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On Premise vs Cloud SAP S/4HANA: Making the Right Choice for Your Organization  

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  • Thousands of organizations are migrating to SAPs S/4HANA and often, your first decision is choosing between on-premise or cloud deployment. Here, decisions aren’t as straightforward as one being better than the other. Instead, your best-fit implementation depends on your business and its model.  

    We interviewed Cognitus co-founder and Deployment Director Jos Romijn based on his experience with 10+ SAP S/4HANA implementations in Europe.  

    “It all depends on the organization, there is no good or bad, it’s about what’s important to you as an organization, and assessing those needs and asking the right questions is a crucial part of finding an answer”  

    On Premise vs Cloud SAP S/4HANA 

    Choosing between cloud and on-premise S/4HANA deployment is always a matter of looking at your organization’s specific needs. In some cases, that will mean reviewing application needs, customization needs, or simpler factors like total budget or required timelines. Everything plays a role in making the right decision for your organization.  

    On-Premise  
    • Traditional licensing 
    • Infrastructure is built and maintained by your organization  
    • You update when and how you want 
    • Full control over customization  
    • Includes SAP ERP, SAP Hybris, SAP JAM, SAP Ariba Network,  
    • Best fit for businesses with customization requirements  
    Cloud  
    • Subscription licensing  
    • SAP/Cloud Provider handle system maintenance and infrastructure 
    • SAP introduces upgrades based on a 5-year roadmap  
    • Scope includes Key Scenarios, ERP Scenarios, SAP SuccessFactors, SAP Fieldglass, SAP Hybris, SAP JAM, SAP Ariba Network, etc.  

    And, of course, once you choose one or the other, you’ll still have to choose what type of cloud implementation you want (e.g., SAP offers infrastructure as a service, platform as a service, and software-as-a-service and all three have pros and cons). The same types of choices will apply if you choose a traditional on-premise deployment with a tailored datacenter integration (TDI).  

    So, the best next-step is normally an in-depth business analysis and scope to determine what benefits your organization and why.  

    Asking the Right Questions:  

    Defining your selection criterion is normally the first step in making a decision. In most cases, organizations asking whether they want on premise or cloud deployment for S/4HANA still have to answer those questions, which means taking time before making a choice.  

    • What are our security needs? Does a cloud implementation offer this or do we need custom solutions?  
    • Is there a cloud provider that meets all of our needs (availability, uptime, scalability, platform, infrastructure, software, etc.)  
    • Are predictable costs and total costs more important to your organization? Or are higher operational costs and the ability to depreciate assets over time more valuable? 
    • How quickly do you have to complete the deployment?  
    • What kind of scalability do you need? Will on-premise handle that?  

    Eventually, there’s a lot to review between the flexibility, reliability and security of an on-premise deployment versus the simplicity, cost-effectiveness, and scalability of the cloud. There is no right answer for everyone, only for your business.  

    If you still need help, reach out and schedule a meeting. We’ll discuss your needs, ask questions, and make a recommendation based on what you share about your business.

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