Issue

As ERP Rebuild evaluates its functional deployment for future state SAP S/4HANA, the decision between utilising a public cloud or a private cloud environment, on which to build business capability, is a critical consideration. This document (when completed post reviews) will provide a clear concise comparison of the primary options to inform this decision. 

Recommendation

Option A) SAP S/4HANA Private Cloud Edition

SAP S/4HANA Public Cloud, with its benefits of low touch maintenance and standardised business processes, presents a simple and straightforward solution. However, for a global chemicals company like Syensqo, the realities of running a scaled operation with multinational compliance obligations  and potential for future acquisition/divestments challenge the viability of this option in it's current offering from SAP. While SAP S/4HANA Public Cloud offers cost efficiency, the need for enhanced security, additional compliance, and control over Syensqo data favours the SAP S/4HANA Private Cloud Edition. Additionally, SAP S/4HANA Private Cloud Edition provides flexibility in project deployment options, allows Syensqo to determine its own schedule for maintenance and adoption of new technologies and business capabilities (such as generative AI), that are rapidly emerging and will advance during the lifecycle of the ERP Rebuild. Changing position on capabilities through deployment lifecycle is a likely scenario that is not supported under the constrains of SAP S/4HANA Public Cloud.

Finally, SAP S/4HANA Public Cloud is generally used for new greenfield deployments, especially for emerging companies without significant standing investments in SAP solutions. Given Syensqo's extensive implementation of SAP dating back to 2001, transitioning to SAP S/4HANA Public Cloud is not feasible. Our existing infrastructure and substantial investments in on-premises SAP solutions necessitate a tailored approach that ensures advancement in business capability that leverages on existing deployed assets and Syensqo IP. 

Background & Context

In recent years SAP has been marketing and constructing it's product offerings towards cloud subscription models in order to become a 'Cloud' company. For SAP/S/4 core systems the product offerings are including SAP S/4HANA Public Cloud, GROW with SAP, SAP RISE and Private Cloud Edition each of these options offer varied configurations of which customers may consider. Broadly speaking (and in order to refine the conversation for decision making) these models are either public or private options thus this KDD is narrowed down to option A) SAP S/4HANA Private Cloud Edition or option B) SAP S/4HANA Public Cloud. For the purpose of this KDD Private cloud edition can be also considered as an SAP RISE construct, however SAP RISE or Private Cloud will have it's own consideration with it's own pro's and con's as SAP licensing negotiation commences and as ERP Rebuild aligns on it's understanding and it's requirements on how it aims to operate SAP more fully. 

Assumptions

1. No on-premise data center
   Building on-premise data center with a perpetual license model is out of the question due to there being no indicators that this would be a preference and ERP Rebuild charter alignment and Syensqo goals means building a modern future proof solution which aligns with cloud. It is such an obvious elimination of choice that it not sensible to take effort to validate this assumption.
2. Requirement to support intentional but disruptive events
   As commonly indicated by executive leadership, Syensqo will at some point undergo mergers/acquisitions/divestments in it's future, possibly even during the ERP Rebuild project lifecycle. These events will have demands and requirements to integrate or onboard / off-board organisational units with speed and flexibility. 
3. No product deviation from SAP
   SAP do not alter their product offerings so significantly in the time period between this decision and securing a license to operate that the recommendation becomes invalid.
4. Uptime and Problem Resolution
   SLA's for availability and support offered through products considered meet Syensqo's requirements
5. Cost Control and Vendor Lock-in
   Ensuring the power dynamic does not shift heavily in SAP's favour while transitioning to a cloud subscription model is a critical non-functional requirement
6. Portioned adoption of public cloud overly complex
   The option to move some business capabilities that are very 'vanilla' into a public cloud offering and operating more complex parts of the business into a private cloud construct would lead to undue complexity to operate and maintain.

Constraints

1. SAP are heavily pushing cloud adoption to it's customers, thus we do not consider on-premise perpetual platform model and the model will be subscription based
2. Vendor lock-in to SAP and cost control become an increasing challenge under any cloud platform model
3. The decision needs to be taken early (in conceptual design phase) in order to progress with the ERP Rebuild agenda and negotiate an ideal outcome

Impacts

At inception of the S/4 transformation project, now is the only point in time it is feasible to consider starting fresh with a public cloud option. With the decision to move forwards SAP S/4HANA Private Cloud Edition will restrict the viability of changing direction in the future. Once acquired and deployed the feasibility to change course and pursue a public cloud solution becomes unwieldy. 

Business Rules

Cloud Platform must support business requirements, the cloud platform itself caters for business requirements but does not directly service business rules . Operationally 

Options considered

List the options (viable options or alternatives) you considered. These often require a longer explanation with diagrams, or references to other documents (links are best, but attachments are also possible). Use enough detail to adequately explain what you considered so that a project or business stakeholder reviewing this decision will not come back and ask "did you think about...?"; this leads to loss of credibility and questioning of other decisions. This section also helps ensure that you considered enough suitable alternatives rather than just copy/pasting SAP's recommendations.

Option A: SAP S/4HANA Public Cloud

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option B: SAP S/4HANA Private Cloud Edition

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option C: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option D: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Evaluation

Outline why you selected a position. The best format could be a pro/con table (sample below), but is up to you as the author. You must consider complexity, feasibility, cost/effort to implement, but also ongoing operational impact and cost. You must consider the program principles and explain any deviations in detail. This is probably as important as the decision itself.

	Option A -SAP Public Cloud	Option B - SAP Private Cloud
Ownership and Control	Con You do not own or control the underlying solution, relying on SAP for maintenance and update on their own schedule	Pro You have control over the solution with a dedicated cloud provider.
Security and Compliance	Con Security and compliance are primarily the responsibility of the cloud provider.	Pro Syensqo have greater control over implementing our own security measures and compliance policies to suit international regulations.
Scalability and Performance	Pro	Con
Customisation and Integration
Deployment
Management
Customisation
Updates
Cost
Integration
Data Residency
Vendor Lock-in
Performance

See also

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

Change log

Workflow history