SAP S/4HANA: Understanding Your Deployment and Transition Options

By: Lorraine Howell

When looking to upgrade to SAP S/4HANA from your current ERP system, there are two broad areas to consider: where your company is starting from, and where you would like to go. Your destination—the deployment option that best fits your corporate needs and environment—will necessarily shape your transition plan.

There are a number of different on-premise and cloud-based deployment options for S/4HANA. For on-premise (or hosted) deployments, there are three core options to consider:

  1. Transition your SAP ECC 6.0 deployment on any database to the SAP HANA database (Suite on HANA). This will unlock the HANA live reporting capability (real-time analytics directly from your transactional ERP system) and pave the way to a transition to S/4HANA in the future. This helps reduce your risk.
  2. SAP S/4HANA Simple Finance (1503/1605), which is a finance-focused on-premise deployment, which provides the benefits of the simplified modern architecture and the Fiori 2.0 user experience.
  3. Or there is the full SAP S/4HANA Enterprise Management solution, of which there have been three major releases (1511/1610/1709).

There are also a number of cloud-based deployments available:

  1. An on-premise deployment in a hosted cloud is a hybrid option in which another company hosts your ERP and manages your services.
  2. Your chosen version of S/4HANA can be deployed on the SAP HANA Enterprise Cloud, hosted by SAP. Here, you are responsible for governance and own all upgrades but can delegate to SAP for additional cost.
  3. You can choose to deploy S/4HANA Enterprise Management Cloud in a Private Cloud environment, hosted by SAP. This is a subscription-based option.
  4. Or you can choose a version of S/4HANA Cloud with a Public Cloud deployment. This is a completely subscription-based option, hosted and fully managed by SAP. SAP S/4HANA Cloud includes the scope and the benefits of the SAP S/4HANA Cloud for Finance and SAP S/4HANA Cloud for Professional Services.

One thing to consider when choosing a deployment option is the innovation cycle. S/4HANA Public Cloud has a quarterly innovation cycle. These same upgrades and updates are rolled down to the on-premise and other versions annually.

If a Public Cloud deployment is the best fit for your organization, there is only one transition option. You cannot convert or migrate to Public Cloud; instead, you must do a new implementation and then bring your company’s modifications into that environment where possible, or transition the company enhancements as applications/extensions in the SAP Cloud Platform.

For the other on-premise and cloud-based deployments, there are three transition strategies to consider, each with its own benefits and challenges:

  1. New Implementation or Re-Implementation: This is a clean, green field implementation of S/4HANA. Your old landscape is retired, and customizations are re-created in the new system. This approach provides the opportunity to standardize and simplify the existing landscape to reduce your total cost of ownership and take advantage of the latest innovations, though time is required to bring IP across to the new system. This approach can work for either cloud or on-premise deployments.
  2. Landscape Transformation: This approach works best for organizations that have multiple ERP implementations or systems, such as in a global company. With this approach you can reduce the total cost of ownership through simplification of the landscape. You have the option of either migrating part of an existing SAP ECC 6.0 landscape to S/4HANA and then migrating the other systems over time, or consolidating systems into a single target with S/4HANA. This approach can work for either cloud or on-premise deployments.
  3. System Conversion: This is a migration of your existing SAP ECC 6.0 implementation on any database to S/4HANA. Basically, the conversion is treated like an upgrade, and allows you to keep your custom enhancements. However, with this strategy you can only migrate your system as an on-premise deployment.

For more on understanding the difference between your current ERP and S/4HANA, building a business case to support your transition and creating a roadmap for implementation, please sign up for our complimentary webinar series. Or, for a live demo of S/4HANA or other personal support, please contact Illumiti.