reasons to choose cloud SAP

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: Reasons to Choose & Its Challenges

The Covid-19 pandemic, increasing competition, constantly changing market requirements, and rising customer expectations. The last few years have become a challenge for every business area. But the key to overcoming crises in the market is a single digital landscape which combines all the company business processes and helps keep them under complete control.

ERP SAP S/4HANA will help organizations to build such a system. In one of our previous articles, we compared two of its implementation approaches, on-premise and cloud. Today let’s dive deeper into the cloud implementation model.

Why Can 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:


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. 


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


Cloud ERP manages and refreshes global compliance regulations in real time, as well as configures automated processes and procedural updates.


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. 


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.


SAP S/4HANA Cloud: How Does It Work?

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:

  1. Cloud applications and UI adaptation
  2. 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.


What 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.


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.

What Challenges Can You Face?

But there is always a fly in the ointment, and you can face challenges while implementing and using cloud ERP. SAP S/4HANA Cloud is not the exception. 


The cloud ERP usage model is a subscription you need to pay for as long as you use its services. 


Modern cloud ERP systems have all the required tools to ensure your data security. But there is always a risk of data leaks. 


While working in the cloud, customers and CSPs can be located in different regions and collaborate via the Internet. Any network failures or other connection issues directly reflect system performance. 


Public cloud ERP is a pre-configured system with limited customization and integration options.


Cloud-based ERP can face data, energy, and environmental standards compliance issues.  


Not all businesses can store their data outside the enterprise because of its sensitivity.


The control process of cloud ERP systems is more challenging as it is located outside the enterprise.

The Bottom Line

Considering all the pros and cons of cloud ERP systems, we can say that there is no unique answer. 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. 

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