SAP S/4HANA Public and Private Editions

Selecting the appropriate edition of SAP S/4HANA is a critical decision. This article from IgniteSAP aims to provide a quick comparison of these editions to help guide further assessment of S/4HANA editions so SAP consultants and customers make informed decisions.

SAP has designed S/4HANA to accommodate businesses of all sizes and types. To meet the unique needs of various customer segments, SAP has created differentiated versions of S/4HANA.

Every business can adopt a form of S/4HANA that suits their specific context, but this has led to some confusion among prospective and existing customers about which version is right for them.

Here we will also explore how Rise with SAP and Grow with SAP offerings support the transition to SAP S/4HANA.

Understanding the differences between the Public and Private Editions of SAP S/4HANA, who they are intended for, and how they relate to Rise with SAP and Grow with SAP, is part of the role of SAP consultants: to guide their clients in selecting and adopting the correct version that aligns with their business needs.

SAP S/4HANA Public Edition

The SAP S/4HANA Public Edition is designed as a multi-tenant cloud solution. It offers a standardized approach, ideal for businesses looking for a cost-effective, scalable ERP system without the need for extensive customization.

This edition is particularly suitable for small to medium-sized enterprises (SMEs) and businesses with standard processes that do not require significant customization.

SAP S/4HANA Private Edition

SAP S/4HANA Private Edition is a single-tenant solution that offers greater flexibility and control. This edition allows for extensive customization to meet the specific needs of an organization, making it suitable for large enterprises and businesses with complex or unique requirements.

The Private Edition can be deployed on the cloud or on-premise. With the Private Edition, organizations can tailor the system to their unique processes and integrate it more extensively with other SAP and non-SAP systems. This level of customization comes with a higher cost and longer implementation time but offers significant advantages.

Typical users of SAP S/4HANA Public Edition include:

Retail businesses seeking streamlined inventory and supply chain management.

Service-oriented companies needing efficient project management and customer service functionalities.

Manufacturing firms looking for standardized production planning and operations management.

Healthcare providers requiring reliable patient management and regulatory compliance without extensive customization.

Typical users of SAP S/4HANA Private Edition include:

Large multinational corporations needing extensive customization to align with diverse and complex global operations.

Financial institutions requiring advanced security features, compliance with regulatory standards, and bespoke financial management systems.

Pharmaceutical companies demanding tailored solutions for research and development, manufacturing, and regulatory compliance.

High-tech industries requiring integration with advanced technologies and customized workflows to support innovation and rapid product development.

Technical Architecture and Infrastructure

For S/4HANA Public Edition:

Public Edition The SAP S/4HANA Public Edition is designed as a multi-tenant cloud solution. This allows for easier scalability. Businesses can easily adjust their resource usage based on their needs without worrying about underlying infrastructure limitations.

SAP manages and deploys updates and patches, ensuring that all users have access to the latest features and security enhancements. This reduces the administrative burden on IT departments.

The Public Edition offers standardized processes and configurations, which helps simplify implementation and reduces the need for extensive customization.

The infrastructure for the Public Edition is hosted on SAP's cloud platform, which ensures high availability, disaster recovery, and string security measures.

For S/4HANA Private Edition:

The SAP S/4HANA Private Edition is a single-tenant solution, providing a dedicated instance for each customer. This architecture offers greater flexibility and control over the system's configuration and customization. Key features of this architecture include:

The Private Edition allows for extensive customization to meet specific business needs. Organizations can modify workflows, interfaces, and data models to align with their unique processes.

This edition supports deeper integration with other SAP and non-SAP systems. Businesses can create a tailored ERP environment that fits into their existing IT landscape.

The Private Edition can be deployed either on-premise or in a private cloud environment. This flexibility is necessary for industries with strict data residency and compliance requirements.

The infrastructure for the Private Edition can be managed by SAP, a partner, or the customer, depending on the chosen deployment model. It's also important to note that specific details around infrastructure management options might vary depending on the chosen service agreement with SAP and partners.

A Two Tier Approach?

A two-tier ERP strategy involves using a customizable SAP S/4HANA edition at the headquarters (Tier 1) and a standardized public cloud ERP for subsidiaries (Tier 2). This approach provides agility and cost efficiency for subsidiaries while maintaining integration and visibility with headquarters.

Volkswagen, for example, uses S/4HANA Private Cloud at major manufacturing sites due to complex integration needs and S/4HANA Public Cloud at other sites for rapid deployment. This strategy requires careful planning and presumably two separate licenses. Since it's not common, consult an SAP S/4HANA expert to ensure feasibility before planning for implementing this approach.

Scalability, Performance, and Security

The architectural differences between the Public and Private Editions have significant implications for scalability, performance, and security.

While both editions are scalable, the Public Edition's multi-tenant architecture offers more straightforward scalability through the cloud. The Private Edition, though scalable, requires more careful planning and resource management, especially for on-premise deployments.

The Public Edition benefits from SAP's cloud infrastructure, which is optimized for performance and reliability. The Private Edition's performance depends on the underlying infrastructure, which can be tailored to meet high-performance requirements but requires careful design and maintenance.

Both editions adhere to high security standards, but the Private Edition offers more control over security configurations. This is crucial for businesses in highly regulated industries that need to implement specific security measures.

Compliance and Regulatory Considerations

SAP S/4HANA Public Edition complies with a broad range of international standards and regulations, with SAP regularly updating the multi-tenant cloud environment to meet the latest requirements. Compliance features include strict data security protocols, such as encryption, access controls, and regular security audits, ensuring customer data protection.

The Public Edition also provides clear audit trails and logging capabilities, maintaining transparency and accountability in business processes. These features make the Public Edition suitable for businesses needing to meet standard regulatory requirements without customization.

S/4HANA Private Edition offers more flexibility for businesses needing to meet specific regulatory requirements. It allows for customized security measures, including advanced encryption, specific access controls, and detailed monitoring. Highly regulated industries, such as finance, healthcare, and pharmaceuticals, can configure the Private Edition to meet industry-specific standards, like FDA regulations. For strict data residency requirements, the Private Edition can be deployed on-premise, ensuring data remains within company control and complies with local regulations.

Rise with SAP

Rise with SAP is a “transformation-as-a-service” offering that includes everything a company needs to move to the cloud and adopt SAP S/4HANA. The main components of Rise with SAP include:

SAP S/4HANA Cloud: Either the Public or Private Edition, depending on the customer’s needs.

Business Process Intelligence: Tools to analyze and improve business processes.

SAP Business Network: Access to SAP’s ecosystem of suppliers, manufacturers, and logistics providers.

SAP Business Technology Platform: Integration and extension capabilities with SAP and third-party applications.

Technical Migration Services: Tools and services to assist with data migration and system conversion.

Rise and SAP S/4HANA Public Edition

The SAP S/4HANA Public Edition integrates seamlessly with Rise with SAP, providing a simplified path for businesses to move to the cloud.

Rise with SAP leverages the standardized processes of the Public Edition to facilitate a quicker and more efficient transition. This is particularly beneficial for SMEs and mid-sized businesses that can adopt SAP’s best practices without the need for extensive customization.

The bundled pricing and subscription model of Rise with SAP align well with the Public Edition’s cost-effectiveness. Businesses benefit from predictable costs and reduced total cost of ownership.

With SAP managing updates and maintenance, businesses using the Public Edition through Rise with SAP can focus on their core operations without worrying about system upkeep.

Rise and SAP S/4HANA Private Edition

The SAP S/4HANA Private Edition also fits within the Rise with SAP framework, offering a more specific approach for businesses with more complex requirements.

Rise with SAP supports extensive customization if required. This allows businesses to tailor their ERP system to their unique processes while still benefiting from the overarching support and resources of the Rise with SAP package.

The Private Edition’s flexibility in deployment (cloud or on-premise) is supported by Rise with SAP’s technical migration services, ensuring a smooth transition.

Businesses can utilize the Private Edition’s custom security features within the Rise with SAP framework, ensuring their specific regulatory requirements are met.

Rise with SAP accelerates digital transformation by providing a clear roadmap and the necessary tools to transition to SAP S/4HANA effectively.

Both editions benefit from the extensive support and services provided by the Rise with SAP package, including ongoing maintenance, updates, and access to SAP’s business network.

The business process intelligence tools included in Rise with SAP help organizations continuously analyze and improve their processes, enhancing overall efficiency and effectiveness.

Grow with SAP

Grow with SAP aims to provide smaller to medium-sized SAP customers with the resources and support needed to adopt SAP S/4HANA efficiently. This includes SAP S/4HANA Public Edition, comprehensive services to support the implementation and adoption process, access to SAP training and certification programs, and connection to SAP’s community of experts and ongoing support services.

SAP S/4HANA Public Edition and Grow with SAP

Customers can adopt SAP S/4HANA Public Edition through Grow with SAP to benefit from a more simple, cost-effective ERP solution. Key aspects include:

The Public Edition’s standardized processes and rapid deployment capabilities.

A scalable ERP solution that grows with the organization. This is particularly advantageous for SMEs looking to expand their operations.

Extensive training and support services, for a smooth implementation and ongoing success.

Integration with Other SAP Products

Both SAP S/4HANA Public and Private Editions are designed to integrate with a range of other SAP products, enhancing their capabilities and providing comprehensive business solutions.

The Private Edition, however, offers greater customization for each integration: tailoring SuccessFactors for specific HR needs, enhancing SAP Ariba integration with customized procurement workflows and on-premise systems, and providing advanced customization with SAP Concur to meet specific travel and expense requirements, and integration with broader financial systems.

Integration with Third-Party Solutions

Both editions of SAP S/4HANA also support integration with third-party solutions, which is vital for businesses with existing IT investments or specific software requirements.

APIs and Integration Tools

Public Edition: Utilizes SAP Integration Suite, which is part of SAP Business Technology Platform (BTP) to connect with third-party applications, making it easier to integrate various cloud and on-premise systems.

Private Edition: Offers greater flexibility through SAP’s integration tools, such as SAP Process Orchestration and SAP Data Services. This allows for more complex and customized integrations with third-party solutions, including legacy systems and specialized industry applications.

Custom Integration Capabilities

Public Edition: Supports integration with widely used third-party solutions through standardized APIs. While customization is more limited compared to the Private Edition, it ensures compatibility with popular software tools.

Private Edition: Enables extensive customization of integrations, supporting bespoke APIs and tailored integration scenarios. This is particularly beneficial for businesses with unique operational requirements or proprietary systems.

Integration with other SAP products and third-party solutions ensures the flow of data across different business functions, enhancing overall operational efficiency.

Integrated systems provide insights and analytics, enabling better decision-making through real-time data visibility across all business areas.

By connecting various systems, businesses can also encourage better collaboration between departments, suppliers, and customers, leading to more cohesive and effective operations.

Cost Comparison

Initial Investment

The initial investment for the Public Edition is lower due to the subscription-based pricing model. This model includes software licensing, cloud infrastructure, and support services, minimizing upfront costs.

The initial investment for the Private Edition is higher, including licensing fees, customization costs, and infrastructure setup, especially if deployed on-premise.

Ongoing Expenses

Ongoing expenses in S/4HANA Public Edition are predictable and include regular subscription fees that cover access to the software, maintenance, and automatic updates. This predictability simplifies budget planning.

Ongoing expenses for the Private Edition can be substantial due to maintenance, support, and periodic upgrades. These costs vary depending on the level of customization, and whether the deployment is on-premise or in a private cloud.

Cost-Saving Opportunities

Public Edition: Cost savings stem from reduced IT overheads, as SAP handles maintenance and updates. Additionally, the standardized processes reduce the need for extensive IT intervention.

Private Edition: Cost savings can be realized through optimized operations and improved efficiencies from tailored solutions. However, these savings are offset by higher customization and maintenance costs.

Beyond this relative comparison it is not easy to put a specific figure on how much the initial outlay and ongoing cost of either solution will be as individual plans and license costs vary according to the needs of the customer.

The S/4HANA Roadmap

The S/4HANA roadmap highlights several key focus areas.

Both the Public and Private Editions will see progressively enhanced AI and machine learning capabilities. In the Public Edition, these advancements will integrate into the cloud platform, enhancing predictive analytics, automating routine tasks, and providing deeper insights into operations. The Private Edition will similarly benefit, with the added advantage of customization to fit specific business processes. It is important to note that AI functionality is difficult to implement in on-premise systems, unless they have hybrid architectures with cloud-based components.

SAP plans to expand IoT integration within both editions, and SAP is developing more industry-specific solutions and best practices for both editions. Industry-specific enhancements will help sectors like retail, healthcare, and finance use SAP S/4HANA effectively, with the Private Edition offering greater customization.

User experience improvements are another focus, with enhancements to SAP Fiori for more intuitive interfaces and better mobile accessibility. Both editions will benefit, with the Private Edition allowing interface customization to align with specific workflows and preferences.

Selecting The Right Edition

Selecting the appropriate edition of SAP S/4HANA is a primary task for SAP S/4HANA projects.

SAP consultants must guide businesses through the selection in early customer interactions. Their expertise in conducting assessments of business processes and IT landscapes, providing clear advice and developing implementation plans, ensures that clients make informed decisions.

Choosing the right edition of SAP S/4HANA is a fundamental decision that can significantly impact the efficiency, scalability, and strategic growth of a business. It is essential to consider the unique needs and long-term goals of the organization when making this choice.

This comparison of the main differences between S/4HANA editions, is intended as an overview, and consultants must regularly check new features and functionality as SAP is constantly improving the both editions of S/4HANA to better meet the changing needs of businesses.

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