We continue to consider SAP S/4HANA editions. This time, we are looking into SAP S/4HANA Cloud and challenges you can face when implementing this ERP system.
SAP S/4HANA Cloud: Advantages and Challenges
Although the world has largely returned to its normal pace, the impact of the Covid-19 pandemic is undeniable. It served as a turning point for businesses, intensifying competition and underscoring the importance of adaptability.
ERP SAP S/4HANA provides organizations with flexibility by creating a unified digital environment to manage all business processes. In a previous article, we compared the on-premises and cloud models for implementing this system. Here, we’ll take a closer look at the benefits of the cloud model.
How Can the Cloud Make Your Business More Sustainable?
Cloud ERP is a centralized intelligent system that makes your resources available to the entire company, regardless of its structure. With the latest technologies, including artificial intelligence, industrial internet of things, and predictive analytics, you can work seamlessly across departments and enterprises.
Collaborate
Collaboration with suppliers, partners, and business networks helps you achieve real agility and resilience. Cloud ERP provides your team and partners with the unified access they need to share strategic plans, insights, and data.
Coordinate
Every link in your manufacturing chain affects other operational areas. Cloud ERP allows you to coordinate your departments’ collaboration with centralized data and analytics. This approach shortens the product lifecycle and your supply chain sustainability.
Align
Cloud ERP manages and refreshes global compliance regulations in real time, as well as configures automated processes and procedural updates.
Integrate
To ensure your business growth, you must be as responsive as possible to customer needs. Cloud ERP provides faster analytics and more flexible manufacturing processes. It helps you design products and bring them to the market faster.
Standardize
A high level of standardization is one more helpful cloud ERP feature. It helps businesses reduce errors, redundancies, and variances, as well as improves efficiency and quality, and reduces the TCO.
What Is SAP S/4HANA Cloud
SAP S/4HANA Cloud is a modern cloud-based ERP system that brings core business processes together into a single, intelligent platform. It is designed to handle complex tasks in real-time and provide the agility businesses need to grow.
Key features of SAP S/4HANA Cloud include:
- A cloud-based architecture that eliminates the need for physical servers.
- Intelligent technologies, such as artificial intelligence, analytics, and machine learning, to optimize operations.
- A modular design that enables customization to meet your business needs.
Why is the cloud so important for business?
Cloud solutions offer major advantages, such as easy scalability, worldwide data access, and reduced infrastructure costs. For businesses focused on agility and sustainability, the cloud is no longer just an option — it’s a strategic necessity.
SAP S/4HANA Cloud stands out from the on-premises version due to its ability to quickly adapt to changes and provide ongoing access to the latest technologies without extra upgrade costs. For a detailed comparison of these two approaches, check out our article: SAP S/4HANA On-Premise vs. SAP S/4HANA Cloud: Which is the Better Implementation Option?
Now, let’s take a closer look at how cloud technologies can make your business more resilient.
Key Benefits of SAP S/4HANA Cloud
Business process automation
SAP S/4HANA Cloud enables intelligent automation, reducing repetitive tasks and minimizing the risk of errors. Automation covers a wide range of processes, from supply chain management to financial accounting, allowing you to focus on strategic priorities.
Improved data management
A centralized data warehouse ensures real-time access to accurate information, helping you make quicker and better-informed decisions.
Flexibility and scalability
SAP S/4HANA Cloud adjusts seamlessly to changes in business needs, making it easy to add new modules and scale the system as your company grows.
Cost efficiency
The cloud-based architecture lowers the cost of maintaining on-premises infrastructure and updates. You only pay for the resources and features you actually use.
Advanced security
SAP S/4HANA Cloud provides a robust data protection system with built-in encryption and access controls, ensuring compliance with global security standards.
Rapid innovation adoption
The system is regularly updated to deliver the latest technologies, including artificial intelligence, machine learning, and predictive analytics. This keeps your business ahead of the competition.
Architecture and Principles of SAP S/4HANA Cloud
Unlike SAP S/4HANA On-Premise, which is essentially a product, SAP S/4HANA Cloud is a service. It is characterized by a modular approach, multitenant architecture, workload isolation, and duties segregation while retaining the concept of a single ERP core. All the corporate apps work independently from each other, but at the same time, they are combined into a single ecosystem.
SAP S/4HANA Cloud provides businesses with innovative technologies that help companies manage complex processes and system landscapes. Due to this, you can transform your business according to its growth rate.
SAP S/4HANA Cloud offers two extensibility levels:
- Cloud applications and UI adaptation
- System extensibility with SAP Business Technology Platform (SAP BTP)
SAP BTP is a foundation for SAP cloud applications. It combines process models, date models, business services, and application programming interfaces (API), helps expand SAP applications, and provides businesses with the required flexibility. This platform has embedded analytics and real-time reporting features that helps companies build an organizational and partner ecosystem.
SAP S/4HANA Public and Private: What’s the Difference?
Today SAP provides businesses with two cloud editions, private and public. Let’s compare them to understand better what model will meet your business needs.
| Private edition | Public edition | |
| Maintenance place | Private network | Delivered over an open network |
| Implementation | Brownfield and Greenfield | Greenfield only |
| Speed of deployment | Quick deployment due to standard processes and predefined settings. | Slower deployment due to the need for customization and integration. |
| Target audience | Ideal for small and medium-sized businesses willing to adapt to standard processes. | Suited for large enterprises or businesses with unique processes and specific needs. |
| Provider | By customer choice | SAP by default |
| Updates | One yearly base release and four quarterly releases. You decide what to install and update | Two releases per year are automatically installed by SAP |
| Cost | Lower costs due to the SaaS (subscription) model and shared infrastructure. | Higher costs due to dedicated infrastructure and extensive customization capabilities. |
| ТСО and ROI | Comparatively higher ТСО | Lowest ТСО and highest ROI |
| Compatibility with other Systems | Limited integration options, primarily through standard APIs. | Broader integration possibilities, including compatibility with on-premises systems. |
| Security and data control | Common security standards for all users, with data hosted in a shared cloud. | Enhanced security measures and greater control over data placement, including the option to select a specific data center. |
| Data migration | 1. Data migration with staging tables 2. Data migration directly from SAP system | 1. Data migration with template files 2. Data migration with separate HANA staging database |
| Industries | Covering all industries like SAP S/4HANA On-Premise | Covering key industry scenarios and selected lines of business only (finance, marketing & sales, production, HR, procurement) |
Which Businesses Should Choose SAP S/4HANA Cloud Edition?
Public Cloud
SAP S/4HANA Public Cloud edition is suitable for small and medium-sized businesses that want to standardize their processes and reduce costs. Large companies can also benefit from this model by implementing this ERP system in their separated branches or regions.
SAP S/4HANA Public Cloud covers only key industrial scenarios and is suitable for specific business areas: finance, marketing & sales, production, HR, and procurement.
The public cloud is the most cost-effective approach to implementing and using this ERP system. It is a pre-configured solution that includes market best practices and helps you perform daily tasks more efficiently. Another distinguishing feature is its flexibility against constantly changing market conditions and the ability to expand with your business.
Key benefits of SAP S/4HANA Public Cloud
- Cost-effectiveness: An affordable solution with low implementation and operational costs.
- Pre-configured best practices: A system built with industry standards to simplify daily tasks.
- Agility: The ability to adapt to changing market conditions and support business growth.
- Rapid deployment: Shorter implementation time due to pre-configured solutions.
- Simplified management: Centralized access to data and functions for improved transparency and faster decision-making.
Private Cloud
Process support, operations, and infrastructure can be distributed in a public cloud to different parties. In the SAP S/4HANA Cloud private edition, only SAP delivers them. This approach provides enterprises with flexibility in solution settings and the opportunity to implement a wide range of add-ons.
In a private cloud, you can use individual services designed exclusively for your company. You can simplify and standardize processes if required while maintaining their flexibility and differentiation.
Another advantage of this model is updates: each must be agreed upon with the customer. You decide which processes should be upgraded and when.
This model is ideal for medium and large enterprises that value unique business processes but require customization and high security.
Key benefits of SAP S/4HANA Private Cloud
- Customization: Tailored solutions to meet specific business needs.
- Advanced add-ons: Support for unique industry processes and specialized functions beyond standard offerings.
- Process flexibility: Options to simplify or standardize processes, while retaining essential differences.
- Update control: Businesses decide which updates to apply and when to implement them.
- Managed support: SAP handles infrastructure and operations, ensuring stability and security.
Below is a comparison of both versions from a business perspective. The table will help you identify which model aligns best with your company’s goals and needs, including factors such as cost, target audience, and use cases.
RISE with SAP and GROW with SAP 一 What Are They and Why Are They Important?
If transitioning to SAP S/4HANA feels overwhelming, SAP offers two comprehensive solutions: RISE with SAP and GROW with SAP. These are ready-made packages that include the services and tools needed for cloud ERP migration.
- RISE with SAP is a complete package for medium and large enterprises seeking flexibility and a personalized transition. It includes business transformation guidance, an SAP S/4HANA subscription, and tools to optimize processes.
- GROW with SAP is an option for small and medium-sized businesses. It offers scalable tools and fixed processes, focusing on the simplicity and speed of implementing cloud solutions.
These programs not only speed up the transition to SAP S/4HANA but also help companies adjust to new business realities.
Choosing the Cloud Platform Is Another Important Step
After selecting the appropriate SAP S/4HANA version, the next step is deciding on a cloud platform for deployment. The most popular options today are AWS, Azure, and Google Cloud. Here's a brief look at the advantages of each:
- Amazon Web Services (AWS) is a leading provider with extensive experience working with SAP. It offers a wide range of certified instances optimized for SAP HANA, along with powerful migration tools. AWS is known for its high performance and scalability.
- Microsoft Azure is a great choice for companies already using Microsoft products. Azure provides seamless integration with tools like Microsoft 365 and Power BI, along with advanced security features.
- Google Cloud is ideal for businesses focused on agility and innovation. It supports SAP HANA, offers powerful analytics and AI tools, and is a cost-effective solution for startups and mid-sized companies.
Now, let’s compare their features in detail:
AWS, Azure, Google 一 Which One to Choose for SAP S/4HANA Cloud
| AWS | Azure | Google Cloud | |
| Experience with SAP | Partner since 2011, supporting SAP HANA, S/4HANA, and BW/4HANA with SAP-optimized instances. | SAP partner in the Embrace project, focusing on integration with S/4HANA and Microsoft products. | Partner since 2017, actively implementing SAP Data Cloud and analytics services. |
| Certified VMs | Over 200 certified instances for SAP workloads, including x1, x2, and r5 types. | E64s_v3 certified VMs, optimized for SAP HANA with up to 12 TB of memory. | Smaller selection of certified instances, optimized for databases with up to 6 TB. |
| SAP HANA performance | Delivers high performance with high-bandwidth instances (up to 100 Gbps). | Optimized infrastructure with low latency for SAP HANA workloads. | Designed for medium workloads with a focus on resource efficiency and stability. |
| Security | AWS Identity and Access Management (IAM), Shield for DDoS protection, and data encryption with KMS. | Includes Azure Security Center, Advanced Threat Protection (ATP), and built-in TLS/SSL encryption. | Offers Cloud Security Command Center, Cloud Armor for attack protection, and custom encryption keys. |
| Migration tools | Offers AWS Migration Hub and SAP Rapid Migration Test Cases for fast migration. | Azure Migrate and SAP Data Migration Framework provide ready-to-use migration scenarios. | Provides Google Migrate for SAP, supporting heterogeneous migration scenarios. |
| Speed and scalability | Easily scales up to 48 TB RAM per server, with fast regional reserve setup. | Supports scaling up to 12 TB for SAP HANA and offers flexible computing configurations. | Easily scalable for medium workloads, with flexible configurations. |
| Integration with other services | Works seamlessly with AWS IoT and analytics tools like Redshift and Quicksight. | Best for Microsoft 365, Power BI, and Teams integration. | Provides AI and ML tools and integrates well with BigQuery and Looker. |
| Use cases | Trusted by large enterprises like Unilever, BP, and Philips for complex SAP systems. | Popular among corporations like Coca-Cola and BMW for combining ERP with enterprise systems. | Ideal for startups and agile businesses, used by PayPal and Evernote. |
To sum up, AWS is the best suited for companies that prioritize scalability, a global network, and handling large volumes of data. Azure is ideal for businesses heavily reliant on Microsoft products, offering seamless hybrid solutions and integration with Microsoft 365. Google Cloud is a top choice for companies focused on analytics, AI innovation, and big data tools.
Each platform has unique advantages. The decision should align with your business needs, IT infrastructure, and long-term goals.
Bottom Line
Considering all the pros and cons of cloud ERP systems, we can say that there are several options. Businesses should analyze their needs to make the right decision. Contact us if you are ready to migrate to SAP S/4HANA and need assistance with choosing the cloud ERP edition. Our experts will help you at any project stage.
