A primary concern for organizations today is to be agile enough to foster enterprise-wide innovation at a fast pace. Businesses are naturally leaning towards adopting software that is ready to use in a short time. Designing, installing and maintaining a modern IT environment is often excessively expensive and complicated for a company.
Furthermore, as an increasing number of cutting-edge IT capabilities become available only in the cloud, even the most traditional organizations are seeking out cloud options for their software needs. Gartner predicts that by 2019, more than 30 percent of the 100 largest vendors’ new software investments will have shifted from cloud-first to cloud-only.
It’s no surprise then that when it comes to ERP, enterprises are now considering the intelligent, next-generation Cloud ERP business suite – SAP S/4HANA Cloud. In fact, IDC recently named SAP S/4HANA Cloud as an ideal Cloud ERP solution for upper-midmarket and large companies operating in complex multinational, multi-entity business environments.
If you are currently considering choosing the SAP S/4HANA Cloud for your business and want to know more about the complexities surrounding its implementation, then read on to find answers to frequently asked questions.
Why should existing SAP customers migrate to SAP S/4HANA Cloud? What are the value and the business case? How does it impact customer’s business?
A fundamental reason why SAP S/4HANA cloud is unique in its offering lies in its ability to execute a wide range of complex inquiries without collecting (and thus sacrificing) information in advance. The in-memory innovation makes it possible to analyze even a huge amount of data in a matter of seconds. SAP S/4HANA Cloud gets advantages of the memory capacity and various caches provided with the latest hardware to make the real-time processing easy and fast.
A move from ECC to S/4HANA Cloud is a logical choice for customers as a complete redesign of SAP GUI in the form of Fiori and UI5 reduces the data footprint needed to run an SAP ERP application, which means, customers get quicker access to data reports. In addition, the restructured data models make development lead time faster and entire models are located on an in-memory database like HANA.
Moreover, SAP S/4HANA Cloud makes continuous developments accessible with scheduled upgrades every three months. This means your IT team can focus on breakthroughs to boost the company’s interests rather than worrying about configuration, administration and other technical operations with the system.
As a result, you get a faster return on investment (ROI), increased business agility, lower total cost of ownership (TCO), improved governance and compliance and more intelligent cloud ERP than you ever had before.
What is the difference between the public and the private cloud options? How should companies choose between them?
Key differences between a Public and Private cloud:
- Public Cloud is completely managed by SAP with automatic updates four times a year and strictly controlled configuration and extension frameworks. Such extensions like SuccessFactors, Concur, FieldGlass, Cloud 4 Customer, Ariba, and Hybris have public cloud delivery model. Public cloud services, applications, and storage are available over the Internet, just sign-up and start using cloud computing anywhere and at any time. Public cloud service has a convenient pay-per-use model. For new customers, SAP S/4HANA offers Public Cloud option.
- Private Cloud is also managed by SAP, however, all upgrades are planned with and agreed to by the customer. Private cloud model provides a high level of data security and control, and clients have more freedom to make software modifications, though it may increase costs to run the framework. Private Cloud delivery model can be deployed by existing SAP customers.
Most companies need to process financial accounting, controlling, sales, and warehouse management – operations that don’t require any individual customization, at the end of the day. For these business needs, it makes sense to choose public cloud model and use SAP S/4HANA as a regular SaaS infrastructure, rather than proceeding to spend a lot of assets on having your own IT offices. Public cloud may lead to security and performance concerns, but there is considerably reduced complexity and lead times. Consider using the public cloud if your company needs to bring a service to market rapidly, and if you have fewer regulatory hurdles to overcome, or if you are looking to outsource all or part of your organizational IT requirements.
On the other hand, companies with specific needs may require more freedom and customization, that can be accomplished in the private cloud. With a private cloud, businesses install their own server and storage hardware but have the flexibility to shift workloads among servers as usage spikes or they deploy new applications. Consider using a private cloud if your business must comply with strict regulations or if you have highly critical applications.
How to choose the correct adoption approach to SAP S/4HANA Cloud? What is the difference between brownfield, greenfield and hybrid approaches and what are the benefits?
There are three different ways to migrate to SAP S/4HANA Cloud as listed below:
- New installation (greenfield approach): Implementation of a new system in accordance with SAP’s best practices, data migration from a previous system.
- System conversion (brownfield approach): Transition to SAP S/4HANA (similar to a migration or upgrade).
- Landscape transformation (hybrid/phased approach): Consolidation of a current SAP ERP landscape, installation of a new SAP S/4HANA framework, or transformation of a current system.
Choose the best approach when considering an SAP S/4HANA implementation
Brownfield is best-suited for the traditional implementation projects. This implementation process requires complete migration of the legacy environment, including master data and transactional data. Typically, large enterprises choose this approach because it requires more time and investment.
In a greenfield approach, most of the master data will be converted, but most transactional data will be archived or discarded. It enables enterprises to see results in the shortest time possible. Greenfield is best-suited for quickly growing small and middle-sized companies.
Hybrid or phased approach enables migration of a complete system or implementation of a new environment to happen gradually: firstly, the master data is converted, and then transactions are transferred to the new system division by division, country by country, etc. This approach is best-suited for all company sizes.
Check out the necessary steps to be taken before, during and after moving to SAP S/4HANA in the Simplification List.
What is the difference between SAP S/4HANA Cloud and SAP S/4HANA Hybrid Cloud? What benefits does SAP S/4HANA Hybrid offer?
Hybrid Cloud consolidates the benefits of both public and private cloud options. In a hybrid cloud, there is obviously greater flexibility – a customer can use services of third-party cloud providers, both partially or completely, as per their requirements. For instance, you can keep in touch with your customers via public cloud and at the same time, store vital data securely in the private cloud.
Hybrid model is rapidly gaining popularity and is most likely going to be the most common usage of the cloud. The best business case for hybrid cloud is e-commerce, due to rapid fluctuations in traffic on an e-commerce website. Daily and seasonal cycles require flexible features of public cloud resources to process the orders. At the same time, sensitive data such as personal and payment information needs to be secured, and therefore, should be handled in the private cloud. The hybrid cloud solution combines the best features of public and private clouds – resource scalability that a public cloud offers and store payment and account management services that a private cloud offers.
Innovate, transform and run ahead
SAP S/4 HANA enables enterprises to benefit from the latest innovations, optimize key operational processes, as well as expand to new markets.
However, SAP S/4HANA Cloud implementation requires serious organization-wide preparation and planning. After you choose the right SAP provider, ensure that there is full involvement from the entire company in this process in order to facilitate effective coordination throughout your journey. Plan each step with your SAP provider to achieve the best results and eliminate risks for your data.
If you still have questions or want to connect with an expert to determine the most effective strategy to start the implementation process, then feel free to get in touch with us. Know more about our approach from the customer’s success story and how we helped implement SAP S/4HANA on a private cloud in just 12 weeks.