SAP S/4HANA in the Public Cloud: What You Should Know

With the transition to S/4HANA, SAP users must deal with the cloud as a deployment and usage environment. There are good reasons for hosting via hyperscalers in the public cloud, and they don’t just relate to IT infrastructure.

At the latest since the introduction of S/4HANA, the use of SAP has been inextricably linked with the question of suitable hosting. The cloud-native orientation of the enterprise resource planning (ERP) suite is forcing the replacement of previous on-premises structures, but which cloud should it be?

For a long time, IT managers had an ambivalent relationship with the public cloud. It often served as a flexible test environment. Still, the operations of the ERP system via the servers of Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) were viewed somewhat skeptically.

That has changed.

Companies are increasingly using SAP S/4HANA in the public cloud. This brings them a whole range of benefits. It also requires detailed planning to avoid unpleasant surprises.

The Advantages: Availability, Flexibility, Scalability, and Services

First, there are IT infrastructural arguments in favor of operations in the public cloud. As the central hub for all ERP processes:

  • S/4HANA can be scaled easily and quickly in the public cloud as required
  • Reserved instances ensure that sufficient capacity is always available
  • Dynamic pricing models provide usage-based billing instead of rigid flat rates

Availability also plays a crucial role in productive systems. Internationally active companies benefit from global access to a uniform cloud platform. This brings the individual locations closer together via a globally used, uniform ERP system, creating enormous optimization potential for all processes.

Another benefit: ERP environment becomes more flexible and efficient. The hyperscalers’ service portfolio enables the automation of system operation and processes. New function modules for S/4HANA can be tested, deployed, and rolled out company-wide even faster in the public cloud environment.

In addition to improved infrastructure and cost-effectiveness, the public cloud offers one thing above all.

Innovation potential.

Numerous platform services from hyperscalers, with some services tailored to SAP solutions, can continuously help companies optimize their ERP processes. With the help of technologies such as the internet of things (IoT), machine learning, artificial intelligence (AI), and analytics, companies derive maximum benefit from their S/4HANA data.

The Challenges: Effort, Complexity, and Expertise

SAP S/4HANA is the platform where all critical business and planning processes converge. Migrating this “control center” to the public cloud involves an enormous amount of work. It must be monitored at every project stage, especially in terms of costs. As efficient as operations are in the public cloud, calculating the total expenditure for the move is often not transparent. In addition, external costs such as consulting services and internal resources such as personnel expenses should also be considered. This is because special regulations often apply in connection with SAP about regular benchmarking or service level agreements.

The topic of costs reveals a fundamental problem.

Many companies use S/4HANA daily, but only at the end-user level. When migrating the ERP suite as a complex overall structure, internal IT quickly reaches its limits. That is why it is advisable to work with an experienced service provider such as Syntax with extensive SAP and cloud expertise. The service provider can develop a comprehensive strategy because the public cloud is much more than ERP software’s new operating environment. It must be planned accordingly for the long term.

S/4HANA in the Cloud: A Practical Example

Smart Press Shop recently set up the world’s most modern press store for car body parts with the support of Syntax. The company uses a combination of SAP Digital Manufacturing Cloud for Execution and SAP S/4HANA Cloud Essentials. Since both solutions run entirely in the cloud, Smart Press Shop does not need its server capacity or an on-site IT team. Because Syntax takes over the operation of the systems as part of managed services, Smart Press Shop can concentrate fully on its core business: the production of car body parts.