SAP S/4HANA Public Cloud or Private Cloud?

Rüdiger Hoffmann

June 4, 2024

SAP S/4HANA hilft Ihnen bei der Digitalisierung

Guidelines for selection and arguments for switching

Storage, computing power, office applications – software and services from the cloud are a matter of course for most people these days. Because cloud computing offers compelling benefits: IT resources available via the Internet are extremely flexible and cost-effective, the model makes it possible to exploit innovations immediately, and it minimizes operating costs. Enterprise resource planning also makes the cloud respectable. According to Bitkom, about 30% of German companies now purchase ERP as software-as-a-service (SaaS). And the trend is rising.

Thus, there is no way around the cloud for most companies’ core business processes. Market leader SAP has two cloud versions of its ERP suite S/4HANA in its portfolio: The highly standardized SAP S/4HANA Cloud, Public Edition, and SAP S/4HANA Cloud, Private Edition, which offers more extensive customizing and expansion options. In addition, there are two bundles for easier, accelerated rollout: RISE with SAP for an individual journey to the private cloud and GROW with SAP for a rapid start with the public cloud.

ERP as a Service – off-the-shelf and made-to-measure

The deployment option that fits best depends on a company’s individual circumstances. Roughly speaking, SAP S/4HANA Public Cloud offers the fastest and most cost-effective way to go live. With this largely pre-configured solution, customers can be ready to go very quickly. This is especially true for small but fast-growing companies that do not yet use SAP. If they have largely standardized processes and little need for customization, they can use the processes and industry best practices provided almost “out of the box.”

Companies with complex processes and heterogeneous system environments are usually better served with SAP S/4HANA Private Cloud, especially when many country-specific requirements have to be mapped. Deployment as a private instance in a cloud environment offers greater freedom in customizing operations. Customers receive the full functionality of SAP S/4HANA on-premises at economically advantageous SaaS conditions.

Business software from the cloud is the future

With the two S/4HANA Cloud variants, SAP’s ERP software as a service is an option for many companies. Basically, the journey to the cloud should be seen as a strategic advantage. In the short or long term, the future is business software there, especially with the public cloud.

Decision-makers should consider the following:

  • With SAP’s cloud ERP, you can stay technologically on the ball and benefit directly from innovation through regular, automatic updates.
  • The required standardization, which initially involves considerable effort and a painful change, offers the opportunity to redesign business processes with best practices.
  • The functionality of SAP Cloud ERP is already greater than is commonly known, and SAP is continually expanding it. In addition: With the help of side-by-side extensions with the SAP Business Technology Platform, individual applications and functions that are not included in the SAP S/4HANA Cloud standard can be developed and integrated with little effort. Even indispensable in-house developments can be reproduced this way.
  • Data and system security is central to all organizations, regardless of whether they are running systems in the cloud or on-premises. Technologically advanced cloud solutions such as SAP S/4HANA provide a high level of security and data protection that is continually improved by SAP and service providers. Regular security updates and certifications keep the systems up-to-date, servers in Europe provide additional protection.
  • Choosing a cloud ERP is not a matter of company size. The SAP S/4HANA Public Cloud is not only suitable for small and medium-sized companies; this depends on their priorities and mindset. With standardized processes that can be optimized further to create a system that is fit for the future, the cloud is attractive for all companies.
  • Minimized investments and operating expenses also speak in favor of SAP Cloud ERP. This is especially true if the internal IT team is small and should be used primarily for strategic tasks.
  • But in the long run, the compelling argument for the cloud will be the innovation, agility, and flexibility that businesses need to stay competitive and fit for the future in disruptive times. 
Mockup strategy paper: With SAP S4HANA to the cloud

With SAP S/4HANA to the Cloud

Which SAP S/4HANA Cloud solution is right for you? Our free strategy paper can help you decide.

Download the strategy paper "With SAP S/4HANA to the Cloud" now! Download the strategy paper "With SAP S/4HANA to the Cloud" now!

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