S/4 HANA and its differences with ECC

Most of us are following the innovations & simplifications in S/4 HANA and wondering about the functionalities & bu
implementing S/4 HANA (S4H).Find lot of questions on differences in ECC with S/4 HANA (S4H). Trying to highlig
full list) differences in digital core of S4H as planned by SAP w.r.t ECC

Hana database

S4H can only be run on Hana database unlike ECC which can be run on Oracle , IBM DB2 etc. Back bone of S4H’s
HANA’s in memory capability and below design principles

In-memory database means that data is read from memory i.e data always reside in main memory RAM (though
hard disk) and hence in-memory database reads data much faster w.r.t traditional databases (fetching the data fro

Hana’s column based tables provide faster access (as only affected columns need to be read in a query), better c
to few distinct values compared to rows), parallel processing (different columns can be easily processed parallely
OLTP and OLAP capability in same system with real time reporting and predictive analysis
There will be no aggregate (total), index and history tables in S4H. Aggregates are created dynamically based on
instantaneously (on the fly).

Single source of truth

S4H combines the data structures of different components (for FI , AA , CO , CO-PA and ML) into a single line item t
called as Universal journal . It eliminates several aggregate and index tables. Now, data needs to be inserted only a
instead of several tables thus reducing the data foot print drastically.

MATDOC is also a new line item table for inventory management and it eliminates 26+ tables. Material documents w
MATDOC but not in MKPF or MSEG tables.

Merger of CO and FI

In ECC , FI GL accounts are mapped to CO primary cost elements . In S4H, only one field of universal journal is use
account and cost element. Cost elements (both primary and secondary) are now GL accounts and hence created / m
FS00) with relevant Cost element category. Reconcilation (as in case of CO to FI) is not needed now. Period end clo
faster.

New GL
S4H is technically very similar to new GL of ECC due to its data structure. Customers using classic GL need not use
parallel ledger. However, new GL’s functionality (Parallel ledger) is a pre-requisite for new Asset accounting .

CO-PA

Account based CO-PA is now the default option with Costing based CO-PA as optional. Both options can be run simultaneously.

Custom code

Read operations in custom code will be redirected to compatibility views (like V_COEP for CO line item table COEP)
setting at database interface level (i.e invisible to source code) so that the custom reports can work without any disru

Business partner

All customer and vendor master need to integrated / migrated as Business partner . Probably, SAP is trying to align the concept

Extension of Material number field : Material number can now be 40 characters from existing 18. It is a optional fea
extension on custom coding, interfaces, other SAP applications need to be evaluated before switching on 40 char
2267140 for more details.

Credit management

ECC’s FI-AR-CR is replaced by credit management of FSCM (Financial supply chain management) . FSCM-C
distributed architecture which allows interfaces with external credit rating agencies. Traditional FI-AR-CR cre
requires high degree of manual work. However, FSCM-CR has advanced features like

Credit rule engine for automatic risk scoring & credit limit calculations
Automatic update to master data on approval of credit limit etc.
Work flow for credit events etc

ATP

ECC provides the option of availability check at the individual or summarized requirements (aggregated at daily
however S4H uses only individual requirements (with no VBBS table) and probably the rationale is that S4H d
aggregate table with its simplified data model.
SAP also has plans to integrate APO’s GATP (Global ATP) functionality in S4 core. Not sure whether all functionaliti
integrated in S4 core. Rule based ATP (For substitution of location (plant) or material), Multi-level ATP check, ad
product allocation with ATP, advanced BOP (Back order processing) etc are some of the unique features of GATP w.

Location substitution allows to check the material availability at plant B (as set in master data or business rule) if
available at sales order plant A. If material is available in plant B, then a stock transfer order from plant B to A is cre
This rule can be extended to a network of plants also.

SD pricing

There are some changes in data model in pricing and condition techniques like existing table KONV replaced by new
PRCD_ELEMENTS with extended fields etc. Refer note 2267308 for more details.

MRP

MRP in ECC is run through batch jobs and during off peak hours. However, there is no need of batch job in S4H and
run in real time with HANA.

MRP can be run on plant and MRP area level, but not on storage location level. In ECC , Storage location can eithe
MRP or planned separately . SAP recommends to use MRP area with MRP type (ND in case of exclusion or VB
planning) for those scenarios at storage location level. MRP with subcontracting has also been simplified.

SAP has plans to integrate the functionality of APO’s PPDS in core of S4H in future releases and hence probably
features like BOM to be selected through production version for in-house , unified source of supply (no source list
for external procurements with S4H core.

Foreign trade

Foreign trade functionality has been replaced by GTS (Global trade services). Advanced features in GTS w.r.t foreig
(Sanctioned party list) screening, automated embargo check (Manual in ECC), automatic & simplified license check
complex in ECC) , Automatic import / export declaration etc.

Material ledger

Activation of material ledger (ML) is mandatory. ML valuates inventory in multiple currencies. Traditionally inventory
with a single currency in SAP ERP. ML allows valuation in two additional currencies. Today’s global organizations op
countries desire to valuate inventory in multiple currencies. Like for example, a company in Norway dealing with oil
their books in Norwegian currency (NOK), they will also like to evaluate their inventory in USD as oil is traded in inte
USD. This functionality is available in Release 1511 of S/4 HANA.
Refer the blog in URL http://scn.sap.com/community/s4hana/blog/2016/02/22/material-ledger-embedded-in-s4-hana–benefit

Revenue recognition

ECC SD revenue recognition is being replaced by SAP Revenue Accounting and Reporting (RAR) due to new ac
released jointly by the Financial Accounting Standards Board (FASB) and the International Accounting Standards B
guide line is also in IFRS 15 issued in 2014.

Existing SD revenue recognition of ECC is based on Generally Accepted Accounting Principles (US-GAAP), Intern
Standards (IAS) / Financial Reporting Standards (FRS) and it provides the option of recognizing the revenue base
Goods issue, proof of delivery ) or over a period of time (based on specific set of dates) apart from standard way o
on billing. New standard introduces the 5 step model (Identify the contract, separate performance obligations, det
price, allocate transaction price and recognize revenue). SAP’s new Revenue Accounting and Reporting (RAR) solu
fundamental changes with IFRS 15 and also to meet the requirement of parallel accounting and cost recognition .

Rebate

Customer rebates through existing SD rebate processing has been replaced by settlement management through Condition con

Output management

ECC message determination through table NAST is replaced by Business rule framework plus (BRF +) and target a
based on Adobe document server and Adobe forms only. Refer OSS note 2228611 for more details.

Warehouse management

Existing WM module will be replaced by SAP’s new application for warehouse management EWM . There will be 2 o

Native integration i.e inbuilt in S4H

There are several advantages in EWM w.r.t WM like complex warehouse processing through Process oriented stora
(POSC) , improved (easily customisable) RF functionality , Value added service like kitting , enhanced wave & reple
processes, labour management etc.
Native integration of SCM applications

Other SCM applications like TM etc will be natively integrated with digital core of S4H. Refer URL https://scn.sap.com/commun

User interface

Fiori is a new user interface . Refer URL https://experience.sap.com/files/SAP_Fiori_UX_Overview.pdf for more details.

Activate implementation methodology

There is no concept of Blueprinting in S4H implementation. S4H has introduced new ‘Activate’ methodology. SAP offers pre-bu

Note : All the above information are based on several sources like SAP Documents , Open SAP courses , SCN blog
subject to change. Also the features stated above are target functionalities i.e may not be available in present edition
tables for material ledger have not yet been merged to ACDOCA in 1511).

Will appreciate if you can highlight other important/fundamental differences or if anything is misinterpreted.
WHAT IS THE DIFFERENCE BETWEEN SAP S/4HANA AND SAP ECC ERP? (SAP S/4HANA VS SAP ECC)

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 th
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 simultan
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. With

What is SAP Business Suite?

SAP ECC (also known as SAP ERP) is SAP’s legacy suite of enterprise applications. ECC was designed to run on a
third-party database. It started 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 R/1.
In 1979, R/2 was released, integrating multiple enterprise functions such as accounting, manufacturing processes,
supply chain logistics and HR.
R/3 was released in 1992. It was their first client/server package (it no longer required mainframes), and supported a
wide variety of operating systems and databases.
In 2004, SAP renamed its core ERP product to SAP ERP Central Component (ECC.) SAP ERP and ECC are now
used interchangeably.
What is SAP HANA?

SAP HANA is an in-memory database designed to dramatically accelerate SAP applications and the business processes they support. It
HANA design innovations such as in-memory operation and a simplified data structure improve performance,
leading to higher productivity, real-time visibility and better use of analytics. For example, companies can react to
market conditions based on up-to-the-minute data, rather than relying on the last quarterly reports.
What is SAP Business Suite on HANA?

When you move SAP Business Suite from a third-party legacy database to HANA, you’re running SAP Business Suite on HANA. Moving t
What is S/4HANA?

SAP rebuilt their ERP solution (SAP ECC) from the ground up to take advantage of HANA’s performance and innovative data models. S/4
On the technical end, S/4HANA also resolves common issues with traditional ERP systems, such as batch latency,
manually driven processes and data sprawl. That means lower IT costs, better stability and less disruption from
future upgrades.
What is the Right SAP HANA Migration Path for My Business?

SAP migration is complex. Companies need to balance the quick ROI and low disruption of an SAP Suite on HANA upgrade against the a
Your partner’s service level is a key consideration. Even a few less hours of downtime can save hundreds of
thousands of dollars in lost productivity, and the benefits of an accelerated migration and smoother go live are even
more significant. It’s imperative to choose a partner who can minimize disruption, cost and downtime.
To learn how Protera can streamline and accelerate the migration process, watch our free webinar on our Protera
FlexBridge Services Platform, or contact us for more information.