Difference Between SAP ECC and SAP S/4HANA

Is your business still on SAP ECC? With support ending in 2027, the time to upgrade to SAP S/4HANA is fast approaching. For many companies, migration is becoming inevitable, but the process can feel daunting.

Should you migrate now or wait? How can you ensure a smooth transition? These are common questions among ECC users. To address these questions, you must understand the key differences between SAP ECC and SAP S/4HANA.

In this article, we explain the difference between SAP ECC and SAP S4 Hana in detail including how the two systems vary in technicality, functionality, database, and other key aspects. By the end, you’ll have a clear understanding of what sets SAP S/4HANA apart from ECC, which should help you plan an efficient migration strategy.

What is SAP ECC?

SAP ECC (ERP Central Component) was SAP’s flagship ERP product for enterprises. It was launched in 2004 as the successor to SAP R3, and quickly became one of the leading ERP systems, used by thousands of businesses.

ECC operates primarily with the SAP GUI (Graphical User Interface), which has been the main interface for interacting with the system. However, the SAP GUI is quite outdated compared to more modern user interfaces.

Currently, the latest version is SAP ECC 6.0, which consists of specific modules for different business functions. SAP also offers Enhancement Packages (EHP) which allows users to selectively add specific functionalities. We’ve listed the core modules below.

History and Evolution of SAP ECC

SAP ECC evolved from SAP R/3 in response to enterprise demands for an integrated ERP. It was introduced in 2004 as its initial version. Enhancement Packages gradually introduced new functionality in the absence of complete upgrades, allowing companies to take in advancements gradually.

• SAP R/3 Roots: Built upon three-tier architecture for flexibility and performance
• Version 4.0: Introduced new modules like PP and QM in the early 2000s
• ECC 5.0: Added more integration with SCM and CRM systems
• ECC 6.0: Launched in 2006 with Unicode support and global features
• Enhancement Packages: EHP1–EHP8 rolled out from 2007 to 2016 to add functionality
• Suite on HANA: Ran ECC on HANA for rapid reporting without upgrading to S/4HANA
• Global Adoption: Utilized by thousands of businesses in all industry sectors globally

Module – Function

SAP ECC’s strength lies in its modules, each built for a key business area. You can match and intermingle modules as you please and scale as you grow. Modules communicate information back and forth readily so that finance, logistics, and HR all stay in sync.

Controlling (CO)

Controlling tracks costs and analyzes profitability across departments and projects. It links to FI for real-time cost posting and offers tools for budgets and forecasts.

• Cost Centers: Record expenses by department or office
• Internal Orders: Track costs for specific projects or events
• Profitability Analysis: Show profits by product, market, or customer
• Product Costing: Calculate unit manufacturing costs
• Activity-Based Costing: Distribution of overhead using actual activities
• Budgeting: Compare actual and planned spending in one glance
• Variance Reports: Indicate differences between predictions and actuals

Quality Management (QM)

Quality Management gives confidence in conformance through auditing and inspection. It defines inspection lots, reports results, and takes corrective action as required.

• Inspection Plans: Set up inspections for incoming and in-process materials
• Inspection Lots: Generate lots for sampling and testing
• Quality Certificates: Issue certificates for shipped goods
• Audit Management: Schedule and track quality audits
• Nonconformance Handling: Log defects and start review workflows
• Corrective Actions: Assign tasks to fix root causes
• Quality Notifications: Alert teams when issues arise

Human Capital Management (HCM)

HCM processes employee information, payroll, time, and general HR reporting. It gives you the capability to process recruiting, benefits, and regulatory needs all in ECC.

• Personnel Administration: Keep personal and job info for all employee
• Organizational Management: State company structure and reporting info
• Processing Payroll: Have compensations, taxes, and deductions calculated automatically
• Time Management: Measure attendance, leave, and work schedules
• Benefits Administration: Take care of health, pension, and other plans
• Talent Management: See performance reviews and training
• HR Reporting: Make headcount and turnover reports

Project Systems (PS)

Project Systems helps in planning, executing, and tracking project time and project cost. It breaks projects into phases, tracks funds, and interacts with CO for cost control.

• Work Breakdown: Have a division of projects to manageable tasks
• Network Plan: Fix tasks and assign resources
• Budgeting of Project: Fix and measure cost targets
• Progress Tracking: Record actual work and expenditures
• Milestone Billing: Invoice customers based on achieved milestones
• Funds Management: Control budgets at higher levels
• Reporting: View project status and budget variances

What is SAP S/4HANA?

SAP S/4HANA is the latest ERP system developed by SAP for enterprises. Launched in 2015, it is the next-generation successor to SAP ECC. As a modern ERP suite, SAP S/4HANA offers advanced functionalities, improved performance, and a simplified data model.

Unlike ECC, SAP S/4HANA only runs on the SAP HANA database, which is SAP’s in-memory, column-oriented relational database management system. This enables faster data processing and real-time insights. It features the modern SAP Fiori interface, providing a more intuitive, user-friendly experience compared to the SAP GUI.

SAP S/4HANA is available in three deployment options.

• On-Premise: The system is installed and managed on the company’s own servers.
• Cloud Public Edition: The system is hosted in a private cloud environment for greater control and security.
• Cloud Private Edition: The system is hosted in a fully managed, scalable cloud solution by SAP, with regular updates and lower upfront costs.

SAP S/4HANA also includes advanced functionalities for revenue recognition, aligning with the IFRS 15 standards through its Revenue Accounting and Reporting (RAR) module.

As for functionality, SAP S/4HANA includes a wide range of modules in addition to 25 industry-specific functionalities (add-ons). Below are the core modules in SAP S/4HANA.

New Features in SAP S/4HANA

SAP S/4HANA brings tools ECC never had. These help teams move faster and see more.

• Universal Journal (ACDOCA): Stores all finance and ops data in one table for real-time reports.
• Embedded Analytics: Built-in dashboards and KPIs show insights right inside the system.
• MRP Live: Runs material planning instantly in memory, slashing batch wait times.
• Core Data Services (CDS) Views: Push calculations into the database layer, speeding up complex reports.
• Central Business Partner: Merges customer and vendor data into one record for easier management.
• Fiori User Experience: Delivers role-based, mobile-ready apps on desktop, tablet, or phone.
• API-First Integration:  Uses REST and OData for simple, real-time connections to cloud apps.
• Industry Extensions: Pre-built add-ons for sectors like oil, retail, and manufacturing smooth setup.

Key differences between SAP ECC and SAP S/4HANA

There’s a lot of discussion within the SAP ecosystem regarding the end of support for SAP ECC. Many businesses have been using SAP ECC for years. For such companies, their ERP system holds tons of historical data, and intricately configured business processes. Migrating to the modern SAP S/4HANA is inevitable, but it’s also an enormous task.

At APPSeCONNECT, as a leading SAP integration platform, we see many prospects and ECC users raise these concerns. And for most of them, the starting point is to clearly understand what has changed between these two systems.

One of the significant improvements in SAP S/4HANA is in inventory management, which offers real-time stock visibility and simplified data structures through the introduction of MATDOC.

So what are the key differences between SAP ECC and S/4HANA? SAP ECC’s traditional on-premises deployment requires significant hardware investments and maintenance, contrasting with the more advanced, cloud-based capabilities of SAP S/4HANA.

Differences in User Interface

The change in interface between the two systems is a major difference. SAP ECC uses the outdated SAP GUI.

But SAP S/4HANA implements SAP Fiori – the more user-friendly, modern, interface, as well as SAP GUI, considering many users are already trained and familiar with it. You have the flexibility to choose as per your preference.

Differences in Application Engine

The application engine in SAP S/4HANA is faster and more efficient with a simplified data model. It’s built for multiple tenancy and handles complex business processes very well in real-time. SAP S/4HANA combines online transactional processing (OLTP) with online analytical processing (OLAP) to streamline data management and enhance system efficiency. The system is capable of in-memory computing and advanced processing capabilities that push certain calculations directly to the database layer.

Differences in Database Layer

As mentioned, SAP S/4HANA uses SAP HANA, an in-memory database that delivers superior speed and real-time data processing. SAP ECC can run on various databases, including third-party ones, but lacks the optimized in-memory functionality that S/4HANA offers.

The new general ledger in SAP S/4HANA integrates financial and controlling data, simplifying period-end closings and enhancing financial management.

You can also run ECC on the HANA database through the Suite on HANA (SoH) configuration. But it still can’t leverage the full capabilities of the modern database as compared to SAP S/4HANA.

Now let’s explore these technical and functional differences in detail.

Differences in Data Processing and Data Structures

SAP ECC handles most work in nightly or hourly batch jobs. Reports, material planning, and finance runs often wait until the job finishes, so users view yesterday’s numbers instead of today’s. 

S/4HANA  holds all info in memory and runs different workflows for every update as instantly as it takes place. The planners get to see a detailed view of the levels of the stock, costs, and sales which helps them take care of the demand growth quicker.

The older system also spreads information over many summary (aggregate) tables. When values change, ECC recalculates these tables, which risks delays and mismatches. S/4HANA removes nearly all extra tables. Every transaction writes straight into one “single-source” record, called the Universal Journal, and the system builds totals on the fly. That cutback reduces storage, trims duplicate data, and makes audits simpler.

Differences in Deployment Options and Architecture

ECC was built for on premise servers that are stored within company walls. Companies purchase the hardware, install the software and schedule yearly upgrades on their own. That model makes cloud service providers unnecessary, but requires making heavy up-front investments – and a lot of technological savvy. 

S/4HANA, on the other hand, brings with it cloud choices. Companies can still run it on-premise, but they can also choose a public or private cloud on which SAP takes care of maintenance and scales the resource when demand grows.

Architecture shifts, too. ECC relies on a three-level stack (database, application, presentation) that can be difficult to scale rapidly. On-premise, S/4HANA will also be able to run on that stack but in the cloud SAP provides integrated load balancing, faster time to patch and a range of services including analytics and AI. Businesses cherry-pick — keeping mission-critical processes on site, and moving lightweight workloads to the cloud — and upgrades are rolled out with less downtime and for less cost.

SAP ECC vs. SAP S/4HANA: Differences in User Interface

One of the most noticeable differences between SAP ECC and SAP S/4HANA is the user interface.

SAP ECC operates with the SAP GUI (Graphical User Interface), a traditional interface that has been around for many years. Though functional, the SAP GUI is known for being complex and less intuitive. Users often requiring training to navigate the interface effectively.

In contrast, SAP S/4HANA introduces SAP Fiori, a modern, user-friendly interface designed to provide a more intuitive, responsive, and personalized experience. SAP Fiori is based on the principles of design thinking, focusing on usability, simplicity, and ease of navigation.

Fiori also works seamlessly across devices, enabling access from desktops, tablets, and mobile phones. This means employees can use the system on the go, improving productivity and providing greater flexibility.

For users who are comfortable with SAP GUI, you can configure the traditional interface in SAP S/4HANA as well.

Quick Summary:

SAP ECC’s SAP GUI can feel clunky and outdated for many users. SAP S/4HANA comes with the Fiori interface which is easier to use and navigate. And it still supports the SAP GUI, making it a flexible system in terms of interface.

SAP ECC vs SAP S/4HANA: Differences in Application Engine

SAP ECC’s application engine was robust for its time. But SAP ECC 6.0 came out in 2005, and the latest enhancement package – EHP 8 – was released in 2016. The underlying system and architecture is already decades old, and even the latest update is outdated.

SAP S/4HANA on the other hand, was released in 2015 and it has received 8 updates so far with a major update every year till 2023.

Although S/4HANA is the upgraded system for SAP ECC, you can imagine the technological shift between both systems. Here are the major differences between the application engine in SAP ECC and SAP S/4HANA.

Simplified Data Structures

In SAP ECC, the system uses many aggregate and index tables to calculate totals and store derived data for quick access. For example, material-related data is stored across separate tables for master data, transaction records, and aggregated reports (e.g., MARA, MSEG and MKPF tables).

SAP S/4HANA simplifies this by replacing multiple tables with a single logical table called the Universal Journal (ACDOCA). It is the central table in SAP S/4HANA for all financial and operational data. ACDOCA stores all data at the most granular level which enables real-time reporting without pre-calculated totals.

Also, SAP ECC has separate master data objects for related entities. For example, ‘Customer’ entity in FI and SD is separate, and so is the ‘Vendor’ entity in FI and MM. SAP S/4HANA integrates common data structure elements into a single Business Partner record, consolidating customer and vendor data for better operational efficiency. SAP S/4HANA replaces individual Customer and Vendor records by merging them into a single entity as Business Partners.

Real-time Processing

In SAP ECC, certain processes like Material Requirements Planning (MRP) rely on batch jobs, which are scheduled periodically. This can cause delays in obtaining updated results, as businesses must wait for the overnight processing of these jobs.

SAP S/4HANA addresses this limitation by enabling real-time processing through in-memory computing. With S/4HANA, MRP and similar operations are executed instantaneously, allowing businesses to respond to changes and make decisions in real time rather than relying on outdated data.

Enhanced Use of Core Data Services (CDS)

SAP ECC processes most of its business logic at the application layer. That means calculations and operations often depend on transferring data between the application and database layers. For large calculations, huge amount of data needs to transfer from database to application layer which slows down the process significantly.

SAP S/4HANA uses Core Data Services (CDS) views to push business logic and calculations directly to the database level. So complex calculations are processed in the database itself, and only the final values are transferred to the application layer. This minimizes data transfer and dramatically speeds up operations like reporting and analytics.

Embedded Analytics

Reporting and analytics in SAP ECC are often managed by external tools, such as SAP Business Warehouse (BW) or third-party applications. But this method is inefficient since users must extract data manually.

S/4HANA integrates embedded analytics directly into its application engine, allowing users to access real-time insights within the system itself. For instance, while creating a sales order, users can instantly view dashboards and KPIs, enabling them to make informed decisions without leaving the transaction screen.

Modern Integration Capabilities

SAP ECC relies heavily on traditional integration methods like IDocs and batch processing for connecting with other systems. While functional, these methods are often rigid and outdated. S/4HANA, on the other hand, adopts a modern API-first approach.

By leveraging REST APIs and OData services, S/4HANA makes it easier to integrate with cloud platforms, eCommerce systems, and CRM tools, ensuring seamless data exchange and enabling businesses to adopt new technologies more efficiently.

Quick Summary: Differences in Application Engine

SAP ECC vs SAP S/4HANA: Differences in Database Layer

Finally, another key difference between SAP ECC vs. SAP S/4HANA lies in the database layer. So far, you’ve already learned that ECC can run on any database, while S/4HANA exclusively runs on the SAP HANA database. There are two key factors that make the SAP HANA database a better choice for enterprises.

Columnar Storage in SAP HANA

Unlike traditional databases used by SAP ECC, which primarily use row-based storage, SAP HANA uses columnar storage.

Columnar storage organizes same category of data in columns, which offers significant advantages when performing read-heavy operations, especially analytical tasks. With columnar storage, the database can perform efficient compression, aggregation, and calculations.

It will retrieve data faster as same data types are arranged in columns. For you, this means faster access times and improved performance. This is particularly beneficial for operations like reporting and real-time analytics.

Calculations at the Database Layer

Traditional databases can store and fetch data, pushing it to the application layer for calculations. As mentioned earlier, SAP S/4HANA uses Core Data Services to perform calculations at database layer itself, minimizing heavy data transfer.

That means unlike traditional databases, SAP HANA can perform calculations and aggregates. It’s a simple but highly efficient change from older systems that makes a huge difference in performance.

Quick Summary

1. While SAP ECC supports multiple databases, SAP S/4HANA exclusively runs on SAP HANA, leveraging its advanced in-memory and columnar storage capabilities.
2. SAP HANA also performs calculations directly at the database layer. It reduces data transfer and enhances system performance.
3. These features allow faster data retrieval, efficient analytical processing, and real-time insights.

Differences in Data Processing and Data Structures

ECC does most data tasks in batches and needs many summary tables. You have to wait for batch jobs to finish before you get reports. S/4HANA use in-memory processing to run all tasks instantly live. It stores every transaction in one central Universal Journal table. You get live data without pre-calculated totals or index tables. For example, a parts maker saw planning run in five seconds, not overnight.

Key Takeaway Pointers

• ECC waits for batch runs; S/4HANA shows results instantly
• ECC data lives in many tables; S/4HANA uses one Universal Journal
• ECC master data is split; S/4HANA merges records into Business Partner

Key Benefits

• Instant insights cut wait time and planning cycles
• Fewer tables mean less error and simpler reporting
• Unified data mix boosts accuracy and makes updates fast

ECC needs separate tables for each data type, which adds complexity. S/4HANA merge master data like customer and vendor into one record. This single structure cut errors and makes updates much faster. Data model is simpler, so you can build reports without extra tools.

Differences in Deployment Options and Architecture

SAP ECC systems run mainly on-premise in corporate data centers and local servers. You must buy expensive hardware and manage complex network yourself. You schedule upgrades and patches on a fixed annual cycle. Cloud options for ECC are often limited or add extra complexity. In contrast, S/4HANA offers flexible deployment paths to match your needs. 

You can keep it on-premise or choose cloud options with ease. Cloud public edition hosts your system on shared network managed by SAP. Cloud private edition gives you dedicated resources in a secure environment. SAP also offers RISE with SAP, a bundle that covers software licensing and cloud services. This option shifts hosting work to SAP, so your IT team can focus on core tasks.

Key Takeaway Pointers

• ECC is on-premise only; S/4HANA offers on-prem and multiple cloud choices
• ECC upgrades need in-house work; S/4HANA cloud updates happen automatically
• S/4HANA hybrid lets you mix local servers with cloud services

Key Benefits

• Cut hardware costs by shifting to cloud resources
• Get faster feature updates with less IT burden
• Scale up or down instantly to match demand

S/4HANA also supports hybrid deployments, mixing local servers with cloud services. You can run core ERP on-prem and shift non-critical modules to cloud. SAP manages updates automatically for your cloud modules, freeing your team from patch work. ECC only offered on-premise or a HANA sidecar setup for analytics. 

The sidecar let you run analytics on HANA but kept core on old database. It never used the full memory power across the entire system. S/4HANA treats HANA as the main database, giving all processes in-memory speed. That transform system performance from slow cycles to instant results for every module.

Why should enterprises migrate from SAP ECC to SAP S/4HANA?

As SAP ECC support nears its end in 2027, businesses must evaluate the benefits of migrating to SAP S/4HANA. Here are key reasons why migrating from SAP ECC to SAP S/4HANA is essential.

• SAP S/4HANA is built to support modern technologies like AI, IoT, and machine learning.
• Regular updates and ongoing support ensure the system remains up to date, unlike ECC, which is reaching the end of its lifecycle.
• The SAP Fiori interface offers an intuitive, responsive, and mobile-friendly user experience.
• Fast and efficient real-time data processing and data transfer.
• S/4HANA’s API-first approach facilitates seamless integration with cloud platforms.

Understanding the current state of your SAP ECC system is crucial for planning an effective migration to SAP S/4HANA.

Simply put, SAP S/4HANA is faster, smarter, and better in many ways compared to its predecessor. Of course, it’s not so simple to upgrade your ERP system. Migration is a long and complex process, but it’s essential.

While migration involves upfront costs, S/4HANA’s advanced architecture can lead to significant operational savings through reduced downtime, better resource utilization, and lower maintenance requirements.

The best move for enterprises is to start preparing now, and slowly making the necessary steps towards a smooth transition from ECC to S/4HANA.

Advantages of Moving to SAP S/4HANA

You get quick data, much simpler models, and high-tech interfaces. It can run solely in HANA’s in-memory database, which gives you real-time information and real-time analytics.

With Fiori apps and cloud solutions, you get flexibility, lowered costs, and future-proof tech.
Real-Time Info: Live info for better decisions without waiting for batch jobs

Easier Data Model: One Universal Journal table minimizes complexity and errors

Quicker Operations: In-memory computing cuts transaction and report times to seconds

Newer Interface: Fiori apps give you intuitive, role-based screens on any device

Cloud Access: Get the options of on-premise, public cloud, private cloud, or hybrid deployments

Less Maintenance: Less work and fewer IT costs through auto-updates and fewer tables

Future-Prepared: Designed to include artificial intelligence, machine learning, and IoT for future innovation capabilities

What’s next – Planning for SAP S/4HANA Integration?

System integration has become a standard necessity for enterprises. As you plan an ERP upgrade, you must also prepare to integrate SAP S/4HANA with other applications, such as your CRM or accounting system.

APPSeCONNECT is an SAP-certified integration platform as a service (iPaaS) which offers industry leading integration solutions for SAP S/4HANA. We offer pre-built connectors and custom integrations to connect SAP S/4HANA with popular CRMs, eCommerce platforms, and marketplaces like Amazon.

Explore our SAP S/4HANA integrations below:

Related: U.S. Tobacco Integrates SAP S/4HANA and WooCommerce with APPSeCONNECT for complete eCommerce automation