SAP R/3 vs. SAP S/4 vs. SAP C/4: differences and product history

• SAP R/3 has been the ERP solution for large enterprises since the early 1990s, later marketed as mySAP ERP and SAP ECC.
• SAP S/4HANA is the successor to R/3 and runs on the in-memory database SAP HANA.
• With the move to S/4HANA, SAP simplifies the system: revised and discontinued applications, the Principle of One, a digital core plus cloud applications.
• SAP C/4 is not an ERP but the successor to SAP CRM and SAP Hybris.

This article was first published on 26 November 2020. SAP now markets the CRM suite C/4HANA under the name SAP Customer Experience. For SAP ECC 6.0 (Enhancement Packages 6 to 8), mainstream maintenance ends at the end of 2027; extended maintenance until the end of 2030 is available at extra cost.

First, a rough overview

SAP has always had an interesting approach to naming its products. It's easy to lose track.

Before we get into the specific terms such as R/3, S/4 or C/4, it's important to understand that all these products belong to SAP's main product line and are therefore aimed at large enterprises. They should not be confused with the solutions SAP provides for SMEs, SAP Business One and SAP Business ByDesign.

Right, back to R/3, S/4 and C/4. What are they all about?

SAP R/3 has been the ERP solution for large enterprises since the early 1990s. SAP has rebranded R/3 several times, for example as mySAP ERP, SAP ECC (for Enterprise Core Component) or even simply SAP ERP. Don't worry, we'll look at the details more closely in a moment.

SAP S/4, or more correctly SAP S/4HANA, is the successor to SAP R/3 and is based on the in-memory database HANA, which delivers much higher performance, especially for dynamic analyses. S/4HANA also brought some fundamental "simplifications" of the system. More on this in the article SAP S/4 vs. SAP HANA.

Unlike SAP S/4HANA, SAP C/4 is not an ERP system in its own right. Rather, it is the successor to SAP CRM and to SAP Hybris, SAP's e-commerce solution.

The SAP product history

So now we have a first overview. Let's take a quick look at the whole thing on a timeline, above all to better understand the various rebrandings of SAP R/3. How have SAP's products developed over time? This will help us understand R/3 better.

It all started with SAP R/1 in 1972. The name came from the fact that it was a real-time system with a 1-tier architecture. This means that the database, application and presentation layers were not separated.

SAP R/2 followed in 1979. This system had a 2-tier architecture and ran on the mainframe.

SAP R/3 then appeared on the scene in 1992. As the name suggests, it now had a 3-tier architecture, and the system was based on the client/server approach.

From 2004 to 2007, SAP R/3 was sold under the name mySAP ERP, before it was then called SAP ERP ECC (Enterprise Core Component). This is also when SAP NetWeaver technology came into use.

Since 2015 there has been SAP S/4HANA, which, as the successor to SAP R/3, will now be introduced at companies step by step.

What changed from R/3 to S/4?

Besides the performance gains from HANA technology, a move from SAP R/3 to SAP S/4HANA brings a number of changes. These can be summed up under the term simplification.

By simplification, SAP means: revised applications, discontinued applications and the Principle of One.

Many applications from R/3 or SAP ECC 6.0 were revised to make the best possible use of the capabilities of the SAP HANA platform. Redundant functions were also reduced as far as possible, for example by using the business partner instead of storing customers and suppliers separately.

Some applications, however, were dropped completely because they no longer have strategic importance for SAP, for example SAP E-Recruiting and SAP Learning Solution. These are replaced by SAP SuccessFactors, for instance, a cloud solution that extends the digital core of S/4HANA.

Speaking of the digital core and cloud solutions.

In SAP S/4HANA, the important core processes were combined in the so-called digital core. As extensions, various cloud applications are available, such as SAP SuccessFactors for HR, SAP Ariba for supplier management or SAP C/4 for complete customer management.

SAP C/4

Under the name SAP Customer Experience (CX), SAP brings together the customer's experience when interacting with the company, with the aim of constantly improving that experience.

This is why a rebranding was carried out. SAP Hybris, SAP's e-commerce solution, and SAP CRM are now combined and replaced by SAP C/4HANA. SAP C/4HANA is thus the fourth-generation customer relationship management suite.

This solution lets you handle customer interactions in the following areas: marketing, sales, service, commerce and billing. It also enables customer and product data management with e-commerce technology and the corresponding e-commerce processes. SAP C/4HANA offers five cloud portfolios that can be used individually or integrated with each other:

SAP Commerce Cloud

SAP Commerce Cloud provides omnichannel functions. It supports both direct sales (B2B or B2C) and indirect sales (B2B2C). For retail there are solutions for product data and catalogue management. There are also industry solutions for telecommunications, media, financial services and the public sector, among others.

SAP Marketing Cloud

Based on machine learning, SAP Marketing Cloud makes it possible to use various data sources to build customer profiles and create individual offers and campaigns.

SAP Sales Cloud

SAP Sales Cloud further automates the sales process, for example through faster pricing, route planning and scheduling. Extended analytics functions are also available.

SAP Service Cloud

SAP Service Cloud makes it possible to communicate with customers across a wide range of channels. Chatbots can also be used. Self-services can be provided to customers and employees as well.

SAP Customer Data Cloud

SAP Customer Data Cloud offers a platform on which customer data can be managed. Full transparency is ensured through self-services and support for the GDPR.

As you can see, SAP C/4HANA is a comprehensive solution that can handle all relevant customer interactions.

R/3 vs. S/4 vs. C/4: a practical example from Lederhosen AG

Let's look at the whole thing using our fictional company, "Lederhosen AG". Lederhosen AG is a traditional mid-sized company that produces and sells traditional Alpine clothing such as lederhosen and dirndls. It has to supply its own shops as well as its online shop and retailers with products.

Lederhosen AG has relied on SAP R/3 since the mid-1990s and has already gone through several release changes, for example from 4.6C to SAP ECC 6.0. Over the years, Lederhosen AG's very innovative IT department in particular has repeatedly toyed with the possibilities offered by the in-memory technology of SAP HANA. Since reporting has recently been taking longer and longer to run, management is now also convinced that it's time to move to S/4HANA.

The planned switch to S/4HANA will, however, bring some changes. Some of Lederhosen AG's processes will no longer be covered by SAP's digital core in future. For supplier management, Lederhosen AG is considering the cloud application SAP Ariba to cover sourcing, ordering and payment, and thus to ensure end-to-end supplier management. It is also currently examining whether external staff will be handled via SAP Fieldglass in future, as they are currently still managed in a standalone tool. After the switch to SAP S/4HANA, both management and IT are satisfied, because they now have a faster and more powerful system at their disposal.

At a glance

SAP R/3 has been the ERP solution for large enterprises since the early 1990s and has been rebranded several times, for example as mySAP ERP or SAP ERP ECC (Enterprise Core Component).

SAP S/4HANA is the successor to SAP R/3 and is based on the in-memory database HANA, with the overarching goal of simplification.

SAP C/4 is not an ERP system in its own right. Rather, it is the successor to SAP CRM and SAP Hybris and offers a fourth-generation customer relationship suite that can handle all customer interactions across a wide range of departments.