Morinaga & Co., Ltd. has introduced many Japanese popular snacks, such as “HI-CHEW,” “Choco Monaka Jumbo” and, “Morinaga Milk Carmel” since it was founded in 1899. The company is currently executing on its 3-year management plan drawn in 2018, to ensure that the company builds a robust infrastructure to accelerate its growth strategy. The plan also outlines three objectives - to strengthen the popularity of its snacks, food ingredients, and frozen desserts in Japan, to expand on wellness and health food products, and to seek global expansion in the U.S., China, and other parts of Asia.

As its IT system plays a critical role to the business strategy, Morinaga decided to migrate its SAP ERP to AWS. This company had introduced SAP ERP to its accounting system in 2003. It started moving its mainframe applications to an open environment, including inventory, production, and sales management through 2009. During the Great Eastern Japan earthquake in 2011, its data center experienced a blackout. This incident led Morinaga to add in-house power generation to its data center, create a Business Continuity Plan (BCP), and look for ways to optimize its infrastructure.

Although Morinaga evaluated migrating to the cloud in 2011, there were only a few SAP ERP systems running in the cloud then, which slowed its decision to move. It continued operating on-premises. In 2017, during an equipment refresh cycle, it decided to upgrade its servers and move to the cloud.

“Our key priority was to acquire a digital native development environment as a step towards business innovation, enabled by digital transformation. In addition, we wanted the same performance, flexibility, and scalability in our future plans. This should optimize cost by eliminating hardware upgrades, and provide a disaster recovery (DR) solution for the entire infrastructure,” said Mr. Naoaki Sugita, Head of the IT Group, Morinaga Business Partner Co., Ltd., a shared service company of Morinaga & Co. Group.

Morinaga & Co. evaluated multiple cloud service providers in 2017. “We had a set of criteria in the selection process, but we did not assume that we would eventually migrate to the cloud. We found AWS presented the best solution,” said Mr. Sugita.

“When we evaluated cloud service providers in and outside Japan, the benefits of the AWS cloud was apparent, including running SAP ERP. AWS was outstanding from an operations and maintenance point of view, and it was able to provide a Disaster Recovery (DR) site in the Singapore region. Hence, we decided to migrate to AWS to operate efficiently,” said Mr. Sugita.

Morinaga migrated to AWS in two phases. In Phase 1, from June to October 2018, it first moved its non-critical systems. In Phase 2, from April 2019 to January 2020, it moved the core SAP ERP and completed the migration after the DR site went operational in March 2020. The approach was to ‘lift and shift’ in the shortest time, prioritizing security, without modifying the SAP ERP application or updating the database.

“We prioritized minimizing the cost and operational load in this project. By separating into two phases we minimized the impact on management. For non-critical systems transfer in Phase 1, we enabled the internal team to manage part of the transfer, which kept the migration cost down and deepened our understanding of AWS. In Phase 2, we were able to make use of the experience to reduce the downtime by one day when migrating the SAP ERP, helped by the AWS partner’s experience and the performance of AWS Global Infrastructure,” said Mr. Sugita.

Morinaga migrated approximately 100 servers, including the SAP ERP core and the supporting systems, which means that almost all the core systems have been integrated on AWS. “We decided to migrate the on premise file server, holding more than 60TB data, including historical data, to AWS in March 2020 after the completion of the project using AWS Snowball,” Mr. Sugita added.

Having migrated the SAP ERP system in January 2020, Morinaga saw two clear benefits: performance improvement and cost reduction.

“The SAP ERP processing times have been significantly reduced every night, going from 4.7 hours to 1.4 hours which also led to significant reduction in running costs. We no longer face the issue of inability to execute transactions the following morning due to incomplete processing during the night. We expect to reduce infrastructure maintenance and operations costs by hundreds of millions of Japanese yen over the next 5 years, which our management is pleased with,” said Mr. Sugita

By outsourcing operations to a partner, Morinaga can now focus on migrating the majority of its systems to AWS, and reduce its internal data center footprint. “The DR solution enabled us to duplicate all systems today, where we used to duplicate only the major system directly connected to production and logistics, due to cost. “Being able to respond with DR for all systems was a benefit of AWS, and we don't need to use the DR if we are not using the servers," said Mr. Sugita.

Morinaga wants to enable digital business development, strategically developing new application AWS and leveraging cloud native services.

“Specifically, we are keen to explore high-speed, low-code development, without the need to write the source codes; automate operation; and use DevOps for a new operation system running on AWS. Since analyzing big data has become possible, we can centrally manage a data lake, integrating SAP data, Point of Sale (POS) data and customer data from various company sources, to accelerate wider adoption of data use and application,” said Mr. Sugita.

For the future use of AWS services, Morinaga is considering shifting its database from a commercial system to Amazon Relational Database Service (RDS), and also shifting from SAP ERP to SAP S/4HANA in preparation for the end of maintenance support in 2027.

“We expect AWS to continue strengthening its key services and providing new ones,” said Mr. Sugita.