SAP is a German multinational corporation which has been creating enterprise software since 1972 to manage business operations and customer relationships. It is especially known for its Enterprise Resource Planning (ERP) software which has been trusted by organizations across the globe. R/1, R/2, R/3, ECC, and S/4HANA – These are the different SAP ERP software which have been made available by SAP over the years. SAP ECC ERP is the most used SAP ERP software now.

However, this is going to change. SAP has decided that SAP S/4HANA will be their primary ERP offering moving forward and that SAP ECC will go out of maintenance by 2027. There are a lot of questions which are resonating across the SAP ecosystem.

• What is SAP ECC? What is SAP S/4HANA?
• How is SAP S/4HANA different from SAP ECC (SAP ECC ERP vs SAP S/4HANA ERP)?
• What are the business benefits of SAP S/4HANA?
• What is the first step in moving from SAP ECC to SAP S/4HANA?

Here’s what we will be focusing as part of this article.

SAP ECC which stands for SAP ERP Central Component is the previous generation of SAP’s enterprise resource planning software. SAP ECC has multiple modules linked together into a single, customizable system which can be run on a database of the user’s choice. An organization using SAP ECC would be able to optimize its business operations across Finance, Logistics, HR, Product Planning, and customer service.

SAP ECC is heavily modular. Businesses can use the pieces they need and configure the pieces as required by their landscape. SAP ECC can also work with third-party or customized applications on a customized technology stack. However, this flexibility brings complexities. Since each part of the landscape interact with one another, a change in one part can and will affect how other parts function. Therefore, it is important to meticulously test your landscape before rolling out any change such as enhancements, add-ons, customizations, or upgrades.

It is also important to know that SAP ECC has reached the end of the line. SAP is planning to end support for SAP ECC by 2027. They are already in the process of phasing out ECC and are promoting the move for SAP ECC users to SAP S/4HANA.

SAP S/4HANA is short for SAP Business Suite 4 SAP HANA. It is the latest ERP offering from SAP and is based on the SAP HANA in-memory database to help organizations execute transactions and analyze business data in real-time. It is the fourth version of the SAP Business Suite and is designed to run only on SAP HANA.

With a refreshing user experience powered by Fiori, embedded real-time analytics, and HANA powered in-memory processing to handle large data volumes of operational and transactional business data, SAP S/4HANA is intended to help organizations run simpler and faster with better efficiency. In addition, SAP S/4HANA solves batch latency, manually driven processes, data sprawl – problems which have been present in traditional ERP systems.

SAP views SAP S/4HANA as one of its flagship products and is heavily pushing it to be the successor for SAP ECC. As discussed before, they are promoting SAP S/4HANA as the go-to solution for existing SAP ERP customers and are hoping to move the 40000+ SAP ECC users to SAP S/4HANA by 2027.

With a refreshing user experience powered by Fiori, embedded real-time analytics, and HANA powered in-memory processing to handle large data volumes of operational and transactional business data, SAP S/4HANA is intended to help organizations run simpler and faster with better efficiency. In addition, SAP S/4HANA solves batch latency, manually driven processes, data sprawl – problems which have been present in traditional ERP systems.

SAP views SAP S/4HANA as one of its flagship products and is heavily pushing it to be the successor for SAP ECC. As discussed before, they are promoting SAP S/4HANA as the go-to solution for existing SAP ERP customers and are hoping to move the 40000+ SAP ECC users to SAP S/4HANA by 2027.

SAP S/4HANA combines the data structures of FI, AA, CO, CO-PA, and ML into a single line item table called ACDOCA. This ACDOCA is also referred to as the Universal Journal and it eliminates many aggregate tables and index tables. In addition, the data footprint is significantly reduced since data needs to be inserted into only a single table instead of several tables.

SAP ECC can run on third-party databases such as Oracle, IBM DB2, etc. However, SAP S/4HANA can run only on the SAP HANA Database. SAP S/4HANA is designed with SAP HANA and its in-memory computing capabilities in mind and provides multiple benefits.

• HANA enables in-memory computing. This enables the data to be read directly from the memory. This means that data always resides in the main memory RAM even through write operations happen in the hard disk. Therefore, SAP S/4HANA reads data much faster than traditional ERPs since the HANA database reads data much faster than traditional databases.
• SAP S/4HANA can access column-based tables faster since only affected columns are read in a query.
• SAP S/4HANA enables better compression since there only few distinct values compared to rows.
• SAP S/4HANA enables parallel processing since different columns can be processed parallelly.
• With SAP S/4HANA powered by SAP HANA, Online Transactional Processing (OLTP) and Online Analytical Processing (OLAP) can happen in the same system. This enables real-time reporting and predictive analysis.
• SAP S/4HANA will not have aggregates, index, or history tables. This is because aggregates are created dynamically based on line item tables instantaneously.

In SAP ECC, the FI general ledger (GL) accounts are mapped to CO primary cost elements. In SAP S/4HANA, the GL accounts and the cost elements are stored in one field of the Universal Journal, the ACDOCA. Primary and Secondary cost elements are now general ledger (GL) accounts and are created and maintained in FS00 with the relevant cost element category. Reconciliation as in the case of CO to FI is no longer needed and period end closings are now faster thanks to the changes in SAP S/4HANA.

Due to the data structure, the new general ledger in SAP S/4HANA is technically like the general ledger in SAP ECC. However, customers using the classic general ledger will have to adopt the new general ledger and its Parallel Ledger Functionality for new Asset Accounting.

Unlike SAP ECC, Account Based CO-PA is the default option in SAP S/4HANA while costing-based CO-PA is now available as an option. In addition, SAP S/4HANA also permits both the options to be run simultaneously.

Custom Code read operations will be redirected to compatibility views through a special setting at the database interface level so that the custom code can work without disruption. This means that it will be invisible to the source code.

• Example: V_COEP for the CO line item table COEP.

In SAP ECC, Business Partners were optional. However, in SAP S/4HANA, the Business Partners concept is mandatory. All customer and vendor master must be migrated or integrated as business partners in SAP S/4HANA. Therefore, Custom Vendor Integration is a mandatory step in SAP S/4HANA.

In SAP ECC, the material number had a character count of 18. In SAP S/4HANA, the character count has been extended to 40 characters. However, this is an optional feature. It is also worth noting that the impact of this extension on custom code, interfaces, and other SAP applications must be evaluated before using the 40-character extension by switching it on.

SAP ECC had FI-AR-CR for credit management. In SAP S/4HANA, this is replaced by credit management of FSCM (Financial Supply Chain Management). The credit management of FSCM (FSCM-CR) has a distributed architecture which allows interfacing with external credit rating agencies. The traditional FI-AR-CR credit control setting requires a lot of manual work.

In SAP S/4HANA, FSCM-CR removes this effort with the help advanced features such as

• Credit Rule Engine automated risk scoring and credit limit calculations
• Automated Master Data Update on approval of credit limit
• Workflows for credit events

SAP ECC provides an option for availability check at individual requirements or for summarized requirements which are aggregated at daily or weekly levels. In SAP S/4HANA, it is only possible to perform an availability check at individual requirements with no VBBS table since SAP S/4HANA does not have aggregate tables due to simplified data models