Many large and mid-sized enterprises now manage nearly all their business processes, logistics, and operations using SAP ERP Core Component (SAP ECC) as their on-premises ERP software. However, with the advent of SAP S/4 HANA as SAP's future flagship ERP software, which works on-premises and in the cloud, businesses are faced with the dilemma of migration. It is important to deliberate the pros and cons of moving from SAP ECC to SAP S/4 HANA. This blog explores the critical differences between the essential business management systems of the leading global ERP provider.
SAP ECC vs. SAP S/4 HANA: Unveiling the Key Distinctions
SAP, a multi-national German corporation, is the world's leading software provider for ERP systems. It provides five ERP systems used by thousands of businesses worldwide, namely SAP ERP Core Component (SAP ECC), S/4HANA, SAP S/4HANA Cloud, SAP Business One, and SAP Business ByDesign. While SAP ECC has been the flagship software of the ERP provider until now, SAP S/4 Hana is the next generation of their core ERP software.
With SAP ECC slated to be supported only up to 2027, businesses using the ERP are faced with the critical decision of migrating to SAP S/4 Hana. Thus, it's essential to understand how SAP S/4 Hana differs from SAP ECC and the advantages it provides, apart from operating on-premises systems and in the cloud.
What is SAP Enterprise Core Component (SAP ECC)?
Launched in 2004, SAP ECC is an on-premises, modular ERP system that helps businesses manage their core business processes, keep track of their resources, and make data-driven decisions. It provides a wide variety of modules to streamline and optimize everyday business operations, such as Finance (FI), Controlling (CO), Sales and Distribution SD), Human Capital Management HCM), Materials Management (MM), Project System (PS), Production Planning (PP), and many more.
SAP ECC is also used by businesses to improve customer service, warehouse management, and quality control. It provides end-to-end data integrations between various business processes, enables real-time data processing, and offers real-time data insights. A critical distinction SAP ECC has in contrast to SAP S/4 HANA is that it can run on third-party databases like Oracle, MaxDB, and IBM.
What is SAP S/4 HANA?
Launched in 2015, SAP S/4 HANA is short for "SAP Business Suite 4 SAP HANA" and is the first SAP Business Suite to run only on the proprietary SAP HANA (High-Speed Analytical Appliance) database platform. It stands out as a flexible ERP that can be deployed on-premises, in the cloud, or through a hybrid model. It is designed to align with SAP's intelligent enterprise framework and its shift towards being more equipped to manage the future digital transformation needs of businesses. Unlike SAP ECC, it doesn't run on third-party databases and can only run on the SAP HANA database.
Like SAP ECC, SAP S/4 Hana is also a modular ERP system. It has nearly all the same modules and core features of SAP ECC, enabling business operations for sales, procurement, manufacturing, distribution, service, quality, accounting operations, and plant maintenance. In other words, businesses can choose and configure the modules that best suit their requirements. However, SAP S/4 Hana also implements AI, machine learning, and automation to improve business efficiency and speed.
What are the key differences between SAP ECC and SAP S/4 HANA?
While SAP ECC has dominated the ERP landscape for years, it relies on a traditional relational database system. This limits its ability to handle massive amounts of data and complex issues and may not fully harness the potential of modern computing technologies.
In contrast, here are some significant improvements that SAP S/4 HANA brings to the table that represent a significant evolution in the ERP domain:
Speed and performance
SAP S/4 Hana's in-memory database architecture helps accelerates data processing and enables real-time data exchange. This means quicker response times, smoother user experiences, and the ability to analyze vast amounts of data in near-real-time. Most importantly, this shift to an in-memory database has far-reaching implications for performance and scalability, streamlining processes and reducing data redundancy.
User experience
S/4 Hana, once again, shines with its intuitive user interfaces. ECC's interface, while functional, can feel dated in comparison. S/4 Hana's modern design enhances usability and contributes to user adoption and efficiency.
Agility and flexibility
Here's where SAP S/4 Hana's agility comes into play. Its simplified data model and streamlined processes make adapting to changing business needs easier. Adding new functionalities or scaling up becomes more seamless, empowering your enterprise to stay nimble in a dynamic market.
Deployment options
SAP ECC's on-premises deployment required organizations to invest in hardware infrastructure and ongoing maintenance. On the other hand, SAP S/4 HANA expands deployment possibilities by offering cloud-based options. Cloud deployment can lead to lower upfront costs, easier scalability, and reduced IT overhead. Organizations can opt for a deployment model that aligns with their budget and strategic goals.
Integration and commerce connectivity
In the realm of integration, both SAP ECC and SAP S/4 HANA emphasize connectivity with other systems and applications. However, the architecture of SAP S/4 HANA facilitates seamless integration through its in-memory capabilities. Additionally, S/4 HANA's integration with the Internet of Things (IoT) and advanced analytics further extends its capabilities in a connected world.
However, when it comes to integrating SAP ECC and SAP S/4 HANA with e-commerce platforms, SaaS solutions, or cloud apps, such as PIM, CRM, WMS, POS, Marketing automation systems, and more, both ERPs lack the necessary API points or web services required for seamless integrations. Usually, building these missing B2B & B2C API points natively within both ERPs may require heavy development projects.
However, there is a shortcut designed to simply install these missing B2B and B2C API Points within SAP ECC and SAP S/4 HANA, enabling either of them for commerce connectivity, and it's called the Alumio API Plugin for SAP. Discover more about:
The Path Forward: Migrating to SAP S/4 HANA
The 2027 support deadline for SAP ECC is clearly a strategic move to encourage businesses to transition to SAP S/4 HANA and future-proof their operations with the latest advancements in ERP technology. Migrating to S/4 HANA involves careful planning and execution, but it promises to unlock unparalleled capabilities and position organizations for sustained growth.
While SAP ECC has long been a reliable workhorse, SAP S/4 HANA offers a leap forward in terms of performance, scalability, and user experience. As you embark on this crucial decision-making process, a thorough understanding of the differences outlined in this comparison will serve as a solid foundation for making an informed choice that aligns with your strategic vision.
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