5 Advantages of using SAP S/4HANA On-Cloud Software as the Digital Core of your organization
In 2019, at the SAPPHIRE NOW event, SAP’s co-founder, Hasso Plattner, made a big statement about the future of IT. He said, ‘Public Cloud is the way to go.’ This is a huge deal because it means that SAP, a major player in the tech world, sees the public cloud as the future. And they’re not just talking about it – their SAP S/4HANA Cloud is already showing us the benefits of this move. It’s helping businesses in many ways.
What is SAP S/4HANA Cloud?
Imagine a powerful tool that helps businesses run everything smoothly – that’s SAP S/4HANA Cloud. It’s the latest and most advanced cloud-based software from SAP. Unlike traditional software that you have to install and manage on your computers and servers, SAP S/4HANA Cloud is different. You simply use it online, like you would a website, which makes it convenient.
So, what’s in the name ‘SAP S/4HANA Cloud’? The ‘S/4’ part is a nod to SAP’s earlier ERP system called R/3, showing that this is the next big step. ‘HANA’ is the name of its super-fast database. This isn’t your ordinary database – it’s like a super-brain for your business. SAP HANA uses something called ‘in-memory technology’. This means it can process huge amounts of data almost instantly. Remember the times when you had to wait for ages to get reports from older systems like SQL or Oracle? Well, those days are gone. With SAP S/4HANA Cloud, you get real-time results and more precise data analysis. It’s like having a turbocharger for your business data!
Why choose SAP S/4HANA Cloud?
1) Speed of innovation
Adopting SAP S/4HANA Cloud puts your company at the forefront of innovation. Unlike traditional on-premise solutions that typically update annually, SAP S/4HANA Cloud boasts faster innovation cycles with updates every three months. This rapid pace ensures you’re always ahead in the technology game.
At the SAPPHIRE NOW 2019, Hasso Plattner highlighted the agility of cloud innovation, stating, ‘We move in the cloud much faster than anywhere else, leading to cloud-first developments in SAP.’ This approach keeps your systems up-to-date with both national and international regulations and lets you benefit from the latest SAP advancements, like the Leonardo technologies on the SAP Cloud Platform.
Take, for instance, the SAP Cash application, a part of Leonardo‘s suite. It automates the matching of incoming bank statements to open receivables using predefined rules. With machine learning, the application continuously learns from past actions to improve future automatic clearing rates, reducing manual efforts.
Furthermore, the ‘Cloud Release Assessment and Scope Dependency’ (RASD) tool is a personalized feature provided by SAP. This tool helps you understand how new updates will impact your specific setup. It analyzes your active scope, recommends relevant new features or innovations, and even suggests specific test cases for a smoother transition with each update.
The tool enables customers to understand the impact of quarterly release changes to the activated scope items in their SAP S/4HANA Cloud system
2) Extensibility: Making SAP S/4HANA Cloud work for you
- Endless integration possibilities: One of the biggest strengths of SAP S/4HANA Cloud is how well it plays with other systems. Whether you have a mix of different software from various vendors for different tasks, SAP S/4HANA Cloud can seamlessly integrate with them. This means less hassle and more harmony in your business processes.
- Preconfigured and custom options: Let’s say you already use other SAP products like SAP Ariba or SAP SuccessFactors. In that case, integrating them with SAP S/4HANA Cloud is a breeze thanks to preconfigured scenarios. The best part? Regular updates won’t mess with these integrations. Everything stays smooth and uninterrupted.
- Bridging the gaps with APIs: What if you need a unique combination of systems that isn’t covered by SAP’s standard offerings? No problem. SAP S/4HANA Cloud uses something called APIs (Application Programming Interfaces). Think of APIs like universal adapters that let you connect all sorts of external applications, even those not typically covered by SAP. Whether it’s a niche third-party system or specific processes unique to your business, these APIs ensure that SAP S/4HANA Cloud fits perfectly into your existing software landscape..
3) Empowering your subsidiaries with SAP S/4HANA Cloud
- Unified solutions for simplified management: SAP S/4HANA Cloud is amazing at handling Two-Tier ERP systems. What does this mean? Essentially, it lets your headquarters and subsidiaries use solutions that are closely related, sharing the same core technology. This reduces the clutter of different ERP systems and makes it easier to manage data and processes across your entire company. No more headaches from manual data matching!
- Flexible for different business models:
- Headquarters-subsidiary model: If your company grows by merging with or acquiring other companies, SAP S/4HANA Cloud is ideal. Your main office can use the on-premise version of SAP S/4HANA, while your subsidiaries use the cloud version. Why? Because your subsidiaries likely have different needs than your main office, and the cloud version is more flexible and cost-effective for them.
- Extended supply chain: In the manufacturing world, the main manufacturers (like car makers) might use SAP S/4HANA On-Premise or traditional SAP ERP. At the same time, their suppliers, subcontractors, and distributors can use the cloud version. This setup ensures everyone in the supply chain is connected and efficient.
- Diverse business lines: If your company is branching out into new areas or industries, SAP S/4HANA Cloud is perfect. You can keep running your existing business lines on the on-premise version, while the new ventures use the cloud version. This allows each part of your business to have the tools it needs without disrupting the other parts.
SAP S/4HANA Cloud: Two-Tier ERP Deployment Options
4) SAP S/4HANA Cloud pricing model: Cost-effective and simplified
- Spread out costs over time: One of the biggest benefits of SAP S/4HANA Cloud is how it helps you manage your budget better. Instead of paying a lot all at once, you can spread the cost over time. This makes it easier to handle financially.
- Avoid hidden costs: With traditional on-premise solutions, there are many hidden expenses. You’re not just paying for licenses and servers. There’s also the cost of managing these systems – like keeping your data safe, making sure everything runs smoothly, and paying IT staff. Plus, every few years, you might face extra costs for maintenance, more storage, or software updates.
- Cloud solution: SAP handles everything: When you choose SAP S/4HANA Cloud, SAP takes care of both the software and the hardware. This includes all the maintenance and updates. You don’t have to worry about the technical side of things or additional costs for upkeep.
- Subscription-based pricing: In the cloud, you don’t pay for a license upfront. Instead, it’s more about subscriptions and paying for what you use. This can be more cost-effective and flexible for your business.
- Lower implementation costs: Implementing SAP S/4HANA Cloud is generally quicker and cheaper compared to traditional methods. Thanks to SAP’s accelerators, best practices, and the Activate methodology, the time it takes to get everything up and running is reduced, which also cuts down on costs.
5) Guided project methodology: SAP S/4HANA Cloud implementation portal
- Streamlined implementation with SAP Activate: The SAP Activate methodology offers a comprehensive framework specifically designed for implementing cloud solutions. It’s like having a roadmap that guides you through the entire process, making it smoother and more efficient.
- Access to an implementation portal: Since February 2019, SAP has enhanced this experience by introducing an implementation portal. This portal is a part of a new product called SAP Cloud Application Lifecycle Management (SAP Cloud ALM). For customers using SAP S/4HANA Cloud, this portal is the first accessible feature.
- Leveraging SAP best practices: The implementation portal is not just a tool; it’s a resource hub. It integrates SAP’s best practices directly into your workflow, along with the specific tasks listed in the Activate methodology. This means you have all the expert advice and structured steps you need, all in one place.
The move to cloud solutions like SAP S/4HANA Cloud offers clear benefits, such as standardization. However, adapting to a ‘fit-to-standard’ approach can be challenging for companies with highly tailored processes. While SAP Cloud Platform permits some customization, it’s important to remember that extensive customization isn’t the core purpose of public cloud infrastructures.
Adopting SAP S/4HANA Cloud often means a significant shift in your business operations. As Stefan Fruehauf from PwC pointed out at SAPPHIRE NOW 2019, transitioning to a public cloud involves more change management than technology. Simplifying your processes and IT landscape with SAP S/4HANA Cloud not only eases management but also enhances agility in a digital economy. Sphinx recognizes the vital role of change management in such transitions, offering guidance and support to ensure your organization’s unique needs are met throughout the process.
For more information or to discuss your specific needs, please contact Sphinx at: