The idea is a simple one: an end-to-end backend software solution that is simple enough for startups and fast-growing businesses to roll out quickly and affordably but is modular and flexible enough that the software will continue supporting the business as it grows
The less simple part is how to buy SAP S/4HANA Cloud Public Edition.
SAP has owned the ERP market since it invented the first product that eventually became known as ERP. Most big businesses use it, and SAP ERP has been a staple of large enterprise IT systems for decades. However, SAP understood that startups and fast-growing small to medium-sized businesses needed something less expensive and easier to roll out without sacrificing most of the functionality that makes SAP the standard. SAP needed more than a “lite” version.
At the same time, how businesses use ERP has changed. Software is in the cloud, it needs to be modular and flexible, and widespread integration with other systems is nonnegotiable. This led to the introduction of SAP S/4HANA Cloud Public Edition a few years ago, a public cloud version of SAP’s flagship ERP product, and to the emergence of the company’s Grow with SAP framework.
Grow with SAP is a framework for faster rollout with a small core that then can be easily augmented with additional functionality through the company’s online marketplace, the SAP Business Technology Platform (BTP). Grow with SAP also stresses easy adoption and makes it easy to adopt SAP for growing midmarket companies that are not heavily IT-led and cannot spend 6 months or a year configuring an ERP system. Rollout can happen in as little as 30 days.
Grow with SAP and S/4HANA Cloud Public Edition is a pretty significant reengineering that really benefits growing businesses that are not yet on the scale of Coca-Cola or Proctor & Gamble but want most of the same functionality or think they might need it in the future.
Understanding pricing and how to buy S/4HANA cloud can be confusing, though.
Most cloud applications now price according to tiers and the number of authorized users who use the system. But ERP solutions such as S/4HANA Cloud are more complex, and they touch upon all areas of a constantly evolving business. So a simple tier and seat license pricing system doesn’t work so well for a startup that wants to buy S/4HANA Cloud. An employee on the shop floor should not cost the same as a CFO who takes advantage of the system more fully.
Instead, SAP uses a metric called Full Use Equivalent (FUE) when calculating the total cost of S/4HANA Cloud for a business. It is the total amount of access to SAP S/4HANA Cloud Public Edition that a company buys, and it is expressed as a single number such as 50 FUEs that is then divided among employees based on how much access they have to the system.
There are four types of users when calculating FUE usage:
Advanced User: 1 FUE. An Advanced User has full access to the S/4HANA Cloud application, enabling them to create and modify data, run reports, and utilize its complete range of business processes.
Core Users: .200 FUE. A Core User has limited access to the S/4HANA Cloud application, allowing them to view data, run reports, and engage in basic business processes.
Self Serve Users: .033 FUE. A self-serve user is one who uses the S/4HANA Cloud application through self-service portals, viewing data, reports, and basic business processes.
Developer Users: 2 FUE. A Developer sets up and plays a role in managing the company’s S/4HANA Cloud application. This type of user accesses SAP application development tools and has developer-level access to the system.
When a startup of a fast-growing business goes to buy S/4HANA Cloud, it defines how many people will be using the ERP solution and which type of user each employee will be. The business then will know how many FUE units to buy, and that will define the cost of the solution.
As a business grows and evolves, it can of course add additional FUE units or change the access that a given employee has in the system to control spend. SAP only cares that the total FUE package supports what a business does with the ERP solution. Businesses even can reduce FUE volume in times of belt-tightening for a lower spend.
This pricing system is more complex than a simple tier-and-seat license approach, but it ultimately benefits businesses and delivers on the speed and flexibility that the Grow with SAP methodology is based on. Growing businesses that buy S/4HANA Cloud get company-wide software that easily expands, but without having to pay the same per-user cost for all users.
For more on the Grow with SAP framework or how to buy SAP S/4HANA Cloud Public Edition and get FUE calculation right, contact one of our experienced SAP consultants at (801) 642-0123 or by writing us at info@nbs-us.com.