This guide will assist you in choosing the most suitable S/4HANA product for your organisation.
In this blog, I will discuss the differences between the SAP S/4HANA products and assess each solution’s suitability for different client needs. In addition, I will tell you how these products can be expanded with client-specific features. Common to all of these S/4HANA packages is the fact that high configurability, use of Fiori, built-in analytics and the latest SAP innovations are fully supported by each package out of the box and are available as ready-made updates from SAP, provided that the versions are kept standard according to SAP guidelines. As an SAP client, it is important for you to be familiar with at least the main limitations of purchasing a cloud-based solution compared to S/4HANA any premise solutions.
Broadly speaking, these solutions can be positioned from left to right as seen in the image:
Generally, the products in the above images from left to right are also the most to least standardised ERP packages in the same respective order:
The core of SaaS (Software as a Service) licensing for cloud-based solutions is flexibility. Under this licence model, high usability of infrastructure and the application layer, data security, the usage rights model, Solman, monitoring, alerts and mandatory technical enablers are included in the price. A partner is required with SAP during the projecting phase and in maintenance, but the partner’s role is reduced furthest in this option.
As billing is based on event-based, easy-to-audit threshold values, SaaS contracts are easily and quickly scalable into larger volumes.
Table 1: Implementation and differences in licensing and maintenance
* SAP S/4HANA Cloud, extended edition is not available for new customers from 25th Jan 2022. Still available for upsell/renewals. The replacement will be called SAP Extended Services for SAP S/4HANA Cloud, private edition.
As the comparison indicates, the Cloud (Essentials) Edition is clearly SAP’s answer to true multi-tenant ERP solutions such as Oracle, Infor and Microsoft. It should be noted that the Cloud (Essentials) Edition includes much more functionality than its little brother, the SAP Business by Design version for small businesses.
Table 2: Modification management differences
* SAP S/4HANA Cloud, extended edition is not available for new customers from 25th Jan 2022. Still available for upsell/renewals. The replacement will be called SAP Extended Services for SAP S/4HANA Cloud, private edition.
The main differences are found in modification and expansion permissions. The S/4HANA Cloud Extended Edition, S/4HANA Private Cloud and S/4HANA Any Premise are more open to the client, with more flexibility for modifications.
Table 3: Implementation and difference in maintenance tools
* SAP S/4HANA Cloud, extended edition is not available for new customers from 25th Jan 2022. Still available for upsell/renewals. The replacement will be called SAP Extended Services for SAP S/4HANA Cloud, private edition.
Only the SAP S/4HANA Cloud, Private Edition and S/4HANA Any Premise versions support transferring critical business ABAP applications to the new version. The suitability of ABAP customisations must be tested using Brownfield conversion tools, such as the simplification list. In addition, data transfer from an existing ECC version is possible via conversion or extraction in software. TietoEVRY’s SNP partner solution for a Bluefield method is an option.
Table 4: Database and operative system modification and access differences
* SAP S/4HANA Cloud, extended edition is not available for new customers from 25th Jan 2022. Still available for upsell/renewals. The replacement will be called SAP Extended Services for SAP S/4HANA Cloud, private edition.
The S/4HANA Cloud (Essential) Edition is a more standardised SAP system, only implemented in a new Greenfield install. In terms of modifications on the operating system level, the Private and Any Premise products are the most flexible.
Important! The separately available Model Company options for speeding up implementation were briefly pulled from the market by SAP. Now, they are returning under a new name: Enterprise Layer. The S/4HANA Private Cloud and S/4HANA Any Premise offers 25 pre-configured industry templates.
The S/4HANA Cloud (Essentials) Edition can be recommended to small and medium businesses as an ERP suite, like the Oracle Netsuite or Microsoft 365. However, SAP includes more features than its competitors right out of the box in 2021. This is also a solid option for larger businesses in search of so-called Administrative ERP, meaning only the basic selling, buying and wider business functionality are located in the ERP and e.g. core production processes (MES) operate elsewhere. In addition, this can be recommended as a multi-ERP strategy when more extensive SAP S/4HANA products are not needed in other countries due to their size.
The S/4HANA Cloud Extended Edition can be safely recommended to large businesses, as long as the differences to existing ERP functionality are carefully identified while understanding how to build missing features as a native cloud solution, for instance. A solid understanding of SAP’s roadmap for the coming years is also highly recommended. Scalability and high infra use are a target of constant development for platform partners, even in the future. In addition, the Extended Edition suits both new and current SAP clients, provided that the client is prepared for implementation via a new Greenfield install and discarding their own ABAP modifications.
The SAP S/4HANA Cloud Private Edition can be recommended to all large and small businesses whose cloud strategy is already clear but who have not yet decided on or implemented their final application standardisation level or application enablers required for competitiveness. This version ensures scalability and the use of existing ABAP applications in the future, alongside the conversion of existing history data as part of your new solution.
The S/4HANA Any Premise version can be recommended to businesses looking for a quick transition to the S/4HANA ERP age with minimal risks and without immediate changes to their operations. In the short term, this version can be the cheapest way by far to update your licences and database to a S/4HANA version, and thus this version can offer additional time for your final SAP suite in the cloud, on-premise or as a hybrid.
The Any Premise version carries over existing critical ABAP functionalities, and the SAP GUI can also remain as the user interface. Naturally, this version can also be used as a template for a modification project by a larger business looking to upgrade their operations with S/4HANA capabilities.
Within the cloud-based solutions, traditional expansions can still be implemented according to our recommendations:
In all cloud-based solutions, the client benefit should be a lower life cycle TCO (total cost of ownership) compared to the old ECC. This comes in the form of cheaper implementation of faster SAP product features, directly benefitting the business, but also as lower costs in terms of maintenance, such as infra, development, safety and personnel costs.
Our view supports the SAP objective, according to the attached image:
Industry-specific innovations will become part of the basic solutions, but the extra feature options under the Enterprise Layer name (formerly Model Company) will remain.
Read more about starting your S/4HANA journey and trip tips here.
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