The Business Case for Cloud Modernization

What is Cloud Modernization?

Cloud modernization is the process of upgrading IT infrastructure, applications, and workflows to use cloud computing. Instead of maintaining outdated, on-premises hardware and software, businesses move workloads to cloud-based platforms to improve scalability, efficiency, and innovation.

This change involves rearchitecting, refactoring, or re-platforming systems to use cloud-native capabilities such as automation, AI-powered analytics, and elastic scaling. This is particularly important for businesses running complex ERP systems like SAP S/4HANA, where integration and optimized performance are key.

Why are businesses moving to the cloud?

The growth of cloud computing is driven by several factors:

• Older systems often lack the flexibility and scalability that modern businesses require, especially when dealing with large-scale ERP deployments like SAP.
• Companies trade irregular capital expenditures for predictable, regular operating expenses.
• Cloud platforms lessen IT maintenance burdens and free up resources for innovation.
• Cloud providers offer security measures and compliance frameworks.
• Cloud technology allows employees to work from anywhere with access to tools and data.
• SAP S/4HANA integration and performance improvements: Many companies move to the cloud to achieve better integration and performance with their SAP systems.

With these benefits, businesses adopt cloud-first strategies to future-proof their operations.

Key Drivers of Cloud Modernization

Increasing IT Agility and Flexibility

Modern businesses need IT infrastructure that can adapt to changing market conditions. Cloud solutions provide on-demand scalability, allowing businesses to increase or decrease resources based on demand. This is important for businesses managing dynamic workloads within SAP environments.

For example, an e-commerce company can scale up servers during peak shopping seasons and scale them back down during slower periods, optimizing costs and performance. This same principle applies to managing resource-intensive SAP processes.

Cost Savings and Operational Efficiency

Cloud computing follows a pay-as-you-go pricing model, meaning businesses only pay for the resources they use. This eliminates unnecessary infrastructure expenses associated with traditional IT systems, such as hardware maintenance, power consumption, and physical security costs. This is beneficial for companies looking to reduce the total cost of ownership (TCO) of their SAP landscapes.

Companies that migrate to the cloud often experience 30-50% cost savings on IT expenses, making it an attractive investment for financial sustainability.

Enhanced Security and Compliance

Cloud providers like AWS, Azure, and Google Cloud invest heavily in security technologies, providing:

• Data encryption to protect sensitive information.
• Automated threat detection to identify security risks before they cause damage.
• Compliance with global regulations such as GDPR, HIPAA, and SOC 2.
• This level of security is key for protecting sensitive data within SAP systems.

For industries handling sensitive data—such as finance and healthcare—cloud security capabilities provide a safer and more compliant environment than on-premises alternatives.

Improved Customer Experience and Innovation

Cloud modernization enables faster application deployment, allowing businesses to roll out new features and services quickly. This leads to better customer experiences through:

• Personalized services powered by AI and machine learning.
• Improved website and app performance due to cloud scalability.
• Automated customer support through chatbots and digital assistants.
• This also includes the ability to rapidly deploy and integrate new SAP modules and functionalities.

Organizations that use cloud capabilities for innovation often gain a competitive edge, as they can adapt to consumer demands.

The Role of Workload Automation in Cloud Modernization

When planning a cloud migration, workload automation is the first and most important application to be migrated. Here’s why:

• Automation ensures business continuity – Migrating workloads first ensures that core business applications, including SAP, are not disrupted.
• It lessens human intervention – Automated workflows make the transition smoother by handling repetitive tasks like data transfers, system monitoring, and updates.
• It supports cost efficiency – Automated cloud workloads optimize resource usage, minimizing unnecessary costs.

By modernizing automation capabilities first, businesses create a stable foundation for migrating their other mission-critical applications, including SAP S/4HANA. As the #1 recommended job scheduler for SAP customers, RunMyJobs is uniquely positioned to unlock the power of S/4HANA. Read more about how RunMyJobs supports your SAP S/4 Hana implementation and your RISE journey.  

How Automation Supports Core Business Applications

Core applications—such as ERP, CRM, and financial systems—rely on backend automation to function effectively. If workload automation is not modernized early in the process, these critical applications may experience downtime, inefficiencies, or performance bottlenecks.

For instance, a logistics company using SAP ERP for supply chain management benefits from cloud-based workload automation by ensuring real-time tracking, automated reporting, and integration with cloud data sources.

Assessing the Current IT Environment

Before migrating to the cloud, businesses must evaluate their existing IT infrastructure to identify inefficiencies, outdated technologies, and dependencies. This includes an assessment of existing SAP systems.

Key areas to assess include:

• Application Performance – Are legacy applications, including SAP systems, slowing down operations?
• Scalability Needs – Can current systems handle business growth?
• Security Risks – Are there vulnerabilities that cloud migration can address?
• Cost Analysis – How much is being spent on on-premises IT infrastructure?
• A detailed IT audit helps businesses create a clear roadmap for modernization and ensures that no critical application or function, including SAP processes, is overlooked.

Prioritizing Applications for Migration

Not all applications should be migrated at once. Businesses should follow a phased approach, starting with:

• Workload Automation (First Priority) – As discussed earlier, automating workloads ensures smoother cloud migration for other applications, including SAP.
• Customer-Facing Applications – E-commerce platforms, CRM systems, and service portals benefit the most from cloud scalability and performance improvements.
• Data-Intensive Workloads – Cloud storage and computing resources optimize the performance of applications that handle large data sets, such as analytics and AI-driven solutions, which is vital for SAP analytics.
• Legacy Systems – These should be refactored or re architected to use cloud capabilities, including legacy SAP implementations.

This prioritization prevents business disruptions and allows teams to address migration challenges systematically.

Choosing the Right Cloud Model (Public, Private, Hybrid, Multi-Cloud)

Selecting the right cloud deployment model is essential for optimizing performance, security, and cost-effectiveness. Businesses can choose from:

• Public Cloud – Resources are hosted by providers like AWS, Google Cloud, or Azure. Ideal for cost-conscious businesses needing high scalability.
• Private Cloud – Dedicated cloud environments offering enhanced security and control. Best for regulated industries like finance and healthcare.
• Hybrid Cloud – A mix of public and private cloud, providing flexibility while keeping sensitive workloads on-premises.
• Multi-Cloud – Using multiple cloud providers to avoid vendor lock-in and improve redundancy.

Increasingly, organizations operate in a multi-cloud model that includes multiple SaaS, IaaS, and public cloud services. To find the model that works best for your organization, you should assess compliance requirements, workload sensitivity, and long-term cost implications that help to inform your level of cloud adoption.

Building a Phased Migration Plan

A well-structured migration plan prevents business disruptions and ensures a smooth transition to the cloud. A well planned, phased approach should include:

• Pilot Migration – Move non-critical applications first to test cloud performance.
• Automate Workloads – Ensure automation tools are in place for seamless data transfers and resource management.
• Migrate Business-Critical Applications – Once automation is stable, migrate core applications such as ERP, CRM, and financial systems.
• Optimize and Scale – After migration, optimize workloads for cost efficiency and performance improvements.

By following this structured approach, your organization can reduce risks and achieve faster ROI from cloud modernization.

The Frequent Challenges of Cloud Modernization and Solutions

Overcoming Resistance to Change

One of the biggest challenges in cloud modernization is employee resistance to new technologies. Many teams fear job displacement or struggle to adapt to cloud-based workflows.

Solution: 

• Provide training programs to upskill employees in cloud technologies.
• Communicate the benefits of automation, such as reduced workloads and increased productivity.
• Appoint cloud champions within departments to lead adoption efforts.

By addressing concerns early, businesses can increase user adoption rates and ensure a smoother transition to cloud-based operations.

Managing Migration Risks and Downtime

A poorly executed migration can lead to downtime, data loss, and operational disruptions.

Solution:

• Implement cloud backup and disaster recovery plans before migration.
• Use testing environments to simulate cloud workloads before going live.
• Conduct gradual rollouts instead of full-scale migrations.

With the right risk management strategies, businesses can ensure business continuity throughout the migration process.

Addressing Cost Overruns and Budget Control

Cloud modernization can exceed budget expectations if resource allocation is not optimized.

Solution:

• Use cost monitoring tools like AWS Cost Explorer or Azure Cost Management to track spending.
• Optimize resource usage through auto-scaling and serverless computing.
• Set spending alerts to avoid unexpected expenses.

By proactively managing costs, businesses can maximize ROI while staying within budget.

Ensuring Data Security and Regulatory Compliance

Security remains a top concern in cloud modernization, especially for businesses handling sensitive customer data.

Solution:

• Implement multi-factor authentication (MFA) and role-based access controls (RBAC).
• Choose cloud providers that comply with GDPR, HIPAA, PCI DSS, or industry-specific regulations.
• Encrypt data at rest and in transit to prevent breaches.

A security-first approach ensures regulatory compliance while protecting valuable business assets.

Measuring the ROI of Cloud Modernization

Performance improvements across applications after cloud modernization can be measured by capturing enhancements to  application speed, availability, and responsiveness.

Key metrics to track may include:

• System uptime and downtime reduction
• Faster response times for customer interactions
• Improved scalability without performance degradation

These performance gains directly impact business operations and customer satisfaction.

Cost Savings from Infrastructure and Operations

Measuring ROI should include tracking cost reductions in:

• Hardware and data center expenses
• IT maintenance and labor costs
• Energy consumption savings
• Reduced incidental spending

Businesses typically experience 30-50% cost savings post-migration, proving that cloud modernization is a strategic investment.

Enhanced Productivity and Employee Efficiency

Cloud-based automation reduces manual workloads, allowing employees to focus on high-value tasks. Success indicators can include:

• Reduced IT troubleshooting hours
• Faster project completion times
• Improved collaboration through cloud-based tools
• Less reliance on high-value IT staff for the accomplishment of daily or mundane tasks

A more efficient workforce translates into higher profitability and business growth.

Leveraging Cloud Partners and Tools for Modernization

Consider the following when selecting a cloud provider to be part of your production IT environment and workflows:

• High availability and uptime guarantees
• Robust security frameworks
• Scalable infrastructure for future growth
• Location, latency, and proximity to employees and customers
• Data sovereignty and other cybersecurity standards that pertain to your business

Top providers like AWS, Azure, and Google Cloud offer extensive support, integrations, and automation capabilities that may be essential for a successful cloud migration.

Automation and Optimization Tools for a Smooth Transition

Automation plays a crucial role in optimizing cloud environments and none are more important than enterprise-wide workload automation. An effective WLA solution will:

• Seamlessly connect all your systems and data, no matter your tech stack – from on-prem mainframes to cloud services and apps.
• Integrate with top ERPs using comprehensive integrations and prebuilt connections including SAP, Oracle, Peoplesoft and more. 
• Streamline critical workload automations and easily connect existing ERPs with emerging cloud platforms and modules such as SAP S/4 HANA.
• Reliably and accurately run critical jobs daily with unlimited connections to systems and apps.
• Protect your business-critical processes with world-class technical support team that is available 24/7. 
• Build your team’s skills with personalized onboarding and on-demand training and certifications.
• Provide enterprise-wide visibility and control by monitoring every automated process from a single pane of glass.
• Track all automated processes from a single point of control. 
• Get early warnings if critical deadlines are predicted to slip, allowing your team to address them before they impact the business.
• Configure process SLAs and thresholds with customizable escalations and alerts to ensure that the right people are informed at the right time with the right information.

This combination of features is critical for organizations that drive value for their customers through the management of complex workflows, and goes far beyond the capabilities of what is typically provided in a basic job scheduler.

Conclusion

Cloud modernization is not just an IT upgrade—it is a business transformation that enhances agility, efficiency, and innovation.

By prioritizing workload automation, selecting the right cloud strategy, and managing costs and security, businesses can future-proof their operations and gain a competitive edge.

A cloud-first approach is the key to scalability, cost savings, and sustained business growth in the digital era.

FAQs on Cloud Modernization

What are the biggest challenges of cloud modernization?

The most common challenges include resistance to change, cost overruns, security concerns, and migration risks. However, a well-planned strategy and the right WLA solution can address these issues.

How does cloud modernization impact business scalability?

Cloud enables on-demand resource allocation, ensuring businesses can scale up or down based on demand without performance issues.

Which industries benefit the most from cloud modernization?

Industries such as finance, healthcare, e-commerce, and manufacturing benefit the most due to high data processing needs, security and compliance requirements.

What role does workload automation play in cloud transformation?

Workload automation ensures seamless migration, optimized resource usage, and reduced operational overhead during and after cloud adoption.

How can businesses ensure a successful cloud migration?

By following a phased approach, prioritizing automation, and leveraging cloud tools, businesses can ensure a smooth and cost-effective migration.

Redwood is the leader in Workload Automation

Redwood Software is a leading provider of workload automation solutions, uniquely qualified to partner with organizations pursuing cloud migration and automation strategies.  Redwood experts facilitate seamless integration between on-premises infrastructure and cloud platforms featuring RunMyJobs, the leading cloud-first SaaS workload automation solution. We drive innovation through automation, helping businesses not only migrate workloads but also optimize them for performance and efficiency in the cloud. If you found this article informative and helpful, consider working with a Redwood automation expert to make the most of workload automation in your cloud journey.

Connect with a Redwood automation expert to explore how RunMyJobs SaaS WLA can support your cloud strategy. Schedule a time that works best for you here.