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bsanthar
Explorer
This blog is going to be a short outline for executives, process owners and enterprise architects to decide between S/4HANA On Premise/Private Cloud Edition

Motivation


The motivation to write this blog is to share my thoughts, experience and point of views depending on Enterprise decision towards selecting a best suitable S/4HANA Deployment option other than the Functional or Technical Scope.

Industry trends and SAP evolution


Blog explains the industry trends, SAP SE evolution from Software maker to cloud based ERP, SaaS providers (such as SAP Business Technology Platform) to help Enterprises become Intelligent, Sustainable.

The industry moves from

  1. Mass Production to Mass Customization

  2. Products to individually tailored services (e.g. streaming services)

  3. Buying items to using items - circular economy

  4. data creating historical analysis to data driven decisions


On the other side SAP evolves quite rapidly to be enable clients to move towards a sustainable, intelligent enterprise here SAP has a powerful ERP product - S/4HANA with tailored deployment options to customers who are in different stages in transformation. It is evident that existing operating models on buying, implementing and running ERP is not helping the enterprise to achieve the vision.

SAP S/4HANA moves towards



  1. Highly standardized core processes but with flexibility to react & deploy based on macro-economic factors around the globe

  2. From a traditional Software Product lifecycle to a more agile cloud powered ERP


SAP offers 3 deployment options for S/4HANA ERP

  1. S/4HANA On Premise(combined with Rise Offering)

  2. S/4HANA Private Cloud

  3. S/4HANA Public Cloud


Now comes the real challenge for Transformation Executives, Architects and Process Owners. In order to understand the differences between I would recommend to read the blog Difference between SAP S/4HANA :Public Vs Private edition : RISE with SAP | SAP Blogs .

How do I choose the best fit product for my Enterprise, here is a short guide. I considered following dimensions to come up with a scoring system which is not functional or technical

  1. Software evolution

  2. Process Implementation methodology

  3. S/4HANA Platform Administration

  4. Change Management


It is important to make a decision based on future readiness and operational efficiency but consider ground realities on a enterprise depending on transformation virtue that leaders, architects and process owners carry based on multiple factors while entering a S/4HANA Transformation Phase.

What happens after the choice is made. Product evolution from SAP does not stop. It is still important to keep the stack up to date with release versions from SAP. Hence it is important to follow a set of guiding principles to be future ready even when the initial adoption is not at its best for the selected deployment mode. It is also not easy to shell out years of operations based on on-premise software model.


Initial Adoption Vs Future Readiness


Note: Since the functional and operational difference between S/4HANA Private Cloud and S/4HANA On-Prem is not so different from core functionality, I have limited to two options. In these two options, SAP Operations are either managed by SAP on Private Cloud Edition or managed by customer for On-Prem edition.

 

In order to achieve future readiness to be closely aligned with S/4HANA Release Roadmap, Enterprises has to follow some of the guiding design principles

  1. Adopt SAP Best Practices(Process Navigator - SAP for Me) to leverage best of S/4HANA Product Capabilities for all deployment options

  2. Keep the core clean - Use Extensibility Framework SAP S/4HANA Extensibility – Simplified Guide for Beginners | SAP Blogs

  3. Build SAP BTP Cloud Engineering capabilities and adjust operating model

  4. Enable high degree of E2E ownership across business functions and capabilities

  5. Set Architecture strategy and governance as integral change function


A successful SAP S/4HANA journey starts with a clear direction for business innovation and growth, automation and simplification through Architecture, Process standardization, Organizational changes such as reskilling current resources in IT and process areas are an essential part of future ready S/4HANA transformation.

Closing Summary


I hope after reading my blog that you consider organization change effectiveness alongside business and technical fitment in the transformation journey. In few cases it may be a good practice to stick with S/4HANA on-prem in order to lift and shift the huge custom code to SAP Extensibility Framework for S/4HANA before considering moving to S/4HANA Public Cloud. It could potentially reduce the transformation risk and organization change management overhead which might be very difficult to achieve while planning transformation.

Thank you for reading my blog, please feel free to share feedback or leave your thoughts in comments. I would be excited to know your experience and more importantly to optimize the approach as things change.

Please follow me on balakumarsantharamey for similar blog post.  ‎