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As 2023 comes to a close, one key theme we're seeing is businesses adopting cloud-based ERP. In fact, according to Statista, the global ERP market is estimated to grow 13.6% per annum to hit $40.5 billion by 2025.
Understanding the benefits of ERP is one thing; choosing the right ERP in 2023 is another thing. It's a business-critical solution that will have a spiral effect on all areas of your business. There are tons of ERP options, but for most companies, the ERP of choice is SAP.
This giant enterprise, founded in 1972, continues to dominate the market of ERP. SAP has over 25,000 customers in over 180 countries. In addition, SAP has a worldwide ecosystem of over 21,000 partners to help you build, implement and support SAP solutions according to your company needs.
Today's guide takes you through an ERP comparison and stacks up SAP against several ERP alternatives.
SAP S4/HANA and SAP ECC
One of the biggest news flying across the SAP ecosystem is the replacement of SAP ECC with SAP S4/HANA. The company plans to completely migrate SAP ECC customers into SAP S/4HANA by 2027 and ultimately stop SAP ECC maintenance.
SAP's new offering S/4 HANA is an intelligent SAP system that runs on HANA, an in-memory database. Unlike other SAP products, S/4HANA can only run on SAP HANA.
SAP S/4HANA is better than ECC on several fronts, such as providing embedded real-time analytics and processing larger volumes of business data. At its core, SAP S/4HANA's focus is to provide organizations with faster and more efficient ERP technology.
Another addition to SAP S/4HANA is its new UX application, SAP Fiori. In simple terms, SAP Fiori will offer a cleaner, and easier user interface for SAP clients. More importantly, SAP S/4HANA will solve previous SAP issues, such as data sprawl and batch latency, that have been quite a pain for many users.
Conversely, SAP ECC is the most used SAP software now, although this will no longer be the case once SAP ECC users are migrated to SAP S/4HANA. Unlike SAP S/4HANA, SAP ECC can run on any database.
SAP ERP integrates multiple modules to create a single, highly customizable system. This modular build enables businesses to configure what they want to use and leave out what they don't.
How exactly is SAP S/4HANA different from SAP ECC?
- SAP S/4HANA eliminates most aggregate and index tables by combining CO-PA, CO, AA, and FI into a single table known as ACDOCA.
- While SAP ECC can run on other databases, such as Oracle and IBM DBz, SAP S/4HANA can only run on the HANA database.
- In SAP S/4HANA, Account-Based COPA is the default option, while costing-based CO-PA is available as an option in SAP ECC. Moreover, you can run both simultaneously on SAP S/4HANA.
- In SAP S/4HANA, the Business Partners concept is mandatory, while it was optional in SAP ECC.
These are only a few key differences between the two. For a deep dive into the nuances of each platform, take a look at this SAP S/4HANA vs. SAP ECC comparison.
Overall the new ERP platform, SAP S/4HANA, leaves a smaller data footprint, is more simplified, and has improved performance planning and execution.
Further Reading:
SAP S/4HANA and SAP MM
As previously mentioned, SAP S/4HANA is the 4th generation system in the SAP offerings. It will run on the HANA only, but in turn, it offers a reduced data footprint, faster processing, and more business intelligence insights.
One of the core modules of SAP S/4HANA will be SAP MM. Generally speaking, SAP MM deals with simplifying the materials management process. This technology covers procurement processes, inventory valuation, material requirement planning, invoice verification, and more. In addition, SAP MM provides warehouse management capabilities.
When a company chooses SAP S/4HANA as the ERP technology of choice, they also get Material Management technology to manage their inventory and warehouse activities.
SAP S/4HANA and SAP FIORI
SAP FIORI is SAP S/4HANA's new user experience application. FIORI was birthed in 2013 to provide mobile-first user experiences for SAP users. Since then, the technology has grown significantly and now boasts over 7,500 apps.
Fiori's primary goal is to create an easier, more intuitive way for organizations to run their SAP applications. Unlike SAP's former GUI, FIORI focuses more on intelligence and integrated user experiences. For instance, FIORI provides a consumer-grade experience even for the most casual users. Instead of complicated user interfaces, FIORI gives users simple and easy-to-control screens that can run on any device.
SAP S/4HANA and SAP Netweaver
SAP Netweaver is a software stack that integrates SAP's applications for seamless running. Basically, Netweaver consolidates components, processes, and information into a single and accessible place for SAP products.
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Ideally, Netweaver is not a product by itself. It's a runtime environment for SAP's newer offering, SAP S/4HANA, among other applications on SAP's network, such as SAP CRM, PLM, SCM, etc.
Primarily, Netweaver is built using ABAP programming language and C++ and JAVA. However, you can extend functionality by integrating Netweaver with other technologies, such as IBM WebSphere.
SAP S/4HANA vs. Microsoft Power Bi
SAP S/4HANA's primary function is not business intelligence but enterprise resource planning. However, SAP S/4HANA has embedded components that allow real-time operational analysis.
These components include the CDS (core data service) views(data sources) and FIORI, an application for data visualization. You can integrate SAP S/4HANA with SAP Analytics Cloud for more BI insights. In fact, you do not require another application to run SAP Analytics Cloud. All you need is SAP S/4HANA and a web browser for more detailed BI insights.
Conversely, Microsoft Power BI provides BI reporting and data visualization capabilities. It contains three components:
Power BI Desktop - It runs on Windows and connects Data sources as well as creating BI reports.
Power BI Service - This is cloud-based and helps you view and share business intelligence reports.
Power BI for Mobile - This is the final solution and is tailored to customers who want to analyze and view data on the go.
SAP S/4 HANA is an excellent choice if you've adopted SAP's business suite of products. SAP S/4HANA can give you ERP capabilities on top of BI and data visualization. On the other hand, Power BI is the obvious choice when you're already utilizing MS SQL and AzZURE.
SAP S/4HANA vs. Oracle EBS
One commonality between Oracle EBS and SAP S/4HANA is that they are both built to support complex and diverse organizations. Both solutions work exemplary well for companies with various product lines or international operations.
However, SAP comes first place as the application that standardizes and harmonizes business processes. SAP has more structure and rigidity to support these larger organizations and keep every business crook and cranny under control. Conversely, Oracle EBS offers more flexibility and can handle change better than SAP, at least for most organizations.
On the upside, SAP S/4HANA provides more deployment models. For example, you can choose Cloud, On-prem, or SaaS models.
SAP S/4HANA vs. Oracle Fusion
Oracle Fusion is a popular SAP S/4HANA alternative thanks to its flexibility, comprehensiveness, and integration capabilities. In addition, Oracle Fusion is generally more robust in intelligence and reporting capabilities. It combines CRM, HCM, and ERP functionalities into one.
Like SAP S/4HANA, the Oracle Fusion business suite does not support external databases. But unlike Oracle Fusion, SAP can run on multiple clouds. However, both technologies have roughly the same cost and time for implementation.
Overall, Oracle Fusion is more flexible, while SAP S/4HANA provides incredible speed, performance, and real-time visibility, thanks to the in-memory database.
Final Thoughts
Choosing the most suitable ERP is daunting, but hopefully, this guide shed perspective on a few key issues. The most important thing to consider when selecting an ERP tool in 2023 is your business needs, culture, and priorities. After all, each ERP software has its own strengths, weaknesses, and tradeoffs.
However, when selecting your ERP, pay particular attention to the modules or functions offered. You need MM, SCM, CRM, etc., and robust reporting and data visualization at the basic level.
For more information on how to select the right ERP software for your business, please download our guide: 2023 Guide to Selecting ERP Software (+ checklist).
If SAP S/4HANA is your ERP of choice, we can help you innovate and advance your SAP system to fulfill your organizational needs. We have invested a great deal in developing automated applications across the lifecycle of SAP S/4HANA adoption.
To learn more about how Transcend Digital can help, give us a call, and we can help turn your vision and business objectives into a successful business reality. Get in touch!
By Chris Clifford
Chief Strategy Officer. Chris founded his first technology startup at the age of 17 out of his dorm room and has gone on to co-found, advise and angel invest in a number of technology and CPG companies.