We are in January 2015 at the SAP Field Kick-Off Meeting in Barcelona. Bill McDermott, SAP’s CEO (at the time) proposes a conference call to present the company’s financial results for the 2014 fiscal year.
Few people know it yet, but this conference will take an unexpected turn as he will talk about the new enterprise software suite S4/HANA.
Six years later, the smart and innovative ERP continues to be SAP’s flagship product. So how and why is the German firm betting so much on S4/HANA? This is what we will try to decipher in this article.
ERP in a Nutshell
Enterprise Resource Planning (ERP) is an information system that allows you to manage what happens in a company, especially in production, logistics, and finance.
At SAP, SAP Business is today the flagship product. It is a multiplatform solution that can be installed on an operating system such as Windows or Linux or a database.
Before going into more detail, let’s look at the different evolutions of this system.
Evolutions of the SAP ERP
One year after its creation in 1972, SAP released the very first version of its ERP R1, R being the abbreviation for Real-Time Processing.
On the other hand, we can’t really say that it was an ERP. In fact, it was only dedicated to the financial and accounting fields.
In terms of structure, we found a rather simple system composed of three layers installed on a single server. The user interface, the database, and the business logic were installed on the same machine.
So, there was no network concept yet and it was impossible to develop web applications.
Four years later, the German company released a new version of R/2, which included an IBM database and, above all, a business application. The main difference with the first version is the implementation of a simple network between the client and the server.
There are therefore two different servers:
- Application and database
A web browser sends a request from a web server. This one is processed, and an adequate answer is returned.
Applications are no longer used in layers and can be used independently, which has made updates complicated for a long time.
However, SAP also had to deal with stability problems, which were finally resolved in the early 1980s. It was then possible to process business transactions in several languages or currencies.
Real-time is no longer just a promise: the event and the master files can be updated simultaneously.
It will be necessary to wait more than 10 years to know the R3 version which was marketed at the beginning of the 1990s.
This version was mainly used in the design of web applications. The browser plays the role of the client, the business logic is contained in an application server or a middleware while we also find a database server.
We thus find the three layers which are each installed on three different servers:
- Business logic/processing
- Data access
This version is the one that allowed SAP to take another dimension in the ERP world. In addition to the new three-layer approach, SAP R3 revolutionizes the user experience by putting an end to the messy green text screens.
The successor to SAP R3 is a system that is still widely used today. This is of course SAP ECC (or SAP ERP Central component). Unlike R3, which runs on a client server-module, SAP ECC runs on NetWeaver.
As a reminder, NetWeaver is SAP’s technical platform that allows companies to run all their applications on a single integrated platform. It has the advantage of supplying role-based access, dynamic communication and, above all, a development environment based on ABAP, and non-ABAP languages connected to all a company’s APIs.
As its name suggests, SAP ERP CC is an ERP package that can run on any database.
This version offers integrated modules such as finance, and HR as well as several additional applications for data analysis and real-time reporting. It is considered as the main product of SAP Business Suite.
The distinctive feature of ECC is that applications such as SAP Business Warehouse, SAP Strategic Enterprise, and Internet Transaction Server have been merged into SAP ECC. It is therefore possible to run them under a single instance.
There are two main versions of SAP ECC (note that there are also sub-versions such as SAP ECC 6.0 EHP1, EHP2, etc. but we will not go into detail here)
- SAP ECC 5.0 (2004)
- SAP ECC 6.0 (2005) offers a new ABAP editor and supports the WebDynpro ABAP technology, unlike the previous version.
In 2020, SAP announced the end of maintenance on ECC in 2027 with the possibility of extending this maintenance for three years with a 2% increase in cost. The goal is that all SAP companies will eventually have the latest version of the ERP.
To learn more about the migration and make it a success for your company, discover as soon as possible our article dedicated to the migration to SAP S/4HANA.
Finally, SAP ECC gave way to S4/HANA in 2015. The name breaks down as follows:
- S for Simple
- 4 because it is the fourth generation of the product (SAP ECC being considered an improvement of SAP R3)
- Hana for the database technology involved.
Even today, this update is considered by experts as one of the biggest updates in the history of SAP.
We will now take a closer look at the features of S4/HANA.
S4/HANA in Detail
SAP’s flagship product is presented as the successor to the SAP Business Suite platform (version 4).
Available in local, hybrid, and Cloud versions (the version SAP prefers), it has been designed to be more usable and to solve more complex problems.
To fully understand this innovative ERP, we first need to know more about the new HANA database.
HANA, the New Generation Database
The fourth generation of SAP’s ERP is therefore based on HANA or High-Performance Analytics Appliance, an in-memory database that was launched in 2011, four years before S4/HANA.
It could be compared to a server, which is a kind of computer that provides database services to other systems or environments.
With HANA, it is, therefore; possible to work with a very large volume of data all in real-time.
Moreover, all this data is still in memory and that is the real revolution. The data is thus extracted directly from RAM, which considerably speeds up data retrieval and analysis.
This technology is called In-memory. It is also referred to as a columnar database because it allows data to be physically stored in columns and not in rows as was previously the case. This leads to a better compression ability.
What is the Difference Between HANA and S4/HANA?
It is easy to confuse HANA and S4/HANA, but they are two quite different technologies. As we have already seen, HANA is the database, the core technology of the ERP.
As for S4/HANA, it is the application that will enable the execution of the various business process transactions: finance, HR, or logistics…
The Advantages of S4/HANA
The simplicity of use: SAP S4/HANA uses the SAP Fiori technology, which is intuitive and customizable. In addition, it is possible to manage all processes from any type of device, from the computer to the tablet or smartphone
More advanced analysis: several applications are included to allow data analysis. Thanks to this analysis, your company will be able to identify opportunities more easily.
Changes from SAP ECC
Unlike its predecessors, S4/HANA was built for Cloud integration rather than on-premises integration, although this option is still available.
The major difference between the two products comes from the database. While S4/HANA only runs on SAP HANA, ECC can run on other databases like Oracle or Informix.
This may seem restrictive for S4/HANA, but the latest version has the advantage of being much faster.
Indeed, the infrastructure used is In-Memory and the data is loaded directly from the RAM of the computer system.
Of course, there are so many differences that it would be complicated to mention them all in this article.
However, when SAP released S4Hana, it also released a document called SAP simplification list which highlights all the differences and new features of the different ERP versions.
This document allows you to easily find the updates according to the business processes. For example, this document includes the Business Partner Approach which presents the new master data application.
Customer and vendor data are no longer separated, some transactions have been replaced…
How to Deploy S4/Hana in your Company?
Although it may seem complicated at first glance, S4/Hana is an intuitive and innovative ERP system that will surprise you with its many features. Its implementation within a company must be done with an experienced partner.
Depending on your current system and the ERP you use, it could take between 3 and 10 months.
On-premises or directly on the Cloud, both options are available to you. The latter has the advantage of being directly linked to SAP which manages updates, governance, and security.
VASPP has specialized for many years in the implementation of SAP solutions. Its numerous experts are there to answer all your questions on this latest version of the ERP and assist you from the audit of all your systems to the handling of S4/Hana. For more information, do not hesitate to contact us.
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