Functional differences between SAP S/4HANA Cloud P...

jmarquezmr · ‎2023 May 03

Updated January 2025

Hello, and thanks for reading this blog post. I’m part of SAP S/4HANA RIG (Regional Implementation Group). My team has supported hundreds of customers on their journey to SAP S/4HANA Cloud Private Edition and, previously, SAP S/4HANA.

In this blog post, I will address a common question I have received from customers and partners regarding the functional differences between SAP S/4HANA Cloud Private Edition and SAP S/4HANA On-Premise.

We know that both solutions share the same codeline. However, this does not mean that they have the same scope. For various strategic reasons, some features currently available in SAP S/4HANA On-Premise were not included for use with SAP S/4HANA Cloud Private Edition. Conversely, certain innovations are exclusive to SAP S/4HANA Cloud Private Edition and are not available in SAP S/4HANA On-Premise.

Let me go into detail about each case.

let's start with the Features only available in SAP S/4HANA Cloud Private Edition

Following SAP's AI strategy, some SAP Business AI features such as Joule and specific Embedded AI capabilities, are only available through cloud solutions. To learn about SAP's AI strategy, I recommend joining the training "Exploring the SAP Business AI Portfolio"

Now, if you are wondering about the difference between Joule and embedded AI features, let me give you a brief explanation:

Joule, as stated in the SAP Portal, Joule is the AI copilot, infused with agents, that amplifies employees’ expertise and impact. It serves as a conversational interface for user interaction and provides natural language processing capabilities.

Embedded AI, on the other hand, refers to AI capabilities that are directly integrated into specific SAP S/4HANA Cloud processes. It aims to enhance individual business functions through AI-driven insights and automation.

So, how can you identify those features? The Bible for AI scenarios is SAP Discovery Center - SAP Business AI features. You can filter the information by product. So, as a rule of thumb, if the feature only shows up for "SAP S/4HANA Cloud Private Edition" and not for "SAP S/4HANA", then you can assume it is only available in Cloud.

Let me provide one example. Using the filter "SAP S/4HANA Cloud Private Edition", among others, you will find the following features that won't be listed if you filter by "SAP S/4HANA"

AI Features.jpeg

If you select one of them, for instance, Goods Receipt Processing, details about that AI feature will be displayed, along with some useful links, including AI Feature - SAP Help Portal. Here, you can confirm that this feature is only available in SAP S/4HANA Cloud Private Edition:

The following slide highlights the innovations introduced in SAP S/4HANA 2023, from FPS0 stack to FPS2. Innovations that are exclusively available in the SAP S/4HANA Cloud Private Edition are marked with a cloud icon in the top right corner.

2023 PCE.jpg

To get more information about each innovation, you can review the Blog Post Artificial Intelligence and other Innovations in SAP S/4HANA Cloud Private Edition 2023 FPS02.

Moreover, to learn more about Joule's current capabilities, please review the following links:

If after this analysis, you believe that only a few additional features in SAP S/4HANA Cloud Private Edition are relevant to your business and are considering an on-premise implementation based on that perspective, I encourage you to assess the long-term implications of your decision. As you can see in the following links: SAP Business AI External Roadmap Highlights and Road Map Explorer tag “Private Cloud Only”, each new release of SAP S/4HANA Cloud Private Edition and its feature packages introduces exclusive innovations for this solution. Consequently, the gap between the two options (Private Cloud vs On-premise) will continue to grow over the years.

This screenshot illustrates an example of what you might find in the Road Map Explorer when using the tag "Private Cloud Only":

In summary, certain functional innovations are only available in SAP S/4HANA Cloud Private Edition and NOT in SAP S/4HANA On-premise. This aligns with SAP's strategy, and this trend is expected to continue in future releases.

I would like to conclude this section with one important clarification: the functional innovations discussed in this blog are specifically those that are integrated into or utilized within SAP S/4HANA Cloud Private Edition. Additionally, SAP offers other innovations or solutions that are only available through RISE or GROW contracts, meaning they are not accessible to customers using On-Premise systems. Some examples of these include SAP Green Ledger and SAP Sustainability Control Tower. Moreover, some solutions previously available for on-premise customers are now only offered to Cloud ERP customers; for instance, SAP S/4HANA Cloud for Central Finance and SAP Ariba Central Procurement. If you need any further clarification, please reach out to your Account Executive.

Now let's review the Features not available in SAP S/4HANA Cloud Private Edition

The good news is that the features not available in SAP S/4HANA Cloud Private Edition but in SAP S/4HANA On-Premises, are part of the SAP S/4HANA compatibility scope.

Why do I say, "good news”?

Because it means that SAP S/4HANA Cloud Private Edition contains all new features and innovations but only non-strategic features from the compatibility scope are not available. On the contrary, all the newest recommended SAP S/4HANA features are already part of the S/4HANA Cloud Private Edition.

So, let’s start with some basics, what is the SAP S/4HANA compatibility scope? In my own words, these are functionalities that were originally created for SAP ERP that are currently available in SAP S/4HANA. However, SAP has authorized customers to use these functionalities in SAP S/4HANA for a limited time. This SAP practice was developed to help customers ease their transition into SAP S/4HANA by allowing them to reuse some legacy solutions in their new SAP S/4HANA target environment. Compatibility pack IDs give customers additional time to move to the newer recommended SAP S/4HANA solutions. Many of the SAP ERP legacy solutions are not optimized for use in SAP S/4HANA and in many cases, much better solutions have been made available to replace them. The legacy solutions that originated from SAP ERP will be treated as solutions in maintenance mode when used in SAP S/4HANA (meaning SAP will not deliver any new innovations for that functionality). SAP expects customers to move to a recommended long-term strategic SAP S/4HANA solution before the compatibility usage rights expire. For more information, please review the SAP Note 2269324 – Compatibility Scope Matrix for SAP S/4HANA. To learn more about what will happen after the expiration of the compatibility scope.

Now that we understand the concept of compatibility scope and recognize that only certain features within the compatibility scope matrix are unavailable in SAP S/4HANA Cloud Private Edition, let me explain how to find more detailed information on this topic.

For that, you can start reviewing the RISE with SAP S/4HANA Cloud Private Edition Service Description Guide (Section 8.13 - S/4HANA compatibility pack)

As you can see, that section states that, with a few exceptions, only part 4 of the SAP S/4HANA Compatibility scope Matrix is available in SAP S/4HANA Cloud Private Edition.

I assume now you are wondering: It sounds good, but how do I know what is included in Part 4?

Do not worry, I will help you to answer that question. For that, you must review the documents attached to the SAP Note 2269324 - Compatibility Scope Matrix for SAP S/4HANA. There, you will find all the details needed. For example, how the compatibility scope matrix is divided (parts), and the alternatives customers have by compatibility pack ID.

To make this easier, I summarized the information in this chart:

This means you can ignore parts 2 and 3 and focus only on parts 1 and 4. Let me provide some examples of how to interpret those sections:

Part 1: Universal Compatibility Packs

First, we have features that are not available in SAP S/4HANA Cloud Private Edition. Therefore, if you are currently using those features in SAP ERP, you must evaluate which alternatives you have before you start your project. Some examples are:

Then, we have features that are available in SAP S/4HANA Cloud Private Edition. But with a different Material code. Thus, you must discuss with your SAP Account Executive how you handle that commercial aspect. Some examples are:

Part 4: Details to ERP_Package

First, we have features that are available in SAP S/4HANA Cloud Private Edition. But an alternative solution may exist. Thus, you must decide if you will move the new alternative solution as part of your project, or if you will continue to use the legacy functionality. If the legacy path via compatibility is selected, moving to the new recommended alternative solution for a future project phase should be planned before the expiration of this compatibility pack ID. Some examples are:

Finally, we have some exceptions for compatibility pack IDs that although the feature is listed in part 4, it is not available in SAP S/4HANA Cloud, private edition. Therefore, if you are currently using those features in SAP ERP, you must evaluate which alternatives you have before you start your project. Some examples are:

In summary, some functionalities that are in compatibility scope in SAP S/4HANA On-Premise, are NOT available in SAP S/4HANA Cloud Private Edition. These functionalities are considered non-strategic.

I hope you found this blog post helpful. If you did, please give it a "like" or share it. I’d love to hear your thoughts and feedback, so feel free to leave a comment. If you have any questions, just drop them in the Q&A section with the tags SAP S/4HANA Cloud Private Edition. We'll try to get back to you as soon as we can.

A big thanks to @Michael_Deller, @noboruota, and @ChrisHofmann for all your help!

Thanks,

Brought to you by the SAP S/4HANA RIG team.

Functional differences between SAP S/4HANA Cloud Private Edition and SAP S/4HANA (On-premise)