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February 26, 2024

Kyndryl transforms hundreds of legacy solutions by deploying SAP S/4HANA on Azure

After its 2021 spin-off from IBM, Kyndryl inherited technology, infrastructure, and employee work environments that weren’t fit for purpose. To reduce complexity during the removal of its legacy technologies, the company implemented a greenfield SAP S/4HANA-based platform on Microsoft Azure. The solution simplified processes across the company and consolidated 375 legacy tools into one SAP ecosystem. Kyndryl completed the migration in 18 months and now plans to help customers complete similar digital transformation initiatives.

Kyndryl

Kyndryl, the world’s largest IT infrastructure services provider, spun off from IBM in November 2021. Since then, the company has capitalized on its freedom of action, adopting the fitting moniker “The Heart of Progress” and enabling IT systems and solutions that meet the unique needs of a wide variety of customers. To quickly implement this mission, Kyndryl moved away from its existing IBM infrastructure early on. “We had a 24-month transition window,” explains Michael Bradshaw, CIO at Kyndryl. “This gave us the dilemma of either focusing solely on transition or compressing our timelines to drive transition and transformation based on the creation of a platform-based architecture. We chose the second option.” 

At the time, Kyndryl had over 1,800 applications running in a diverse set of environments—375 of which were related to SAP technology. Ensuring the availability of this data was key, and it led Kyndryl to set a series of goals for itself. First, it would assure its independence from legacy IBM systems within two years. Second, the company would create a modern, highly resilient, secure, and responsive SAP platform that would unify and replace the functionality of an initial 375 legacy applications, with more to follow. Finally, Kyndryl wanted its new solution to make more use of out-of-the-box functionality, which would streamline operations and drive efficiency.  

Quickly, the company determined that the only way to meet its goals was a greenfield implementation based on current SAP S/4HANA technology, paired with a scalable, robust, and reliable cloud infrastructure. To make sure everything went smoothly, Kyndryl wanted to work closely with an infrastructure provider that had experience operating a proven platform.  

Complex modernization accomplished quickly 

One week after Kyndryl became an independent company, they announced Microsoft as their first strategic alliance partner. Along with Microsoft meeting all of its other criteria, Kyndryl had built a close relationship and trust with Microsoft that convinced the company to adopt Azure as its cloud platform of choice. Azure Storage, Azure Monitor, and Azure network security would soon thereafter become key pieces of the solution. “We didn’t want to create another heavily customized SAP system,” says Gino Ruggiero, Director, SAP Delivery Partner at Kyndryl. “We saw greater benefit in using Azure architecture and working with a technology partner to make just a few tweaks around high availability.”  

Microsoft experts, including SAP Specialists, SAP product engineering teams, Azure solutions architects, and Customer Success Account Managers, were called in to lend their expertise during the incredibly rapid and well-orchestrated 18-month development, deployment, and adoption process. “Our services organization treated the Kyndryl CIO as a customer,” explains Brandon Smith, Director, SAP Infrastructure at Kyndryl. “This way, if an external customer asked Kyndryl to provision, build, deploy, and manage their SAP environment on Azure, it would be precisely what we’ve done here.” 

The solution’s deployment was done in stages. The initial design was completed in February 2022, and deployment began the following month. A year later, the solution architecture went live. The Finance organization adopted the platform soon thereafter, following that with revamped quote-to-cash processes across 25 countries in its first wave of adoption and an additional 41 countries a few months later. The Kyndryl S/4HANA-based platform now handles the department’s contracting, ordering, billing, invoicing, accounting, and procurement. By the end of this process, Kyndryl had reduced its 375 legacy apps to a single, unified, and highly reliable SAP on Azure platform.  

These changes were done in addition to company-wide adoption of Power BI, Outlook, and Teams, alongside many other elements of Microsoft 365, which enabled further consolidation of the company’s 1,800+ business applications. “These were the first major IT changes we made across the company,” says Guido Reisch, Vice President of Enterprise Applications at Kyndryl. “The ease of the rollouts of Microsoft 365 and our SAP on Azure solution, along with how easily interoperable they are, gave us confidence in our ability to drive sweeping, positive change.” 

Opportunity realized

On top of confidence, the development of its greenfield SAP platform has given Kyndryl a powerful new way to realize its goal of relentlessly transforming business to move the world forward. Building upon lessons learned during its own transformation, the company has identified gaps in the marketplace that present it with the opportunity to help other organizations facing similar modernization challenges. To facilitate this opportunity, Kyndryl has created an internal SAP Center of Excellence focused on expanding the expertise of its SAP specialists.  

The company has also begun working with SAP to codevelop the SAP Business Transformation Center, which will collaboratively produce new solutions for customers tackling highly complex digital transformations. “Combined with our deep expertise in data migration and application modernization services, we are working together with SAP and Microsoft to enable and accelerate customer transformations into intelligent enterprises,” says Ruggiero. “Each company we serve will enjoy cost-effective, reliable, and operationally sustainable processes designed to meet their unique needs.” 

Kyndryl is already generating interest around the offering as well, with many potential customers asking not only how the company accomplished everything it did in so short a time, but who they partnered with to make it happen. “We’ve been telling those who ask that the collaboration with Microsoft and creation of our Kyndryl environments was very important to the successes we achieved,” says Reisch. 

The continuing value of collaboration

Change has been a common theme for Kyndryl, and by embracing that change, the company has found a way to break from its one-time parent company and thrive. “Our early transformative successes paved the way to where we are today,” says Reisch. “They gave people the understanding that we, in partnership with Microsoft and SAP, can meet aggressive deadlines and instigate meaningful change.”  

By consolidating the initial 375 applications into a modern S/4HANA-based platform, Kyndryl realized massive gains in terms of efficiency and IT simplification. The process of platform refinement continues as well. With its legacy IBM solutions replaced, the company is now turning its attention to those systems and applications not associated with its separation. Soon, Kyndryl will be able to take advantage of an even more powerful strategic platform built on SAP and Microsoft technologies. “We believe in trust and partnership, put simply,” says Ruggiero. “We felt that Microsoft was committed to Kyndryl’s success, and that’s what drove our shared success.” Smith agrees, noting that the close collaboration between the two companies is not a guarantee when dealing with solution providers. “In our dealings with Microsoft, we were the benefactor of a very good combination of both technology and human teamwork,” he says. “It’s that sort of support we’re looking to offer our own customers as they take aim at digital transformation.” 

Find out more about Kyndryl on Twitter, Facebook, YouTube, and LinkedIn.

“In our dealings with Microsoft, we were the benefactor of a very good combination of both technology and human teamwork. It’s that sort of support we’re looking to offer our own customers as they take aim at digital transformation.”

Brandon Smith, Director, SAP Infrastructure, Kyndryl

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