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There has been some confusion about the differences between SAP ECC and S/4 HANA, especially among the students who are new to the SAP world. In this blog, let’s discuss the key differences between ECC and S/4HANA from a Technical, Finance and Logistics modules perspective.

Firstly, what is SAP ECC?

ECC stands for ERP Central Component. It is SAP’s main ERP application that was initially released in 2004. Since then, it has gone through a lot of version updates and the latest version of SAP ECC is EHP8. It contains a lot of core modules such as Finance, Consolidation, Payroll, Procurement, Logistics, S&D, Materials Management, Production Planning, Quality Management, Plant Maintenance, etc.

Gartner estimates around 35,000 customers globally uses SAP ECC as their main ERP system to run their day-to-day operations.

Now, you might ask, if ECC is the main ERP system then what is S/4HANA.

Well, S/4HANA is trying to dethrone ECC as SAP’s main ERP product. It is the next generation ERP software that runs on an in-memory database called SAP HANA. It offers realtime analytics, advanced functionalities, simplifies data structure, and improved user experience.

I have written blogs about both SAP ECC and SAP S/4HANA, if you are interested to learn more about them.

Now, let’s take a look at the key differences between ECC and S/4HANA and why SAP customers are migrating from ECC to S/4HANA.

Key Differences in Technology and Scope.

On a high level, there are three key differences when it comes to the technology and scope.

One of the key reasons for SAP customers considering to move to S/4HANA is that ECC will go out of support in 2027. Which means post 2027, SAP customers won’t receive support for new bugs from SAP for the ECC system.

Whereas, SAP has committed that S/4HANA will be in support at least until 2040. There is a small nuance here that you need to make note of. S/4HANA as a product will be supported until 2040 but the versions of S/4HANA which SAP calls releases will be supported only for 7 years starting from 2023. For example, the latest version or release of S/4HANA is called S/4HANA 2023 which will be supported until 2030. When S/4HANA 2025 is released next year it will be supported until 2032 and so on and so forth. Previously, these releases were supported for 5 years but recently SAP changed their strategy and now each releases are supported for 7 years and a new release is realised every two years instead of one new version per year.

The next main technical difference is that the ECC system can run on multiple database types such as Oracle, MaxDB, DB2, SQL Server and Sybase.

But S/4HANA can run only on HANA database which is SAP’s in-memory database. So, if currently a SAP customer is running their ECC system on a Oracle or any other database apart from HANA, then they need to start using HANA database when they move to S/4HANA. Which means the customer must either hire new employees with HANA skills or they must upskill their current database team in the HANA database technology.

SAP Claims that S/4HANA running on a HANA database is much faster than ECC running on a non-HANA database and there are several reasons to it. 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.

If you would like to learn more about SAP HANA, then click here

The next difference comes in the presentation layer. Up until SAP ECC, customers were using SAPGUI as the tool to access the system. SAPGUI was released in the early 1990’s and there has always been complaints from the SAP customers that SAPGUI is not modern when it comes to user interface and lacks advanced features.

The main presentation layer for S/4HANA is SAP Fiori that is browser based and developed using modern programming languages such as SAPUI5 and Java script. It is user friendly and includes advanced features such as embedded analytics and modern dashboards.

Now, let’s take a look at the 4 key differences in the Finance module

The first and the most commonly talked about change in the finance world is the introduction of the Universal Journal.

S/4HANA consolidates various data modules into a unified table known as ACDOCA, referred to as the Universal Journal. This integration encompasses asset accounting (AA), general ledger (GL), material ledger (ML), management accounting (MA), finance (FI), and profitability analysis (CO-PA). By incorporating these modules into ACDOCA, the system eliminates the need for numerous aggregate and index tables, leading to a significant reduction in data footprint. This streamlined approach enhances system efficiency.

The next one is activating the Material Ledger

While optional in ECC, the Material Ledger (ML) becomes a mandatory feature in S/4HANA. Many companies choose not to activate ML in ECC due to challenges associated with numerous aggregate and index tables. However, in S/4HANA, the Material Ledger seamlessly integrates into ACDOCA, eliminating past frustrations and making its activation a more straightforward process.

Account based profitability Analysis

In ECC, costing-based CO-PA (CO-Profitability Analysis) is the default option. But in S/4HANA, the default option is account-based CO-PA, though you can run both options together.

Running an account based CO-PA has various advantages such as real time reporting, simplified data structure, alignment with external reporting and much easier period end closing.

Credit Management

In ECC, the credit management module was referred to as FI-AR-CR. However, with S/4HANA, credit management is now integrated into Financial Supply Chain Management (FSCM). The FSCM-CR module introduces automated workflows, eliminating the need for manual intervention in activities such as credit limit approval and risk scoring. Furthermore, the distributed architecture of FSCM-CR enables seamless interfacing with external credit agencies, facilitating direct communication.

Now let’s take a look at the 7 key differences in the Logistics module

The first key difference in the logistics module is the introduction of Business Partners.

Within SAP ECC, customers and vendors are distinct data entities. In S/4HANA, these entities are consolidated into a cohesive master data entity known as business partners. The integration of customers and vendors into business partners brings forth various advantages, including:

• A single business partner can fulfill multiple roles and possess multiple addresses.
• General data is shared across various roles, leading to a reduction in database size.
• Minimized redundancy as any unused data is removed after a specific time period.

The next one is planning the material requirements in real time.

In ECC, conducting material requirements planning (MRP) requires waiting until non-peak hours and executing a batch job. In contrast, S/4HANA allows for real-time MRP execution. Additionally, subcontracting processes have been streamlined in S/4HANA. However, a limitation is that MRP can no longer be performed at the storage level, as was possible in ECC; instead, it is limited to the plant and area levels.

The next one is the SAP IBP add-on

Previously, customers had to use a seperate SAP application called Advanced Planning and Optimizer (APO) for logistics planning but In S/4HANA, the key submodules of the Advanced Planning Optimizer (APO) have been restructured into two distinct configurations:

1. Demand planning and supply network planning have been consolidated within the new SAP Integrated Business Planning (SAP IBP) module.
2. Production planning, detailed scheduling, and parts of Global Available-to-Promise (ATP) module have been partially combined within the S/4HANA digital core.

As a result of these modifications, there is no automatic migration path from APO to the new configurations. So, while moving from APO to S/4HANA, all the settings and configurations must be reimplemented.

The next one is the introduction of MATDOC table in S/4HANA.

In ECC, material documents were stored in MKPF & MSEG tables. Whereas in S/4HANA, it is stored in the MATDOC table that is the Material Documentation table, eliminating the need for more than 26 tables that are currently present in the ECC system. The MATDOC table maintains the records for material movements, valuations, and other relevant information. It is part of the unified data model in S/4HANA, which aims to simplify data structures and improve system performance.

The next one is the introduction of Advanced Available to Promise (aATP)

In ECC, you can check product availability, product allocation, and backorders with available-to-promise (ATP). Whereas the Advanced Available-to-Promise (ATP) functionality in S/4HANA represents an enhanced and more sophisticated version of the ATP functionality such as using the unified data model where data is stored in a single table (ACDOCA). This allows for real-time visibility into ATP information. And it also uses automation for functionalities like releasing items for delivery, checking stock availability in alternative plants, performing mass availability checks.

The next one is the introduction of Global Trade Services functionality in S/4HANA

Within SAP S/4HANA, the Global Trade Services (GTS) module supersedes the foreign trade capabilities found in ECC. The Global Trade Services employs automation to enhance the efficiency of tasks that were previously performed manually in ECC, such as embargo checks, license verifications, and the processing of import and export declarations.

The last one in the Logistics space is the introduction of Extended Warehouse Management Module in S/4HANA

Warehouse Management (WM) was a module in the ECC application. The Warehouse Management module in ECC focused on the effective management of warehouse processes, including the receipt, storage, and retrieval of goods within a warehouse.

In SAP S/4HANA, there has been a shift towards the SAP Extended Warehouse Management (EWM) module, which provides advanced features and a more comprehensive solution for warehouse management such as Slotting and rearrangement, labour management, advanced shipping and receiving, multi-level storage and advanced analytics and reporting.

I hope you received some valuable information. If you found this useful, please share the blog with your friends who might also benefit.