Industry-leader Kubota Australia and New Zealand complete the first of its migrations to Azure, starting with the most critical part of its landscape – its SAP ERP system, working with local SAP and Microsoft Azure (Azure) partner Zag part of Accenture (Zag) on the cloud migration.
As the increasingly globalised world economy continues to sort the leaders from the laggards, now more aggressively than ever, companies like Kubota are holding onto their position at the top of the market by investing in tech that enables them to scale rapidly and accelerate innovation efforts.
For over 40 years, Kubota Australia and New Zealand (ANZ) has been the leading supplier of agriculture, construction, and power equipment. In the last seven years, the business has doubled in size, recording a half-billion turnover last year. Kubota ANZ is looking to double again in the next 5 years, primarily by introducing new products and services to the market.
Until recently, many of Kubota ANZ’s digital platforms were hosted by its parent, Kubota Japan. Its significant growth ambitions prompted it to separate the local business and transition core applications to Azure starting with the most mission-critical of them all, SAP. Here’s the story.
Scaling Kubota’s Local Operations
All Kubota’s equipment is distributed and serviced through its authorised dealership network. It holds a significant market share for several product ranges. The ANZ business is essentially a sales and distribution arm of Kubota global. To put it in numbers, Kubota ANZ;
- Sells through 160 dealerships in Australia,
- And 26 dealerships in New Zealand, so has
- 186 business customers, and
- 170 staff, experts in their fields,
- 10+ IT staff,
- Three warehouses that hold spare parts and inventory,
- Competitive finance options for consumers and business operators (a finance business), and
- Has operated in ANZ successfully for 43 years.
Stacking Strategically for Growth and Market Leadership
“You can’t grow when you are fighting fires every day,” states Jonathon Bonnici, IT Service Delivery Manager. “You can’t sustainably lead a market with ageing systems – you need to be at the cutting edge to compete, and win.”
Previously, Kubota ANZ worked between multiple private clouds, on-premise servers, and a Japanese instance, all hosted and charged out by its Japanese parent. Back in 2013, Kubota rolled out SAP ERP globally, but the cookie-cutter approach meant that some local business needs were not met.
More recently, Kubota Japan selected Azure as its preferred cloud provider, a decision that was welcomed by Kubota subsidiaries around the globe, says Daniel Lodder, Head of Enterprise IT. The ANZ team saw the opportunity to achieve greater autonomy and agility by proactively adopting Azure, carving out the data and systems required to run their local business and migrating this from Japan to Australia.
“The SAP component was a big deal to us because the IT team provides its value through delivering advantageous solutions, like SAP, to the business. The way our IT team can provide an even greater value-add is by having the flexibility and agility of putting applications like SAP in Azure and being able to work with strategic partners like Zag to deliver better outcomes, faster,” says Bonnici.
“Hence, we wanted to host everything in one scalable Azure layer that we had full control over. Not only would this help the business ramp-up and achieve its 100% growth targets, achieving data sovereignty makes data security and compliance easier too.”
Getting Started – Laying the Foundation
Having confirmed its strategy to move all mission-critical workloads into a local instance of Azure (SAP is 25-30% of this), starting with the most critical system for running the business, its SAP ERP, “Kubota needed a partner that could scale with us, take the lead and pull us forward – not the other way around,” says Bonnici. After all, when you’re building a platform for growth, there’s a lot at stake.
“We made a fundamental shift by choosing Zag, a partner that would put in place appropriate governance structures and controls as well as build roadmaps and then execute Statements of Work to deliver on every step of that roadmap,” says Lodder.
“There was that trust in the relationship from the outset based on their depth of knowledge and experience in moving SAP workloads to Azure but, also, we just clicked with Zag – we had a good feeling about them and knew we would work well together,” reiterated Bonnici.
Soon after partner selection in September, the project kicked-off, starting in mid-November and ending promptly mid-March. The project took a phased approach and included the following services:
- Deployment and setup of Azure Services to support the migration process and target state
- Migration of Kubota’s 3-tier SAP ERP landscape (Development, Quality, Production) from the Japan data centre to Microsoft Azure (Sydney Region)
- Re-platform SAP onto a new technical platform of Oracle Linux & Oracle Database (from 11.2 to 19c)
- SAP backup & recovery and Disaster Recovery configuration and validation via Azure Recovery Services vaults
- Implementation of Solution Manager 7.2 and Technical Monitoring enablement
- Migration of Kubota jobs scheduled in former on-premises job scheduler to Solution Manager
As is the case with most migrations, the Production cutover was quite challenging with 40+ hours of continuous Basis activities run around the clock. The Zag Basis team managed to complete all the tasks well ahead of schedule, providing an opportunity to Kubota to extend their testing phase.
The delivery model was collaborative between Kubota ANZ and Zag, with Zag responsible for the above activities and Kubota ANZ primarily managing Integration and Testing, as well as the coordination with Kubota Japan. Zag brought experience and expertise in moving SAP systems to Azure, and Kubota brought strong in-house expertise and deep knowledge of their systems and IP, which really aided the process and ensured the project was delivered swiftly. A true team effort.
The result? A stable and reliable SAP platform in a Sydney Azure instance and a simplified network connecting local offices within the Azure network. Kubota ANZ has established a highly scalable and agile digital foundation to support the company’s significant growth plans, accelerate opportunities for innovation and establish a more resilient and responsive platform to serve its 186 dealerships across Australia and New Zealand.
“With our datacentres all over the place we wouldn’t have been able to make that next leap,” says Lodder.
Outcomes and Benefit Realisation
With critical parts of the project delivered remotely due to Covid-19 inflicted lockdowns, some of the benefits of cloud technology were realised earlier than expected including the ease of remote working and collaboration thanks to cloud hosting, experienced first by the project team.
Importantly, “Inheriting our systems into an Australian datacentre and achieving data sovereignty has allowed us to dial up capacity and capability with Azure,” says Lodder. “If we want to make changes or improvements, we don’t have to work through the logistics of going through a private datacentre, a Managed Service Provider, or Japan. We can autonomously extend and optimise our platform,” says Bonnici. “And on the other hand, efficiently identify, diagnose and solve issues that arise,” adds Lodder.
“This move has allowed us to put the focus on building our internal capability, upskilling our people in SAP and Azure, and gaining greater independence, which makes us more agile to meet business demands and deliver value-add solutions,” elaborates Bonnici. Lodder also noted that being nimble when responding to the needs of Kubota dealers is critically important to maintain distributor loyalty in a fiercely competed sector.
“As many of our systems are dealer facing, we’re now in a position to provide a significantly better outcome for our customers and can rely on our highly available systems to do the job. We’ve improved our speed to market, setting us up to achieve our growth ambitions.”
The scalability of cloud consumption has significant cost benefits to Kubota. “Our costs have been rationalised and having divested from multiple datacentres in Australia and Japan, including the networks between them, by just having one Azure workload and network connecting local offices, we will continue to reap significant cost savings,” says Bonnici.
Looking to the Future
“Together, Azure and Zag give us that foundation for growth.”
“We’re all-in on Azure, it’s our platform for cloud, networking, security – everything lives there now, and we’re building on that stack. There’s scope to leverage a lot of other functionality from Azure and Microsoft,” says Bonnici. “Azure is going to be at the heart of how Kubota operates.”
“From an application perspective, Zag is helping us to execute our roadmap for the next five years.” Kubota ANZ has transitioned to a support model with Zag, including SAP Basis Support, so the IT team can keep truly focused on delivering those value-add solutions in their roadmap – including SAP’s next-generation ERP, S/4HANA.
“Everyone in the IT team will testify that we’re benefitting from the support structures in place. It’s allowing that growth without us needing to double our IT footprint,” says Lodder. “It’s fantastic to go home on Friday and know that your vendors have your back, to know that you can take annual leave and not have to check your phone because they’ve got you covered, and you don’t need to worry,” says Lodder.
“That trust and that relationship with key partners is what’s going to take us forward,” concludes Bonnici.