SAP Rise - A Comparison of the Different Operating Models
Classic S/4HANA on Cloud or on premise? SAP RISE in Private or Public Cloud Edition?
The paths to the cloud with SAP S/4HANA are becoming increasingly diverse. Not least the recent launch of the RISE with SAP initiative opens up new approaches. This blog post is intended to provide a little information about the different operating models.
The Basics at the Beginning: What is Rise with SAP?
With Rise with SAP, customers receive a bundle of software and services centered on SAP S/4HANA as a SaaS model (Software-as-a-Service). Here, the public cloud variant with more standardized processes or the private cloud variant with greater individuality and a similar process flexibility to on premise are available for selection. Both variants are hosted by one of the cloud providers Amazon (AWS), Microsoft (Azure) or Google (GPC).
Rise with SAP also includes the use of the SAP BTP (Business Technology Platform/formerly SAP Cloud Platform), which is used, among other things, for the outsourcing of developments (side-by-side extensibility). In addition, innovations (e.g. Robotic Process Automation (RPA), Machine Learning (ML) or Artificial Intelligence (AI) from SAP and SAP partners are provided here, which can be used as services. Last but not least, BTP is also an important tool as an integration platform to other SAP or non-SAP systems.
In addition, the SAP Business Network can be used for collaboration with other companies in the area of purchasing and supply chain. To analyze the business processes used, reports (Business Process Intelligence) can support in the Rise model. The customer can choose one of the hyperscalers for the infrastructure, with technical management provided by SAP.
As a subscription model, RISE with SAP thus offers a wide range of services and options that facilitate the path to the Digital Enterprise.
For which company is Rise with SAP the right initiative?
In principle, RISE with SAP is intended for customers who
- already have S/4HANA in use or
- are about to start a transformation project towards S/4HANA (ECC --> S/4HANA) or
- search for a completely new ERP system (greenfield approach).
These SAP customers currently have the following operating models to choose from:
- S/4HANA on Premise
- S/4HANA on Cloud
- Rise with SAP (Private Cloud Edition)
- Rise with SAP (Public Cloud Edition)
S/4HANA on Premise
This model can be described as a classic license model with operation in the company's own data center or at a service provider. Brownfield and greenfield approaches are possible in the transformation process. The customer selects the data center service provider and the service provider for technical management itself. This variant offers a high process variance and flexibility in expandability. An update to a higher S/4HANA version is not mandatory, but is recommended after at least 5 years in order not to run out of SAP maintenance (corresponds to the 5-year maintenance period for an SAP release).
S/4HANA on Cloud
In this model, too, the customer owns its own SAP S/4HANA licenses and selects one of the hyperscalers (Azure, AWS, GCP) for the infrastructure. All other points do not differ from the previous model, so that a brownfield or greenfield approach is also possible here. Likewise, the service provider for technical management can be freely selected here. Similarly, a high process variance and high flexibility in expandability are also given here. In addition, integration into existing cloud solutions (e.g. Office 365) is easier, depending on which hyperscaler is used.
Rise with SAP (Private Cloud Edition)
Compared to the "On Premise" and "On Cloud" variants, Rise with SAP is a classic subscription model and includes the components listed above. The customer can choose a term of up to 60 months, during which an upgrade to a newer S/4HANA version is mandatory (once in 5 years). Both a brownfield and a greenfield approach are suitable as a conversion strategy.
In addition to the additional RISE services such as
- SAP BTP
- Business Process Intelligence
- Business Network
S/4HANA can be operated like an on-premise or any-premise system, which is particularly advantageous for customers with major customizations in their existing ECC system, as the enhancements are S/4HANA-compliant but can continue to be operated. So here, too, a high process variance and high flexibility in extensibility are possible.
Rise with SAP (Public Cloud Edition)
The Public Cloud Edition is the Rise with SAP offering for near-standard customers. Customizing options, as known from the classic SAP ERP world, are not possible here. In most cases, this model is suitable for the smaller customer segment with low process complexity or for on premise customers with a public cloud solution in a branch office (e.g. abroad). However, it can also be used for start-ups.
SAP best practice processes are used in this model, which implies that only a greenfield approach can be selected as the migration path. All other services already mentioned above are also included in this model. The four release upgrades per year are mandatory, with test automation tools included. These ensure that a release change can be well prepared and will therefore quickly feel like "daily business" for a company. Each release contains new innovations or the mapping of additional countries or lines of business, which means that the range of functions is constantly expanding.
In the public cloud variant, one can certainly speak of the lowest TCO (Total Cost of Ownership) of all alternatives due to the low extensions alone.
For all four operating models, the following additional issues should be considered and weighed:
Conclusion
Companies facing a switch to S/4HANA will have to deal intensively with the different operating models. Here, companies are advised to weigh up all the pros and cons on the basis of their own digitization strategies and to include the result in the IT roadmap.
Ideally, a trustworthy partner with extensive transformation and cloud experience will be able to provide support, correctly classify the pros and cons for the respective company and derive the consequences. The decision for or against one of the operating models should be made with the utmost care, as it can have far-reaching consequences in some cases.
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