SAPinsider Technology Executive Forum Issue 1 2021

First Things First: Solving the Cash-flow Crisis Even though companies have been under pressure to reduce capital expenditures for over a decade, prior to the pandemic many companies operated smoothly on recurring cash flows that allowed them to aggre- gate cash reserves. These predictable revenue streams gave them fairly liquid operations where they had sufficient cash to sustain large capital investments, such as in on-premise hardware and software. All this changed in early 2020. A new kind of economy very swiftly emerged where moving capital expenses (CapEx) to operational expenses (OpEx) and liquidity became urgent. Now, with less predictable revenue streams and less cash on hand, it has become necessary to pay for business transformation as an operating expense. This is where cloud resources make more sense than capital-intensive, on-premise ones. For example, one of the industries hardest-hit by the pandemic, the airline industry, was able to defer costly capital outlays by moving applications and data to the cloud. One Latin American airline subscribed to RISE with SAP to enable this trans- formation of CapEx to OpEx by shifting from on- premise to the cloud and reducing the total cost of IT asset ownership with flexible quarterly subscription payments. In addition to surviving a difficult cash- flow situation, the airline is now in a position to exploit the scalability of cloud when normal business conditions return. Easing the Transition To the Public Cloud Another challenge many organizations are encoun- tering when attempting a swift business transfor- mation is that their processes are based on highly customized made-for-them-only IT environments. These businesses are having to consider transition- ing to business processes that eliminate or decrease the need for customization, and which instead can coexist in a much larger—and much more open— technology ecosystem. Robin Manherz, Chief Performance Officer, SAP SAPinsiderOnline.com 5