SAP S/4 HANA and SAP ECC – Key Differences

Table of contents

• SAP ECC - What is It? 
• SAP S/4HANA - What is It? 
• The differences between SAP S/4HANA and SAP ECC 
• Identifying the Best SAP ERP for a Business 
• SAP S/4HANA or SAP ECC Integration is Necessary

Determining the key diverse benefits of SAP S/4 HANA and SAP ECC is critical nowadays. Actually, in the realm of modern business management, Enterprise Resource Planning (ERP) applications play a pivotal role in ensuring seamless operations. For decades, SAP has been at the forefront of ERP technology, providing cutting-edge digital enterprise management solutions to businesses.

With the ever-changing landscape of technology and industry demands, SAP has consistently evolved its ERP applications. Presently, SAP offers two primary solutions for large-scale enterprises: the time-tested SAP ECC and the latest SAP S/4 HANA applications, both designed to facilitate the efficient functioning of companies. These applications have gained widespread adoption across various industries, each offering unique features and advantages. However, comprehending the distinctions between SAP S/4HANA and SAP ECC, determining the optimal fit for their business, and grasping integration best practices can be a challenging task

In this article, we shall explore the distinctive attributes that set SAP S/4 HANA and SAP ECC diverse, while exploring the pivotal features of both to identify the most suitable ERP solution for an enterprise. So, our comprehensive analysis aims to provide valuable insights into the contrasting functionalities of these platforms, assisting businesses in making well-informed decisions when selecting an optimal ERP application to drive their successful business in today’s competitive landscape. 

Thanks to SAP, you can achieve remarkable enhancements in your business metrics and ensure seamless connectivity across all your systems. So, if your business relies on multiple systems and aims to effortlessly integrate them with your SAP application within a unified platform, streamlining business processes and automating workflows, consider leveraging the capabilities of In Tech Partner (ITP), in terms of SAP S/4 HANA and SAP ECC.  

 

SAP ECC – What is It? 

SAP ECC, originally known as SAP ERP Central Component, was initially introduced as a financial software suite in 1972 and has become one of the most widely adopted ERP solutions in the market. This ERP application is renowned for its extensive implementation across various industries. Notably, SAP ECC is designed in a way to be able work on third-party databases such as Oracle, IBM DB2, and more, offering businesses seamless integration options. With a rich history and ongoing global adoption, SAP ECC stands as a reliable and future-proof choice for organizations seeking efficient and adaptable ERP solutions. 

SAP ECC, also known as SAP ERP, serves as a centralized platform designed to integrate essential business functions within an organization. As the successor to SAP R/3, it is built upon its foundation, streamlining operations and facilitating seamless processes. By consolidating key business functions in a single location, SAP ECC enhances efficiency and fosters better collaboration across the enterprise. 

SAP ECC serves as the central business component within SAP Business Suite, offering a comprehensive and up-to-date view of an organization’s key processes, encompassing financials, human resources, and more. This solution is used across multiple departments, including IT and finance. SAP ECC played a crucial role in establishing the groundwork for both on-premises S/4 HANA and cloud-based S/4 HANA solutions.

As an essential part of an enterprise’s digital framework, the legacy SAP ECC application remains central. However, by 2027 SAP will no longer maintain SAP ECC, hence companies will need to migrate to SAP S/4 HANA.  

 

SAP S/4HANA – What is It? 

Introduced in 2015, SAP S/4HANA represents the latest generation of ERP software, seamlessly adaptable to on-premises and cloud infrastructures. With a vast user base of 20,000 as of 2022, this software delivers numerous benefits. Leveraging AI, machine learning, and automation capabilities, it efficiently processes vast data volumes in real-time. This empowers users with personalized business insights, streamlined workflows, and enhanced cybersecurity measures.  

SAP S/4 HANA comes with a host of enhanced features and advantages over its previous version. However, it operates exclusively on its dedicated SAP HANA database, which poses a restriction for organizations relying on third-party databases. To take advantage of SAP S/4 HANA, these organizations will need to transition to the HANA database. Embracing this change will unlock the full potential of the platform and its benefits for their business operations. 

 

The differences between SAP S/4HANA and SAP ECC 

Understanding the differences between SAP HANA and S4 HANA can be confusing due to their similar names. In essence, SAP HANA serves as an in-memory database technology that runs the SAP landscape, while S4 HANA represents a next-generation ERP business suite exclusively built to operate on the HANA database. To sum it up, SAP HANA is the database, and S4 HANA is the ERP suite that utilizes the database. 

 Essential Functionalities: The SAP ECC software suite includes modules for financials, human resources (HR), warehousing, and logistics, streamlining vital business workflows. With SAP S/4 HANA, you benefit from modern features that enhance business efficiency. It combines multiple data modules into a single table, reducing data footprint by eliminating aggregate and index tables, resulting in a highly efficient system. Additionally, SAP S/4 HANA incorporates AI and Machine Learning capabilities, enabling deeper analytics for business operations and data-driven predictions of future outcomes. 

Database Architecture: SAP S/4 HANA operates exclusively on in-memory HANA database, while SAP ECC can function on various third-party databases. Although this limitation may impact operational flexibility, the advantage lies in the enhanced performance of SAP S/4 HANA when paired with the SAP HANA Cloud database. This optimized setup allows SAP S/4 HANA to achieve faster and more efficient data processing, thanks to its ability to directly read data from the main memory rather than relying on traditional hard disk storage. 

Enhancing Global Trade Efficiencies: In today’s interconnected business landscape, the seamless integration of trade functionalities is a necessity. SAP S/4 HANA offers a powerful solution through its Global Trade Services (GTS), which replaces the foreign trade functions in SAP ECC. By adopting SAP GTS, businesses can automate manual workflows, optimizing operations and improving overall efficiency. This automation encompasses vital aspects of international trade compliance, such as managing licenses, embargoes, and declarations for imports and exports.  

Customizability: SAP S/4 HANA, while offering fewer integration capabilities compared to SAP ECC, prioritizes a simplified user experience. On the other hand, SAP ECC boasts high customizability, providing businesses with flexibility but potentially adding complexity to its implementation.  

Deployment Options: While SAP ECC is restricted to on-premises infrastructure, SAP S/4 HANA offers the advantage of deployment on both on-premises and cloud systems. This enhanced flexibility empowers organizations to select the deployment option that precisely aligns with their requirements and preferences. 

Implementation Costs: When deploying SAP S/4 HANA, the expenses involved may surpass those of SAP ECC implementation. This is primarily attributed to the requirement of investing in new hardware and transitioning to a HANA database.  

 

Identifying the Best SAP ERP for a Business 

SAP S/4HANA presents numerous benefits over its predecessor, SAP ECC, in various aspects. Nevertheless, the decision to upgrade is a complex one. Transitioning from an established SAP ECC infrastructure to SAP S/4 HANA comes with considerable challenges. Hence, determining the optimal ERP application for a business necessitates a comprehensive assessment of the organization’s unique needs and requirements. 

Enterprises have valid reasons to choose SAP ECC over SAP S/4 HANA. Unlike a simple upgrade, transitioning to SAP S/4 HANA means a fresh implementation of the ERP solution. SAP ECC has served businesses for years, with many having tailored it to fit their existing infrastructure. Shifting to SAP S/4 HANA would demand substantial time and resources to re-establish these customizations and integrations. Moreover, the move to SAP S/4 HANA comes with considerable costs, from the initial investment to ongoing operational expenses. 

As we approach the end of official support for SAP ECC by 2027, it becomes essential to transition to SAP S/4 HANA. This next-generation ERP solution offers numerous advanced features, outperforming SAP ECC in many ways. Built on the powerful HANA infrastructure, SAP S/4 HANA leverages in-memory computing, leading to improved performance and quicker response times. Moreover, it provides the flexibility to be deployed on both cloud and on-premises infrastructures, allowing organizations to scale as needed. Another significant advantage is its advanced data analytics capabilities, integrating AI and Machine Learning to analyze big data effortlessly and gain valuable insights into operations and performance. Embracing SAP S/4 HANA is a vital step for businesses to thrive in the ever-evolving digital landscape. 

Businesses must carefully assess their current organizational situation and considerations before adopting SAP ERP solutions. If a company already has a well-established SAP ECC system, it may be prudent to continue using it until an urgent need for change arises. On the other hand, companies without an existing ERP solution or those looking to transition from a non-SAP ERP can greatly benefit from opting for SAP S/4 HANA, an enterprise-grade ERP application. Making the right choice between the two solutions can significantly impact a company’s efficiency and overall success. 

 

SAP S/4HANA or SAP ECC Integration is Necessary

For any enterprise implementing SAP ERP, seamless integration of the ERP solution is of utmost importance. Whether it’s SAP ECC or SAP S/4 HANA, integrating the ERP system with other business applications is crucial for automating and streamlining workflows. To achieve this, consider using a proficient company ITP (In Tech Partner). ITP specializes in SAP implementation and support, making it an ideal choice for businesses seeking efficient ERP integration. With ITP’s low-code Business Process Automation (BPA) and pre-configured integration packages, enterprises can swiftly deploy the required integrations without excessive time or resource investments. Embracing SAP ERP integrations with ITP will empower businesses to outpace competitors with faster time-to-market and seamless scalability.