Deciding on an SAP S/4HANA adoption is often a combined exercise between the business and IT.
Which product version of SAP S/4HANA should be the right fit, given the business needs and the current IT landscape, is also a joint decision as it’s driven by several factors from both business and technology. The enterprise architect team gets involved in these roadmap exercises and can include, apart from the enterprise architect from the customers team (for those customers who have an enterprise architect), SAP enterprise architects and advisory partner enterprise architects.
Given SAP’s strategic cloud-first direction for future innovations, customers aren’t encouraged to go ahead with on-premise SAP S/4HANA deployments. Rather, the recommendation from SAP steers the customer toward SAP S/4HANA Cloud Public Edition, if the functionalities and nonfunctional requirements are met. Otherwise, SAP steers customers toward SAP S/4HANA Cloud Private Edition, which is essentially the same as on-premise SAP S/4HANA but in a managed cloud environment. In this way, the customers have three main advantages:
- Futureproofing their investments
- Leveraging the innovations available only on these cloud editions
- Reaping the commercial benefits of an operating expenditure (OpEx) model or a subscription-based model (RISE with SAP)
Triggers
Let’s delve into the triggers of such a decision to adopt SAP S/4HANA. The triggers can come from business, IT, or a combination of both. Some of the typical triggers for business needs are as follows.
Businesses may need functionalities that are available only in SAP S/4HANA Cloud. Businesses also may have certain pain points that can be solved by migrating to or implementing SAP S/4HANA. For example, there may be a need to have carbon footprint or emissions data and its traceability.
There may be a consolidation scenario in which several large ERP systems need to be consolidated into a single large ERP system where all the business processes are aligned to the standard processes and are supported by a cutting-edge technology platform. This could be an existing system consolidation exercise or the result of a merger and acquisition. It could even be a divestiture in which some functions and data are removed, and the business wants to align the remaining solution with the latest SAP solution—SAP S/4HANA.
Sometimes, customers may need to implement their ERP system from scratch because the business has changed drastically, or the ERP system needs to be modernized by overhauling it completely. They will, in this case, typically start with the latest version of SAP S/4HANA Cloud and, occasionally, on-premise SAP S/4HANA as a greenfield implementation.
There can be several technology drivers for an SAP S/4HANA adoption evaluation:
- Some of these considerations include automation, total cost of ownership (TCO) reduction through infrastructure footprint reduction, or landscape simplification.
- For many clients, the SAP HANA roadmap evaluation is triggered by a hardware refresh cycle. Instead of keeping the traditional hardware, they select hardware to support the SAP HANA platform so that they don’t need to invest in the hardware for a reasonably longer period. Thus, they get the latest innovations of the SAP HANA database and SAP HANA platform at the same time, which provides a future-proof solution.
- Futureproofing the SAP technology platform and making it ready for innovations is a driver for customers who need the platform to enable their business process innovation.
- End-of-life issues for SAP ERP versions can be drivers to cause some SAP customers to think about the latest product versions of SAP S/4HANA. The fact that SAP’s mainstream support for the SAP ERP will be over by 2027 is a driver for many customers to adopt SAP S/4HANA Cloud.
- Upgrades can be important trigger points for many clients because they can be such cumbersome IT projects. So, rather than upgrading to a version that will be supported only for another two or three years, it’s better to go for the latest technology-supported application, doing some cleanup in the process.
Decision Factors
When a client wants to evaluate their SAP S/4HANA Cloud roadmap, there are major factors to consider.
The first step for the roadmap is to decide on the product version of SAP S/4HANA, which is required. Based on that, the next question is about greenfield or brownfield or any other intermediate flavor.
The evaluation criteria for a greenfield implementation scenario will be very different for different clients, and the weighting of different factors will vary with the client’s focus or the primary driver for such an evaluation. Some clients want to be at the leading edge of innovation in their IT strategy, and they are more willing to take risks, whereas others want to have a more balanced strategy. This also can drive the weight placed on different factors under consideration.
The migration scenarios are even more complex because there needs to be detailed evaluation of the existing solution impact and the impact on the business processes subsequent to the migration (or conversion) to SAP S/4HANA target product version.
With an existing SAP ERP system, the challenge can be the adoption of new ways of working, which requires change management. Change management is also required when it’s a completely new solution for the customer’s business users or IT users. However, with Joule (for SAP S/4HANA Cloud) making the interface to the system responsive, with the various phases of SAP Activate guiding you each step of the way, with SAP experts being part of the team to help in adoption, and with embedded help in every help documentation, there are several accelerators to help in this change. A modern interface with easy self-service analytics helping to increase operational efficiency can lead to overall improvement in adoption.
Almost every existing SAP ERP customer is either building their roadmap to SAP S/4HANA (including the products and pathway of adoption) or deciding on their plan of action. The decision also includes business models such as RISE with SAP and GROW with SAP, which may include licenses for other solutions such as those from SAP BTP. SAP BTP is a major player from an extension and clean core perspective as well as being an enabler for modernization and automation (process as well as build).
Release Cycle
There is one major release of on-premise SAP S/4HANA every two years, starting with the release of SAP S/4HANA 2023 in 2023. Each on-premise SAP S/4HANA release, from 2023, has mainstream maintenance for seven years. There will also be more frequent but less disruptive feature pack releases, that is, three FPSs between the two major releases. The release number of the on-premise version corresponds to the calendar year of release. The same is true for SAP S/4HANA Cloud Private Edition.
SAP S/4HANA Cloud follows the YYMM release numbering format with a more frequent, that is, biannual release cycle.
Compatibility Packs
Compatibility packs are versions of standard SAP Business Suite software products that are compatible with SAP S/4HANA. SAP provides time-restricted usage rights that allow on-premise SAP S/4HANA customers to run certain classic SAP ERP solutions on their SAP S/4HANA installation (regardless of their deployment model). A critical prerequisite is that these customers have acquired not only the SAP S/4HANA license but also the license to the applicable classic solution.
Compatibility packs are set to expire on December 31, 2025, so it’s imperative to take actions to replace them. However, there are four exceptions: you can use customer service (CS), transport (LE-TRA), and production planning for process industries (PP-PI) until the end of 2030. Additionally, you can run consolidation in compatibility pack EC-CS in parallel to SAP S/4HANA Finance for group reporting until the end of 2027. You can refer to the latest blogs on this topic and also refer to SAP Note 2269324 for comprehensive updates on various features.
Note: The announcement regarding the extension of mainstream maintenance for SAP Business Suite solutions until the end of 2027 has no influence on the end of compatibility pack use rights. They will be terminated after 2025. For more information about the SAP S/4HANA compatibility scope, refer to SAP Note 2269324.
Editor’s note: This post has been adapted from a section of the book SAP S/4HANA: An Introduction by Devraj Bardhan, Axel Baumgartl, Madalina Dascalescu, Mark Dudgeon, Piotr Górecki, Asidhara Lahiri, Richard Maund, Bert Meijerink, and Andrew Worsley-Tonks. They are are a multinational author team working for IBM, SAP, and Accenture. They have
been working with SAP S/4HANA since its first release.
This post was originally published 11/2025.
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