What SAP S/4HANA deployment options are there available?

SAP continues to emphasize ERP in the cloud. With monthly new releases, S/4HANA Cloud has become SAP's flagship. Regarding the implementation of the solution, SAP offers three options: S/4HANA Cloud Essentials Edition, S/4HANA Cloud Extended Edition, or S/4HANA AnyPremise. In this blog, we compare the three deployment options. What are the advantages and disadvantages of the different options, and which option best fits your organization?

S/4HANA Cloud Essentials Edition (ES)

With the SAP S/4HANA Cloud Essentials Edition (ES), previously known as S/4HANA Multi Tenant Edition, you opt for a state-of-the-art ERP system with a full cloud approach. The software is hosted and managed by SAP, with SAP making quarterly upgrades available with new configurations and functionalities.

Infrastructure & License

The infrastructure involves a public cloud shared with other customers and hosted by SAP. The license is sold in a Software as a Service (SaaS) subscription model. Quarterly configuration and software upgrades are fixed and cannot be installed at any other time.

Functionalities

S/4HANA Cloud ES consists of Core ERP, encompassing all processes expected from an integrated ERP system. The country-specific (42*) and industry-specific (26*) configuration options allow for customizing the software for an organization. Additionally, SAP offers products and cloud suites with more advanced functionalities, including SAP Intelligent Asset Management (asset management), SAP Hybris (marketing), and Enterprise Portfolio & Project Management (projects). Read about available SAP Best Practices & Model Companies here.

*These numbers are as of August 22, 2019; new languages and industries are added every 3 months.

Scalability

S/4HANA Cloud can be extended with all available SAP products. New applications and extensions are possible through whitelisted (approved) APIs and the SAP Cloud Platform. SAP provides a range of software components called the SAP Extensibility Framework for developing these applications. The SAP Compatibility Scope Matrix explains which existing SAP products based on R/3 are compatible with S/4HANA. Learn more about customization and customization in S/4HANA Cloud and future-proofing customization in ECC here.

Configuration and Approach

With this solution, there is always a completely new implementation, also known as a greenfield implementation. Fit-to-standard workshops are organized with the help of SAP and an implementation partner to determine the right application setup for the organization. The Fiori Launchpad, SAP's user-friendly interface, serves as the starting point for the interface. Configuration of S/4HANA Cloud is done using Self Service Configuration User Interfaces, also known as SSCUIs.

SAP offers the Implementation Portal as a tool for project management of the ERP transition. Read the SAP Activate Roadmap for S/4HANA Cloud ES here.

S/4HANA Cloud Extended Edition (EX)

The S/4HANA Cloud Extended Edition, previously known as S/4HANA Single Tenant Edition, offers more flexibility and control than the essentials edition and the benefits of the cloud. The infrastructure, services, and SLAs are standardized.

Infrastructure & License

S/4HANA Cloud EX involves a dedicated landscape on a cloud infrastructure of choice. Here, one can choose SAP or a Hyperscaler such as Microsoft Azure, AWS, or Google Cloud. The license is sold in a Software as a Service (SaaS) subscription model. Upgrades are offered twice a year, which the user can plan themselves.

Functionalities

The S/4HANA Cloud Extended Edition includes the full scope of functionalities, country- and industry-specific configuration options. The software already includes functionalities for 64 countries, 39 languages, and 25 industries. However, there are some limitations regarding the integration of third-party software. Read about available SAP Best Practices & Model Companies here.

Scalability

This edition of S/4HANA offers full extension capability, except for changes to the software. Adding extensions or enhancements is possible using the SAP Cloud Platform or adhering to the guidelines of the S/4HANA Extensibility Framework.

Configuration and Approach

With S/4HANA Cloud EX, there is a completely new implementation (greenfield) or selective data transition. Fit-to-standard workshops are also organized for this solution to determine the right application setup. However, there are some limitations. Configuration of this software is done using the Implementation Guide (IMG).

SAP offers the Solution Manager as a tool for project management of the ERP transition. Read the SAP Activate Roadmap for S/4HANA Cloud EX here.

Selective data transition is used for SAP ERP customers when a new implementation is not desired. Configuration data, master data, transaction data, and the ABAP repository (fully or partially) are converted and migrated to S/4HANA. SAP and selected data transformation partners help ensure that this does not impose restrictions on other SAP products or the SAP Model Company.

S/4HANA AnyPremise

With S/4HANA AnyPremise, one opts for a completely 'own' S/4HANA environment, where the organization itself or a supplier takes care of the technical management.

This brings the following choice options:

1. S/4HANA AnyPremise Managed Cloud
2. S/4HANA AnyPremise Private Cloud
3. S/4HANA On Premise

The three options will be explained later. First, we outline the similarities between the S/4HANA AnyPremise solutions.

Infrastructure & License

S/4HANA AnyPremise involves a dedicated or customer-specific landscape on a hyperscaler of choice. Since this is a fully dedicated landscape, the organization retains its existing - perpetual or infrastructure subscription - license. New upgrades are made available annually, with the organization determining when to install them (adoption speed).

Functionalities

S/4HANA Cloud Extended Edition includes the full scope of functionalities, country- and industry-specific configuration options. Read about available SAP Best Practices & Model Companies here.

Scalability

In addition to the extension capabilities of S/4HANA Cloud, S/4HANA AnyPremise allows for modifications and even customizations in the system. It offers the same extensions as the SAP ERP predecessor.

Configuration & Approach

S/4HANA AnyPremise offers all implementation options: a new implementation (greenfield), system conversion (brownfield), or selective data transition. Configuration is done using the full Implementation Guide (IMG). The starting point is a fit-gap approach; unlike a fit-to-standard approach, organizational needs are the starting point rather than the standards on which the software is developed.

SAP offers the Solution Manager as a tool for project management of the ERP transition. Read the SAP Activate Roadmap for Transition to SAP S/4HANA here.

A system conversion means that the existing SAP system is technically converted. All existing configuration, data, and customization are transferred to the new system.

S/4HANA AnyPremise Managed Cloud

In a managed cloud implementation, an on-premise environment consisting of proprietary hardware and infrastructure is hosted by a cloud provider. There are two types of cloud providers:

• SAP
• SAP partners

SAP offers the SAP HANA Enterprise Cloud (HEC) as a managed cloud solution. The system is hosted on a hyperscaler of choice, with SAP providing continuous application support and management. This includes upgrades, backups, patches, recovery, infrastructure monitoring, and event detection.

The so-called technical management that SAP takes care of can also be outsourced to consultancy partners like Emixa. When selecting a supplier, consider their management expertise and possession of a Partner Center of Expertise SAP certification.

S/4HANA AnyPremise Private Cloud

With S/4HANA AnyPremise Private Cloud, the customer manages and uses their cloud infrastructure. Hosting takes place in the cloud with a hyperscaler of choice.

Possible hyperscalers for S/4HANA:

• Microsoft Azure
• Amazon Web Services (AWS)
• Google Cloud

These hyperscaler options also apply to the S/4HANA Cloud Extended Edition (EX) and the S/4HANA AnyPremise Managed Cloud.

S/4HANA On Premise

In an On Premise implementation, the software is deployed on servers within the organization. In this scenario, the organization itself is responsible for managing the software, infrastructure, and data.

An on-premise implementation is the traditional approach, without using the cloud. This approach is suitable when companies want full control over all aspects of the IT environment and are willing to finance, operate, and maintain the environment themselves.

How to Choose the Right Deployment Option?

When choosing a deployment option, it's about balancing standardization versus flexibility. For corporate ERP users, the central question is whether they want to (continue to) perform technical management themselves. Additionally, existing SAP users will consider whether they want to retain existing customization and/or configuration.

Choosing cloud and standardization helps organizations increase their agility, speed, innovation, and flexibility. Implementing a cloud solution is less complex, often cheaper, and means that the software vendor takes care of technical management. Standardization prevents issues with upgrades, ensures the future-proofing of IT investments, but requires more in terms of change management and SAP training.

S/4HANA Cloud Essentials is the ideal solution from a future and cost perspective. There is a high chance that certain unique processes may not be supported by the system. It is not possible to reuse existing configurations and customization in this option. However, these disadvantages do not outweigh the benefits. It is logical to consider this option first.

S/4HANA Cloud Extended is a solid intermediate option that will gain strong market share in the coming years. It is a choice for standardization, cloud, and the ability to retain unique processes. As an organization, you determine which Hyperscaler provides the cloud infrastructure and who, internally or externally, handles technical management. Existing SAP customers can retain part of their existing configuration and transaction data with Selective Data Transition, ensuring the future-proofing of the IT solution.

S/4HANA AnyPremise is a choice for flexibility. The flexibility SAP is known for: anything is possible. This means that all existing customization from SAP R/3 can be carried over to the new system. Both internal SAP users and the IT department require few adjustments to workflows and knowledge. The risk of creating or maintaining an incredibly complex IT environment remains with all its consequences.

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Vincent Weiss

Vincent Weiss is a Solution Architect in the field of SAP Cloud and Mobile applications at Emixa. He has demonstrated experience in solving cloud and mobility issues, utilizing his expertise in the SAP Cloud Platform, SAPUI5, and native app development.