SAP S/4HANA ERP platform options expand but raise deployment questions

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S/4HANA Cloud adoption starts to flourish in fast-growing companies

But growth of S/4HANA Cloud deployments still appears to lag on premises by a huge margin, and many of those cloud moves are to private clouds rather than multi-tenant SaaS.

SAP S/4HANA adoption seems to still be a predominantly on-premises phenomenon, but if new S/4HANA Cloud implementations are any indication, organizations may want to take another look at both public and private cloud options.

Plans for rapid growth, coupled with a desire to keep infrastructure costs low, have inspired several companies to deploy S/4HANA, SAP's newest ERP platform, in public and private clouds. During a panel discussion at this month's Sapphire Now conference, SAP customers shared their reasons for eschewing a traditional on-premises installation.

For Vivint Inc., outgrowing its existing infrastructure spurred the Provo, Utah-based security systems provider to examine other options. Vivint has been in business since the mid-1990s and has more than 1 million customers. Its CEO set a growth target of 10 million customers in the next three years, according to Jerry Druce, senior director of program management and ERP operations.

"Being a young company, our infrastructure was largely homegrown," Druce said.

The company was running a hodgepodge of applications, with an off-the-shelf financial application and two inventory systems, which meant the field service, sales and other teams couldn't view inventory, transactions or other data easily.

"We needed the agility to grow on demand," Druce said.

Vivint chose to deploy S/4HANA on the S/4 private cloud through the SAP enterprise cloud organization without going through a request-for-proposal process.

"We wanted to have just one name, one chokeable throat," Druce said.

As an organization, Vivint didn't have the skill set or resources to maintain a complex infrastructure and architecture, and keeping the software current and healthy was a priority.

S/4HANA Cloud can provide a path for fast growth

Meanwhile, MOD Super Fast Pizza LLC, a fast-casual restaurant chain founded in Seattle in 2008, experienced triple-digit growth in the past three years. It needed something that would continue to grow with the business and that could be deployed quickly, according to Tara Gambill, director of MOD Pizza's SAP center of excellence.

The company chose an S/4HANA Cloud deployment, along with SuccessFactors, SAP's software-as-a-service HR suite, so it could continue to operate as a lean IT organization and cloud-only shop.

S/4HANA was deployed in a public cloud model, which took months instead of years, Gambill said. The company worked to implement standard best practices to ensure adoption.

"Have an understanding of the stakeholder community, key processes and business transformation items that you're hoping to achieve to right-size your technology decision," she said.

Additionally, she said change management is key to understanding how much the organization can handle and how flexible it is.

As her advice suggests, going with S/4HANA will enable MOD Pizza to continue to grow at a rapid rate. Future plans involve point-of-sale integration and a restaurant-specific platform that needs to be integrated using APIs, Gambill said.

"Having an idea of what the architecture is today and where it needs to go is what we try to focus on," she said.

Public cloud offers quick turnaround time

Other companies, particularly those with multiple locations and short timelines, find that the public cloud model can help them get online a lot faster.

Deploying S/4HANA in a public cloud model took 10 weeks for Adita Technologies Ltd., according to Kumar Govindarajan, the company's CEO and chief architect. The systems integrator, which is based in Sydney, expects to deploy its S/4HANA Cloud system in India in four weeks.

"We're using the same solution as the best companies in the world," Govindarajan said.

Like the other companies on the panel, Adita wanted a system it could grow with, as well as software that would be around for the long haul.

"A lot of these cloud solutions won't be with us," Govindarajan said.

Private cloud guards against latency

Not all companies were sold on the public cloud, and three of the panelists chose a private deployment for their S/4HANA Cloud: Vivint, Karma Automotive LLC and Vectus Industries Ltd.

Karma Automotive and Vectus Industries chose private clouds primarily due to the timing of their implementations. In 2015, when they were working on their projects, there weren't a lot of choices. India in particular didn't have a lot of options for the public cloud, according to Manish Sinha, head of IT at Vectus.

However, latency was also an issue that concerned Vectus.

"When [the software] goes to the end user, and they feel that [transactions] aren't happening instantly, the acceptability is reduced," he said.

On a private cloud, if there is lag time, the IT team can at least have control over troubleshooting.

Bad experiences have also driven customers to private clouds. According to Vivint's Druce, a cloud-based customer relationship management package with limits, thresholds and concurrent transactions created an IT mess, and the company didn't want to deal with that.

Staying on premises maximizes existing investments

Other SAP customers who were not on the panel chose to conduct greenfield installations of S/4HANA to replace legacy R/3 ERP systems -- but did so on premises to maximize their existing infrastructure investments.

According to Faizan Mustafa, head of information technology at Pakistan-based Indus Motor Company Ltd., this was the driver to stay in-house when his company upgraded its ERP system. That choice has resulted in real ROI for the data center.

"Because S/4HANA has a more simplified architecture as compared to R/3, it has reduced our data footprint by 40 to 50%," Mustafa said.

From what these customers said, the choice of public or private cloud or on premises comes down to risk tolerance, growth plans and whether existing infrastructure can support S/4 HANA. The advice, whether from panelists or customers, boils down to this: Do your research and understand your organization before taking the leap.

Next Steps

Learn more about on-premises S/4HANA

Read about a manufacturer's S/4HANA deployment

Understand how SAP Activate can speed an S/4 implementation

Dig Deeper on SAP S4HANA Cloud