Feeling unsure about whether to choose S/4HANA On-Premise or S/4HANA Cloud? You’re not alone! Many businesses face this dilemma when deciding how to best leverage SAP's powerful ERP solutions. Let’s break down together the key differences, benefits and scenarios to help you make an informed choice.

What is S/4HANA On-Premise?

S/4HANA On-Premise requires your business to purchase a traditional license with an annual maintenance fee. This model provides full ownership of the software, but also makes your team or a third party responsible for its installation, upgrades, and day-to-day management. SAP S/4HANA On-Premise offers greater flexibility, enabling your team to implement and test annual SAP upgrades. It also allows for changes and adjustments within the system, ensuring it aligns with your specific business needs, budget, and resources. While this solution may take longer to deploy, it grants access to the full range of functions and settings. Additionally, it allows for a high level of customization to your organization, giving you complete control over the software’s operations within your company’s infrastructure.

When is S/4HANA On-Premise the better option?

The S/4HANA On-Premise solution would be the go-to choice for large enterprises that already have well-established processes, operations and policies. This offering would enable them to own the full range of the software features and take advantage of its high degree of flexible customization. Additionally, having the system hosted on the company’s own servers offers enhanced opportunities for effective monitoring and control that the Cloud edition may not fully match.

Consider S/4HANA On-Premise if you are a:

• Global Shipping/Manufacturing Giant with complex, well-established operations spanning multiple countries
• Financial Institution with Strict Compliance Needs that maintain tight control over data security and implements custom security protocols

What is S/4 HANA Cloud?

The S/4HANA Cloud alternative is a Software as a Service (SaaS) solution hosted and maintained by SAP on their servers. Unlike S/4HANA On-Premise, upgrades in the cloud version occur quarterly, relieving your team of the complex tasks involved in testing, adjusting and implementing changes. This edition operates on a monthly subscription model that covers everything from infrastructure to system upgrades, executed entirely by SAP. However, it's important to note that S/4HANA Cloud is a more restricted version of the On-Premise edition. While deployment is faster and the system is easier to use, the settings and configurations are limited, offering less flexibility for customization to meet your company’s specific needs.

When is S/4 HANA Cloud the better option?

If you own a small to middle-size business and demand a lighter and more flexible database platform, S/4 HANA Cloud is likely the better solution. Installing, testing and adjusting the On-Premise version would typically require a more experienced IT team specialized in SAP maintenance, which could result in higher costs . In addition, S/4 HANA Cloud would ideally fit rapidly developing companies that benefit from faster upgrade cycles and comprehensive support, all fully managed by SAP’s expert team.

Consider S/4 HANA Cloud if you are a:

• Retail Chain Expanding Regionally that needs a quickly implemented solution in new stores, with minimal IT overhead

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