Some of you may already be familiar with the various deployment options for SAP S/4HANA, while others may still be researching the topic as you try to navigate through various topics such as selective data transition, on cloud, on-premise, single-tenant, multi-tenant, public, private version. What does it all mean? I’m here today to provide you with a single source for all questions you may have about selecting the right deployment option for your company and provide information on what an implementation might look like for the various available options.
Let’s get started with a few key terms and definitions before we dive in:
SAP S/4HANA Cloud – System is cloud-based and comes pre-configured based on industry standards
SAP S/4HANA On-Premise – System is installed within the company’s own physical data center
Private Edition – Services are maintained on a private network
Public Edition – Services are maintained via a public network that is open to public usage
Single-Tenant – Company has an isolated instance of the SAP Application
Multi-Tenant – Company is sharing a single instance of the SAP Application with other SAP Customers
New Implementation – commonly referred to as the ‘Greenfield’ approach
System Conversion – commonly referred to as the ‘Brownfield’ approach
Selective Data Transition – commonly referred to as the ‘Bluefield’ approach
When selecting a deployment option for SAP S/4HANA, SAP recommends that companies follow the 5 Golden Rules of Deployment for the best chance at a successful deployment:
- Apply the fit-to-standard approach and leverage SAP Activate/Agile Methodology
- Use pre-configured solutions that follow SAP Best Practices
- Leverage modern integration technology (API – Application Protocol Interface, CPI – Cloud Platform Integration)
- Leverage modern extensibility methods (In-App, Side-By-Side extensibility)
- Ensure that custom requirements are well-documented
For more information on the golden rules for deployment outlined above, please visit: The 5 Golden Rules for Implementing SAP S/4HANA Cloud, Extended Edition
Additional detail on the summary-level definitions included above can be found in the following paragraphs:
1. Greenfield (New Implementation Approach) for SAP S/4HANA On-Premise
Overview of the Deployment Option:
The greenfield implementation approach for SAP S/4HANA On-Premise allows you to start from scratch, leveraging SAP’s latest technologies and the ability to realign business processes according to best practices, which can help to correct common pain points faced by the business team.
If your company meets the following criteria, the Greenfield Approach for SAP S/4HANA On-Premise may be the right fit for your business needs:
- If you are looking to replace all legacy systems
- If you are looking to replace outdated business processes
- If you have a higher degree of custom processes running in your current business
- If you expect your business to have higher growth & acquisition rates in the future
- If you’re looking to revamp your data to purge outdated records, duplicates, and other data that can be archived
The Greenfield Approach for SAP S/4HANA On-Premise is recommended when you are starting a new company, going through a merger & acquisition, a separation from a parent company, or facing significant changes in compliance & regulations. This approach can also be useful when you are going through a large transformation initiative.
Pros:
Process Optimization
- Your company can tailor your new SAP System according to the specific needs of the business without the need for outdated processes.
Centralized Data Management
- Your company can boost your data governance strategy, consistency, and control across the organization.
Reporting & Analytics Capabilities
- Your company can streamline insights in real-time, allowing for better decision making and a robust system.
Compliance with SAP Standards
- The system comes fully compliant with the latest standards from SAP, making your SAP S/4HANA On-Premise System future-proof.
Customizations/Configurations
- Your company has the flexibility to adapt the system if the standard processes that SAP provides do not fit the needed business model, this is identified in the approach ‘Fit-To-Standard Workshops’, outlined in Figure 1.
Cons:
Longer Implementation Timeline
- Performing a Greenfield Implementation for SAP S/4HANA On-Premise may take a longer time than some of the other deployment options, resulting in a slower time-to-value.
Organizational Change Management
- There may be resistance to change among employees, but having an effective Organizational Change Management team can help effectively shift to a smooth user adoption experience.
Staffing & Resourcing
- A greenfield implementation for SAP S/4HANA On-Premise may require highly skilled project management, team leadership, and subject matter experts.
Initial Cost of Implementation
- The initial amount of investment in this type of deployment can be higher than other types of deployment due to software licensing, hardware infrastructure and resourcing. Actual costs are specific according to the company’s needs.
Unexpected Challenges
- Unplanned changes can come up throughout the implementation that can occasionally require additional time to address.
Greenfield Implementation for SAP S/4HANA On-Premise Deployment & Workstream Activities
2. Greenfield (New Implementation Approach) for SAP S/4HANA Cloud Private Edition (Single-Tenant Edition)
Overview of the Deployment Option:
The greenfield approach for SAP S/4HANA Cloud, Private Cloud Edition allows you to start a brand-new implementation of the private cloud that ensures privacy and data isolation. This approach also entails rapid deployment and automatic updates for SAP’s latest innovations.
If your company meets the following criteria, the Greenfield Approach for SAP S/4HANA Cloud Private Edition may be the right fit for your business needs:
- If your company is prioritizing the adoption of cloud-based solutions
- If you are looking to expedite your go-live processes
- If you already have well-defined and simplified business processes in place
- If you are implementing an SAP S/4HANA System for the first time
- If you are looking for a global solution that can address the needs of multiple business units
The Greenfield Approach for SAP S/4HANA Cloud, Private Edition is recommended when you are starting a new company, a small to medium, or medium to large sized enterprise, a company with a global presence, seeking digital transformation, or a company with limited IT resources.
Pros:
Automatic Updates
- The release cycle for SAP S/4HANA Cloud, Private Edition happen every quarter, allowing the system to be updated with the latest security & compliance measures and innovations, following the requirement to perform one base update within 5 years.
Mobility
- Your company can easily access the SAP S/4HANA Cloud interface from a mobile device, enabling on-the-go and seamless productivity.
Faster Time-To-Value
- Following this approach allows your company to deploy SAP S/4HANA Cloud faster than some of the other options, allowing faster time-to-value and ROI (return-on-investment).
Seamless Integration Across the Ecosystem
- With SAP S/4HANA Cloud, Private Edition, your company can seamlessly integrate with other cloud applications, allowing your company to build a connected ecosystem.
Customization Flexibility
- Leveraging the SAP S/4HANA Cloud, Private Edition, your company can easily tailor the system according to specific business processes and requirements and have more scalability in the environment.
Cons:
Downtime Windows
- There is a greater need to plan downtime windows more carefully due to regular/quarterly updates being applied to the system.
Upfront Cost Investment
- Licensing and subscription management can be more complex than the SAP S/4HANA Cloud Public Edition, requiring a higher upfront cost investment that can impact cash flow at the beginning of the implementation. Actual costs are specific according to the company’s needs.
Vendor Management
- There may be more limited flexibility on switching to a new cloud provider following the completion of the implementation.
Maintenance Complexities
- There may be a higher need for resources to help manage the system maintenance following the go-live, for upgrades, system patches and new customizations that come into the environment as companies continue to expand.
Deployment Timelines
- The Go-Live timeframe for this approach may be extended due to the infrastructure and customization requirements.
Greenfield Implementation for SAP S/4HANA Cloud Private Edition Deployment & Workstream Activities
3. Greenfield (New Implementation Approach) for SAP S/4HANA Cloud Public Edition (Multi-Tenant Edition)
Overview of the Deployment Option:
The greenfield approach for SAP S/4HANA Cloud, Public Edition allows you to start a brand-new implementation of the public cloud for seamless integration of business processes leveraging minimal customization and configurations. This solution also leverages post-implementation support and regular semi-annual automatic updates.
If your company meets the following criteria, the Greenfield Approach for SAP S/4HANA Cloud Public Edition may be the right fit for your business needs:
- If your company is prioritizing the adoption of cloud-based solutions
- If you have limited historical data
- If you are in the process of establishing your business processes
- If you are looking to adopt industry best practices
- If you are implementing an ERP (Enterprise Resource Planning) System for the first time
The Greenfield Approach for SAP S/4HANA Cloud, Public Edition is recommended when you are a start-up company or small business, looking for a more cost-effective and quicker implementation when starting your ERP (Enterprise Resource Planning) journey.
Pros:
Rapid Deployment
- Applying the Greenfield Approach for SAP S/4HANA Cloud Public Edition has the added benefit of a shorter deployment timeframe compared to some of the other deployment options.
Continuous Innovation
- The system automatically receives the latest and newest features and functionalities on a bi-annual basis.
Lower Total Costs
- Since the resources for the environment are shared, there is a reduced subscription and overall maintenance cost compared to other deployment options, but costs may vary according to the specific needs of the company.
Sustainability
- Due to the environment using the same infrastructure and resources, there is a reduced carbon footprint by decreasing the need for additional hardware and energy consumption. This is a great advantage for companies looking to improve sustainability measures and awareness.
Seasonal Demands
- Following the deployment of a multi-tenant environment, companies can easily meet the seasonal demands of the market due to the regularly applied system updates, as functionality can shift following update.
Cons:
Limited Customizations
- When migrating to SAP S/4HANA Cloud Public Edition, there is not much room for flexibility to customize the system according to unique business needs and processes.
Data Isolation
- Although the data isolation measures for the environment are substantial, there is still concern around potential data breaches due to the shared infrastructure.
Upgrade Dependencies
- When an upgrade is applied to the system, it could potentially impact system customizations, which can require an adjustment to customization to realign with recent updates from SAP.
Control on System Updates
- Companies have a restriction around how and when updates are applied to the system, which can impact the overall user experience.
Resource Usage
- System response times can be impacted during peak performance or user traffic on the system, which can potentially impact system performance and output.
Greenfield Implementation for SAP S/4HANA Cloud Public Deployment & Workstream Activities
4. Brownfield (System Conversion Approach) for SAP S/4HANA On-Premise or SAP S/4HANA Cloud
Overview of the Deployment Option:
The Brownfield approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud allows you to transform an existing SAP System to SAP S/4HANA, rather than starting from scratch like you would with the Greenfield approach. This solution also supports the compatibility of customizations, previous configurations that were made to the ECC system, and historical data.
If your company meets the following criteria, the Brownfield Approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud may be the right fit for your business needs:
- If you are looking to upgrade to S/4HANA without starting from scratch
- If you have a high amount of customization in your current SAP landscape
- If you need to maintain compliance with specific data retention policies
- If you have well-established business processes in place
- If you have cost and time restraints for your deployment timeframes
The Brownfield Approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud is recommended when you are an existing SAP customer and have made significant investments to your current SAP landscape and are looking to build or add-on additional business processes, data and user interfaces.
Pros:
System Familiarity
- Since the Brownfield approach builds on the existing ECC landscape, users are likely to already have familiarity, allowing for better user adoption, higher user acceptance and an overall decrease in the level of training that is needed.
Risk Mitigation
- There is a chance of reduced risks to the implementation with this approach, as the company can leverage existing knowledge from the legacy ECC system to create a more proactive approach to risks.
Rapid Return on Investment (ROI)
- With this approach, it is much quicker to realize the added value and benefits to the organization, as existing assets and customizations can be leveraged in the new SAP S/4HANA environment.
Easier Project Justification
- It is much easier to gain buy-in from stakeholders for this approach due to lower disruption to day-to-day processes that the business team performs, and the overall cost effectiveness of the solution while maintaining heavy customizations.
Simplified Master Data Migration
- Migrating master data to the new SAP S/4HANA environment is much more straightforward than some of the other implementation approaches, due to having the core data structure in place, reducing the need for data cleansing and transformation.
Cons:
Vendor Support Dependency
- Leveraging the Brownfield Migration approach requires a reliance on ensuring that the vendor can provide the level of support, tools and strategies needed to make the implementation successful.
Potential Custom Code Refactoring
- Some of the customizations may need to be converted over to a newer version of technical upgrades or business logic, which can cause custom code to need to be refactored or recoded.
Limited Flexibility for Redesign
- Companies that are looking to completely redesign their existing business processes may find this approach restrictive compared to a Greenfield Approach
System Downtime During Cutover/Go-Live
- Although the Brownfield migration approach aims to reduce system downtime, there may be an increase in downtime during cutover, data loads and migration, and custom code testing.
Process Optimization & Innovation
- The Brownfield approach allows companies to prioritize the migration process, taking focus away from solution innovation and process optimizations.
Brownfield Implementation for SAP S/4HANA On-Premise and SAP S/4HANA Cloud Deployment & Workstream Activities
5. Bluefield (Selective Data Transition Approach) for SAP S/4HANA On-Premise or SAP S/4HANA Cloud
Overview of the Deployment Option:
The Bluefield Approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud allows you to combine the elements of the Greenfield & Brownfield approach, and overall provides a more flexible approach to deployment by allowing transformation to happen in a step-by-step manner. This solution also allows you to only bring over the data that you need and adopt a temporary hybrid environment – meaning, that some of the processes still run in the legacy ERP (Enterprise Resource Planning Platform), and some of the processes will run in the SAP S/4HANA On-Premise or SAP S/4HANA Cloud environment.
If your company meets the following criteria, the Bluefield Approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud may be the right fit for your business needs:
- If you are looking for a phased approach to migration
- If you feel that users of the new system will require extensive training
- If you have a complex SAP landscape – meaning, high customization or multiple instances of ECC
- If you are looking to only move some of your business processes to S/4HANA
- If you have budget, time or resource constraints
The Bluefield Approach for SAP S/4HANA On-Premise or SAP S/4HANA Cloud is recommended when you are already an SAP Customer and have an established SAP System in place, or a company that has specific business process prioritizations, looking to stay current on latest innovations while preserving the legacy SAP ERP System.
Pros:
Preserving Existing Investments
- Companies can leverage previous investments in SAP ECC and build on them with the capabilities that SAP S/4HANA provides.
Reduced Project Timelines
- Since ECC is not completely converted to S/4HANA in one go, the timeline for this approach is significantly shorter than the other approaches, however, the specific timeline depends on what your company is planning to migrate.
Business Continuity
- It is easier to maintain business continuity throughout the transition period since critical business processes can continue to run on the existing ECC system and do not need to be migrated over immediately.
Cost-Effectiveness
- Your company can manage the migration and deployment based on cost restraints; however, cost can vary based on the companies’ needs and goals.
Day-To-Day Operations
- Since the Bluefield Approach is phased, there is a lower disruption to day-to-day operations which allows for a smoother transition for users.
Cons:
Scope Creep
- Due to the Bluefield Approach being incremental, additional customizations or processes can be added to the scope, which can have an overall impact on the timeline or the cost.
Increased Licensing Costs
- Operating both the ECC environment and the S/4HANA environment simultaneously can increase the overall licensing cost.
Functionality Overlap
- There may be an overlap in functionality between ECC and S/4HANA, which can cause process inefficiencies.
Change Management & Project Management Complexity
- Complexity is added to change management and project management for resource & allocation planning, risk management and stakeholder management. Ensuring that your team is well-equipped with strong communication and mitigation strategies can help address this concern.
Compatibility Issues
- Customizations, third-party applications, and add-ons between the systems can present a challenge in maintaining compatibility.
Bluefield Implementation for SAP S/4HANA On-Premise and SAP S/4HANA Cloud Deployment & Workstream Activities
Closing Thoughts
In summary, there are many different deployment options to choose from when considering an SAP S/4HANA Implementation, and hopefully the above can be a back pocket guide to provide some guidelines on how to think through the deployment options in selecting the one that can help you achieve the level of business transformation you are looking for.
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