In order to manage corporate operations and customer connections, SAP, a multinational corporation based in Germany, has been developing enterprise software since 1972. It is renowned in particular for its Enterprise Resource Planning (ERP) software, which is used by businesses all over the world.
The various versions of SAP ERP software that have been made accessible by SAP over the years include R/1, R/2, R/3, ECC, and S/4HANA. The SAP ERP software that’s most widely used is SAP ECC ERP.
This is going to change since SAP decided to discontinue support for SAP ECC by 2027 and replace it with SAP S/4HANA.
What is SAP ECC?
SAP ECC, or SAP ERP Central Component, is a previous version of SAP’s enterprise resource planning software. SAP ECC’s various components are interconnected to form a single, flexible solution that can be utilised with whatever database the user selects. Utilizing SAP ECC allows a company to optimize its business operations in the areas of finance, logistics, human resources, product planning, and customer service.
There is a lot of modularity in SAP ECC. Businesses can use the components they need and arrange them as their surroundings require. SAP ECC is also capable of integrating with specialised or third-party applications on a specific technological stack. However, this independence also comes with challenges.
Every part of the landscape interacts with one another, therefore changing one part will inevitably change how other parts function. Therefore, before making any changes—including upgrades, additions, customizations, and enhancements— it’s imperative to thoroughly test your landscape.
What is SAP S/4HANA?
SAP S/4HANA is the new business suite for SAP HANA. The SAP HANA in-memory database is the foundation of this most recent ERP solution from SAP. It enables businesses to carry out transactions and analyse data in real-time. The SAP Business Suite version 4 is made specifically to work with SAP HANA.
With a modern user interface powered by Fiori, integrated real-time analytics, and in- memory processing powered by HANA to handle enormous data volumes of operational and transactional business data, SAP S/4HANA is designed to make operations simpler, quicker, and more efficient for businesses. Additionally, SAP S/4HANA resolves issues with batch delay, manually operated procedures, and data sprawl that have existed in conventional ERP systems.
One of SAP’s major products, SAP S/4HANA is being actively pushed as SAP ECC’s replacement. As was previously mentioned, they are attempting to convert the 40000+ SAP ECC users to SAP S/4HANA by 2027 and are marketing SAP S/4HANA as the preferred option for existing SAP ERP clients.
It’s crucial to understand that SAP ECC has served its purpose. And that’s the reason SAP plans to stop providing support for SAP ECC by 2027. SAP ECC users are being urged to migrate to SAP S/4HANA as ECC is already being phased out.
How is SAP S/4HANA different from SAP ECC?
Let’s go over the primary differences between SAP ECC ERP and SAP S/4HANA ERP in terms of 8 key factors.
The Universal Journal
The data structures of FI, AA, CO, CO-PA, and ML are combined into a single line item table called ACDOCA by SAP S/4HANA. This ACDOCA, also known as the Universal Journal, gets rid of plenty of index tables and aggregate tables. Additionally, since data must be placed into just one table rather than numerous tables, the data footprint is drastically reduced.
MATDOC
For inventory management, MATDOC, a new line item in SAP S/4HANA, replaces more than 26 tables that were previously included in SAP ECC. Material documents in SAP S/4HANA are kept in the MATDOC table rather than the MKPF or MSEG tables.
CO & FI Merger
The CO primary cost elements in SAP ECC are mapped to the FI general ledger (GL) accounts. The GL accounts and the cost components are both stored in the ACDOCA field of the Universal Journal in SAP S/4HANA. General ledger (GL) accounts for primary and secondary cost elements are now established and kept in FS00 together with the appropriate cost element type. Due to developments in SAP S/4HANA, reconciliation, like in the case of CO to FI, is no longer required, and period-end closings are now quicker.
A New General Ledger
The new general ledger in SAP S/4HANA is theoretically identical to the general ledger in SAP ECC due to the data structure. For new Asset Accounting, users utilising the traditional general ledger will have to switch to the new general ledger and its parallel ledger functionality.
Change in CO Profitability Analysis (CO-PA)
In contrast to SAP ECC, SAP S/4HANA makes costing-based CO-PA an option whereas Account-Based CO-PA is the default. Additionally, SAP S/4HANA allows for the simultaneous operation of both choices.
Change in Custom code
Through a particular option at the database interface level, read operations for custom code will be routed to compatibility views so that the custom code can continue to function without interruption. It will therefore be undetectable to the source code.
Material Number Extension
The material number in SAP ECC has a character count of 18. The character limit has been increased to 40 characters in SAP S/4HANA. This functionality is optional, though. It’s also important to note that before turning on the 40-character extension, the effect it will have on interfaces, custom code, and other SAP applications must be assessed.
Business partners are now mandatory
Business Partners were an option in SAP ECC. However, the Business Partners concept is required in SAP S/4HANA. All customer and vendor masters need to be converted or linked into SAP S/4HANA as business partners. Custom Vendor Integration is hence a requirement for SAP S/4HANA.
Real-Time MRP
Batch jobs must be executed outside of peak times in SAP ECC to process material need planning (MRP). SAP S/4HANA alters the rules of the game. Batch jobs are not necessary because MRP can operate in real-time. Additionally, SAP S/4HANA has made MRP with subcontracting simpler.
Conclusion
SAP ECC and S/4HANA differ significantly in several ways. Because of this, switching from one to the other may seem intimidating. However, there are several business reasons to switch to SAP S/4HANA, not the least of which being the 2027 maintenance deadline for SAP ECC.
Many business procedures are streamlined by SAP S/4HANA thanks to automation and AI. As a result, efficiency is increased, duplication is decreased, and the customer experience is enhanced. All of this can increase income and lower costs for your company.