SAP ECC and SAP S/4HANA mark big moments in how businesses plan their resources. For years, SAP ECC was the base for many businesses, managing key steps. Technology keeps moving, and SAP S/4HANA came about as the next level of ERP. It's built on the HANA platform that keeps data in memory.
Choosing between SAP ECC and S/4HANA means more than just changing software. It's a key choice that changes how well a business can adapt, come up with new ideas, and grow in the future. Knowing the main differences is super important.
This article looks into the core differences. It helps you understand the details and pick the best ERP solution for your company.
SAP ECC stands for SAP ERP Central Component. SAP ECC is modular in design, which makes it highly customizable. You can configure SAP ECC to suit your needs in all areas of your business, from finance to HR to logistics. Plus, SAP ECC works with third-party or custom applications, like business messaging apps.
SAP ECC has many interactions between components, which makes it flexible but also more complicated. If you change one area, it affects the function in other areas. You need to carefully plan changes like upgrades and add-ons so you don’t disrupt important business functions. This also applies to migrating your systems to SAP S/4HANA.
SAP S/4HANA is SAP’s newest generation of ERP software that works on on-premise and in the cloud. It uses technologies like AI, machine learning, and automation to improve business efficiency and speed. With aSAP S/4HANA, you can analyze large amounts of data in real time. You’ll also enjoy features like:
The main downside is that SAP S/4HANA is only compatible with the SAP HANA database. This is bad news if you currently run a third-party database like Oracle in your SAP ECC system. If you convert to SAP S/4HANA, you’ll need to remove unsupported add-ons during the move.
SAP S/4HANA streamlines features and processes from SAP ECC to reduce costs and boost business efficiency. This means some features have changed, while others have been replaced or combined into new features.
Some of the key changes in SAP S/4HANA are listed below.
In SAP ECC, costing-based CO-PA (CO-Profitability Analysis) is the default option. But in SAP S/4HANA, the default option is account-based CO-PA, though you can run both options together.
Businesses manage their financial data in SAP ECC with both FI (Finance) and CO (Controlling). In SAP S/4HANA, FI and CO are part of a single table in ACDOCA, the Universal Journal. This means you no longer have to reconcile them with the General Ledger at each period-end. ACDOCA reconciles them automatically in real-time, so period-end closings are simpler in SAP S/4HANA.
SAP S/4HANA gives you the option of extending the material number from 18 characters to 40 characters. Bear in mind, though, if you turn on the extension you will have to adjust your custom code to the new material length of CHAR40.
In SAP ECC, customers and vendors are separate data objects. SAP S/4HANA integrates customers and vendors into a unified master data object called business partners. Customer-vendor integration has several benefits, such as:
To process material requirements planning (MRP) in SAP ECC, you must wait until non-peak hours and run a batch job. In SAP S/4HANA, you can run MRP in real-time. SAP has also simplified subcontracting in SAP S/4HANA. The downside? You can no longer run MRP at the storage level like in SAP ECC, but only at plant and area level.
For SAP S/4HANA, SAP integrated the main SAP Advanced Planning Optimizer (APO) submodules into two new configurations:
These changes mean you can’t automatically migrate from SAP APO to the new configurations.
The Material Ledger (ML) is another feature that's optional in SAP ECC but mandatory in SAP S/4HANA. Most companies don't activate the ML in SAP ECC due to frustration with the many aggregate and index tables. But in SAP S/4HANA, the ML is part of ACDOCA, so this frustration is now a thing of the past.
SAP S/4HANA includes a ton of new features to help you manage your data more effectively. Key features include the following.
As mentioned before, SAP S/4HANA combines several data modules into a single table called ACDOCA (the Universal Journal). This includes asset accounting (AA), GL, ML, management accounting (MA), FI, and CO-PA. ACDOCA removes many aggregate and index tables, which greatly reduces your data footprint. It's also a much more efficient system.
SAP S/4HANA introduces MATDOC, a new inventory management system that eliminates over 26 tables present in SAP ECC. Now, material documents are stored in MATDOC instead of MKPF or MSEG tables. This removes redundancy and improves stock reporting efficiency.
As we discussed earlier, SAP S/4HANA can only run on the SAP HANA database. But, thanks to the SAP HANA Cloud database, SAP S/4HANA is faster and more efficient than SAP ECC. Why? There are several reasons. Firstly, SAP S/4HANA reads data from the main memory instead of the hard disk, so there are fewer data movements. Next, the tables in SAP S/4HANA are column-based instead of row-based, so it only reads the relevant column in a query. It can also process different columns in parallel. There are no aggregate, index, or history tables since applications can access the original data. Lastly, SAP S/4HANA combines the online transactional processing (OLTP) and online analytical processing (OLAP) tables. You no longer need to reconcile them.
In SAP ECC, you can check product availability, product allocation, and backorders with available-to-promise (ATP). With SAP S/4HANA, you can do all this and more with advanced ATP (aATP). aATP uses automation for functions like:
SAP S/4HANA has global trade services (GTS), which replace the foreign trade functions in SAP ECC. SAP GTS uses automation to speed up processes that were manual in SAP ECC. This includes embargo checking, license checks, and import and export declarations.
FI-AR-CR was the credit management system in SAP ECC. In SAP S/4HANA, credit management falls under financial supply chain management (FSCM). Automated workflows in FSCM-CR remove manual processes for tasks like credit limit approval and risk scoring. Also, its distributed architecture means it can interface with external credit agencies directly.
In SAP ECC, warehouse management takes place in the Warehouse Management (WM) module. But this is replaced by the extended warehouse management (EWM) module in SAP S/4HANA. SAP EWM helps you manage complex warehouse processes such as labor management and goods distribution with ease.
The SAP S/4HANA Revenue Accounting and Reporting (RAR) module replaces SAP ECC’s SD Revenue Recognition module. RAR is an add-on that’s based on the new, five-step revenue recognition model found in International Financial Reporting Standard 15 (IFRS 15). RAR comes with new optimized contract management capabilities to comply with IFRS 15. At the same time, it simplifies revenue recognition.
SAP S/4HANA introduces a new user interface, SAP Fiori. SAP Fiori gives users a consistent, intuitive, and integrated experience. With SAP Fiori, you can get work done faster and more accurately. This speeds up onboarding and training and provides a better user experience. You can also create custom enterprise apps that work consistently across devices.
This part looks at the tech differences underneath. Let's get started.
HANA uses in-memory computing. This means it stores data in its memory instead of on a hard drive. This makes it way faster than the older databases ECC uses. You get real-time analytics and reporting. Imagine seeing how your business is doing right now, not last week.
ECC uses a row-based structure. S/4HANA uses a column-based structure. Think of it like this:
| Feature | SAP ECC (Row-Based) | SAP S/4HANA (Column-Based) |
|---|---|---|
| Data Storage | Stores data by row | Stores data by column |
| Speed | Slower for reports | Faster for reports |
| Best Used For | Transactions | Analytics |
Column-based is much faster when you need reports. This makes a big difference in making decisions.
SAP GUI is the old way to use SAP. SAP Fiori is new and easy. Fiori gives each person only what they need. It makes things simple and user-friendly.
This section highlights new features and better things in S/4HANA. Let's dive in.
S/4HANA lets you see what's happening as it happens because HANA is very fast. You can have dashboards that show you everything in real time. This helps you make better choices faster.
APO was a separate system for planning. S/4HANA puts planning right into the system. This makes business planning easier and smoother.
S/4HANA has analytics built-in. You don't need extra tools. It's all there, ready to use.
This part talks about how S/4HANA makes business steps easier.
S/4HANA uses a simple data model. This means there's less repeated data. This helps keep data consistent. It also makes processes run better.
S/4HANA has Central Finance. It lets you combine financial data in real-time. This makes financial reporting faster.
S/4HANA helps manage stock better. It shows you what you have in real-time. It uses data to guess what you'll need. This keeps stock at the right level.
This section talks about how you can set up S/4HANA.
On-premise means you keep the system in your own building. You control everything. But you also pay for everything.
You can also use the cloud. Public cloud is shared with others. Private cloud is just for you. Cloud lets you grow quickly and saves money.
RISE with SAP makes moving to S/4HANA in the cloud easier. It's a package deal. It includes everything you need.
This part advises on moving from SAP ECC to S/4HANA.
Brownfield means you update your current ECC system to S/4HANA. It's like remodelling your house.
Greenfield means you start from scratch with a new S/4HANA system. It's like building a new house.
Bluefield means you combine data from many ECC systems into one S/4HANA system.
This section talks about the costs of S/4HANA and if it's worth it.
S/4HANA has license costs. You can pay a subscription or buy it forever.
Setting up S/4HANA costs money. You pay for consultants and for new hardware.
S/4HANA can save you money in the long run. It makes things more efficient. It helps you make smarter choices. It also keeps customers happier. It can also let your business change as the market changes.
SAP ECC and S/4HANA are for different needs. ECC is solid. S/4HANA is new and gives real-time info. Think about what your business needs. Think about what you want in the future. Choose the one that fits your goals. This helps you get the most out of the tech. It also helps you be successful.
In 2021, 72% of businesses said the biggest benefit of SAP S/4HANA was improved efficiency, followed by greater satisfaction (61%). Other benefits of moving to SAP S/4HANA include:
Better integration with other SAP products
Lower costs, such as lower operational and ownership costs
A smaller database footprint due to simplified data models
Automated processes improve productivity and performance
Faster, more intelligent decision-making
Higher overall profits
There are many differences between SAP ECC and SAP S/4HANA. This can make migrating from one to the other a daunting prospect. But there's a strong business case for migrating to SAP S/4HANA - not least the 2027 maintenance deadline for SAP ECC. Thanks to automation and AI, SAP S/4HANA streamlines many business processes. This improves efficiency, reduces redundancy, and provides a better customer experience. All of this can reduce your business costs and boost revenue.