UnionBank Migrates SAP S/4HANA to AWS to Improve Resilience While Optimizing Cost

Union Bank of the Philippines (UnionBank) is well on its way to becoming the first major bank in the Philippines to be fully hosted on the cloud. Having recently hit a milestone of migrating the first 100 of 200 applications to Amazon Web Services (AWS), UnionBank recognizes the power of the cloud to achieve its digital transformation goals.

Scalability and cost optimization, both hallmarks of cloud-based IT models, are critical to helping the bank realize its vision. UnionBank aspires to improve the lives of about 50 million unbanked Filipinos by offering them digital payment and cash management solutions. Dennis Omila, chief information and operations officer at UnionBank, comments, “We’re a bank, but we’re a technology company first.”  

Innovating new and affordable digital service models necessitates that UnionBank optimize costs on the backend. In October 2020, the business decided to migrate its enterprise resource planning system, SAP HANA Enterprise Cloud, to AWS. This move aligns with the bank’s vision to go all-in on the AWS Cloud. Plus, its leaders found that running SAP S/4HANA on AWS would be more cost-effective and offer greater flexibility and resilience.

Before the migration, UnionBank was running SAP in a software-as-a-service (SaaS) model offered by the vendor through a local data center. Rather than paying a fee based on usage, the bank was charged in advance based on estimates of its compute and storage requirements, while accounting for the total cost of operating the data center. Costs stayed the same regardless of actual resource usage per month.

Increasing capacity was also a persistent concern. It took weeks to scale up the bank’s SAP infrastructure—a timeline that wasn’t well-suited to serving the high volumes of traffic the business experiences. “To deliver financial services to the unbanked, we need to hyperscale to handle 100,000 digital account openings a month. We require tremendous scalability to operate at this level, and SAP on AWS is a fundamental enabler of our vision,” explains Omila.  

To assist with the migration, UnionBank partnered with eCloudvalley, an AWS SAP Competency Partner. The bank appreciated eCloudvalley’s thorough approach to migration, with clear executive sponsorship and a willingness to understand UnionBank’s current business and future goals.

“This was one of the most successful migrations we’ve experienced for a mission-critical system to the public cloud. It was executed very well with a team of experts, and the collaboration was great,” emphasizes Omila. The initial timeline was estimated at 12 weeks, but migration was completed two weeks ahead of schedule. “I was pleasantly surprised that we beat our timeline. This further demonstrated the maturity and capability of the project team from eCloudvalley and AWS,” Omila adds.

The project scope included the migration of SAP S/4HANA to AWS and the addition of high-availability components including application and database failover clusters. SAP Ariba integration was achieved later as part of a subsequent project. The bank’s SAP on AWS infrastructure supported the immediate rollout of SAP Ariba because AWS servers were simple and fast to spin up.

Planning was integral to the project’s success, as was sufficient oversight to ensure accountability for all system integrations prior to the production cutover to SAP S/4HANA on AWS. UnionBank and eCloudvalley followed the AWS Well-Architected Framework and security best practices when setting up the SAP infrastructure. This included the creation of an AWS Landing Zone for identity and access management and adherence to CIS Benchmarks from the Center for Internet Security.

Post-migration, UnionBank benefited from two months of SAP Hypercare Support—a service bundled into the migration project with eCloudvalley—followed by the managed services support from the partner. The managed services arrangement includes 24/7 coverage for SAP and AWS infrastructure. This includes proactive application and platform management in addition to continuous improvement through automation and cost optimization. As part of this optimization, eCloudvalley helped UnionBank consolidate and right-size its compute instances in AWS, which reduced the cost of running SAP by 20–30 percent.

High availability and consistent system access were some of the challenges in UnionBank’s former SaaS development environment. Developers and testers often struggled to log in to SAP, and they performed server restarts as a temporary solution to remedy the situation. This hampered the development efforts to run reports, both for internal management and regulatory purposes. Troubleshooting these issues was time-consuming for UnionBank’s IT team.

These are now troubles of the past, thanks to a much-improved user experience after migration. UnionBank uses Amazon Elastic File System (Amazon EFS) to support high availability in the production environment and to facilitate file sharing between production and non-production systems. “Ever since we migrated SAP to AWS, we’ve not had a single instance of downtime, and I can’t recall the last time an issue was escalated about our services running slowly,” says Omila. “Our IT team knows that they have access to additional compute resources if required, and users can reliably access mission-critical SAP data. This provides us with a lot of mindshare to focus on other value-added tasks.”

Deploying multiple Availability Zones (Multi-AZ) on AWS is one of the factors contributing to higher uptime for the bank’s SAP users. Multi-AZs have also helped UnionBank meet its infrastructure redundancy requirements and strengthen its disaster recovery (DR) posture. The bank has reduced its recovery point objective (RPO) and recovery time objective (RTO) to less than an hour, which according to Omila is very low compared to other banks in the Philippines. In January 2022, UnionBank successfully performed its first annual DR exercise for SAP as part of its service contract with eCloudvalley.

In addition to more robust DR, backups have likewise improved with SAP on AWS. The bank is using AWS Backint Agent as an SAP-certified solution for faster backups of its SAP HANA workloads to Amazon Simple Storage Service (Amazon S3). The average time required for database backups in the S/4HANA production environment is about 24 minutes.

Omila concludes, “We’re reaping the benefits of AWS Global Infrastructure in many ways. We no longer worry about capacity, slowdowns, or potential data loss with SAP on AWS. We’ve laid a solid data foundation to achieve our goal of opening 100,000 digital accounts per month to improve financial inclusion for all Filipinos.”

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