SAP ERP has been evolving and improving since the 1970s, but the release of SAP HANA represented a sea of changes in the SAP landscape. Rather than continuing to design their enterprise software to run on databases built by other companies, SAP SE created their own innovative database, designed to move customers toward a faster, more flexible all-SAP landscape.
As companies plan their transition to the next generation of SAP software, the need to choose between SAP HANA cloud migration, appliances and TDI, and weigh the benefits of IT managed services against in-house support. But deciding whether to move straight from SAP ECC to S/4HANA or to choose Business Suite on HANA can be the most challenging decision. Here’s what they need to consider:
What is SAP HANA? – SAP HANA Basics
As we explained in What is SAP HANA, HANA is the backend that runs the SAP landscape. Its central feature is an innovative, column-based Relational Database Management System (RDBMS), which is used to store, retrieve and process data on core business activities.
SAP HANA itself doesn’t determine what sorts of tasks a business does — it can accommodate any type of data. Businesses install applications that run on top of HANA, such as SAP applications for finance, HR and logistics. As such, companies have to make choices about what software best meets their current needs.
The design of SAP HANA allows it to drastically boost speed for both Online Transaction Processing (OLTP) and Online Analytical Processing (OLAP). Most databases store the majority of their information on the hard drive, and can only keep a limited amount of information in main memory; hard drives are relatively slow, which limits how fast they can recall information. Because SAP HANA resides in-memory, it can retrieve, process and transmit data much more quickly.
SAP HANA also has a simpler structure and lower memory footprint than other RDBMSs. In most competing systems, OLAP and OLTP are stored and processed in separate databases, which is inefficient, and leads to a lot of redundant information bloating the database footprint.
Additionally, most RDBMSs are oriented, and require indexes to speed up performance. SAP HANA, on the other hand, is column-oriented and combines OLAP and OLTP into a single structure, cutting memory usage by a factor of 10 or more and improving performance.
As a result, SAP HANA can do real-time analytics, crunching data nearly instantaneously. This allows businesses to react more quickly to changing conditions, providing significant strategic benefits.
SAP HANA isn’t just a new choice for enterprise computing; because it handles data very differently from other databases, it’s designed to run SAP software. SAP SE has been reworking their core ERP applications to better harness HANA’s speed and flexibility, and will only support older versions of the software until 2025, at which point customers need to have completed their SAP HANA migration, and upgraded to the new software.
SAP ECC and Suite on HANA
SAP ECC, or Enterprise Central Component is the pre-HANA enterprise suite used for ERP modules like logistics, warehousing, financing, and human resources.
There’s a lot of overlap between the terms ECC, R/3 and SAP ERP, which can cause confusion. The software developed from SAP R/3, which was first released in the early 90s. Starting with a 2003 release, the company started using the term “SAP ERP.” From 2004 on, the term “SAP ECC” was used more or less interchangeably with “SAP ERP.” Got all that? If not, don’t worry — for simplicity, we’ll stick with the term “SAP ECC.”
The new front end of SAP ECC is SAP Fiori UX. Fiori replaced the SAPgui with a standardized User Experience (UX) based on innovative design using input from SAP customers. This UX gives a commercial-grade, design-focused feel to enterprise software, which is a radical departure from how SAP worked in the past. There are a wide range of Fiori apps, including:
- Transactional apps to perform tasks
- Analytical apps to simplify data analysis, and
- Fact sheets to show relationships between business objects
SAP Fiori apps are designed around the most common tasks users have to do, rather than the structure of the SAP modules themselves. This boosts productivity and ease of use, allowing users to choose and customize apps based on their roles and needs, rather than having to dive deep into SAPgui to find the right tools.
Because SAP ECC predates SAP HANA, companies using it generally started on other databases. When ECC users perform a SAP HANA migration without changing the front end, it becomes SAP Business Suite on HANA. Although SAP HANA Business Suite has a different backend, it still has Fiori UX, and the same SAP applications. This lets businesses benefit from the performance boost of SAP HANA without restructuring the application layer; the process is relatively simple, and users don’t have to adapt to a new system.
SAP S/4HANA is SAP’s next generation business suite. It’s meant to replace SAP ECC/ERP, with a simplified tool designed specifically to work with SAP HANA. Currently, SAP is reworking the code behind the SAP ECC modules, optimizing them for the way the HANA database is set up.
However, S/4HANA is an ongoing project. So far, SAP has reworked the finance module, and improved logistics as part of the core S/4HANA features. In other areas, the business benefits of S/4HANA over Business Suite on HANA are less significant.
ECC users have to pass through SAP HANA Business Suite to arrive at S/4HANA. The databases and tables will have to be converted into the columnar structure of SAP HANA, with unneeded indices and aggregate tables removed. Additionally, applications designed or modified by the customer will need to be evaluated; in some cases, new HANA functionality may render them unnecessary, while in other cases, they may have to be adjusted to work properly with the new backend.
S/4HANA is designed to use Fiori UX. Customers can still use the old user interface during the transition, however they’ll be able to take advantage of the power and flexibility offered in HANA S/4 with Fiori. For some organizations, the current S/4 features may not outweigh the added complexity of moving past ECC. As time passes and new SAP S/4HANA functions are added, the benefits of moving away from Business Suite on HANA to S/4 will increase for a greater range of organizations.
Enhanced Functionality, Features, and Benefits of SAP S/4HANA
The greatest benefits of SAP S/4HANA over Business Suite on HANA lie in financial management and accounting. SAP S/4HANA Finance is designed to cover the full range of finance tasks, including planning, analysis, accounting, compliance and risk management. According to SAP chairman Hasso Plattner, the HANA S/4 finance app can shrink data more than 10 fold, from 593 GB to 42 GB, “with only 8.4 GB being dynamic, current-year data requiring high availability and backups.”
Even more importantly, SAP S/4HANA Finance offers flexibility that Business Suite on HANA can’t match. Traditional databases are structurally complex, and designed to do certain types of analysis and reporting. To change the data flow, organizations have to rework the entire structure, which can require extensive reprogramming and testing.
Because SAP S/4HANA does away with the supporting data, it can also do away with the rigid structures. You can rapidly build models, predicting the effects of business decisions, such as divestment or acquisition. This flexibility allows predictive modeling, real-time cost and revenue analysis and cash flow optimization.
It also makes compliance and monitoring financials easier and quicker, by centralizing data and eliminating redundant information. Organizations aren’t forced to wait until the next close to get an in-depth look at financial KPIs — they can analyze data in real time over any range and at the desired depth, which provides better insight into the health of the company.
SAP S/4HANA Finance also allows companies to automate risk, compliance, international trade and other activities. By proactively minimizing risk and compliance violations, the software makes it easier to optimize business operations, protect assets, and improve financial performance. HANA S/4 also provides real-time fraud detection, and can even predict and block future fraudulent behavior.
SAP S/4HANA Supply Chain provides compelling advantages over Business Suite on HANA in a range of logistics uses, including sales and procurement, inventory management and capacity planning. SAP HANA S/4 allows real-time tracking of current inventory, transportation of goods, production costs and other data. Costs and profits are instantly reflected in accounting, providing better visibility into the company’s current finances.
S/4HANA logistics can even synchronize with mobile devices in individual trucks, automating invoicing and route planning, and posting problems such as missing goods. It also analyzes the flow of goods to reduce bottlenecks and help materials planners minimize inventory levels.
Moving to HANA S/4 vs. Suite on HANA
Moving straight to SAP HANA Business Suite and S/4HANA are very similar processes. In both cases, the organization needs to carefully calculate their hardware requirements. SAP HANA has exacting hardware requirements that are different from those of SAP ECC on other databases. In order to ensure future SAP support, an SAP-certified team will need to crunch the numbers based on use case, and either install a new SAP HANA appliance, build out existing hardware using Tailored Data Center Integration (TDI) or provision appropriate resources in a private cloud or hybrid cloud.
Installing either SAP Business Suite on HANA or S/4HANA requires adjustment at the backend. SAP HANA is able to support all ECC functionality, but the different structure of the database necessitates good SAP Basis support, plenty of testing and backups, and some post go-live tweaking to ensure everything is working properly.
If your company has custom applications, legacy servers or multiple environments, it can further complicate things. An SAP partner with extensive SAP HANA migration experience can help you plan the best way to adapt complex or custom ERP environments to HANA. In many cases, HANA functionality can obviate the need to use custom code.
To get to S/4HANA, companies have to pass through HANA Business Suite. The road to SAP S/4HANA is fairly simple for companies running SAP Suite on HANA ERP 6, but requires extra steps for companies using older versions of Suite.
In either case, organizations will need to upgrade Netweaver, adjust and tweak the new applications, and provide some additional training using HANA S/4 applications and updates. Companies may also benefit from optimizing their ERP landscape (for example, by merging multiple SAP HANA Business Suite systems or migrating legacy systems to HANA), which adds extra complexity to the project.
Making the Choice
SAP will continue to support and update ECC and Suite, allowing businesses to plan their SAP HANA migration and S/4 upgrade in a way that makes sense to them. Good planning can maximize strategic benefits, while minimizing disruptions.
For most SAP ECC users, the best bet is to start with SAP Business Suite and save S/4HANA for another project. It provides many key benefits of HANA S/4, and is simpler, less expensive and less disruptive. However, for companies in finance industries — and, to a lesser extent, logistics — the advantage of S/4HANA may be profound enough to warrant the additional complexity of upgrading all at once.
For companies upgrading from a legacy or non-SAP system, SAP S/4HANA is usually the best bet; they’ll be building and migrating to a completely new system anyway, so there’s no benefits to moving to SAP Business Suite on HANA, and no disadvantage to moving to S/4HANA. For companies with a complex blend of SAP ECC and other ERP environments, however, the choice can be more complex, and a multi-phase project may make the most sense.
Your company’s attitude toward cloud and IT infrastructure upgrades is also a factor. If your organization is reluctant to take on big IT projects, migrating straight from SAP ECC to S/4HANA may make the most sense, in spite of the added complexity.
Get the Most Benefit Out of SAP Business Suite on HANA or S/4HANA
When it comes to migrating to ERP on HANA, the right business partner can make all the difference. Symmetry’s experience in cloud and hosting, IT consulting and ERP managed services makes us the right partner for every step of your journey. From choosing between SAP Business Suite and S/4, to planning and executing your SAP HANA migration to tweaking and running your SAP HANA cloud post go-live, we can maximize the benefits of SAP ERP, while minimizes costs and disruptions. Contact us to learn more about how we can help you get the most out of HANA.