SAP RISE vs On Premise : Which One Should You Choose?

When deciding between SAP RISE and an on-premise SAP solution, it’s essential to consider several factors, including your organization’s needs, budget, scalability requirements, and long-term IT strategy. Here’s a breakdown of both options and key considerations to help you decide which path to take:

1. SAP RISE (Cloud-Based Solution)

What is SAP RISE?
SAP RISE is SAP’s comprehensive offering for businesses to accelerate their digital transformation with a cloud-based platform. It is essentially a subscription-based service that bundles SAP S/4HANA, cloud infrastructure (on SAP Business Technology Platform), business process intelligence, and various additional services aimed at helping companies move their business operations to the cloud.

Advantages of SAP RISE:

1. Faster Implementation: With SAP RISE, companies get pre-configured solutions and industry-specific best practices, which can speed up the implementation process.
2. Scalability: As a cloud offering, SAP RISE is scalable, which makes it suitable for businesses that anticipate rapid growth or need the flexibility to adjust their infrastructure as needed.
3. Lower Initial Capital Expenditure (Capex): Since SAP RISE is subscription-based, there are no large upfront costs for hardware or licenses, which makes it financially appealing, especially for companies with limited capital expenditure budgets.
4. Automatic Updates & Innovation: With SAP RISE, you benefit from automatic updates, meaning your company will always be on the latest version of SAP software, including new features and functionalities.
5. Simplified IT Management: SAP RISE handles the underlying infrastructure and software management, reducing the burden on your internal IT team for maintenance, updates, and scaling.
6. Global Reach & Flexibility: SAP RISE is hosted in the cloud, offering global availability and flexibility to support businesses with remote teams or operations across different regions.
7. Focus on Business Processes: SAP RISE includes business process intelligence and optimization tools, helping organizations transform their processes and gain insights to improve business performance.

Disadvantages of SAP RISE:

1. Long-term Subscription Costs: While the initial cost is lower, the ongoing subscription fees can accumulate over time, potentially resulting in higher overall costs in the long run.
2. Dependence on Internet Connectivity: Being a cloud-based solution, SAP RISE depends on stable internet connectivity. Any disruptions in internet services can impact your business operations.
3. Customization Limits: Although SAP RISE is highly flexible, it may not allow for as much deep customization as an on-premise solution, especially for companies with complex, unique business requirements.
4. Data Residency Concerns: Depending on the region, some organizations may have concerns regarding data sovereignty or regulatory requirements for storing sensitive data outside their home country.

2. On-Premise SAP (Traditional Deployment)

What is On-Premise SAP?
An on-premise SAP solution refers to the traditional deployment where all SAP systems (e.g., SAP S/4HANA, SAP BW/4HANA) are installed and run on your own hardware and data centres, either on-site or within a private cloud environment managed by your organization.

Advantages of On-Premise SAP:

1. Full Control: With on-premise deployments, you have complete control over your IT infrastructure, including hardware, security, and software customizations.
2. Customization: On-premise solutions often offer greater flexibility for customization, allowing businesses with unique or complex processes to tailor the system to their specific needs.
3. Data Privacy & Security: For organizations that handle sensitive data or must comply with stringent data privacy regulations (e.g., GDPR, HIPAA), on-premise deployments allow you to keep your data within your own data centres, providing full control over data access and security.
4. One-Time Licensing: On-premise SAP typically involves a one-time license fee for the software, which may be appealing for companies that prefer capital expenditure (Capex) rather than ongoing subscription fees.
5. No Dependence on Internet: Unlike cloud solutions, on-premise systems do not depend on an internet connection for operation, which may be beneficial in regions where internet connectivity is unreliable or for highly critical applications.

Disadvantages of On-Premise SAP:

1. Higher Initial Costs: The upfront costs for hardware, software licenses, implementation services, and ongoing maintenance can be quite high. Additionally, companies must budget for periodic hardware upgrades and SAP support fees.
2. Longer Implementation Time: On-premise deployments typically take longer to implement due to the need for infrastructure setup, detailed customization, and testing.
3. Ongoing Maintenance: Managing, updating, and patching on-premise systems require dedicated IT resources and personnel. It’s also necessary to ensure high availability, backup systems, and disaster recovery processes.
4. Limited Scalability: While on-premise systems can be scaled, doing so involves significant costs and effort. Scaling requires investing in new hardware, system upgrades, and potentially more IT staff.
5. Limited Access to Innovations: Updates, new features, and innovations may be slower with on-premise systems compared to the cloud-based SAP RISE offering, which ensures access to the latest version of the software without manual intervention.

Key Factors to Consider When Choosing Between SAP RISE vs. On-Premise SAP

1. Budget and Financial Strategy:

   • If you prefer lower upfront costs and predictable ongoing costs, SAP RISE may be a better fit due to its subscription model.
   • If you have sufficient capital to invest and prefer a one-time cost structure with full control over your infrastructure, on-premise SAP may be more suitable.

2. Business Complexity and Customization Needs:

   • If your organization requires highly customized business processes, on-premise SAP offers more flexibility for complex configurations and unique workflows.
   • If your business processes are standardized and can benefit from pre-configured industry solutions, SAP RISE offers faster deployment and modern best practices.

3. IT Resources and Management:

   • If you have a strong internal IT team and prefer complete control over your systems, on-premise SAP could be more appealing.
   • If your team is smaller or less equipped to manage infrastructure and updates, SAP RISE reduces the burden by offloading infrastructure management and system updates to SAP.

4. Scalability and Growth:

   • For organizations with rapid growth and a need for quick scaling, SAP RISE offers greater flexibility without the need for significant hardware investment.
   • For businesses with stable or predictable growth, on-premise SAP may offer sufficient scalability, though it requires manual adjustments and infrastructure planning.

5. Data Privacy and Regulatory Compliance:

   • If data residency and compliance are critical, and you need to have complete control over your data, on-premise SAP allows you to store data on your own premises or within private data centres.
   • SAP RISE can be ideal if your organization is open to cloud solutions but requires careful consideration of cloud data privacy regulations depending on the region.

6. Innovation and Updates:

   • If your organization seeks to stay on the cutting edge of SAP innovations, SAP RISE offers automatic updates and access to the latest features as part of the subscription, ensuring you benefit from SAP’s ongoing developments.
   • On-premise SAP may require more manual effort to stay current, and updates can be slower depending on your internal processes.

Conclusion

• Choose SAP RISE if you want to leverage the cloud for scalability, speed of implementation, lower upfront costs, automatic updates, and simplified IT management. It is a good fit for organizations that seek flexibility, innovation, and minimal IT overhead, particularly for businesses that are ready for a cloud-first strategy.

• Choose On-Premise SAP if your organization requires customization, has strict data residency or compliance needs, and has the internal resources to manage infrastructure and IT maintenance. On-premise deployments are more suited to businesses that prioritize control, security, and long-term cost management with fewer dependency risks on external service providers.

Ultimately, the choice between SAP RISE and on-premise SAP depends on your company’s specific needs, current IT capabilities, and long-term strategic goals.

How we can help choosing the right option !!