LOTTE: Achieving zero system outages with S/4HANA migration on Google Cloud at 60% reduction in total costs
About LOTTE
Founded in June 1948, LOTTE began as a business making and selling chewing gum. Today, the company manufactures and sells confectionery, ice cream, health foods and sundries with LOTTE CO., LTD., LOTTE SHOJI CO., LTD. and LOTTE ICE CREAM Co., Ltd. coming together in April 2018. As part of the company's commitment to the SDGs, specialty chocolate Dari K, known for its commitment to sustainable production and the environment, is now a Group company as of 2022.
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Contact usBy moving its S/4HANA operating infrastructure from on-premise to Google Cloud, LOTTE achieved better stability with less system outages, and gained data-driven business insights, without incurring additional costs.
Google Cloud results
- Live migration eliminates system maintenance outage, improving stability and minimizing system outages
- Creates a foundation for data analytics by linking data extracted from S/4HANA and business systems
- Decreases operational costs by up to 60%
LOTTE migrated its entire S/4HANA operating infrastructure from on-premise to Google Cloud in just seven months
LOTTE introduced SAP in 1998, and has run it on-premises for over 20 years. In 2018, however, LOTTE, LOTTE SHOJI CO., LTD. and LOTTE ICE CREAM Co.,Ltd., and with support for SAP ERP Central Component (ECC6.0 below) reaching end of life in 2027, the company investigated a zero-base core system renewal and adopted S/4HANA.
The project to migrate S/4HANA started in 2017, with just a year to spare before the three companies' merger. Hisaaki Ogata of the ICT Strategic Division says, "We selected SAP's Managed Services because the project was time-sensitive and few companies were implementing S/4HANA at the time, making the support of SAP Japan Co., Ltd. essential."
After running S/4HANA on SAP's managed services for about three years, the company decided to revamp its cloud infrastructure with three goals in mind, to improve stability, reduce costs, and leverage their data. Following an evaluation of different solutions to operate S/4HANA more efficiently on more robust infrastructure, the decision was made to migrate to SAP on Google Cloud.
"The four key factors are robustness, resilience, cost and use of data. We assessed the first, robustness, in terms of minimizing the risk of downtime, and looked for a proven track record in stability, elimination of downtime through live migration, compliance with international standards and certification, and the multi-layered security offered by Google Cloud's bespoke hardware. The second, resilience, is possible by achieving redundancy using regions within Japan and overseas. Thirdly, we were impressed by the cost-effectiveness of multi-year discounts, flexible discount plans and options to configure resource usage, and the option to procure custom machines with the CPU and memory needed for the job. Fourth, considering the future of data-driven business, we had high expectations for leveraging data through Google Cloud services such as BigQuery, AI, machine learning, Looker and Apigee. Against the backdrop of a groupware refresh in February 2019 moving to Google Workspace and the adoption of Google Chromebooks in 2020, the high affinity of all of these proved to be a deciding factor," shares Ogata.
Yūsuke Ikeda of the ICT Strategic Division System Infrastructure Team adds on, "Many of our business applications were running on other companies' clouds, and rather than continue to use only one company's cloud, we decided to adopt Google Cloud in the belief that multi-clouding would be better for our future."
"Many of our business applications were running on other companies' clouds, but we felt that it would be better to use only one company's cloud going forward. We decided to adopt Google Cloud with a view to the future."
—Yūsuke Ikeda, ICT Strategic Division System Infrastructure Team, LOTTE CO., LTD.Achieving quick transition with best practices in place
The project to migrate the existing S/4HANA environment to Google Cloud began in March 2021, going live in early December. To achieve this short, 7-month migration time, LOTTE reduced the number of hours required for migration by designing infrastructure according to best practices that defined in advance the business scenarios and functional modules related to the migration to Google Cloud.
Partner Interconnect, a private network environment, can be used to achieve multi-level security through firewalls. Eliminating unnecessary servers, integrating functions and resizing databases streamlined the system. Going forward, LOTTE aims to improve resilience by configuring Disaster Recovery (DR), which makes use of Google Cloud's backup recovery and load-balancing mechanisms.
"The biggest reason we were able to migrate to Google Cloud so quickly was that we were able to draw on the knowledge and expertise of Mr. Nakasuga, who was also in charge when we introduced S/4HANA. Google Cloud's support was also a key factor behind the quick implementation, as they responded to our inquiries quickly and accurately," says Ikeda. "We also used Enhanced Support after the system migration, on account of the high level of support we received."
"We also use Enhanced Support to assess Google Cloud performance, such as whether it's performing as expected, whether there are bottlenecks, and whether there are sufficient resources. We hope to improve the quality of maintenance by doing so. I believe that the scope for using Google Cloud will continue to expand, and I hope that this will make better environments possible at lower cost. It would be great if Google Cloud could set out the best configuration to achieve this," adds Koji Nakasuga of the ICT Strategic Division System Infrastructure Team.
Rapid decision-making with real-time data across all teams
Ogata had the following to say about the benefits of adopting Google Cloud: "In terms of improving stability, we have achieved zero system maintenance outages through live migration, and around a 50% reduction in costs by using flexible discount plans and resource configuration, which rises to around a 60% reduction when including managed services with SAP on Google Cloud."
Data extracted from S/4HANA and business systems is linked to create a data analysis infrastructure to leverage data. "All data, from manufacturing through to logistics to sales, is recorded in almost real-time, making rapid decision-making based on that data possible. As someone who remembers the days when the system was all on-premises, I can honestly say that Google Cloud is amazing, both in terms of technology and cost," says Nakasuga.
"In terms of improving reliability, we have achieved zero system maintenance outages through live migration, and around a 50% reduction in costs by using flexible discount plans and resource configuration, which rises to around a 60% reduction when including managed services with SAP on Google Cloud."
—Hisaaki Ogata, ICT Strategic Division, LOTTE CO., LTD.Now that the project to migrate S/4HANA to Google Cloud has almost completed its first stage, LOTTE plans to implement a DR configuration that takes advantage of Google Cloud's regional, zone and resource redundancy, and on improving operations conscious of internal controls.
"Google Cloud offers a wide variety of products, so I feel it can be used to meet requests from other departments and in new fields. Google Cloud representatives offer quick consultations, which we hope to make use of in future. As we grow familiar with this system, I think it will be possible to quantify the benefits in terms of annual downtime and response time," adds Ikeda.
Looking ahead, Ogata shares, "We have high expectations for BigQuery in supporting our data-driven business. Since Google Cloud is a combination of products, we can do our own proof of concept, and four of us have already obtained Google Cloud certifications to further increase our ability to drive change. We intend to use Google Cloud proactively to improve our in-house production."
"Google Cloud offers a wide variety of products, so I feel it can be used to meet requests from other departments and in new fields. Google Cloud representatives offer quick consultations, which we hope to make use of in future. As we grow familiar with this system, I think it will be possible to quantify the benefits in terms of annual downtime and response time."
—Yūsuke Ikeda, ICT Strategic Division System Infrastructure Team, LOTTE CO., LTD.Tell us your challenge. We're here to help.
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About LOTTE
Founded in June 1948, LOTTE began as a business making and selling chewing gum. Today, the company manufactures and sells confectionery, ice cream, health foods and sundries with LOTTE CO., LTD., LOTTE SHOJI CO., LTD. and LOTTE ICE CREAM Co., Ltd. coming together in April 2018. As part of the company's commitment to the SDGs, specialty chocolate Dari K, known for its commitment to sustainable production and the environment, is now a Group company as of 2022.