The latest SAP ERP choices each have different strengths and weaknesses. But first, you need to understand the differences and what each offers.
Here's an overview of the S/4HANA software types and the most important facts about each.
1. S/4HANA Cloud
What it is. S/4HANA Cloud is SAP's multi-tenant SaaS ERP software and is the company's entry-level product. It was previously called S/4HANA Cloud Essentials Edition and Multi-Tenant Edition.
Who it's good for. Companies that are looking for a basic cloud ERP software or only require core financial modules may benefit.
Benefits. S/4HANA Cloud offers many of the same benefits as other cloud products, including outsourced infrastructure management, the ability to rapidly add computing power and a simple user and functionality provision process. S/4HANA Cloud SaaS ERP is also less expensive than other SAP software, and the product's automatic upgrades allow you to receive new functionality more quickly.
Downsides. S/4HANA Cloud has less customization potential than other S/4HANA versions and lacks some of the features found in other S/4HANA software. S/4HANA Cloud also has less scope for extensibility. The software can only be used for greenfield -- or new -- implementations. In addition, upgrade timing is non-negotiable.
2. S/4HANA Cloud Extended Edition (EX)
What it is. Previously known as the S/4HANA single-tenant edition, S/4HANA Cloud EX is, as the name implies, a more advanced version of S/4HANA Cloud. It is on a dedicated cloud landscape.
Who it's good for. It's for companies that would rather not -- or can't -- take care of an IT infrastructure but need more than S/4HANA Cloud can offer.
Benefits. You can implement more customization and third-party integrations than with S/4HANA Cloud. The software also includes more user interface options and functionality. Unlike S/4HANA Cloud users, you can choose EX upgrades timing -- to an extent.
Downsides. You must have a certain number of employees to get EX, as SAP demands a bigger user count for EX than for S/4HANA Cloud. EX is also more expensive than S/4HANA Cloud and has fewer customization and enhancement options than S/4HANA Any Premise software. Like S/4HANA Cloud, it can only be used for greenfield implementations.
3. S/4HANA Cloud Private Edition
What it is. Private Edition is similar to S/4HANA Cloud and EX but offers more customization options than the other two S/4HANA software types.
Who it's good for. It's good for companies that require a wider range of features and more flexibility and can pay Private Edition's higher price tag.
Benefits. Unlike with S/4HANA Cloud and EX users, you can implement partner templates with Private Edition, which speeds up implementation. You can also migrate from a previous SAP environment.
Downsides. While Private Edition has more extensibility than S/4HANA Cloud and EX, it still falls short in that area when compared to the Any Premise software.
4. Customer-Managed S/4HANA Any Premise
What it is. Customer-managed S/4HANA Any Premise offers more customization than the previously discussed S/4HANA versions. Companies can choose to have the software hosted in the company data center, at an SAP data center or at certain hyperscalers. You can choose to have an internal IT team manage it or have a third party do so.
Who it's good for. It's for bigger companies that have somewhat complicated requirements for their ERP -- for example, extensive customization -- and are switching from another SAP system.
Benefits. You can extend and customize the product to whatever extent your organization needs and can deploy partner-developed content without any restrictions. In addition, customer-managed Any Premise permits system conversion or selective data transition from a previous SAP environment. Upgrade timing is up to you.
Downsides. Because you choose upgrade timing, you take charge of the process, which could be a challenge for some organizations. Upgrades are annual, so you may need to wait to receive fixes or new features.
5. S/4HANA Any Premise on HANA Enterprise Cloud (HEC)
What it is. Any Premise on HEC users employ HEC as a framework. HEC is an infrastructure-as-a-service group of tools that also provides services like new user provisioning and disaster recovery.
Who it's good for. It's suited for bigger companies that have complicated ERP needs but prefer SAP manage the bulk of their environment.
Benefits. Any Premise on HEC provides flexible customization and integration, and you can choose from multiple product deployment locations. As with customer-managed Any Premise, you can upgrade from a previous SAP ERP product, and the software supports partner content.
Downsides. SAP must sign off on the applications used on HEC, which could cause problems if a necessary application isn't approved. Even though SAP takes care of most Any Premise on HEC software needs, you're in charge of upgrades.