Sustainability as a Criterion for the SAP Cloud Strategy

The decision between SAP S/4HANA Public Cloud and Private Cloud is made early in many companies. It is often driven by an IT perspective or by the pressure to quickly set a direction for the transformation. What frequently goes unconsidered is the question: What role does sustainability play in the future design of the system?

Three Topics – Considered Separately, Effective Together

Companies are currently facing three central challenges:

•       Transformation from SAP ECC to S/4HANA

•       Decision on an SAP Cloud Strategy

•       Building a robust sustainability data foundation

In practice, these topics are often addressed in isolation.

The SAP Cloud Strategy is defined first, processes are then transformed, and sustainability requirements are only taken into account in the next step.

This approach has clear consequences for the resulting system landscape.

When Sustainability Originates Outside the System

In many companies, sustainability data is not generated within the operational process, but downstream of it.

Typical examples include:

•       Energy consumption captured via invoices

•       Emissions calculated on the basis of average values

•       Sustainability-relevant data consolidated manually

The result is data that is aggregated, difficult to trace, and only marginally controllable. In addition, an extra layer of data logic often emerges outside the actual ERP system.

Sustainability Requires a Process-Integrated Data Foundation

Sustainability only becomes manageable once it is taken into account in day-to-day operations. This means that relevant data must be captured as close as possible to where it is generated in the process, and that contextual relationships must be preserved. A simple example illustrates the difference:

Classical approach:
Energy is recorded via monthly invoices. Emissions are calculated retrospectively.

Process-integrated approach:
Consumption is recorded in a differentiated manner and assigned to the respective processes. Emissions can be derived from this in a more consistent way.

The difference is that in the first case, data is aggregated after the fact, while in the second case, a robust data foundation is created directly within the process.

Why the Choice Between Public Cloud and Private Cloud Matters

With the transformation to S/4HANA, the question of the appropriate cloud variant inevitably arises.

This decision concerns not only the technical platform but also has direct implications for:

•       the design of processes

•       the structure and granularity of data

•       the options for extending the system

As a result, it also determines the extent to which sustainability requirements can be implemented within the system.

Sustainability as a Structural Criterion

Sustainability is not an additional aspect that can be added later. It has a direct impact on the design of processes and data structures.

The central questions are:

•       Which data needs to be available?

•       At what level of detail is it required?

•       How closely is it linked to operational workflows?

The answers to these questions vary considerably depending on the business model and have a direct effect on the system architecture.

Example: Energy and Water Consumption

A typical scenario clearly shows the differences:

Standardized representation:

Data is captured via existing finance or procurement processes.

It is available periodically and in aggregated form, and can only be assigned to individual processes to a limited extent.

Process-integrated representation:

Consumption is recorded in a differentiated way and assigned to specific assets or processes. Emissions can be derived from this in a more consistent and traceable manner. This results in different requirements for both the data model and the process logic.

Public Cloud vs. Private Cloud – A Differentiated View

The choice between Public Cloud and Private Cloud cannot be assessed in a one-size-fits-all way.

It results from the business requirements.

Public Cloud:

•       is oriented toward standardized processes

•       allows extensions within defined boundaries

•       focuses on stability and upgradeability

Private Cloud:

•       offers more flexibility in the design of processes and data

•       enables stronger adaptation to specific requirements

•       at the same time requires more deliberate governance of the system landscape

Which option is suitable depends largely on how strongly processes and data need to be individualized.

The Necessary Shift in Perspective

The central question is not which cloud fits the existing IT strategy. What matters is rather: Which system environment makes it possible to adequately represent the company's own processes and sustainability requirements?

How a Well-Founded Decision Emerges

A reliable decision between Public Cloud and Private Cloud is based on three perspectives:

•       the actual usage of the existing system

•       the business processes as they are truly lived

•       the concrete requirements for sustainability data

Only the combination of these aspects makes it possible to determine which system capabilities are needed and which cloud variant supports them.

Conclusion

Sustainability is not a downstream aspect but an integral part of system design. It influences how processes are defined, how data is captured, and how systems are built. This makes it a relevant criterion for the choice between SAP Public Cloud and Private Cloud. A well-founded decision is therefore guided not by preferences, but by the requirements of processes and data.

Closing Question

What role does sustainability play in your Cloud Strategy? Is it already being taken into account when deciding between Public Cloud and Private Cloud – or only at the next step?