In which scenario would you utilize a Side-By-Side Extension?

Utilizing a Side-By-Side Extension is particularly effective for extending the SAP S/4HANA Cloud with external applications. This approach allows organizations to enhance their existing SAP systems while maintaining the integrity and upgradability of the core system. In a cloud environment, traditional methods of customizing or modifying the core applications can pose risks or complicate future upgrades.

With a Side-By-Side Extension, businesses can develop new functionalities or applications hosted separately but linked to the S/4HANA system. This enables them to leverage best-of-breed applications or services that integrate seamlessly with their SAP environment, thereby enhancing overall capabilities without disrupting the core system. This strategy is ideal for organizations looking to innovate quickly and remain agile in response to changing business needs, as it allows for experimentation and growth without jeopardizing the foundational SAP infrastructure.

In contrast, enhancing user interfaces or implementing lightweight changes may be more related to in-system modifications rather than involving external applications. Modifying standard reports directly is against best practices in a cloud environment, as these actions can lead to issues during updates and are not aligned with the modular architecture strategy encouraged by SAP.