usage or even an hour.”

Road map for the future

In the coming year, Route4Me plans to offer additional add-ons as part of its self-service marketplace, providing customers with transparent pricing on highly complex route optimizations. The service will be extremely valuable to heavy users. For instance, if an organization has to visit 50,000 locations by a certain time, it might wonder if it needs to add 20 people to make that happen and how much it’s going to cost. “Because we’re on GCP, our customer can run a variety of complicated routing scenarios to see which one is the most efficient in seconds instead of minutes,” says Khasis. “As far as I know, none of our competitors can offer that kind of service, giving us an edge as well as a new revenue stream.”

Going forward, Route4Me will begin migrating a huge portion of its core routing optimization platform to Google Google Cloud Spanner. “We want to take further advantage of Cloud Spanner, which comes closest to the CAP theorem and permits us to operate an infinitely scalable and nearly indestructible platform,” Khasis says.

As one example, Route4Me receives telematics data, such as GPS coordinates, from Internet of Things (IoT) devices in smartphones and vehicles, and performs complex algorithmic analysis running on Cloud Spanner. This provides real-time return on investment (ROI) information, so customers can see how much money they’re saving by using Route4Me routing optimization services.

“In order to help as many logistics-intensive businesses as possible, we intend to migrate our proprietary mapping, routing, and route optimization services to Cloud Spanner to take advantage of its extreme reliability and redundancy, and the multi-availability zones of Google Cloud Platform,” says Khasis.

Route4Me also plans to leverage Google machine learning technology, in part to make its routing solution available for use in autonomous and drone vehicles, as well as decentralized edge computing deployments. In addition, Google security and encryption technology will help the company expand its offerings to the heavily regulated medical industry.

Over 60 Route4Me team members use G Suite for almost everything. ”We’re interested in using everything possible with G Suite. We get inspiration from G Suite, too. A lot of thinking and effort went into improving G Suite, and we use that as inspiration to improve own products.”

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