Cost Optimization with SAP Cloud Platform – The Path to Reducing Expenses

Cost Optimization with SAP Cloud Platform – The Path to Reducing Expenses

In recent years, companies have been turning to cloud services for flexibility, scalability, and a faster infrastructure.

When managed correctly, the cloud increases efficiency, reduces unnecessary expenses, and provides financial savings. However, uncontrolled use of cloud resources can lead to high costs.

In this guide, we will explore SAP BTP cost reduction strategies that can be implemented using SAP Cloud Platform and discover practices that help businesses optimize their cloud spending and maximize the value of their SAP investments.

A New Way to Save as Cloud Spending Increases: SAP Cloud Platform

Formerly known as SAP Cloud Platform, SAP Business Technology Platform (SAP BTP) stands out as a versatile platform that empowers businesses to develop, deploy, and manage cloud applications.

At the core of the platform is the reliable SAP S/4HANA in-memory database, which delivers unmatched performance to increase businesses’ potential for success and growth.

What Is Cost Optimization and Why Is It Important?

Cloud cost optimization is the efficient and effective use of cloud resources to meet the specific needs of operations or applications.

The primary goal of cloud optimization is to align costs with actual needs without compromising service quality or performance.

This is typically achieved by limiting expenses associated with over-allocated resources, unused instances, or inefficient architecture.

Cloud infrastructure optimization balances performance, cost, compliance, and security to optimize cloud technology and align it with business objectives.

Why Does Overspending Occur in the Cloud Environment?

If companies do not accurately determine their needs or regularly monitor their spending, unnecessary services and excess capacity can quickly increase budgets. The main reasons for this increase in spending are:

• Unused or inefficient resources
• Incorrectly sized servers and data storage areas
• Uncontrolled increase in data transfer and network costs
• Inadequate monitoring of billing and pricing mechanisms

Contribution of Cost Optimization to Business Results

• Efficiency with SAP cloud: Higher output with fewer resources
• Rapid scalability: Infrastructure ready for increased demand
• Sustainable IT: Savings on hardware and energy costs

8 Effective Cost Optimization Strategies

To achieve effective cloud cost management, businesses must implement clear policies for purchasing and managing reserved cloud resources. These practices should be incorporated into workflows for real-time cost monitoring and intervention.

Here are eight key strategies for optimizing cloud costs.

1. Monitor Billing and Pricing

The first step in controlling cloud costs is to identify anomalies in service fees and perform regular monitoring.

Using SAP Cloud billing reduction and cost management tools, you can generate detailed reports and clearly see how much is being spent on which department or project by tagging resources.

This ensures transparency and allows unnecessary costs to be identified early on.

2. Identify Unused Resources

Over time, many companies can accumulate unused or underutilized resources.

Idle servers, unused storage space, and inactive databases can lead to unnecessary expenses if left unnoticed. Regularly analyzing and decommissioning these resources with SAP cloud cost optimization can lead to significant budget savings.

3. Scale Resources According to Need

The same capacity is not always needed. With the auto-scaling feature, the system can increase or decrease capacity according to demand. This maintains performance during peak periods and prevents unnecessary resource costs during periods of low usage.

CONA Services reduced the organization’s operating costs by 50% using SAP Cloud Platform (SAP BTP) and SAP Integration Suite. By effectively managing multiple customer applications, the company accelerated the customer onboarding process, minimized data errors, and increased the accuracy of core data for use in subsequent processes.

4. Set Up Budget and Alert Mechanisms

Creating real-time budget alerts is one effective way to prevent unexpected cost increases. SAP Cloud’s budget management tools allow you to monitor spending in real time, and the system alerts you when specified limits are exceeded.

5. Use Discounted and Reserved Plans

Options such as reserved cloud servers (RI), savings plans, and spot servers are models that offer long-term cost advantages from cloud providers. While RIs provide significant discounts for fixed usage scenarios, savings plans offer more flexible, usage-based pricing.

6. Minimize Data Transfer

Data transfer is often overlooked but is a significant cost item. Optimizing data backup and transfer processes, preferring cloud-internal data transfer, and limiting unnecessary external data outflows reduces additional fees.

7. Boost Efficiency with Automation

Automating routine operations reduces costs associated with human error and speeds up operational processes. Automation allows resources to be directed toward more strategic tasks.

8. Build Awareness and Training

For cloud cost optimization to be sustainable, IT teams must be trained in cost awareness and cloud management. Creating awareness across the organization and sharing best practices strengthens a long-term savings culture.

The Role of SAP Cloud Platform for These Strategies

SAP Cloud Platform offers powerful tools that enable cost optimization, efficient cloud scaling, and sustainable financial management. Below are the main areas where SAP Cloud contributes to cost optimization.

Resource Management with SAP Cloud

SAP Cloud Platform prevents unnecessary resource usage by optimizing resource allocation and ensuring that only the required capacity is deployed.

With SAP resource management, companies avoid paying for unused resources and keep overall cloud spending under control.

Process Automation

The platform automates processes by minimizing manual tasks. This increases operational efficiency, reduces costs caused by human error, and allows teams to focus more on strategic tasks.

Eliminating Hardware Costs

Thanks to the cost-saving structure of cloud-based ERP, internal hardware, maintenance, and licensing costs are significantly reduced. SAP Cloud eliminates the need for physical infrastructure, lowering the total cost of ownership (TCO).

The Financial Impact of SAP Cloud

SAP Cloud Platform helps companies manage their budgets more effectively thanks to enhanced productivity and cost transparency. Automatic cost tracking and reporting features provide businesses with financial sustainability and a competitive advantage.

Key Cost Advantages of SAP Cloud Platform

SAP Cloud Platform offers businesses various advantages that increase efficiency while keeping costs under control:

• Flexible pricing: Thanks to the pay-as-you-go model, you only pay for the resources you use.
• Automatic scaling: Resources are automatically increased or decreased based on demand.
• Advanced analytics and reporting: Enables the rapid identification of unnecessary costs.

Make a Difference in SAP Cloud Transformation with Nagarro+ MBIS

Nagarro + MBIS seamlessly integrates the SAP Cloud Platform with your existing ERP systems, leveraging over 25 years of experience. 

This integration connects processes across different business areas such as finance, HR, supply chain, and procurement, enabling them to progress more quickly.

Our AI-powered solutions streamline your operations, optimize resource utilization, and reduce unnecessary costs. As a result, your costs are kept under control, your business processes become more efficient and error-free, and your team can focus more on strategic tasks.

By using the SAP Cloud Platform with Nagarro + MBIS, you can run your business faster, make more accurate data-driven decisions, and evaluate new opportunities more effectively.

Are you ready to reduce your operational costs with SAP Cloud? Get in touch with Nagarro + MBIS experts!

SAP Cloud Delivers Not Only Scalability, But Also Sustainability

SAP Cloud Platform not only provides businesses with a flexible and scalable infrastructure but also supports sustainability.

Environmental impact is reduced through less physical hardware usage and lower energy consumption. Thanks to Cloud IT cost reduction and the Green IT approach, businesses gain both cost and carbon footprint advantages in the long term.

• Less physical hardware: Reduces hardware needs, lowering energy and maintenance costs.
• Lower energy consumption: Enables more efficient energy usage through cloud infrastructure.
• Environmental sustainability: Minimizes carbon footprint through the Green IT approach.
• Long-term advantages: Provides savings in terms of both cost and environmental impact.