SAP On-Premise versus SAP Cloud

14 Marts 2018
af Krzysztof Wiklendt Jensen

Let’s forget about fancy buzzwords and figure out what your business needs – and how to achieve it!

Many IT Executives have one big question on their minds – should they go for an on-premise solution, where the SAP software is installed and operated from an in-house server and computing infrastructure, or should they go for a cloud solution, where the SAP software is deployed and managed by SAP, and the users gain access over the internet. It’s definitely not an easy question to answer. It’s tempting to stick with your current setup and how you’ve always done it, because it’s been working so far, right?

Perhaps the overall feeling is that everything has been working fine – but have you asked your colleagues and employees how their daily work is? Have you talked with the actual people who uses it? And have you looked at your total cost of ownership? You might figure out, that many of the daily tasks are conducted via workarounds, which may be the case because the system is too slow or too complex.

Maybe there’s an easier and quicker way to get things done. You might already be aware of it, and maybe you’ve already decided to switch your system – but how do you want to run it? On-premise on your own servers? Or, maybe move it to a cloud solution?

The answer to this question is not straight forward. There is no golden solution. It is all about figuring out what your business needs and what a fair price to pay for it is.

Changing the backbone of your company is not easy – it’s expensive and time consuming. But, it might be a good investment, if you are willing to put in the effort. The more you know your own business, the better the solution you will get.

There are a lot of things you need to keep in mind, before you choose the right path. Let’s have a look at some of the biggest examples.

CAPEX vs. OPEX

Do you prefer seeing your IT solution as an asset, or do you prefer a stable, monthly cost? You can compare it to owning or leasing a car. Do you want to own your own solution with the security of always knowing that you are in control; with your own IT-department and your own experts available 24/7 whenever you need them – but also when you don’t need them. Maybe a stable monthly cost is more suitable for your business with access to full support from a trusted supplier who will ensure that the system is always up-to-date, and that the experts are only utilized when you need them.

There are PROS and CONS to either option – and maybe a hybrid solution might be a better, third option.

Complexity vs. Simplicity – Stability is the key!

How complex is your current solution? Do you have many custom and tailored systems, and do you really need all of them? The good thing about a custom system is that you get exactly what you need, when you break it down. But there is also a huge drawback in that setup. A complex solution requires a lot of maintenance, and the bigger it gets, the less manageable it becomes. No one knows every system, and even a small update can result in a huge breakdown. This results in a lot of work in regard to compliance. It may even result in old systems that cannot be updated, which is a huge risk and breaks the agility and speed of adapting the business to new markets.

Simplicity, on the other hand, might not fit your business 100%, but it can give your business the edge of always being ahead of your competitors and the ability to quickly adapt when necessary. A suggestion is to always keep your core solution as simple as possible and only have a few custom-tailored systems built as separate elements. This way, you can isolate an issue if it occurs. But again, it really depends on your business.

Are you up for a challenge?

Let me challenge you. Try for a moment to forget about the solution you currently have and how “you’ve always done it”. Really think about it – what would best fit your business?

Krzysztof Wiklendt Jensen

Krzysztof Wiklendt Jensen

is a consultant with a strong economic background specialized in Accounting, Business Performance Management, and SAP S/4.
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