Functional differences between SAP S/4HANA Cloud, private edition and SAP S/4HANA On-premise

[jmarquezmr]

Hello, and thanks for spending some time going through this blog post. I’m part of SAP S/4HANA RIG (Regional Implementation Group).  My team has supported hundreds of customers on their journey to SAP S/4HANA and now we are focused on SAP S/4HANA Cloud, private edition.

In this blog post, I would try to address a common question that I have received from customers and partners about the functional differences between SAP S/4HANA Cloud, private edition, and SAP S/4HANA On-Premise.

We know that both solutions share the same codeline. However, it does not mean that both have the same scope. For various strategic reasons, some features currently available in SAP S/4HANA On-Premise were not included for use with SAP S/4HANA Cloud, private edition.

The good news is that the features not available in SAP S/4HANA Cloud, private edition but in SAP S/4HANA On-Premises, are part of the SAP S/4HANA compatibility scope. Why do I say, "good news”?

Because it means that SAP S/4HANA Cloud, private edition contains all new features and innovations but only non-strategic features from the compatibility scope are not available. On the contrary, all the newest recommended S/4HANA solutions are already part of the S/4HANA Cloud, Private Edition solution.

So, let’s start with some basics, what is the SAP S/4HANA compatibility scope? In my own words, these are functionalities that were originally created for SAP ERP that are currently available in SAP S/4HANA. But SAP has authorized customers to use these functionalities in SAP S/4HANA for a limited time (typically until the end of 2025, with a few exceptions that will be available until 2030).  This SAP practice was developed to help customers ease their transition into S/4HANA by allowing them to reuse some legacy solutions in their new S/4HANA target environment.  Compatibility pack IDs give customers additional time to move to the newer recommended SAP S/4HANA solutions. Many of the SAP ERP legacy solutions are not optimized for use in SAP S/4HANA and in many cases, much better solutions have been made available to replace them. The legacy solutions that originated from SAP ERP will be treated as solutions in maintenance mode when used in SAP S/4HANA (meaning SAP will not deliver any new innovations for that functionality).   SAP expects customers to move to a recommended long-term strategic SAP S/4HANA solution before the compatibility usage rights expire.

For more information, please review the SAP Note 2269324 – Compatibility Scope Matrix for SAP S/4HANA. To learn more about what will happen after the expiration of the compatibility scope, I also encourage you to read the blog post published by my colleague anja.wilde called Compatibility Scope: What Happens after 2025/2030.

Now that we know what the compatibility scope is, and that the functional differences between SAP S/4HANA Cloud, private edition, and SAP S/4HANA On-Premise are only features that belong to the compatibility scope Matrix, let me explain to you how to start looking for more detail.

For that, you can start reviewing the RISE with SAP S/4HANA Cloud, private edition Service Description Guide  (Section 5.9 -S/4HANA compatibility pack)

In summary, that section states that only part 4 of the SAP S/4HANA Compatibility scope Matrix is available in SAP S/4HANA Cloud, private edition, with a few exceptions.

I assume now you are wondering, it sounds good but how do I know what is included in Part 4?

Do not worry, I will help you to answer that question. For that, you must review the documents attached to the SAP Note 2269324 - Compatibility Scope Matrix for SAP S/4HANA. There, you will find all the detail needed. For example, how the compatibility scope matrix is divided (parts), and the alternatives customers have by compatibility pack ID.

To make this easier, I summarized the information in this chart:

This means you can ignore parts 2 and 3 and focus only on parts 1 and 4. Let me provide some examples of how to interpret those sections:

Part 1: Universal Compatibility Packs

• First, we have features that are not available in SAP S/4HANA Cloud, private edition. Therefore, if you are currently using those features in SAP ERP, you must evaluate which alternatives you have before you start your project. Some examples are:


• 


• Then, we have features that are available in SAP S/4HANA Cloud, private edition. But with a different Material code for SAP S/4HANA Cloud, private edition. Thus, you must discuss with your SAP Account Executive how you handle that commercial aspect. Some examples are:

Part 4: Details to ERP_Package

• First, we have features that are available in SAP S/4HANA Cloud, private edition. But an alternative solution may exist. Thus, you must decide if you will move the new alternative solution as part of your project, or if you will continue to use the legacy functionality.  If the legacy path via compatibility is selected, moving to the new recommended alternative solution for a future project phase should be planned before the expiration of this compatibility pack ID. Some examples are:

• Finally, we have some exceptions for compatibility pack IDs that although the feature is listed in part 4, it is not available in SAP S/4HANA Cloud, private edition. Therefore, if you are currently using those features in SAP ERP, you must evaluate which alternatives you have before you start your project. Some examples are:


• 

In summary, some functionalities that are part of SAP S/4HANA On-Premise and the compatibility scope are NOT available in SAP S/4HANA Cloud, private edition. The functionalities that are not available are considered non-strategic.

I hope this blog post was helpful to you. If so, click on “like” or “share”. I’m looking forward to your feedback and comments. If you have any questions, I encourage you to post them into the Q&A using the tags: SAP S/4HANA. We will try to answer all your inquiries as soon as possible.

 

Special thanks to tina.gailus and michael.deller2 for your contribution!.

 

Thanks,

Brought to you by the SAP S/4HANA RIG team.

 

 

[nigel_collins]

Jose - that was a great summary of the differences!

[jmarquezmr]

thanks Nigel!

[nelagil]

Hi Jose and thanks for a good explanation.

I'm reading this in August 2023, after reading the note 2976262 dated on 07/27/2023.

This note indicates that Travel Management can be used in SAP S4/Hana Cloud, private edition when the customer can't migrate to SAP Concur in the short time, as a way to preserve the customer investment.

Do you know if something changed between your publication and this note? Do you have any comment/opinion about what would happened if the client activate this functionality in its S4/Hana Cloud private edition? Is there any related cost, as far as you know?

Thanks in advance

 

[jmarquezmr]

Hello Marianela,

 

As you mentioned, the SAP note 2976262 was updated a week ago. I will review this internally and update the blog accordingly. Karem Barito will reach out to you when we have clarify this update.

 

Regards,

Jose M.

[nelagil]

Many thanks José.

I will wait for Karem's answer.

Regards,

Marianela

[jmarquezmr]

Hello Marianela,

Thanks for being on top of the latest information. As you realized, for SAP travel management our customers now have to consider this information:

SAP Travel Management is available as an option for those customers moving from SAP ERP ECC or SAP S/4HANA to SAP S/4HANA Cloud, private edition, that cannot move to SAP Concur right away. Mainly designed for SAP Installed Base customers to protect their investments.

SAP encourages our customers to implement SAP Concur to cover those business needs since this is our strategic solution. However, exceptionally SAP installed base customers can consider SAP Travel Management on SAP S/4HANA Cloud, private edition, through a new material number. The detail about the license/subscription with the new material number must be discussed with your Account Executive.

 

I will update the blog accordingly.

 

Regards,

Jose M.

[robphelan]

Great Article Jose..

For clarification purposes, if we wanted to migrate our on-prem S/4 HANA to S/4 HANA Private Cloud, those two do not necessarily have the same code base, even if they are the same version, right?

[jmarquezmr]

 

SAP S/4HANA OP to SAP S/4HANA Cloud, private edition shares the same codeline. The difference is the rights to use a few features that are part of the compatibility scope.

It means if you planning a lift & Shift from SAP S/4HANA OP to SAP S/4HANA Cloud, private edition, you have to evaluate if there is any compatibility scope ID that you are currently using in OP that you are not entitled to use in SAP S/4HANA cloud, private edition. For that, you have to follow the steps described in this blog :).

 

Regards,

Jose M.

[Georgiafarr]

Hi Jose,

Great blog and interesting read. Can you comment on the Codeline of S/4HANA Cloud, public edition vs S/4HANA Cloud, private edition?

Many thanks,

Georgia

[robphelan]

thanks a ton for the quick follow up!

[jmarquezmr]

Hello Georgia,

 

Although SAP S/4HANA Cloud, public edition, and SAP S/4HANA Cloud private edition have similarities, we are talking about two different products targeting different markets. Therefore, some features available in SAP S/4HANA Cloud, public edition, may not be available in SAP S/4HANA Cloud, private edition, and the other way around.

Just to provide one example, the concept of Compatibility scope does not apply to SAP S/4HANA Cloud, public edition. The reason is that those features are not part of the codeline of this product.

Thanks and regards,

Jose M.