The SAP product line is very familiar with business management and resource planning tools. SAP S/4HANA is a modern reinvention of a longstanding asset in resource management, SAP ECC. This product has been “one of the key technologies in business and all other industries” since it’s introduction in the 1970s. [i] Many businesses still utilize the company’s flagship ERP even though SAP is transitioning into the modern, intelligent ERP market with S/4HANA. The future calls for S/4HANA, however SAP will continue to support ECC through 2027 with an option to extend to 2030. A look at the history and utilization of ECC gives a foundation for understanding the direction of the company’s ERP offerings.
What is ECC?
SAP ECC stands for SAP ERP Central Component. As an enterprise resource planning software, ERPs take digital information from disparate sources and integrate that data into a unified view of a business’s resources. For example, an ERP may utilize transactional sales data to modify inventory for an accurate picture of stock on hand. SAP ECC is the core of the SAP Business Suite. The 10 functional components of ECC work together to create a flexible ERP based on specific business use cases. They also integrate with the other offerings of the SAP Business Suite for a comprehensive business management solution.
Development and Lifecycle of ECC
SAP ECC launched in the 70s as RF, which was initially a financial software product. Module expansions brought additional capabilities and new terminology. With the first expansion, SAP renamed the product from RF to R1. In 1979, R2 was released with significantly enhanced enterprise capabilities. These included things like logistics, supply chain management, HR, accounting, and manufacturing. Subsequent releases (R3 in 1992 and R4 in 2004) continued to expand its capabilities and compatibility. This resulted in a robust group of applications that could handle a wide array of essential business operations. Current iterations include tools and support for finance, HR, procurement, product development, marketing, sales, services, IT management, and supply chain management.
SAP ECC’s Core Capabilities
SAP ECC contains 10 functional and 2 technical components. All functional components are completely optional, allowing businesses to implement only what is needed to meet their specific needs. The two technical components, ABAP and
NetWeaver, are required however. The two help to facilitate custom reporting and administrative tasks necessary to run SAP ECC. The list of functional components includes:
- Financial Accounting (FI) – Manages receivables and payables.
- Controlling (CO) – Provides profit and cost center accounting, and financial planning, primarily for manufacturing cost analysis.
- Sales and Distribution (SD) – Handles sales and distribution nationally or worldwide including billing and returns.
- Materials Management (MM) – Offers procurement and inventory management.
- Production Planning (PP) – Aligns supply and demand estimates to manage manufacturing schedules and costs.
- Quality Management (QM) – Integrates with other components to facilitate quality management and can assist in product issue audits.
- Plant Maintenance (PM) – Manages facilities and equipment to ensure proper maintenance and prevent machine failure.
- Customer Services (CS) – Manages processes involved with businesses providing maintenance services to customers.
- Project System (PS) – Assists with large-scale project management to simplify the process.
- Human Capital Management (HCM) – Manages HR tools like payroll, attendance, scheduling, and time-management.
S/4HANA vs ECC
SAP ECC is still widely utilized and will continue to be supported for several years. For those businesses currently utilizing this ERP, or for those new to SAP, that is great news. It is never a good idea to rush a transition or migration. This additional lifespan will allow businesses to carefully make the switch to S/4HANA with a strategic transition plan in place.
Many of the capabilities you have come to rely on in your ECC package will have renewed life in S/4HANA. The main difference between the two offerings is the platform. ECC operates on a variety of databases, which is a flexible choice. Nonetheless, this increased flexibility also increases complexity levels further limiting its specificity in capability and performance. S/4HANA runs exclusively of the SAP HANA cloud database, therefore it takes advantage of the power and speed of the in-memory database. This allows S4/HANA to provide advancements in AI and machine learning, analysis, real-time data, and more. It offers a simplified experience, reduced redundancies, and improved business processes.
SAP ECC continues to provide leading services to its users and can serve as a launchpad for the even more streamlined and advanced S/4HANA. SAP is simplifying the transition process through the SAP S/4HANA Movement Program, helping companies take full advantage of the modern benefits of S/4HANA. SAP partners and consultants have comprehensive knowledge of SAP ECC 6.0 and S/4HANA and what will be needed to transition. Reach out to an SAP partner to discuss your ERP options in detail.
[i] Wood, Dave, “SAP ECC VS. SAP ERP S/4 HANA: WHAT IS THE DIFFERENCE?”