Caring Pharmacy Runs SAP on AWS as the Data Foundation for Rapid Expansion

As the second-largest employer of registered pharmacists in Malaysia—just trailing the Ministry of Health—Caring Pharmacy is dedicated to providing professional, innovative pharmacy services. The pharmacy chain currently has 150 stores under the Caring brand and has a vision to achieve 1 billion Malaysian ringgit ($242M) in revenues by 2025. As of 2021, Caring reported 650 million ringgit in revenues, and the figure keeps climbing.

To achieve its goal, Caring embarked on a digital transformation journey in 2019. It recognized the importance of robust enterprise resource planning (ERP) software to consistently integrate data across its expanding store network. However, Caring’s on-premises ERP system had stability challenges due to capacity bottlenecks, and required time-consuming data transformations to share data across divisions. The pharmacy chain began migrating to SAP for Core Retail (SAP S/4HANA 1909) to better unify the group’s stores across the country and its internal departments, such as supply chain, sales, and finance.

Caring selected E-Outsource Asia, a Consulting Partner in the Amazon Web Services (AWS) Partner Network (APN) and an SAP Services Partner with expertise in SAP Retail and ERP migrations. Though the pharmacy chain had worked with another cloud provider in the past, Caring decided to run SAP on AWS due to the range of SAP-certified instances on AWS and its experience in supporting complex retail operations such as 7-Eleven Malaysia.

The company was previously constrained by server capacity, so running SAP on the cloud was a natural choice to support Caring’s aggressive expansion plans. When the business grew, the IT team had to change out hard disks on aging machines, for which it was often difficult—or impossible—to find the right components. Even when higher-capacity disks were available, upgrading servers meant days of downtime.

SAP on AWS went live in Caring Pharmacy stores in stages from October 2020 to January 2021, and the IT team can now spin up server instances on the fly. Caring is using AWS Lambda and AWS CloudFormation to accelerate cloud provisioning with infrastructure as code. “We don’t know how fast we’re going to grow, so the easy scalability is a big advantage of AWS,” says Ooh Chin Boon, head of Management Information System at Caring Pharmacy. The ability to spin up and down instances on demand was also important during data migration. This enabled Caring to temporarily add new instances during the two-week data transfer and stabilization period. It could then revert to its original infrastructure specifications once the target data was migrated, helping control costs while ensuring system uptime.

Thanks to monitoring tools such as Amazon CloudWatch, Caring can take a proactive rather than passive approach to infrastructure maintenance. Detection of a system bottleneck or slowdown now triggers an alert that allows the IT team to resolve issues before it affects users.

This proactive posture has also improved Caring’s baseline security and disaster recovery framework. “We have intelligent security controls on AWS to detect abnormal activity,” Chin Boon adds. Caring is using CloudEndure Disaster Recovery to ensure business continuity in the event of a cyberattack or other server corruptions. Being proactive means the IT team can focus on improving the system and seek ways to fulfill enhancement requests. “We can innovate now instead of firefighting,” says Chin Boon.

Caring’s finance department has seen the most tangible benefits from the migration thus far. Finalizing month-end payables and receivables reports used to occur on the 20th, even the 25th of the month following the reporting period. Just 2 months post-migration, the finance team is releasing reports by the 17th of the following month and continues to reduce processing time. The goal, which the team expects to reach before the end of 2021, is to process month-end results by the 7th day of the following month.

Faster processing times have resulted from a reduction in manual labor previously needed to transform data from separate ERP subsystems that had accumulated over the years. Data integrity is no longer a headache as Caring now has a single source of truth with data stored in SAP on AWS.

Caring’s pharmacy branches are also able to access real-time, automatically updated profit and loss (P&L) statements in SAP each day. Previously, the on-premises ERP system meant a wait of 2 or 3 months before viewing P&L reports issued from finance. Store managers now have ongoing visibility into profit margins and can make agile adjustments within a day to increase business value. 

Pharmacy employees also have improved visibility into inventory levels at each location via the SAP Fiori user-friendly interface. Inventory updates occur in SAP in real time, whereas in the past there was a delay of at least a few hours for the online ordering system to update, often forcing staff to call around to source products for customers.

Caring Pharmacy credits the success of its large-scale SAP migration to the commitment of, and communication among, team members. E-Outsource Asia and Caring spent nearly nine months preparing for the migration, with daily discussions and a formal change management team set up to help Caring’s employees transition to SAP and the AWS Cloud. 

E-Outsource Asia assisted to assure skeptical staff members, by sharing retail best practices and educating them based on its experience handling complex migrations. The partner also involved Caring’s IT team from the start, training them in system mapping and design that helped prepare the team to run the system on their own, which they now do.

The learning journey has likewise entailed a mindset change; with greater visibility, Caring’s stores and internal departments are no longer operating like disconnected islands. They have a broader awareness of how their actions, and transactions, impact others down the supply chain.“From this migration, business users have gained ownership in their area of interest. And the IT team has pivoted to supporting them on how to build and improve their systems and processes,” says Chin Boon. 

As the next step in its digital transformation journey, Caring plans to take advantage of the analytics ecosystem on AWS. “SAP is just the first fundamental step in establishing a data foundation we can use to start analytics activities and build new applications on AWS,” Chin Boon concludes.

 To learn more, visit aws.amazon.com/sap.