SAP/4HANA is one of the best ERPs out there. While it’s not exactly one of the most mature options, it is being considered a huge step up from ECC. Hence, over 2000 organizations have made the shift to it. However, there are two different editions of the same program: on-premises and the cloud. This begs the question, which one should you shift to if you do shift at all.

Types of Customers for SAP/4HANA On-Premises vs. Cloud

SAP/4HANA’s delivery model allows a lot of its customers to choose how they are delivered the software. They can operate on-premises and on the cloud. This depends on the need of their business. Customers that are looking for greater agility and the ability to scale and grow will find the cloud more appealing. Most well-established businesses looking for a more secure business model will be interested in the on-premises model. The fact that their system is in-house makes sense for them since it allows for greater control and security. With the cloud, smaller businesses won’t have to take care of 99% of the workload. They’ll just use the system and leave the upkeep to the vendors. They won’t have the cash or the manpower to run it.

Enterprise-scale customers, on the other hand, are interested in business transformations. They’re radical enough to go for business transformation with reduced up-front costs. They can choose a hybrid model that utilizes elements of both on-premises and cloud delivery options. This will allow them to maintain core data and applications in-house.

For them, the cloud will allow them to adapt to new applications and give them quick access. For instance, the cloud computing system will allow them to instantly incorporate mobile applications into their system. It will also allow them to bypass the need to lay down huge infrastructure to build connectivity on.

SAP On-Premises vs. Cloud Editions

SAP/4HANA On-Premises

The SAP/4HANA on-premises software requires that companies deploy their own hardware and database and networking infrastructure. They need to have an IT staff and experienced developers and programmers to maintain the entire setup. This will require more manpower and cash to do so. It will also require the kind of vigilance that only multiple shifts can cover. It’s not something that one person or a single team can even manage. In that, the deployment on premises is a good idea only for those that are established and experienced. It’s also not for those that can’t cough up the kind of cash needed for this venture. However, customers still have more control over this setup than they would over the cloud.

Another great benefit of the on-premises system is that you can customize the setup anyway you want. You won’t have to wait for approval or a reply to a request. If you need to integrate your system with another partner or with another program, you can do so.

Implementation for on-premises SAP deployment will take longer. It will take time to set up the infrastructure and connectivity and storage. It will also take time to hire specialists and certified programmers and developers.

SAP Cloud

Cloud deployment for SAP means that SAP takes care of everything from end to end. The only thing that the organization or company need worry about is the annual bill. Maintenance, upgrades, networking, manpower, and functionality is all taken care of by the ERP vendor.

Customization may not be the most accessible when you opt for the cloud. It’s something that is just out of reach always. You may get the ERP vendor to integrate programs for you and scale-up. However, you won’t be able to do it when you want and when you need it. Also, the SAP cloud follows the best practices that are pre-ordained by SAP. You can’t do anything that is against their norm. Hence, SAP Cloud gives you lesser flexibility with regards to the requirements and a lesser ability to customize.

You will get a better deployment speed with the SAP Cloud. Since you won’t have to care about the deployment infrastructure, you will get instant deployment. You won’t have to worry about the updates or the maintenance.

What Is Right for Your Business?

The best way to find out is to ask yourself these questions:

Do I need the full spectrum of functionality and flexibility?

If the answer is yes then you should go for an on-premise option. This will help you customize the SAP infrastructure the way you want to. It will also allow you to scale up as much as you want.

Do I need agility over flexibility and customizability?

If the answer is yes then you should go for the cloud computing edition. This will allow you to get to work instantly without much financial input.

Do I need both?

If the answer is yes, you fit into the rare niche of hybrid models. You need instant access as well as full control.

The best way to approach SAP/4HANA on-premises or Cloud editions is to honestly ask yourself what you need. It’s always better to approach a large purchase or commitment like this objectively. It’s a tool, not a lifestyle. Hence, it’s something that deserves to be looked at objectively.

Whichever decision you make, make sure it’s informed.