What is SAP S/4HANA?


If you have been following SAP in recent years, you would have definitely come across the word “SAP S/4HANA”. S/4HANA stands for Suite on HANA.

It is SAP’s next-generation ERP software that comprises simplified architecture, lean functionalities, improved user experience and incorporates advanced technologies like Artificial Intelligence and Machine Learning. It runs only on the SAP HANA database and can be hosted both, on-premise and in the cloud.

Checkout my YouTube video about SAP S/4HANA


SAP S/4HANA Architecture

S/4HANA’s architecture is quite complicated and involves a lot of moving parts. There are books that are dedicated specifically to S/4HANA’s architecture. I am not going to take a deep dive but let’s take a quick look at each component and its purpose in this section.

  • SAP WebDispatcher – WebDispatcher is the software switch that lies between the internet and your SAP system. When an end-user sends an HTTPS request, it first hits the WebDispatcher which then decides whether to accept or reject the request. When it accepts a connection, it balances the load to ensure an even distribution across the servers. SAP Web Dispatcher, therefore, contributes to security and also balances the load in your SAP system.
  • SAP FIORI – SAP FIORI is the presentation layer for S/4HANA. According to SAP, “SAP FIORI is the design language that brings great user experiences to enterprise applications”. Users can still access the S/4HANA system using SAPGUI but it is mostly reserved for administration and compatibility reasons. Moreover, utilising FIORI apps is a must in order to take full advantage of S/4HANA functionalities such as embedded analytics and robotic process automation.
  • SAP Gateway – As the name implies, SAP Gateway lets you connect devices, environments and platforms to SAP systems. It uses Open Data Protocol (OData) for communication which means you can use any programming language or model to connect to SAP and non-SAP applications using the Gateway. S/4HANA uses Gateway and OData services to translate business data from the database and present it using FIORI apps.
  • Application engine – S/4HANA’s application engine contains a simplified data model. There are no more aggregates and indices required, as a result, the number of tables required to perform day to day business operations is reduced. As a result, the memory footprint is drastically reduced as well. S/4HANA can perform both OLAP and OLTP transactions and there is a clear seperation of master data and transactional data.
  • CDS views – CDS stands for Core Data Services. It is also known as the code pushdown model. This means some of the resource-intensive calculations are pushed down to the database layer, which takes the load out of the application server thus providing the best possible performance. CDS also offers capabilities beyond the traditional data modelling tools, including support for conceptual modelling and relationship definitions, built-in functions, and extensions.
  • SAP HANA – S/4HANA only runs on the SAP HANA database. It is SAP’s in-memory, column-oriented, relational database management system that combines OLTP (Online Transaction Processing) and OLAP (Online Analytical Processing) into a single system. OLTP is basically about capturing, storing and processing data from transactions whereas OLAP is about analytics, processing complex queries to analyse aggregated historical data from OLTP systems. Storing data in main memory rather than on disk provides faster data access, faster querying and processing hence offering better performance than a non-in-memory database.

Now let’s take a look at the evolution of SAP S/4HANA

Evolution of SAP S/4HANA
  • SAP ECC – ECC is the predecessor of S/4HANA. It’s latest enhancement pack version is 8 and it can run on multiple databases such as MS SQL Server, Oracle, DB2, Max DB and Sybase.
  • Suite on HANA – In 2011, SAP introduced it’s in-memory database called HANA. From enhancement pack 7, ECC got the capability to run on HANA. Even though technically it was able to run on HANA database, it’s functionalities were not optimised to take advantage of the in-memory capabilities of the HANA database.
  • Simple Finance – In 2015, SAP introduced Simple Finance and the first version was called 1503. It is an add-on that sits on top of the ECC system. The ECC system must at least have an enhancement pack version of 7 as a requirement for the add-on to be installed. The add-on contained the core finance functionalities of ECC and the code was optimised to take full advantage of the HANA’s in-memory capabilities. But other functionalities in ECC remained the same and were not optimised.
  • SAP S/4HANA – In November 2015, SAP released the fully optimised Suite for HANA application called S/4HANA. The initial version of 1511 contained only some core functionalities. More functionalities and advanced technologies were added during future releases. By the time of writing this blog, the current version was release 2020. All the modules available in S/4HANA are optimised to take full advantage of in-memory capabilities of HANA database and FIORI user experience.

S/4HANA modules:

S/4HANA consists of modules such as Sales & Marketing, Finance, Manufacturing, Supply Chain, Professional Services, Asset Management, R&D / Engineering, Sourcing & Procurement and Human Resources.

It offers more than 30 Industry Solutions. Industry Solutions are addon’s that provide a tailored system with industry-specific business processes for an organisation. It includes categories such as Energy & Natural resources, Service Industries, Consumer Industries, Discrete Industries, Financial Services and Public Services. Please note, not all the industry solutions are available in the S/4HANA Essential Edition (public cloud) yet.

S/4HANA releases:

Every year, a new release of S/4HANA is released with new functionalities and bug fixes. The releases follow a naming convention of four numbers, where the first two numbers represent the year and the last two numbers represent the month. For example, S/4HANA 1610 was released in October 2016 and S/4HANA 1709 was released in September 2017, so on and so forth. From 2020, a new nomenclature was introduced where the information about the month is not added in the name of the release. For example, the latest S/4HANA release is called S/4HANA 2020 and the one that will be released in 2021 will be called S/4HANA 2021 regardless of which month, it is released.

Difference between S/4HANA and ECC:

So how is S/4HANA different from SAP ECC? Well, it is a huge topic and might require a book of its own, but below are some of the key differences.

  • While SAP ECC can run on multiple databases such as Oracle, SQL server, DB2, HANA, Max-DB; S/4HANA can run only on SAP’s HANA database. S/4HANA has been rewritten in a way to take full advantage of HANA’s in-memory capability. Hence S/4HANA is faster than its predecessors when it comes to performing certain operations
  • S/4HANA comes in different versions such as S/4HANA any-premise (previously known as on-premise), S/4HANA Essential edition (previously known as S/4HANA public cloud) and S/4HANA Extended edition (previously known as single tenant edition). SAP ECC doesn’t have a pure cloud version but can be hosted on one of the hyperscalers such as AWS and Azure on a HANA DB.
  • Some of the functionalities that were available in SAP ECC were removed in S/4HANA since there is a cloud product available as an alternative for those functionalities. For example, payroll is not available in S/4HANA as customers can choose to run payroll using SuccessFactors’s employee central (EC) payroll instead. As a result, redundant functionalities and database tables has been removed in S/4HANA making it a lean software
  • While S/4HANA can be technically used with SAP GUI (SAP’s desktop client based graphical user interface), in order for the customers to take full advantage of S/4HANA’s capabilities, they have to access it using FIORI (SAP’s user experience product). For example, functionalities such as robotic process automation and embedded analytics cannot be used using SAP GUI. There are FIORI apps available for ECC system as well, but they are limited in numbers and functionality
  • SAP claims that customers can experience a 50% reduction in data footprint by taking advantage of HANA’s data compression technique. SAP also claims that reports run 100 times faster in S/4HANA, customers experience improved insights, better forecasting and experience better user experience with the help of S/4HANA

In the next blog, i will write about the difference between S/4HANA’s different deployment options like Any premise (on-premise), Essential edition (Public cloud) and Extended edition (Single tenant).

If you have made it this far, thank you so much for reading my blog. Please check out my YouTube channel as well – https://www.youtube.com/channel/UCYhvHUq8iZRzkg_zEmvrWyQ

P.S. Check out my course on Udemy – “Introduction to SAP – The Complete Package for Beginners

Published by

Aroon Raj

A blog about SAP

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