SAP ECC vs. SAP S/4HANA – Which One is Right for You?

Let’s take a deep dive into SAP’s core offering of products so you can understand the nuances between them. It will help you better develop and refine your SAP roadmap.

We receive many questions about the differences between SAP’s core offerings so it’s important to define the various SAP products to make sure there’s no confusion.

For those with a non-technical SAP background, here’s what you should know about the differences between SAP ECC, SAP HANA, and SAP S/4HANA.

What is SAP ECC?

SAP ECC stands for SAP ERP Central Component. It’s also known as SAP ERP. It’s one of SAP legacy applications that originally designed to operate on a third-party database such as Oracle and IBM DB2.

SAP ECC is the system that most companies have and are familiar with because it includes the more commonly used modules such as financials, human resources (HR), warehousing, and logistics. SAP ECC also has modules such as Production Planning, Materials Management, and Plant Maintenance for manufacturers.

SAP ECC is the core product within SAP Business Suite and should not be confused with SAP Business Suite. SAP Business Suite goes beyond the foundational modules and supports specialized or complex functions such as supply chain management (SCM) and customer relationship management (CRM). Similar to SAP ECC, SAP Business Suite can run on a third-party database such as MSSQL, IBM DB2, and SAP HANA.

What About SAP R/3?

SAP R/3 is SAP ECC’s predecessor and some companies still run R/3. At its core, R/3 uses a client-server model to store, retrieve, analyze, and process data while SAP ECC runs on a web-based application server. Users can now access ERP data through web browsers as well as clients (SAP GUI).

SAP ECC began as a financial software package called RF in 1973, followed by a Material Management module called RM/1. As SAP added additional components, the package was renamed to R1. In 1979, R2 was released to integrate accounting, manufacturing, supply chain logistics, and HR. In 1992, R/3 was released to support various operating systems and databases. In 2004, SAP renamed it to SAP ECC. SAP ERP and ECC are now used interchangeably.

What is SAP HANA?

SAP HANA is an in-memory columnar database designed to accelerate SAP apps and business processes that was released in 2010. SAP HANA is now the foundation for running SAP Business Suite products. It’s an in-memory, column-oriented database. It simplified the data structure and improved performance to increase user productivity, provide real-time visibility, and take advantage of analytics. It was created so companies can react to up-to-the-minute data instead of static quarterly reports.

What is SAP Business Suite on HANA?

SAP Business Suite on HANA is SAP ECC that operates on the SAP HANA database. If you are running SAP Business Suite on a third-party database, you can move it to SAP HANA. When you put SAP Business Suite on HANA, you improve performance without having to make changes to the app layer. SAP Business Suite performs faster on SAP HANA because it’s working inside the memory component. The ECC functionality within SAP Business Suite remains the same.

What is the Difference Between SAP ECC vs. SAP HANA?

SAP ECC is the ERP system and SAP HANA is the in-memory database, designed to handle transactions and analytics. HANA was originally designed to be a data warehouse, but it has grown into all-in-one data platform that manages analytical, transactional, and application development.

SAP plans on terminating its maintenance support for SAP ECC in 2027 so SAP customers will be required to move to S/4HANA. For most companies, it’s an expensive and lengthy undertaking, often spanning years.

What is SAP S/4HANA?

After R/3, SAP S/4HANA is the fourth version of SAP Business Suite.

SAP rebuilt SAP ECC from the ground up to create SAP S/4HANA in 2015 to take advantage of SAP HANA’s performance and data analytics capabilities. That is a big benefit and a big drawback. S/4HANA can exclusively run on SAP HANA while SAP ECC can run on a third-party database.

S/4HANA is designed to solve complex problems and manage larger amounts of data than ECC and R/3. It provides a better user experience with SAP Fiori and makes a shift from transactional systems that record data to real-time data from internal and external sources.

Why are some companies reluctant to move to S/4HANA? Some companies will have to completely overhaul their existing business processes.

SAP S/4HANA Finance has become a stepping stone for this transition because S/4HANA Finance allows users to move accounting and finance processes to S/4HANA while keep using SAP ECC or other SAP products.

What’s the Difference Between SAP HANA vs. SAP S/4HANA?

It’s simple. SAP S/4HANA is the ERP system like SAP ECC while SAP HANA is the database.

What’s the Right SAP Offering for You?

It’s important to understand the differences between SAP product portfolio so you can map out your SAP roadmap. By understanding the benefits and challenges of each SAP offering, you’ll be able to make informed decisions that ensure their SAP systems and business requirements are aligned.

To learn more about how you can get more value from your SAP systems, visit our resources page where we have SAP whitepapers, webinars, data sheets, and much more. Or you can contact us today to find out how we can help you maximize your SAP investment.