When comes to SAP BW upgrade many companies may have many questions but the most asked  question is should we upgrade to BW4HANA or BW ON HANA.

I would like to explain briefly the difference between both and what should be the approach and what  are the most important steps to take care after the upgrade.

first thing first if you are planning to upgrade your BW with tons of enhancements and developments then you should plan to upgrade to BW on HANA first because by doing this you will not lose any of your existing enhancements and development and at the same time you can enjoy
the power of SAP HANA DB, in other words we can say that BW ON HANA is backward
compatible and also offer all the new Optimize contents which offer by BW4HANA
and also provide the easy tools and techniques to convert your existing objects
and data flows to new HANA optimize objects and data flows.

It is important to know that BW4HANA is the strategic direction for SAP data warehouse but direct  transition to BW4HANA comes with lots of challenges, so it is always advisable to plan in steps.

1. Upgrade to BW ON HANA and perform all the conversions of objects and data flows.
2. Upgrade to BW4HANA.

The Challenges

1. HANA Optimization
2. LSA++
3. Multitemperature management.
4. RSA7 to ODP conversion of data flows.
5. Hana optimize transformations

All above challenges are easy to perform with good understanding and training but when it comes to decide LSA++ always remember the Hybrid approach i.e., the mixture of predictive and Agile i.e., always choose the best and never go by definition.