Celanese is a $5.7 billion specialty materials company based in Dallas, Texas, that has a hand in producing many household and industrial products that people use every day. Its Materials Solutions division produces specialty thermoplastics, cellulose derivatives, and food ingredients used in items such as plastics for car dashboards and smartphones, cigarette filters, and sweeteners and preservatives. Its Acetyl Chain division produces vinyl acetate and polymers that are commonly found in vinegar, paint, glue, and water-proofing materials.

The two business units share an IT infrastructure, which predominantly features a single SAP instance that helps run processes for 27 manufacturing locations. Its SAP landscape includes SAP Business Suite with functionality for finance, human resources, manufacturing, and supply chain management. Additionally, the business runs SAP applications for business intelligence (BI), process integration, portals, advanced planning and optimization, global trade services, and governance, risk, and compliance (GRC). In all, Celanese runs roughly 40 SAP solutions and applications in its development, test, and production environments.

As its SAP landscape grew, Celanese’s model of remotely hosting its servers through a third-party data center manager started to create some lingering challenges, foremost among them the hefty cost associated with owning the physical assets while also paying a third party for upkeep and maintenance. The fixed costs associated with steady capital expenditures made less sense as Celanese began to transition to a virtual environment on more of a shared infrastructure. The company also struggled with allocating IT resources for the seemingly constant upgrade projects, many of which required niche SAP skillsets that Celanese often had to outsource.

“The costs were piling up, and we reached the point where we had to transition away from the capital expense model,” says Madhu Bangalore, Senior Manager of Application Development Strategy for Celanese. “As we moved to a virtual environment, we were still tied up in the old world of physical machines, and the upkeep with maintenance costs, operating costs, and licensing costs became exorbitant.”

Finding a Cloud Partner

In 2014, with the primary objective of reducing its SAP operational cost, Celanese began preparations to migrate its SAP data center to a hosted private cloud with IBM Cloud Managed Services for SAP. The scope of the project involved the migration of its roughly 40 SAP systems and 30TB of data across development, test, and production environments.

As an SAP global partner for over 40 years and an SAP-certified provider of cloud services, IBM offers three levels of managed services with IBM Cloud Managed Services for SAP: the operating system (OS), database, and application layers. Celanese chose managed services through the application layer, transitioning to an IBM-compatible OS and moving from Oracle to IBM DB2 to decrease the database cost. IBM Cloud Managed Services for SAP includes service options for the actual migration, which Celanese chose in part because of the breadth of its SAP environment.

One of the factors that tipped the decision in IBM’s favor, according to Bangalore, was IBM’s flexible pricing options, where nearly all operating system and system management licenses and services are consolidated into a single monthly billing charge. In addition to the greater flexibility and scalability options naturally afforded by a platform-as-a-service (PaaS) model and on-demand provisioning, IBM’s pricing structure provided Celanese with precise accounting for its IT spend.

“IBM’s rate card subscription-based model was very attractive for us,” says Bangalore. “Having gone through a very detailed sizing exercise, we had come up with certain specifications and knew exactly the number of servers that had to be installed and brought into the data centers, knowing that we could scale up or down as needed.”

This was especially attractive, Bangalore says, because mergers, acquisitions, and divestitures are so common in the specialty chemical business. By migrating to a hosted private cloud, not only would Celanese avoid the usual capital expenditures from these activities, it would also be able to bring any new businesses online much more quickly and have complete visibility into their impact on the operating budget. This would drive a lower total cost of ownership (TCO) as well as make it easier to discern a return on investment (ROI).

Another factor that Celanese considered before choosing a cloud partner was SAP-specific expertise. Reducing the need for specialty skillsets to help steer SAP projects would also help drive a lower TCO. IBM was chosen, according to Bangalore, because of its deep-rooted experience with SAP workloads, both throughout the migration and with post-migration management services. “We were very comfortable with the level of expertise of the IBM team,” he says. “They definitely knew what they were doing, and we were confident they were the right partners to help take us through the migration.”

Preparing to Migrate

Celanese’s datacenter migration entailed moving off its third-party platform to a virtualized infrastructure with a primary data center in Raleigh, North Carolina, and a backup in Boulder, Colorado. In all, IBM has 45 global data centers, including at least two in every major region, to handle even the largest and most complex SAP infrastructures. “Even though we had one SAP instance, we had three environments, so the overall landscape included 40 SAP systems to migrate,” Bangalore says. “That meant a lot of due diligence and preparation to make sure we had the right resources in place.”

Preparation activities included verification of OS compatibility, security configurations, process changes, and transferring third-party SAP Basis support to IBM as part of the managed service contract, touching 213 interfaces connecting the SAP software with other internal and external systems. “All this had to be put in place before the migration; in working with IBM’s cloud managed services team and our in-house experience with our environment, we found a common ground that made sense for our business,” says Bangalore.

One challenge to the migration was a compressed timeframe exacerbated by the 30TB migration. The company originally planned for 48 hours of downtime over a weekend to minimize disruption, but later had to extend that to 72 hours because of the high data volume. “Celanese and IBM had teams working in different time zones around the clock for those three days,” Bangalore says. “It was not easy coordinating between IBM, Celanese, and our application development teams while at the same time working with the infrastructure teams. Those were some of the challenges we overcame. While nothing is ever truly seamless, it was as close to seamless as possible.”

Looking Ahead

Since going live in October 2015, Celanese has reduced its SAP operational cost by more than 50%, has reported better response to SAP workload demands, and has achieved equivalent or superior service levels for its managed infrastructure.

When Celanese chose IBM as its cloud partner, it was looking ahead at the possibility of moving its non-SAP workloads to a managed cloud, and IBM’s experience in that regard was another factor in its favor. Thus the hosted SAP landscape, in a sense, laid the path for a full-scale cloud migration. “We will take our lessons learned from the SAP migration — not just how it affected our SAP data center, but the overall environment — and then, looking from a different lens, strategically decide how and when to move our non-SAP data center to the cloud,” says Bangalore.

In addition to fine-tuning plans to migrate its non-SAP environment, Celanese is also considering building a business case for SAP HANA, as well as expanding its use of SAP solutions for GRC. “By reducing cost with a cloud migration, we can take that savings and put it toward innovation, strategy, and a greater emphasis on security,” Bangalore says. “The drivers for this project were cost and flexibility, and we are now seeing the results of that bear fruit.”