IBM is six months into a massive ERP modernization, moving core on-premises systems to Power servers running in its own cloud as it upgrades them from SAP\u2019s legacy ECC software to the cloud-ready S\/4HANA.\n\nIBM\u2019s ERP transformation will be one of the largest under the \u201cRise with SAP\u201d umbrella \u2014 perhaps rivaling that of Microsoft, which announced its own adoption of Rise with SAP for the first stages of its move to S\/4HANA in March 2022.\n\nRise with SAP is an all-in-one subscription offering from SAP, under which the software vendor takes on the hassles of software license management and coordinates the activities of cloud providers and systems integrators chosen by its clients.\n\nIn February 2022, SAP named IBM as its first premium supplier for Rise. To earn that designation, IBM combines advisory, implementation, and application management services from IBM Consulting with technical managed services from IBM Cloud, a combination it calls \u201cBreakthrough with IBM for Rise with SAP.\u201d\n\nIBM\u2019s internal transformation will be the first one managed under the Breakthrough offering, according to Joanne Wright, the company\u2019s vice president of enterprise operations and services. Work on it began in late 2021, a few months before Breakthrough was announced.\n\nSome companies might migrate a small department or country system first, as a proof of concept. That\u2019s certainly the approach Microsoft\u2019s consultants are taking, moving just three small areas of its highly customized SAP software to Azure while they figure out processes.\n\nLargest business segment first\n\nIn a show of confidence, though, IBM is first moving its largest and most profitable business segment: software, which accounted for $24 billion of its $57 billion revenue in 2021.\n\nThat bold choice was driven by the need to free up the software segment from constraints on its growth. Over the years, acquisitions and moves into new geographical markets had left it with a complex product and pricing structure requiring a lot of manual intervention in the sales process.\n\nThe move to S\/4HANA has enabled IBM to simplify and harmonize processes, eliminating complexity and customization and introducing more flexibility, Wright said: \u201cWe've been able to deliver touchless process capabilities for the bulk of our transactions.\u201d\n\nIBM has already migrated the quote-to-cash processes for its $13 billion subscription-based software business to S\/4HANA in a series of two-week sprints, Wright said, with the rest of the software segment to follow by year-end. After that will come technology services next year, then consulting some time in 2024.\n\nOn the way, Wright says, IBM has been training the teams who will migrate and then operate the new platform in other business segments using its internal learning platform. She hopes that their collaboration will also have helped educate SAP about running other customers\u2019 workloads on IBM Power systems. \u201cWe've helped them, I think, to be trained up and enabled on Power and Red Hat,\u201d she said.\n\nPower up\n\nKey to IBM\u2019s internal transformation is the ability to run SAP applications on Red Hat Enterprise Linux on Power servers in its own cloud, a capability it will now be opening up to other companies under the Breakthrough banner.\n\n\u201cThis is our technology stack, and the opportunity for us was to be \u2018client zero.\u2019 We wanted to be a user of the experience that our clients would have,\u201d said Wright.\n\nIBM\u2019s multiple roles in this project \u2014 as client, consultant, and cloud provider \u2014 might at first glance leave little room for SAP, but Wright says the software vendor is highly involved.\n\n\u201cWe are very engaged with SAP and are leveraging SAP Consulting on the project alongside IBM Consulting, and an SAP executive will be on our steering committee,\u201d she said. \u201cWe also have top to top alignment with SAP as a strategic partner.\u201d\n\nAs if to prove Wright\u2019s point, SAP CEO Christian Klein mentioned IBM\u2019s ERP transformation early in his opening keynote at Sapphire, SAP\u2019s annual customer event in Orlando this week.\n\n\u201cTake IBM, a great partner, and as a customer we are helping them now, with Rise with SAP, to transform their portfolio, investing into new business and divesting other businesses in an agile fashion,\u201d Klein said, adding: \u201cWe are moving over 375TB of data into the cloud and consolidating 300 instances into one global instance in the cloud.\u201d\n\nThis article has been updated to include Christian Klein\u2019s comment from Sapphire.