Standard Bank will soon begin moving its operational SAP banking systems onto the Microsoft Azure cloud platform as it looks to create what it calls an “always-on bank”.
The bank’s CIO for personal and business banking in South Africa, Sabelo Nkwanyana, told journalists on Tuesday that it will move its core SAP services to Microsoft Azure to improve customer experience and allow it to introduce new solutions to market more efficiently.
Nkwanyana was speaking at the unveiling of a cloud partnership between Microsoft South Africa and SAP Africa in Johannesburg.
The bank told TechCentral that its strategy of using both Microsoft’s Azure data centres and Amazon Web Services (AWS) infrastructure remains unchanged.
Standard Bank was one of the first banks in the world to move its core banking systems onto SAP. It’s been a costly and painful process. “It’s been a long and difficult journey. It’s been quite tough,” Nkwanyana said. However, he added that “trust that has been built with these partners, Microsoft and SAP. We have faith that them partnering together will greatly benefit Standard Bank.”
The bank’s decision to begin moving its IT operations into the cloud comes after Microsoft last year launched two Azure data centres in South Africa, one in Johannesburg and another in Cape Town. Microsoft’s most direct rival in the cloud services market, the Amazon.com-owned AWS, is expected to launch a data centre in Cape Town this year, too, setting the stage for a showdown in the local enterprise IT market between the two US cloud giants.
“Our clients are getting more and more sophisticated. To compete, we need partners that have global exposure. We don’t have to build it ourselves anymore,” Nkwanyana said of the bank’s partnership with Microsoft and SAP. “We want to leverage Microsoft’s computing power… We want to leverage these global companies to use their computing power to scale up and down (as demand requires).”
Microsoft and SAP said their partnership, known as Project Embrace and announced globally in 2019, will allow enterprise customers to accelerate their digital transformation journeys using “jointly developed reference architectures, road maps and industry best practices”. It is centred on helping customers move to S/4Hana (an in-memory database system) and the SAP Cloud Platform on Microsoft Azure.
The work with Standard Bank is the first local demonstration of the Project Embrace partnership, said Microsoft South Africa MD Lillian Barnard.
The partnership brings together SAP and Microsoft, along with a global network of systems integrators, to move on-premise SAP enterprise resource planning and SAP S/4Hana customers to the cloud.
The two software vendors said Project Embrace will help Standard Bank deliver a faster time-to-market on products and services, while ensuring its IT infrastructure is optimised.
“By moving workloads to the cloud, Standard Bank will be able to access a range of features that it can deploy instantly and scale according to demand. This will result in cost reductions, improved system performance and access to innovation.”
Nkwanyana said running its IT systems on-premise rather than in the cloud has been “quite expensive” for the bank.
“During the migration, it still be expensive, with some on-prem and some in the cloud. But from an agility perspective, the move will put us in a good position, with the ability to scale up and scale down when we need to.”
He said the shift to the cloud will require the “up-skilling” of Standard Bank’s workforce, which is already under way. “In the longer term, this will reduce our costs. It will reduce our IT budget quite significantly…,” he said, without disclosing numbers.
He said the bank must still decide which systems and processes it will move to the cloud first. “The last thing we want to do is impact our clients as we transform.” — © 2020 NewsCentral Media