The digital transformation has meant that businesses constantly empower themselves with enterprise resource planning (ERP) tools for seamless business management. This has led to the popularity of SAP software to better manage business operations.
With numerous SAP products available, understanding the differences and comparisons across them can help IT managers and SAP architects know what to expect from the software and the benefits of migrating to S/4HANA. This post will explain what SAP HANA and S/4HANA are and the critical distinctions between the two.
What is SAP HANA?
SAP HANA is a database in memory and application development platform. It was first published in 2010, and it’s SAP’s most popular tool, allowing data analysts to query enormous amounts of data in real time.
Along with this, SAP HANA includes a programming component that enables enterprises to create and operate custom applications on top of the database. HANA can run alongside other SAP applications, allowing users to access real-time data rather than waiting for daily or weekly reports.
What is SAP S/4HANA?
SAP S/4HANA is an ERP meant to run entirely on SAP HANA; it’s incompatible with other databases. It was released in 2015 as the fourth product generation, and users can choose between numerous deployment methods, including on-premise and cloud, or a combination of both.
SAP S/4HANA has fundamentally reinvented ERP systems and is regarded as the most significant update since SAP R/3 in 1992. Given the evolution of technology over the years, the differences between SAP R/3 and SAP R4 HANA are substantial; hence, businesses often rely on agencies offering comprehensive S/4 HANA services to digitalize their entire enterprise system.
S/4 HANA has been launched in numerous editions, with the most recent on-premise version (S/4HANA 2021) being released in October 2021. Additionally, many businesses intend to migrate to S/4HANA using SAP’s Activate architecture in the coming years, partly because SAP will stop support for ECC and prior versions in 2027.
Major Differences Between SAP HANA and S/4HANA
The best way to differentiate between SAP HANA and S/4HANA is to understand their functionality. SAP HANA is an in-memory database that serves as the core on which other SAP applications run. This means that SAP HANA is responsible for running the SAP landscape; however, it does not execute business transactions, including logistics, finance, or HR. Organizations require specific SAP applications compatibe with SAP HANA to conduct business operations.
SAP HANA is the SAP landscape’s backend. Its key feature is a sophisticated Relational Database Management System critical in storing, retrieving, and processing data for core business activities. This in-memory database can hold any data applications deployed alongside SAP HANA and can be used to suit specific company needs for various functions such as logistics or finance.
SAP ECC is a business suite with ERP modules, including warehousing, human resources, shipping, and finance. ECC evolved from SAP R/3, which launched in the early 1990s. By 2003, the application had grown into SAP ERP before becoming SAP ECC in 2004.
The next-generation business suite from SAP, S/4HANA, was made specifically to work with SAP HANA. The development of SAP 4 HANA is ongoing, and SAP is currently updating the code underlying SAP ECC modules to optimize them for the design of the SAP HANA database. S/4HANA is a powerful ERP solution because it integrates BI and ERP functionalities and makes use of SAP HANA’s in-memory computing capabilities.
Advantages of S/4HANA
Many people have been impressed by S/4HANA’s data model, business processes, user experience, decision-making, and business model simplifications. Compared to earlier SAP GUI, S/4HANA brings much-needed improvements for big data analytics and mobility. It also employs the contemporary Fiori User Experience to create a more intuitive and efficient UX.
S/4HANA Finance is perfect for financial management and accounting since it can handle all aspects of running a successful finance company or department, such as planning, accounting, analysis, risk management, and compliance.
Unlike S/4HANA, SAP ECC does not provide this whole range of features in a single application, making it a less efficient solution. This model offer a centralized data repository, thus eliminating redundant information and making compliance and financial monitoring easier. Businesses no longer need to wait until the end of the day to gain an in-depth view of the company’s financial KPIs with S/4HANA. An organization can examine data in real-time across any range and depth to better understand the business’s health.
Additionally, S/4HANA Finance enables businesses to automate international commerce, risk compliance, and a variety of other business-critical processes, making it easier to streamline corporate operations, boost financial performance, and protect assets by reducing risk and compliance violations.
However, considering S/4HANA isn’t responsible supporting data or inflexible structures, you may use quick data modeling to estimate the implications of business-critical actions like acquisition or divestiture.
Furthermore, S/4HANA outperforms SAP ECC on various logistical applications, such as inventory management, orders, sales, and capacity planning. In addition, S/4HANA may offer a real-time tracking of current inventory, goods transit, and production costs.
SAP HANA and SAP S/4HANA’s success has resulted in broad use worldwide. The need for these modules is highly significant, and a wise expert must capitalize on this trend to meet market expectations.
Understanding the underlying differences between SAP releases explains why the transition to S/4 HANA is desirable. Among other benefits, the S/4HANA transformation provides a better user experience, enhanced performance, and a cheaper total cost of ownership.