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What is SAP S/4 HANA?

Written by
Published on
September 1, 2023

In 2015, SAP, the global leader in providing ERP (Enterprise Resource Planning) systems, launched SAP S/4 HANA as their future flagship ERP solution. When SAP recently announced the end of mainstream support by 2027 for SAP ECC (Enterprise Core Component), their nearly two-decades-old legacy ERP, the succession of SAP S/4 HANA was solidified and it sparked a more urgent need for businesses to learn about the next-gen ERP and its business applications. From offering cloud-based and hybrid deployment options to being built on a high-performance, in-memory database, SAP S/4HANA promises improved real-time analytics, intuitive user experiences, predictive capabilities, advanced planning tools, and cloud-ready flexibility.

What is SAP S/4 HANA?

SAP S/4 HANA is a next-gen ERP for large enterprises, developed by SAP SE as their next flagship solution, which can be deployed as a cloud-based, on-premises, or hybrid solution.

The name SAP S/4 HANA is short for “SAP Business Suite 4 for SAP HANA”, and SAP HANA is short for “High-performance ANalytic Appliance”. What does this (double) abbreviation of SAP S/4HANA mean? It means that the ERP is unique for being built on its proprietary high-performance, in-memory database that’s called SAP HANA.

Designed to align with SAP's intelligent enterprise framework,  SAP S/4 Hana marks the ERP provider's shift towards building better capabilities for helping enterprises achieve digital transformation. 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 financial accounting, CRM, HR, 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.

Understanding SAP S/4 HANA and its features

Traditional ERP systems have started to lack the agility needed to keep up with rapidly changing business environments that are being redefined by digital transformation and cloud technology. SAP S/4 HANA is designed to provide this agility by embracing the cloud-based future and integrating modern technologies like artificial intelligence, machine learning, IoT, advanced analytics, and in-memory computing.

As such, SAP S/4 HANA is much more than a mere software upgrade to SAP ECC, rather it’s a comprehensive ERP designed to harness the potential of real-time data processing. It marks a major evolution for the ERP provider, as it brings together the power of SAP (Systems, Applications, and Products in Data Processing) and the speed of HANA (High-Performance Analytic Appliance) database technology. This convergence empowers increased business efficiency, improved process optimization, and quicker adaptability of newer technologies.

The benefit of SAP S/4 HANA’s in-memory computing

While SAP Enterprise Core Component (SAP ECC) used to run on third-party databases like Oracle, MaxDB, and IBM, SAP S/4 HANA strictly runs only on its SAP HANA in-memory database. The reason that this is central to SAP S/4 HANA’s prowess is because this in-memory computing helps store and process data directly in the system’s main memory. This eliminates the need for time-consuming data retrieval processes, enabling lightning-fast data access and real-time analytics.

The key features of SAP S/4 HANA

1. Real-time analytics

SAP S/4 HANA's in-memory capabilities enable real-time data analytics. Whether it’s assessing sales trends, monitoring supply chain performance, or tracking customer behavior, real-time analytics provide instant insights for strategic decision-making.

2. Simplified user experience

Being built on the tile-based SAP Fiori UX, SAP S/4 HANA provides a modern user experience with a leaner architecture. Navigating through the complexities of business operations is now simpler than ever. SAP S/4 HANA offers an intuitive user interface that minimizes the learning curve and enhances productivity across your organization.

3. Predictive capabilities

Thanks to its machine learning integration, SAP S/4 HANA can predict future trends and outcomes based on historical data patterns. This proactive insight empowers businesses to take preventive measures, optimize processes, and seize opportunities before they arise.

4. Advanced planning and optimization

Optimizing resources, managing inventory, and planning production are all critical aspects of business operations. SAP S/4 HANA's advanced planning and optimization tools enable you to streamline these processes, ensuring efficient resource allocation and reduced operational costs.

5. Cloud-Ready flexibility

The flexibility to choose between on-premises and cloud-deployment models offers scalability and adaptability to your business needs. This cloud readiness ensures that your organization can seamlessly transition to the cloud when the time is right.

The on-premises version of S/4HANA can also be deployed in public/private cloud or hybrid environments. There is also a multi-tenant SaaS version, SAP S/4HANA Cloud, whose modules and features differ from those of the on-premises version.

How to integrate SAP S/4 HANA with e-commerce

One of the great aspects of implementing SAP S/4 HANA is that it makes it easier to integrate other SAP applications and services to improve ERP capabilities. The in-memory capabilities of the ERP expedite this.

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 fo SAP. Discover more about:

In Conclusion

Currently, some of the biggest businesses that use SAP S/4 HANA are Amazon, Walmart, and PayPal. At the same time, many businesses that are using SAP ECC are still struggling to make the shift to SAP S/4 HANA. However, the global ERP provider is emphasizing the necessity to do so in order to prepare their customers for the inevitable digital transformation requirements of Industry 4.0 and beyond. Its fusion of advanced technologies, real-time capabilities, and user-friendly interfaces opens doors to unprecedented business potential.

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