Last updated: Jan 26 2024 (Updated links)
This blog targets SAP solution architects and explains the different deployment options for SAP S/4HANA. I have used the latest terminology. It covers cloud, on-premise and hosted deployment options. Here are the options discussed:
1. SAP S/4HANA Cloud, public edition: This is SaaS public cloud.
2. SAP S/4HANA Cloud, private edition
3. SAP S/4HANA On-Premise managed by SAP (HEC)
4. SAP S/4HANA On-Premise: On-Premise or managed by cloud provider Hyperscalers
Deployment options 1 and 2 are the most commonly positioned options for new SAP customers. Option 2 is available through a RISE with SAP contract. Option 1 is available through a GROW with SAP contract.
I cover the following aspects of each option: infrastructure, license, how upgrades are managed, scope (functional, country and industry), configuration, extensibility (how solution can be extended beyond configuration) and implementation (possible approaches). All options can be implemented by the customer, SAP or a partner.
I also cover which roadmap of the SAP Activate implementation methodology is relevant, what SAP Best Practices are used and what tools are relevant. See my other blog for an overview of SAP Best Practices and the SAP Enterprise Management Layer.
1. SAP S/4HANA Cloud, public edition
Commonly used by net new customers that want the full public cloud approach with regular upgrades that include new configuration and new software. This is a SaaS public cloud offering. Also used for subsidiaries alongside SAP on-premise implementations.
- Infrastructure: public cloud shared with other customers and hosted and operated by SAP only
- License: subscription for Software as a Service (SaaS) available as RISE with SAP or for new customers in the mid market through GROW with SAP.
- Upgrades: managed by SAP. fixed and mandatory (configuration and software). The upgrade of configuration is unique to the public cloud edition. SAP and customer do automated and manual regression tests.
- Scope: core ERP (subset of full ERP), specific industries and 59 countries.
- Extensibility: key user (in-app) extensibility, developer extensibility and extensions through SAP Business Technology Platform Extension Suite (side-by-side extensibility) with whitelisted APIs.
- Configuration: use SAP Central Business Configuration and Self Service Configuration User Interfaces (SSCUIs) based on fit-to-standard workshops in the Explore phase
- Implementation: greenfield only (new implementation)
- Partner content: partners can add configuration manually.
Unlike all the other deployment options, the user interface is purely Fiori and configuration is done using SAP Central Business Configuration and not through the IMG.
2. SAP S/4HANA Cloud, private edition
Has advantages of the cloud with the scope and flexibility of the on-premise solution. Existing SAP ECC customers can move to private cloud using a system conversion and retain their configuration and extensions. Has standardized infrastructure processes, services and SLAs.
- Infrastructure: dedicated landscape on cloud infrastructure operated by SAP and running at a Hyperscaler e.g. Microsoft Azure, AWS, Google Cloud)
- License: subscription for software but not SaaS (available as RISE with SAP).
- Upgrades: available like on-premise but you chose your own speed but must stay in mainstream support. The customer must manage the upgrade process. SAP does specific technical aspects of the upgrade only.
- Scope: on-premise S/4HANA functional scope. 64 countries, 39, languages and 25 industries. Some third-party add-on limitations.
- Extensibility: key user (in-app) extensibility, developer extensibility and extensions through SAP Business Technology Platform Extension Suite (side-by-side extensibility). Classic ABAP extensibility is still available but modifications are not recommended.
- Configuration: use the IMG based on fit-to-standard workshops in the Explore phase.
- Implementation: greenfield (new implementation), system conversion or selective data transition
- Partner content: partners templates allowed.
- Customers use SAP Solution Manager and/or Cloud ALM to manage their project design.
Also see this blog on the 5 golden rules to adopt some of the lessons learnt from public cloud. https://blogs.sap.com/2018/07/28/the-5-golden-rules-for-implementing-sap-s4hana-cloud-single-tenant-...
3. SAP S/4HANA On-Premise managed by SAP (HEC)
An on-premise solution with individual and private hardware and infrastructure hosted by SAP or a hyperscaler. Infrastructure management is delegated to SAP with flexible service offerings. This can be used for combinations of solutions that are not available in SAP S/4HANA cloud, private edition.
- Infrastructure: customer specific landscape on SAP HANA Enterprise Cloud (HEC) in SAP data centre or at a hyperscaler
- License: infrastructure subscription
- Upgrades: you choose your own speed of adoption of software upgrades. Customer is responsible for managing the upgrade.
- Scope: full S/4HANA functional, country and industry scope and partner add-ons
- Extensibility: customization, modification, and extensibility possible as with ERP
- Configuration: use the full IMG based on a fit-to-standard approach in the Explore phase
- Implementation: new implementation, system conversions or selective data transition
- Partner content: partner templates allowed.
- Customers use SAP Solution Manager to manage their project design. Most customers use SAP Best Practices activated using SAP Solution Builder or set up by SAP through the "Enterprise Management Layer" service.
4. SAP S/4HANA On Premise: On-Premise or managed by cloud providers Hyperscaler
Classic on-premise SAP S/4HANA managed by the customer in their own data centre or managed by a third party.
- Infrastructure: customer data centre or hosted by hyperscaler (e.g. e.g. Microsoft Azure, AWS, Google Cloud)
- License: perpetual or Bring Your own License
- Upgrades: you choose your own speed of adoption of software upgrades. Customer is responsible for managing the upgrade..
- Scope: full S/4HANA functional, country and industry scope and partner add-ons
- Extensibility: customization, modification, and extensibility possible as with ERP
- Configuration: use the full IMG based on a fit-to-standard approach in the Explore phase
- Implementation: new implementation, system conversions or selective data transition
- Partner content: partner templates allowed.
- Customers may use SAP Solution Manager to manage their project design. Most customers use SAP Best Practices activated using SAP Solution Builder or set up by SAP through the "Enterprise Management Layer" service.
Which Deployment Option is Right?
The SAP Activate roadmap has 3 approaches to implement SAP S/4HANA:
- New implementation (also known as greenfield)
- System conversion (also known as brownfield)
- Selective data transition.
New implementation: for new customers or existing customers that want to reset and start again with a clean system.
System conversion involves converting your existing ERP system into SAP S/4HANA by migrating the database, applying software updates and doing a data conversion from the old data model to the new S/4HANA data model. The system must be converted to S/4HANA in one go meaning a single big bang go-live.
In the “selective data transition” approach, configuration and custom code from your old ERP system are used in the new SAP S/4HANA instance. For example, this can be done with a "shell copy" of the old system that leaves all master and transaction data behind and is followed by a system conversion to S/4HANA.
What will influence your choice of deployment option? Organizations that are completely new to SAP will do a new "greenfield" implementation and can choose any option 1 to 4. What about if you are currently running the on-premise ERP ECC and want to move to S/4HANA?
- The route selected by 50% of customers is a "system conversion" where your existing system is converted to S/4HANA. This means option 2, 3 or 4.
- If you want to start again on a new page and do a "new implementation", you can choose any deployment option. Note: option 1 may not cover all the processes and scope in an existing SAP ERP ECC solution.
- The "selective data transition" approach allows you to take some of your existing solution into a new S/4HANA instance. Option 2, 3 or 4 can be used. Around 5% of customers choose this approach.
See me related blog on moving to S/4HANA from ERP: https://blogs.sap.com/2019/10/30/how-to-move-to-sap-s4hana/. This blog may also be helpful:https://blogs.sap.com/2020/05/11/sap-s-4hana-deployment-on-hyperscalers/
When using the Transition to SAP S/4HANA SAP Activate roadmap, you can select the approach e.g. system conversion in the search tags.
Note: there is an option called SAP S/4HANA Cloud, extended edition but this is no longer available for customers buying SAP S/4HANA now. This was an earlier variation on SAP S/4HANA Cloud, private edition.
I hope you found this blog informative.
Amin Hoque
Enterprise Architect at SAP Services UK
