Enterprise resource planning used to be just ERP. To be more specific, ERP software used to be mainly associated with accounting software and was perhaps only spiced up with a peppering of procurement, sales planning, and business forecasting functionality.

That time has passed.

Now, we think of ERP as a complete tool set of functions encompassing everything from HR to corporate governance and compliance management, plus sales and accounting. It's even moved onward to functions related to enterprise asset management (EAM) and supply chain management (SCM).

Understanding the New Era of ERP

Because the scope of ERP has increased, SAP describes SAP S/4HANA as a complete suite of ERP applications that are all capable of working on a single, unified framework. The use of in-memory processing has allowed SAP to engineer near-real-time performance on business data running through SAP S/4HANA.

So, this is not just ERP—this is ERP that extends across the wider realms of business intelligence (BI) itself.

Many people have already become used to talking about SAP S/4HANA without stopping to ask what the “S” stands for. SAP S/4HANA is in fact a shortening of SAP Business Suite 4 SAP HANA. But beyond just knowing why it’s called what it’s called, you should also know the different ways you can implement it.

What Is SAP S/4HANA Cloud?

SAP S/4HANA Cloud is exactly as it sounds—a cloud-optimized, cloud-delivered version of the SAP software. It comes in three editions: cloud marketing edition for marketing line of business functions; cloud project services edition for professional services specialists; and cloud enterprise edition—a version of the software that presents the full scope of ERP functions.

In terms of use, SAP S/4HANA Cloud is likely to suit organizations that wish to run two-tier business models (or more) where some resources are run on-premise (see below). Some lines of business or entire departments can benefit from a more service-based approach to IT delivery.

In terms of cadence, SAP S/4HANA Cloud benefits from quarterly releases, so ASUG members wanting the latest functions (some options of which may even be in test/trial format) can gravitate toward this version. It also is preconfigured for specific processes in specific lines of business.

This model has a software as a service (SaaS) licensing model. It is governed by SAP, adapted through configuration, and runs on the SAP Cloud Platform. SAP S/4HANA Cloud has the lowest TCO, plus it offers speed of innovation and standardization. It’s easy to replicate and deploy, as well as to scale.

What Is SAP S/4HANA On-Premise?

SAP S/4HANA on-premise is designed for enterprises across industries that need a deep and broad level of ERP suite functionality, combined with a high degree of flexibility in terms of both configuration and customization.

This is best suited for companies that want to manage everything including deployment and maintenance with their own dedicated IT staff as well as for those more interested in a traditional licensing model. The platform is governed by the customer and runs on-premise, so it has the highest TCO. But it is still easy to replicate, deploy, and scale.

The on-premise edition comes in an annual release and is provided with five years of mainstream maintenance. It features the SAP Business Scenario Recommendations tool to analyze an organization’s current SAP software usage information. This tool generates a personalized report that recommends implementation and development guidelines. When and how often to upgrade is completely up to the customer.

What Is SAP S/4HANA Cloud Single Tenant?

Also available in the mix is SAP S/4HANA Cloud, single tenant edition. As many ASUG members will know, single-tenant cloud software is supplied so that each customer gets an independent instance of a software stack, which is not shared with any other source. This version also follows a SaaS licensing model and adapts through configuration.

If you’re searching for more information on SAP S/4HANA Cloud, single tenant, it’s worth bearing in mind that this offering used to be known as SAP S/4HANA Cloud, private edition. For reasons of data governance and compliance, this dedicated cloud landscape is sometimes needed.

With the full public cloud offering greater overall flexibility, the trade-off with SAP S/4HANA Cloud, single tenant comes in its higher overall TCO. But the control element (and the separation of church and state) is a price worth paying for some use cases.

SAP S/4HANA Cloud, single tenant edition is configurable and customizable to a defined degree for applications in finance, HR, procurement, sales, and others. As with all the different options shown here, SAP changes the number of upgrades offered inside different contract periods. The saving grace in this area is that customers can define their upgrade window and are able to dictate when this happens.

What Is SAP HANA Enterprise Cloud?

SAP HANA Enterprise Cloud (HEC) is the private managed cloud from SAP that can be used to run SAP S/4HANA. It matches a customer’s on-premise environment in a cloud model, essentially working as infrastructure as a service (IaaS) combined with managed services for SAP software.

It is fully scalable, privately managed, and adaptable through code modification. Using SAP HEC provides a controlled path to standardization and innovation, which allows customers to innovate at their own pace.

SAP provides the complete system landscape, which includes applications based on SAP reference architecture. SAP will also manage patching, enhancements, and updates on SAP HEC.

What About SAP S/4HANA with Hyperscalers?

Running SAP S/4HANA with hyperscalers—Microsoft Azure, Google Cloud Platform (GCP), and Amazon Web Services (AWS) to name a few—is like running it on-premise in that the platform is governed by the customer and it’s adapted through code modification. The difference, however, is that it runs on the hyperscaler’s public cloud and has either a traditional licensing model or an IaaS licensing model. This allows companies to run portions of their SAP workloads on the host provider and still maintain governance over their platforms.

During SAPPHIRE NOW and ASUG Annual Conference 2019, SAP announced project Embrace, which aims to put any move to SAP S/4HANA in the cloud in the language and context of the user’s primary industry. It recommends the platform, software, services, and infrastructure from SAP as well as its preferred hyperscaler and preferred service partner.

More recently, SAP announced Microsoft Azure as its preferred partner in an effort to provide customers with unified reference architectures, road maps, and market-approved journeys for a clear path to the cloud.

Even still, SAP will continue to support customers in the public cloud of their choice, including GCP and AWS.

Learn how SAP S/4HANA becomes intelligent and changes user engagement to help you reimagine your business. Register for the on-demand ASUG webcast “SAP S/4HANA: Road Map, Overview, and Strategy for SAP S/4HANA.”