Attachment K Deployment Approach Options.pdf

State of Arkansas

S / 4 H A N A D E P LO Y M E N T O P T I O N S

Topics for Discussion

➢ Deployment Options

➢ Infrastructure Considerations

➢ Platform Hosting Options

➢ Data Security

➢ Customization Scope

➢ Integration Scope

➢ Business Scope

➢ Deployment Costs

➢ Recommendation

Deployment Options for S/4HANA Conversion/Migration

Options to Migrate/Convert Traditional ECC system to

S/4HANA?

• Greenfield Implementation

• Bluefield Implementation

• Brownfield Implementation

Greenfield Implementation

A D VA N TA G E S

➢ This is the best approach when the existing ECC system has highly customized configuration and modifications that are supported by more complex workflows.

➢ This approach will reduce complexity of existing Business

Processes by adopting SAP simplified Business Processes and standard practices wherever possible (“Fit-to-

Standard”) to increase flexibility, while reducing cost of maintenance.

➢ Enables fast access to innovations, standard business practices.

➢ Allows the State to start with clean master data.

➢ Implement S/4HANA in the cloud to benefit from latest innovations.

D I S A DVA N TA G E S

➢ This approach requires longer implementation time and is more expensive in terms of time spent on resources for complete assessment, planning and redesign of Business

Processes.

➢ This approach causes the State to disconnect the from

AASIS ECC historical data from the data in the AASIS

S/4HANA system.

➢ This approach requires more comprehensive testing when compared with other deployment options.

This approach follows the path of new implementation of S/4HANA from the ground up. It allows organizations to build a brand-new system, tailored to their specific business requirements, to leverage the latest functionalities and best practices offered by SAP S/4HANA.

Brownfield Implementation

➢ Lower effort and lower implementation costs equal faster overall implementation.

➢ Preservation of historical data and individual developments.

➢ Rapid return on investment, as this approach it is much quicker to realize the added value in such a way utilization of existing assets and customizations in the S/4HANA environment.

➢ Provides ability to use simplified Master Data Migration to migrate master data from existing ECC environment using core data structure in-place which reduces additional overhead for data cleansing and transformation.

D I S A DVA N TA G E S

➢ The existing custom code might need to be converted to a newer version of the target S/4HANA version to be compatible with technical upgrades/business logic, which raises the need custom code refactor.

➢ Limited flexibility for redesign, enterprises looking to completely redesign their existing Business Processes, should have restrictions for complete transformation.

➢ This approach reduces technical downtime and business downtime might increase system downtime during cutover, data loads, migration and custom code testing.

➢ The Brownfield approach mostly focuses on migration process by taking off the focus from solution innovation and process optimizations.

This approach goes with path conversion of existing ECC suite on HANA or Any DB system to S/4HANA by moving PAS and HANA Database to new little-Indian architecture

Bluefield Implementation

➢ This would preserve existing investment in ECC while building an S/4HANA system with those capabilities that would transform business processes.

➢ Reduced project timelines, because existing ECC is not scheduled to convert into S/4HANA in one go and it happens on various phases.

➢ This approach requires business continuity throughout the transition period(s) since critical business processes continue to run on the existing ECC system.

➢ This approach has lower disruption on day-to-day operations which allows smoother transition of business processes to new S4/HANA system.

D I S A DVA N TA G E S

➢ This approach increases licensing costs and infrastructure costs since the ECC environment must co-exist with the

S4/HANA environment.

➢ This approach adds complexity from Change Management and Project Management perspective in terms of resource allocation, planning, risk management and stakeholder management to implement changes on dual environments.

➢ This approach might introduce compatibility issues associated with existing customizations, third-party applications, changes to master data and add-ons between the systems.

This approach would facilitate combination of Greenfield and Brownfield using Selective Data Transition Approach, which:

• Allows specific Cost Center to be migrated to S/4HANA, while other Cost Centers remain on ECC system,

• Preserve critical code to adapt for S/4HANA,

• Allows Re-use of wholly/partially existing ECC customizing to mix/match with new customizing,

• Permits migration of only critical financial data such as balance sheets, income statements and cashflow statements,

• Allows some of the business processes to still run in legacy ECC system and some of the business processes in new S/4HANA system.

Bluefield Implementation Cont’d

➢ This approach facilitates the transfer of only relevant data to the new system, rather than migrating all data, which minimizes the risk of data loss, reduces the migration time and cost to the S/4HANA system.

➢ This approach allows selection of ABAP Repository of objects and developments, Customizing data, Master data, Transactional data with open items and time-slice of historical closed items as per Business requirement e.g: 1 year or different period.

D I S A DVA N TA G E S

➢ This approach introduces functionality overlap between

ECC and S/4HANA which has further impact on process inefficiencies.

Infrastructure Considerations for On-Premise, Public Cloud, and Private Cloud

IT Infrastructure Terminology

➢ Data Center

➢ Servers

➢ Computers

➢ Memory

➢ Storage

➢ Networking

➢ Operating system

➢ Virtualization

➢ Middleware

➢ Database

➢ Applications

➢ Integrations

➢ Data

IT Infrastructure Terminology

➢ Data Center: A data center can be described as a facility/space of networked computers and associated components, which helps business and organizations to function a large amount of data. Data centers allow the data to be organized, processed, stored and disseminated to the application used by businesses.

➢ Servers: A server is a piece of computer hardware or software computer program that provides functionality for other programs or devices, called clients. This architecture is called the client–server model.

➢ Memory: Server memory is Random Access Memory (RAM) which processes data from HDDs to the CPU. As a form of volatile memory, when server memory is powered off it loses all its held information. One way to think about this is that your RAM modules are the short-term memory, and your HDDs are the long-term memory.

➢ Storage: A storage server, also known as a file server, is a type of server used to store, secure, and manage data and applications. This server is primarily built for storing and accessing data through the internet or over a shared network.

➢ Networking: Network is a combination of servers and clients to collaborate each other to share resources like disk space, hardware access, printer access, email service, etc.

➢ Operating system: An operating system is system software that manages computer hardware and software resources and provides common services for computer programs.

➢ Middleware: Middleware is software and cloud services that provide common services and capabilities to applications and help developers and operators build and deploy applications more efficiently.

IT Infrastructure Terminology

➢ Virtualization: Virtualization is the process of running a virtual instance of a computer system in a layer abstracted from the actual hardware. Most commonly, it refers to running multiple operating systems on a computer system simultaneously. To the applications running on top of the virtualized machine, it can appear as if they are on their own dedicated machine, where the operating system, libraries, and other programs are unique to the guest virtualized system and unconnected to the host operating system which sits below it.

➢ Database: A database is an organized collection of structured information, or data, typically stored electronically in a computer system. A database is usually controlled by a database management system (DBMS). Together, the data and the

DBMS, along with the applications that are associated with them, are referred to as a database system, often shortened to just database.

➢ Application: An application program is a computer program designed to carry out a specific task other than one relating to the operation of the computer itself, typically to be used by end-users.

➢ Integration: System integration is defined in engineering as the process of bringing together the component sub-systems into one system an aggregation of subsystems cooperating so that the system can deliver the overarching functionality and ensuring that the subsystems function together as a system.

➢ Data: Data is defined as a collection of individual facts or statistics. Data can come in the form of text, observations, figures, images, numbers, graphs, or symbols.

What is S/4HANA On-Premise Edition?

S/4HANA On-Premise is the next generation ERP Business suite designed/deployed on the SAP in-memory database, which allows the customer to manage everything. It can be deployed in a customer on-premise data center or on an Infrastructure as a Service

(IaaS) with public cloud providers like Azure, AWS, GCP, or HEC.

This includes IT Infrastructure such as:

➢ Data Center

➢ Servers

➢ Computers

➢ Memory

➢ Storage

➢ Networking

➢ Operating system

➢ Virtualization

➢ Middleware

➢ Database

➢ Applications

➢ Integrations

Pros and Cons of S/4HANA On-Premise Edition

P R O S

➢ Provides full control of customizations of SAP Standard code in order to adapt the business process if it doesn’t fit into the standard process.

➢ Integrates with business partner Add-On’s.

➢ Fully compliant with the new standards from SAP.

➢ Streamlines insights in real-time, allowing for better decision making.

➢ Manages faster data transfer between S/4HANA and other systems and integration over the internet with third-party applications is simpler.

➢ Provides the ability to tailor the S/4HANA system according to State-specific needs.

C O N S

➢ Initial deployment requires a large initial investment in the on-premise data center to procure hardware and software licensing.

➢ SAP delivered innovations and enhancements must be planned and executed by the State with an in-house testing team or IT partner which increases the cost to bring the system up to speed with the latest innovations.

➢ Deployment timeline may take longer and require more effort because the State will have to plan procurement of hardware in addition to all the other phases and activities required to implement S/4HANA functionally.

What is S/4HANA Private Cloud edition?

S/4HANA Private Cloud edition is the next generation cloud-based ERP system that centralizes business processes on a secure and flexible platform to help organizations protect investments, optimize growth and innovation.

This includes IT Infrastructure:

➢ Data Center

➢ Servers

➢ Computers

➢ Memory

➢ Storage

➢ Networking

➢ Operating system

➢ Virtualization

➢ Middleware

➢ Database

➢ Applications

➢ Integrations

Pros and Cons of S/4HANA Private Cloud Edition

P R O S

➢ Provides full control of customizations of SAP

Standard code in order to adapt the business process if it doesn’t fit into the standard process.

➢ Integrates with business partner Add-On’s.

➢ Fully compliant with the new standards from SAP.

➢ Streamlines insights in real-time, allowing for better decision making.

➢ Manages faster data transfer between S/4HANA and other systems and integration over the internet with third-party applications is simpler.

➢ Provides the ability to tailor the new S/4HANA system according to State-specific needs.

➢ Initial deployment requires a large initial investment in the on-premise data center to procure hardware and software licensing.

➢ SAP delivered innovations and enhancements must be planned and executed by the State with an in-house testing team or IT partner which increases the cost to bring the system up to speed with the latest innovations.

➢ Deployment may take longer time and require more effort because the State will have to plan procurement of hardware in addition to all of the other phases and activities required to implement S/4HANA functionally.

➢ SAP does not offer regular maintenance when the standard code is changed to meet organization business requirements. For ease and speed of upgrades and SAP recommends that the number of standard code changes be reduced to ensure the environment remains stable.

C O N S

Pros and Cons of S/4HANA Private Cloud Edition Cont’d

➢ The S/4HANA Cloud Private edition deployment on Any-

Premise data center does require huge initial investment to procure hardware with choosing option On-Premise data center and does not require huge initial investment by choosing IaaS as a service by cloud providers Azure, AWS, GCP, HEC, though must spend to purchase required services as subscription model not a classic SaaS service.

➢ The keep core clean principle of not changing massive SAP standard code has an alternative option to meet unique Business requirements by leveraging pre-built integration scenario’s, extensions and applications available on SAP BTP in the form of

API's can be integrated with the core S/4HANA system.

➢ There are no model company services given at free of cost rather to buy separately from SAP as part of a larger SAP services engagement because SAP retired this methodology and suggested to use SAP Best Practices content activation .

➢ The model company services contain industry specific and Line of Business Content, pre-configured end-to-end Business

Processes, Business content, accelerators to speed-up implementation of S/4HANA, which goes beyond standard delivered SAP Best Practices content.

P R O S C O N S

On-Prem / Private Cloud – Greenfield vs. Bluefield

G R E E N F I E L D

➢ If the State is planning to replace all legacy systems in scope (e.g., AASIS – ECC).

➢ If the State is considering replacing outdated and non-standard business processes (e.g., Park and Post replaced by Workflow).

➢ If the State is running with a high volume of custom code/custom processes.

➢ If the State is looking to consolidate data, purge outdated records, and remove duplication (e.g., migrate multiple ledgers and sub-ledgers to a single data source like the

Universal Document Table).

➢ If the State is anticipating significant number of changes in compliance and regulatory process (e.g., GASB changes to financial reporting models).

B L U E F I E L D

➢ If the State is looking for a phased approach to migrate existing ECC system to S/4HANA.

➢ If the State has a complex SAP landscape in terms of high customization or multiple instances of ECC.

➢ If the State is looking to move only some business processes to S/4HANA.

➢ If the State has annual budget, time and resource constraints, go with phase-by-phase Business functionality transition over a period.

What is S/4HANA Public Cloud Edition?

➢ The S/4HANA Cloud Public edition is an immediately available SaaS solution which is hosted on the SAP managed data centers.

➢ As a public cloud infrastructure, it shares the same hardware to store, and compute; memory; and network to process business process data.

➢ Data and Software reside in one a multi-tenant environment, accessed by the State via a shared and public network.

Pros and Cons of S/4HANA Public Cloud Edition

➢ Facilitates faster transition to S4/HANA.

➢ Receives updates with the latest and newest features and functionalities two times a year, in addition to several minor releases to utilize latest innovations.

➢ Can be implemented with lower costs, because the resources in the environment are shared with other customers using public internet.

➢ Provides Greenfield and Selective Data Transition implementation approaches. Both are implemented and maintained by SAP.

➢ Provides ad-hoc scalability by increasing the compute/memory/storage/Disk IOPS to the underlying tenant to meet the State Business scale-up

➢ Provides lower TCO and, potentially, a higher Return on

Investment

➢ Provides data isolation measures for the resident data

➢ The customization of SAP standard code is restricted. You can make customization to the State’s Business processes using Fiori application to extend custom functionality and integrate with standard code. In addition, further customization can be achieved using SAP BTP extension suite.

➢ The business process response time can be degraded during peak activity on the system by other customers user activity, as underlying resources are shared across different enterprises.

➢ The State can’t control how or when S/4HANA bi-annual innovation updates or more frequent minor release updates are applied to the tenant, which can impact business operations.

➢ There is a potential threat to data breach due to the shared infrastructure.

➢ When an innovation is applied to the tenant, it could impact customizations done by the State to meet unique business needs. This could require rework of the customizations and would need end-to-end testing.

➢ There is no access to SAP GUI and all the communication happens through Webgui/Fiori.20

Public Cloud Edition – Greenfield / Bluefield

G R E E N F I E L D / B L U E F I E L D

➢ If the State is prioritizing the adoption of cloud-based solutions

➢ When the State has limited historical data

➢ When the State is still in the process of defining Business process

➢ When the State is looking to adopt industry best practices

➢ When the State is implementing an ERP system for the first time

➢ When the State needs to lower the costs to implement and maintain the S/4HANA system

Platform Hosting Options

S/4HANA On-Premise Edition – On-Premise Data Center

➢ Ability to fully secure data to meet legal compliance.

➢ Accelerate business process response times, as this approach has low latency compared to Any-Premise cloud deployments as they are usually located far from the State’s network.

➢ Offers greater flexibility in customizing and tailoring the

S/4HANA system to the specific needs of the business. The

State can configure and optimize the system according to their own requirements, workflows and processes, which renders more control and adaptability to their unique business needs.

➢ Large initial in terms of more upfront cost to procure hardware and infrastructure setup. Also requires staff to manage the infrastructure in the data center.

➢ Limitations on scalability and flexibility to scale-up resources for

S/4HANA system on ad-hoc basis. This requires additional planning to procure resources for future growth in terms of compute, memory, storage, and network.

S/4HANA On-Premise Edition – Any-Premise Data Center

➢ Despite the monthly subscription fees to the cloud provider, this option is cost effective in terms of reduction in capital expenditure as there is no need to procure hardware.

➢ Offers greater scalability and flexibility to scale-up system resources or scale-down system resources to meet unique business needs.

➢ Significantly reduces investment to maintain IT resources for day-to-day operations of IT infrastructure management from hardware point of view, as this is managed by Any-

Premise data center provider.

➢ Offers greater flexibility in customizing and tailoring the

S/4HANA system to the specific needs of the business. The

State can configure and optimize the system according to their own requirements, workflows and processes, which renders more control and adaptability to their unique business needs.

➢ There are additional concerns regarding data security and compliance because data is stored and processed outside the organization's infrastructure. Although various security measures are implemented by the Any-Premise provider, complete confidence cannot be achieved.

➢ There may be legal regulations for certain organizations in a public domain for storing data outside of their own infrastructure. This can lead to various complexities especially if data spans various regions with country specific legal requirements.

➢ Greater dependency on internet connectivity between organization corporate office and target provider location can affect the performance of the system with constant latency and if there is any outage with the service provider

➢ Potential impact for both production and non-production operations if the

Any-Premise provider inadvertently rolls out changes that were not properly tested or if change impacts can’t be identified in the lower environment. This could cause an outage for the entire region from a minute to 12 plus hours as seen with one of the major Any-Premise providers. 24

S/4HANA Private Cloud Edition – On-Premise/Any-Premise Data Center

➢ The data center pros and cons listed on the previous slides are the same for Private Cloud vs. On-

Premise Editions.

➢ Regardless of the data center, the main difference between the On-Premise and Private Cloud Edition is that the Private Cloud edition uses a subscription-based licensing model.

S/4HANA Public Cloud Edition – SAP Data Center

➢ Can be deployed in shorter deployment time frame compared to other deployment options.

➢ Continuously receives the latest and newest features and functionalities on a bi-annual basis.

➢ Lower TCO and higher ROI because underlying tenant uses shared resources used by another customer.

➢ Facilitates easy scale-up/scale-down system resources to meet seasonal business demands.

➢ Supports both Greenfield implementation approach and selective data transition approach

➢ Doesn’t allow customization of SAP standard code other than adding a few customizations using Fiori applications. Additional customization is also allowed through SAP BTP extension suite.

➢ Potential impacts to customizations after an innovation or upgrade is released. May require adjustment to customizations.

➢ Possible performance degradation because of shared resource utilization during peak traffic.

➢ Data security concerns.

➢ Possible impact to business processes while performing bi-annual innovation updates into the system as per SAP decided time despite business decided time.

Data Security for S/4HANA Deployment

Data Security Concerns

O N - P R E MI S E

➢ Implementation in an on-premise data center allows for additional data security as the data is stored and processed within in-house hardware and meets legal regulations and compliance.

A N Y - P R E M I S E

➢ Implementation in an any-premise data center could bring data isolation as the data is stored and processed within hardware where it was protected and accessed by a private network. This may not meet legal regulations and compliance for certain organizations.

➢ Implementation on a Public Cloud brings data isolation by storing the data on separate tenants which brings certain extent of data security.

➢ Implementation on a Public Cloud brings data security concerns because, various customers data is processed in the shared infrastructure albeit several security protocols are implemented on the underlying hardware.

P U B L I C C L O U D

Customization Scope for S/4HANA Deployment

Customization Scope

O N - P R E MI S E / P R I VAT E C L O U D

➢ The On-Premise and Private Cloud Editions allow you to customize SAP standard code to meet unique business needs and have full control of the backend SAP GUI.

P U B L I C C L O U D

➢ The Public Cloud Edition does not allow customization to SAP standard code. However, customization is allowed through Fiori apps to facilitate changes like custom fields, custom logic, custom business objects and for complex customizations that can’t be done through Fiori apps, the SAP BTP extension suites are readily available with extra effort, easy integration to S/4HANA Public cloud.

➢ This has no access to SAP IMG and SAP GUI, all the connectivity happens through Fiori app/Web GUI.

Integration scope for S/4HANA Deployment

Integration Scope

➢ The On-Premise and Private Cloud editions facilitate integrations with partner Add-On’s and SAP SaaS solutions and third-party SaaS Solutions without security risk.

P U B L I C C L O U D

➢ The Public Cloud edition requires additional effort to integrate source S/4HANA Public Cloud edition with outside world due to the nature of the product offering and involves security risk because of infrastructure shared by multiple customers over public internet.

Business Scope for S/4HANA

Business Scope

➢ The On-Premise and Private Cloud editions support various business processes in wide variety of Line of

Business more than 25 industries with end-to-end integration.

P U B L I C C L O U D

➢ The Public Cloud edition supports highly standardized business processes which covers selected Line of

Business, industry scenarios, comprehensive ERP scope and in-depth coverage for professional services with restricted direct integration from third-party.

Deployment Costs for S/4HANA

Cost Estimates for S/4HANA in an On-Premise Data Center The estimate below considers our current AIX / Linux environment costs with DIS utilizing the existing hardware investment. Included is an overview of the systems presently installed at DIS. Costs will vary depending on the chosen implementation approach, additional modules / systems required or other unknown system requirements. i.e., existing ECC system is needed for ongoing operations, implementation of CRM is required, etc.…

Non-Production HANA DBs

▪ 2 - ECC

▪ 1 - Fiori Gateway

▪ 1 - Portal (Used for ADS)

▪ 1 - BW4HANA

▪ 1 - BW Portal

▪ 1 - Solman

App Servers

▪ 5 - ECC

▪ 4 - Fiori Gateway

▪ 3 - Portal (Used for ADS)

▪ 3 - BW4HANA

▪ 3 - BW Portal

▪ 1 - Solman

Web Dispatchers

▪ 5 - ECC and BW

Production HANA DBs

▪ 1 - ECC

▪ 1 - Fiori Gateway

▪ 1 - Portal (Used for ADS)

▪ 1 - BW4HANA

▪ 1 - BW Portal

▪ 1 - Solman

App Servers

▪ 5 - ECC

▪ 2 - Fiori Gateway

▪ 2 - Portal (Used for ADS)

▪ 1 - BW4HANA

▪ 1 - BW Portal

▪ 1 - Solman

▪ 1 - SAP Router

Web Dispatchers

▪ 3 - ECC and BW

Existing Shared Resource Usage: 12.5 TB RAM and 163 Physical Cores = @ $82K monthly

➢Option - Replace the existing operational ECC landscape with equivalent S/4 system landscape. (Sandbox through Production)

➢ Potential cost savings as the resource needs for S/4 are not as large due to the amount of data being transformed with S/4.

➢ Cost savings are further recognized as the 8 Fiori Gateway and 6 BW Portal systems could be decommissioned if the HR module was migrated to another solution.

➢ Note: Minimum configuration / sizing would be required for using ECC for historical reporting

➢Option - Add equivalent S/4 system landscape to the existing operational ECC landscape.

(Sandbox through Production)

➢ Potential cost increase as we are increasing the number of systems and will likely need to add resources to the servers to accommodate.

➢ This would be relevant for a scenario where the HR or other requirements where the ECC system needs to remain operational.

Costs Estimates for S/4Hana in an Any-Premise Data Center Below are approximate costs based on the source and are assessed to run a standalone S/4HANA system without HA. Actual costs might vary.

NOTE: This does NOT include cost estimates for any other system, such as CRM which may be required for Grantor Management.

➢ Standalone, Production Sized S/4HANA system without HA:

➢ Hana Database physical host/VM :

➢ Production (1 total) – 32 Cores/64 vCPU’s, 1TB RAM, 6TB SSD, 10Gb/ps Ethernet Card

➢ One-Year cost: $48,831

➢ Non-Production (2 total)– 32 Cores/64 vCPU’s, 1TB RAM, 6TB SSD, 10Gb/ps Ethernet Card

➢ One-Year cost: $97,662

➢ Application Servers (10 total):

➢ Production - 16 vCPUs, 128 GB RAM, 256 GB SSD, 10Gb/ps Ethernet Card

➢ One-Year cost: $ 2407.8

➢ Non-Production - 16 vCPUs, 128 GB RAM, 256 GB SSD, 10Gb/ps Ethernet Card

➢ One-Year cost: $ 2407.8

Ingress and Egress traffic charges are applicable as per design of the landscape.

In addition to these charges are applicable to use Cloud Backup tool and storage to store database backups, virtual machine backups.

Costs Estimates for Public Cloud in an SAP Data Center

Below are approximate costs based on the source and are assessed to run a standalone S/4HANA system without HA. Actual costs might vary. This works as SaaS.

➢ S/4HANA multi-tenant Per Month costs:

➢ Basic License: $20K - $100K (depends on the number of users, modules and other functionalities)

➢ Named User License: $100 - $250 (per user, varies by roles, Engine and Component Licenses will be charged extra for few)