SAP aims to move its customers from SAP R/3 or SAP ECC to SAP S/4 HANA. Large companies, in particular, are reluctant to take this step due to the high migration costs. However, SAP wants all its customers to migrate to SAP S/4 HANA by 2025 and will discontinue support for its predecessors. For customers, the question often arises as to how these solutions actually differ from each other. This question, and what SAP actually is, is answered in the following article.
What is SAP?
The systems listed here all belong to the family of Enterprise Resource Planning (ERP) systems and come from the German software manufacturer SAP. ERP systems are designed to plan, control and document many processes and parts of a company’s value chain as possible. In manufacturing companies, for example, material requirements planning is carried out with ERP systems. The system maps, documents and supports the entire process, from order and delivery of the material to invoicing and product delivery. Because of this scope, ERP systems are very complex software with huge amounts of data.
Due to the enormous data volume, there is great potential for process analysis, resource utilization and much more. Since many companies carry out a large part of their processes and bookings with an SAP solution, the software must work error-free and always be accessible. It is the heart of a company and if this system fails a company quickly becomes unable to act, which leads to large losses.
How do the systems differ?
SAP R/3 is the oldest version of the three SAP systems considered here. The name R/3 comes from the three-level architecture of the software. The first level from the user’s point of view is the presentation level on which the user interface is located. Below this is the application level, which represents the business logic. The third and last level is the database level. The tables used to store the data are here.
The successor version SAP ECC also follows this architecture. ECC stands for ERP Central Component. With this version, SAP has moved away from the idea of “everything in one software” to software with certain basic functionalities, which is extended by modules for special areas or industries, for example in production (SAP Production Planning).
In both systems, the data is stored in a relational database and the processes in the systems are transaction-based. This means that a posting is only completed once the entire activity has been completed, as in the example “Post Goods Receipt”. The goods receipt is not written to the system until this process has been completed.
Both systems – SAP R/3 and SAP ECC – were only offered as an on-premises solution, i.e. as an installation on a separate server with clients.
SAP S/4 HANA, on the contrary, exists as an on-premises or a cloud solution. It also has a database based on columns. This means that the database, or its storage sequence, is based on columns instead of rows, as is usually the case. So you could say that the storage order has been reversed. A short example for a better understanding:
Row-based storage sequence:
4200, Max Müller, Berlin; 4711, Klaus Schuster, Hamburg;
Column-based storage sequence:
4200, 4711; Max Müller, Klaus Schuster; Berlin, Hamburg;
Column-based databases are generally better suited for analysis-oriented databases because aggregations and other arithmetic operations can be performed faster.
New possibilities through different data management
As explained above, SAP S/4 HANA stores the tables in a different order than the previous versions. In addition, the data here is not stored on the hard disk as before, but in the working memory (RAM). This change also increases the query speed of the software, since the data does not have to be loaded into the working memory from a hard disk with relatively low read speeds. However, this form of data storage increases the need for RAM, which is significantly more expensive than hard disk storage. If the cloud variant is purchased from SAP, these hardware costs are avoided. Improved performance and more efficient data storage not only increase processing speed but also reaction speed. For example, SAP S/4 now enables real-time analysis, which prevents dwindling resources and machine failures.
Differences in pricing
The billing of SAP products has also changed a lot with the new version. The pricing of the “old” products depends on the number of users. This means, for example, that you have paid for 200 users or licenses for one year of use. With SAP ECC, in addition to these license costs, the costs for the use of certain add-ons were also added.
The pricing for SAP S/4, on the other hand, is no longer based on the number of users, but on the resources used. The pricing according to resource usage is widespread and common in the area of cloud software.
So should you change?
SAP S/4 HANA changes not only the deployment model and pricing but also the architecture of the database. This makes the system more efficient and more suitable for analyses. But the change of the used SAP solution usually involves an extensive migration project.
Do you want to start your migration or are you already there? Then our blog article on migration projects might be interesting for you.
Read this article if you want to know how Process Minig can support and improve your migration project.
If you would like to know what your SAP processes look like and how they perform, contact us.