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What is the difference between SAP S/4HANA and SAP ECC ERP? (SAP S/4HANA vs SAP
ECC)
by : Akilesh
August 10 , 2018
1 Comment
in : ERP , SAP S/4HANA
3

SAP introduced SAP S/4HANA in 2015. Since then, most of us are following the innovations & simplifications in SAP
S/4HANA. We also wonder about the the functionalities & business benefits of SAP S/4HANA. However, even now,
questions do arise in SAP S/4HANA vs SAP ECC (SAP S4H vs SAP ECC) discussions as to what is different between
SAP ECC and SAP S/4HANA. So, what is the difference between SAP S 4HANA and SAP ECC?

In this blog post, I will cover some of the key differences between SAP S4H and SAP ECC. Therefore, by the end of the
blog, you will have a brief overview of the SAP ECC SAP S/4HANA difference.

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, please get in touch with me
at sakilesh@kaartech.com or send us a message on our website.

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Akilesh

Aspiring digital marketer with a specialization in Content Marketing, SEO, and Social Media Marketing, working
towards the proud title of CMO while also strategizing and working with SAP architects to guide enterprises on the
optimal path towards SAP S/4HANA and digital transformation with tailor-made enterprise-specific tools and
accelerators to reduce capital expenditures and maximize business value in a risk-free manner.Ping me on LinkedIn or
mail me at sakilesh@kaartech.com if you would like talk regarding the ideal paths to SAP S/4HANA.

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Comment ( 1 )

1.
Naresh
March 8, 2019 at 1:01 pm
Reply

Could you please send me the difference BETWEEN S/4 HANA FICO and ECC SAP FICO step by step details.

Thanks,
Naresh

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