WHAT IS THE DIFFERENCE BETWEEN SAP S/4HANA

AND SAP ECC ERP? (SAP S/4HANA VS SAP ECC)

Database Factor of SAP S/4HANA and SAP ECC

SAP S/4HANA can run only on the HANA database. This is completely
different from SAP ECC. SAP ECC can run on Oracle, IBM DB2 etc. SAP
S/4HANA leverages on SAP HANA’s in-memory capabilities and design
principles.

 The HANA in-memory database reads data faster than traditional

databases which fetch data from the hard disk. This is because data is
read from memory, i.e., data resides in the main memory RAM (though
Write happens in hard disk).
 HANA’s column based tables enable faster access (since only affected
columns need to be read in a query), better compression (because only
distinct values are compared to rows), parallel processing (different
columns can be easily processed parallely)
 OLTP and OLAP capabilities are available in the same system. They
offer real time reporting and predictive analysis.
 There will be no aggregate (total), index, and history tables in SAP
S4HANA. This is due to dynamic aggregate creations on the fly based
on line item tables.

Single Source of Truth and SAP S/4HANA Universal Journal

SAP S/4HANA combines data structures of different components such

as FI , AA , CO , CO-PA and ML into a single line item table. This table
is ACDOCA, also known as the Universal Journal. The presence of the
universal journal eliminates several aggregate and index tables. Now,
data insertions occur into a single table instead of several tables. Hence
reducing the data foot print by a huge margin.

In addition, the MATDOC, the new line item for inventory management,
eliminates 26+ tables. Material documents are stored in MATDOC but
not in MKPF or MSEG tables.

New Functional Capabilities

New functional capabilities are available to work with SAP S4H and the
HANA in-memory computing. A few examples are Central Finance, SAP
Cash Management, and SAP BPC Optimized for SAP S/4HANA. However,
these require additional licenses.

Addition of standalone solutions to SAP S/4HANA Core

Some standalone SAP Solutions are now available as a part of the SAP
S/4HANA core. Two common examples are SAP Transportation
Management and SAP Extended Warehouse management.

Unison of CO and FI

In SAP ECC, we could observe FI GL accounts mapped to CO primary

cost elements. However, in SAP S/4HANA, the universal journal uses
only one field to store both GL accounts and cost elements. Cost
elements (both primary and secondary) are now GL accounts. Hence, a
relevant cost element category is used when they are created and
maintained (in FS00). Reconciliation (as in case of CO to FI) is not
needed now. Therefore, period end closings will be faster.

Introduction of a New GL in SAP S 4HANA

SAP S/4HANA is technically similar to the new GL of SAP ECC. This is

beacuase of it’s data structure. Customers using the classic GL need not
use the document split or the parallel ledger. However, the new GL’s
functionality (Parallel ledger) is a prerequisite for new Asset accounting.

Account based CO-PA vs Costing based CO-PA

Account based CO-PA is now the default option. The costing based CO-
PA is now available as an option. However, both options can also be run
simultaneously. Please use http://scn.sap.com/docs/DOC-65828 for
more details.

What about Custom Code?

In SAP S/4HANA, custom code read operations redirect to compatibility

views due to a special setting at the database interface level (i.e
invisible to source code). Therefore, custom reports work without any
disruptions.

Business Partners and Material Number Extensions

In SAP S/4HANA, Customer and vendor master data need to be

integrated/migrated as Business Partner. Customer-vendor integration
(CVI) is a mandatory step to run business with SAP S/4HANA.
 One key difference between SAP ECC and SAP S/4HANA is that the
Material number can now be 40 characters instead of the existing 18 in
SAP ECC. This is an optional feature. Therefore, impacts of this
extension on interfaces, custom coding, and other SAP applications
must be evaluated. This must be done before switching to 40
characters. You can refer to note number 2267140 for more details.

New Credit Management System

There is a new credit management system in SAP S/4HANA by the

name of FSCM-CR. It is the credit management of Financial supply
chain management. It replaces SAP ECC’s FI-AR-CR. FSCM-CR is built
on a distributed architecture. This allows interfaces with external credit
rating agencies. Traditional SAP ECC’s FI-AR-CR credit control setting
requires high degree of manual work. In addition, FSCM-CR has
valuable advanced features like

 Automatic risk scoring & credit limit calculations with a credit rule
engine
 Automatic update to master data based on the approval of credit limit
 Work flow for credit events

SD Data Model Changes

There are changes among data models in pricing and condition

techniques. For example, the new PRCD_ELEMENTS table with
extended fields replaces the the existing KONV table. Please refer to
note 2267308 for more details.
 Live Material Requirement Planning (MRP)

In SAP ECC, MRP runs occur through batch jobs during off peak hours.
However, there is no need of batch jobs in SAP S/4HANA. In SAP
S/4HANA, MRP runs can occur in real time by leveraging the power of
SAP HANA.

One key point of difference between SAP S/4HANA and SAP ECC is that
while MRP can be only be run on plant and MRP area level, it cannot be
run on the the storage location level in SAP S/4HANA. In SAP ECC,
storage locations can either be excluded from MRP or they can be
planned separately. For SAP S/4HANA, SAP recommends usage of MRP
area with MRP type for scenarios at storage location level. In addition,
MRP with subcontracting has been simplified in SAP S/4HANA.

Global Trade Services for Foreign Trade

GTS (Global trade services) in SAP S/4HANA replaces the foreign trade
functionality in SAP ECC. A few of the features in GTS w.r.t foreign
trade are

 SPL (Sanctioned party list) screening.

 Automated embargo check. A process which requires manual effort in
SAP ECC.
 Automatic & Simplified license checks in SAP S/4HANA. License checks
in SAP ECC were complex and required a lot of manual effort.
 Automatic import/export declaration
 Material Ledger Mandate

In SAP S/4HANA, activation of the material ledger (ML) is mandatory.

ML valuates inventory in multiple currencies. Traditionally, in SAP ERP,
a single currency valuates the inventory. In SAP S/4HANA, ML allows
valuation in two additional currencies. This is essentially helpful for
global organizations operating in different countries. They tend to
valuate their inventories in multiple currencies.

Revenue Accounting and Reporting

SAP S/4HANA’s Revenue Accounting and Reporting (RAR) replaces SAP

ECC SD Revenue Recognition. This is due to new accounting standards
released jointly by the Financial Accounting Standards Board (FASB)
and the International Accounting Standards Board (IASB). The new
guideline is also in IFRS 15.

SAP ECC’s SD Revenue Recognition is based on Generally Accepted

Accounting Principles (US-GAAP), International Accounting Standards
(IAS)/Financial Reporting Standards (FRS). Therefore, it provides the
option of recognizing revenue based on an event (like Goods issue,
proof of delivery ) or over a period of time (based on specific set of
dates) apart from the standard way of realizing revenue on billing.

The new standard introduces a 5 step model.

 Identify the contract

 Separate performance obligations
 Determine transaction price
 Allocate transaction price
 Recognize revenue

Revenue Accounting and Reporting (RAR) in SAP S/4HANA accounts for

fundamental changes with IFRS 15. Moreover, it also meets the
requirements of parallel accounting and cost recognition.

Customer Rebates

Settlement management through Condition Contracts in SAP S/4HANA

replaces customer rebates through existing SD rebate processing in SAP
ECC.

Output Management

SAP S/4HANA’s Business rule framework plus (BRF +) replaces SAP

ECC’s message determination with the NAST table. In addition, the
target architecture is based on Adobe Document Server and Adobe
forms only. Please use OSS note 2228611 for more details.

Extended Warehouse management

SAP’s new application for warehouse management, EWM replaces the

existing WM module. There will be 2 options

 Native integration i.e inbuilt in SAP S/4HANA

 Side car approach for decentralized deployment
 Some Advantages of EWM over WM

 Complex warehouse processing through Process oriented storage

control (POSC)
 Improved (easily customisable) RF functionality
 Value added service like kitting
 Enhanced wave & replenishment processes
 Labour management

User interface

A key difference between S4H and ECC is that SAP Fiori is the new user
interface in S4H to offer a rich and intuitive user experience.

You can now understand that there are some significant changes in SAP
S/4HANA. Therefore, IT leaders should understand the functional and
technical differences and build their best business use case on why their
firm should move to S/4HANA.

Having completed a variety of SAP and SAP S/4HANA projects across

multiple industry verticals, Kaar Technologies can help you with this
process. If you want to understand our SAP customer success stories,
take up an SAP S/4HANA readiness assessment or need a consultation
on the path to digitization with SAP S/4HANA,