How is SAP S4 HANA different from the current SAP ECC ERP?
SAP S4 HANA is positioned as the new digital core and a direct evolution from SAP ECC for existing ECC customers. SAP is now offering attractive discounts to nudge this adoption forward. But, it is not a direct replacement for SAP ERP with respect to the functionalities and capabilities. The major changes in SAP S4 HANA compared to SAP ECC ERP are as follows:
Introduction of a new database
The introduction of the new in-memory database platform SAP HANA means faster analytics and removal of unnecessary tables. The architectural changes have enabled new ways of working with data. In financials, SAP has changed the physical data architecture so that it can unify the previously separate accounting ledgers into a single physical table called the universal journal. This allows for extremely fast profitability analysis. Other functional capabilities such as logistics have also been enhanced this way.
Functional scope changes
Elimination of duplicate functionality:
SAP ECC has two general ledgers (GL) architectures. But, SAP S4 HANA uses the new General Ledger Accounting architecture implemented automatically as part of the S4 HANA migration. SAP S4 HANA also has Extended Warehouse Management (EWM) functionality embedded into the core-system instead of having a separate SAP SCM system as in SAP ECC.
Some Functionality in ECC has no direct replacement in S/4HANA:
SAP has stated that the functionalities in SAP ECC will be probable cases in the SAP S/4HANA roadmap. But, this means that the enterprises migrating to S/4 HANA will have processes which are obsolete.
Replacement of ECC and on-prem functionality with SAP cloud LoB solutions:
Examples: Replacement of human capital management with SAP SuccessFactors and supplier relationship management with Ariba.
Incorporation of stand-alone solutions in S/4HANA core:
SAP Transportation Management and SAP Extended Warehouse management are two standalone solutions which S/4 HANA has brought into its core.
New functional capabilities:
SAP is releasing a number of new functional capabilities which are designed to work with S/4HANA and in-memory computing. Examples include Central Finance, SAP Cash Management, and SAP BPC Optimized for S/4HANA. But these require additional licenses.
Overall, there are some pretty significant changes in the S/4HANA functional scope. SAP does offer compatibility packs to allow certain SAP ECC functionalities to run on S/4HANA. But this a stop-gap measure. To truly use S/4HANA and get the best return on investment, IT leaders of existing SAP ECC customers should understand the functional difference and build the best business use case on why their firm should move to S/4HANA.
If you wish to learn more about the transition to S/4HANA, have a look at the case studies where Kaar helped clients embrace S/4 HANA. You can also gain insights on the challenges faced and ways to overcome them.
Or, if you are looking to ascertain the business and IT benefits from shifting to S/4 HANA, you can request a free assessment from Kaar here.