Are you evaluating SAP ECC and SAP S/4HANA for your business? Since SAP ECC is reaching the end of it’s support as it is too old and S/4HANA is getting popularity, it is necessary to understand the differences between these ERP systems if you are planning to upgrade your productivity by using one of these ERP systems. Which one suits better for your business? Read further to know the key differences and business benefits of each, and how they may impact your ERP strategy.

What is SAP ECC?

SAP ECC is a short abbreviation for Enterprise Central Component, which can be described as something like the older edition of SAP’s ERP system. It was rolled out in 2004 and has been used by companies in administering diverse operations including the financial section of the company, sales section, and even in its human resources or HR and supply chain. Ironically, for its age, it is still that useful for many companies.
Also, discussing the concept of modularity, components of SAP ECC can be selected individually depending on the needs of an organization.

For instance, there are some very necessary parts that involve finance, human capital management, and sales and distribution. However, the problem with ECC is that once you change one part, it may influence other parts of the system, which at times becomes complex. The main reason that many manufacturing, retail, and utilities industries are still on SAP ECC, is that it has aged into a mature product quite stable and reliable in running their operations.

What is SAP S/4HANA?

Now, if we speak of SAP S/4HANA it is a new version of SAP’s ERP, released in 2015. In fact, it is designed on SAP’s superfast in-memory HANA database that enables the real-time processing of data. Also, it can be implemented in the cloud as well as on-premise, much like ECC, and provides business organizations with ample flexibility.

S/4HANA is much more advanced and latest than ECC. It applies artificial intelligence (AI) and machine learning for intelligent data processing. Interface too is advanced and easier—SAP Fiori is super user-friendly and more suitable for today’s age of digitalization.

Not like ECC, S/4HANA simplifies its data structures, hence fewer tables with less clutter. Industries like healthcare, finance, and logistics, that deal with vast extents of data, are highly benefited from S/4HANA. Its real-time analytics and capability of handling large-scale data transactions make it perfectly suitable for these fields.

Difference Between ECC and S4 HANA

Well, now that we have a general idea about SAP ECC and SAP S/4, let us see how both of them differ from each other. After seeing these points, you will be able to choose one for your business.

1. Database

The largest difference is in the database. SAP ECC runs on third-party databases, such as Oracle and IBM DB2, whereas S/4HANA uses its own HANA in-memory database, giving it a big speed and real-time insights advantage.

2. User Interface

ECC has a quite traditional, old GUI while S/4HANA has a much more modern and mobile-friendlier interface called SAP Fiori, which is easier to use and looks much better.

3. Speed and Performance

S/4HANA is quite faster than ECC with its HANA database. It is most suitable for companies that require immediate access to data and fast processing of transactions.

4. Data Processing

Batch processing is applied in ECC, where data is processed in batches, while S/4HANA processes data in real-time, thus enabling fast decision-making and better insights.

5. Customization

ECC is very customizable, but that can be very complicated. S/4HANA will encourage standardized processes and make everything more smoothened and streamlined.

6. Deployment

ECC today is only an on-premise product, whereas S/4HANA is available in three deployments: on-premise, cloud, or hybrid. Thus, businesses now can choose the deployment model best suited for their requirement.

7. Architecture

When comparing ECC and s/4hana architecture, the architectural design of ECC is based on a traditional, multi-tiered structure, which may limit integration and scalability, leading to in data silos. On the other hand, S/4HANA uses a cloud-native architecture which allows seamless data flow and real-time processing across all operations, improving overall agility and responsiveness.

8. Licensing and Costs

S/4HANA is certainly a pricier licensing option, but if you do opt for the cloud-based deployment route, then you can keep the infrastructure costs lower compared to the on-prem ECC scenario.

SAP ECC vs SAP S/4HANA Business Benefits of Each

Now that we know the basic differences between SAP ECC and S/4, there is still a need to know how much impact both of them create for a business. We need to know why some businesses are still on ECC and why others may opt for S/4 HANA.

Why Some Businesses Still Use SAP ECC?

Some companies continue to use ECC for the simple reason of its stability and familiarity. Besides that, they already invested a lot into it, and lastly, migration to S/4HANA is costly and complex, hence most of the companies are avoiding this transition for now.

Why Many Businesses are Moving to SAP S/4HANA?

Some of the S/4HANA key benefits are the following: lots of real-time data analytics, AI, future-proofing. Companies wanting to remain competitive as well as make more data-driven decisions faster will head for S/4HANA

Migration from SAP ECC to SAP S/4HANA- Challenges and Opportunities

Having known why some businesses are yet sticking on ECC while others are moving to S/4 HANA, if you are also one of those who made up his mind to move to S/4, then here are the challenges and opportunities that you have to face.

Challenges of Upgrading from SAP ECC to SAP S/4HANA:

Migration from ECC to S/4HANA is not an easy task. It involves a massive data migration, setting up new processes, and then retraining your team. Additionally, migrating all the data could take quite some time and might disrupt business operations during the transition.

Opportunities with S/4HANA:

Even though the most difficult part is actually migrating, the long-term benefits are super high. In the case of S/4HANA, companies can automate more processes, handle data more effectively, and scale operations much easier. This makes businesses agile and ready to grow.

SAP ECC vs S/4 HANA – Key Considerations for Businesses

While formulating their ERP strategy, companies are supposed to think of what future they would want. When the companies are still on ECC, it is important to draw the appropriate time for them to make their transition to S/4HANA. If the companies opt to upgrade, they should ensure that their IT strategy is in congruence with all of its business goals and future growth plans.

Conclusion

This is not about leaning into that which you are familiar with, nor chasing the most contemporary, new technology trends, but rather about building your business for the long-term. ECC provides stability and familiarity, but modern capabilities such as real-time analytics of data, along with integration with cutting-edge technologies, are what S/4HANA offers.

The one that is best suited for your company primarily depends on the needs of the business, the future goals, and how ready it is to shift from one environment to another. No matter what you decide, this line of demarcation holds a key to understanding and making your ERP strategy, confident that your business will be agile and sharp for the long term.