SAP S/4 vs. SAP HANA: definition, differences and use

• SAP HANA is a technology platform with an in-memory database. SAP S/4HANA is the business suite that runs on it.
• In-memory means the entire database sits in main memory. That makes dynamic analyses considerably faster.
• To make the database fit into main memory, SAP slimmed down the data model: column-oriented, without aggregate and history tables.
• S/4HANA consists of a digital core that can be extended with cloud applications such as SuccessFactors, Concur or Ariba.

This article was first published on 19 November 2020. Some product names have changed since then: SAP Cloud Platform has been called SAP Business Technology Platform (BTP) since January 2021, C/4HANA is now called SAP Customer Experience, and SAP Leonardo is no longer offered as a separate product. Its AI services are now part of BTP (SAP AI Core).

The differences between SAP S/4 and SAP HANA (because there are some)

Let's get straight to the point. SAP HANA is a technology platform and includes, among other things, the much-discussed in-memory database. SAP S/4HANA is SAP's next-generation business suite. It is therefore based on the in-memory platform SAP HANA and comprises a whole range of applications in what is known as the "digital core". These core applications can then be extended with cloud applications, which can in turn be integrated with the digital core.

What is an in-memory database?

But what does in-memory database actually mean, and what does it achieve? In a classic SAP ERP system, the database was stored on a hard disk. All the data for an operation was first read from the hard disk and, once the operation had been carried out, written back to the hard disk. This meant that the performance of the system was always limited by the speed of the hard disk. And compared with the processor and main memory, hard disks are relatively slow. That is why the in-memory database SAP HANA was developed. In-memory means that the database is no longer stored on a hard disk. Instead, the database is held entirely in the server's main memory. A major bottleneck of traditional database systems is that data stored in a disk-based database can only be transferred to the processor slowly. This results in relatively poor performance. New trends such as big data and IoT (Internet of Things) are increasingly raising expectations that system data can be processed ever faster. For example, to be able to run dynamic evaluations and analytics. This increased performance can be ensured by storing the database directly in main memory. In addition, concepts such as code pushdown make it possible to move compute-intensive processes from the application layer to the database layer. This achieves higher performance.

In-memory challenges

You're probably now asking yourself: "Hang on, main memory isn't permanent storage. As soon as the computer restarts or the power fails, the entire database is gone." That's true. And it is a problem that has to be taken into account with a technology like this. For this reason, the database in main memory is regularly backed up to a hard disk. But what happens to the data that has changed since the last backup? It is continuously written to what is known as a transaction log. That way, no data change can be lost. Another problem, of course, is the size of the database. Traditionally, it didn't really matter how large the database became, since it was stored on a hard disk anyway. Although the price of main memory has been falling steadily recently and ever larger capacities have become available, main memory is still generally only available in the GB range, compared with TB for hard disks. That is why shrinking and simplifying the classic data model was a basic prerequisite for an in-memory database in the SAP world. This way, the entire database fits into main memory. This is achieved on the one hand through a column-oriented database, and on the other through the reduction of aggregate and history tables.

SAP S/4

As already mentioned, S/4 is SAP's next-generation business suite.

A major focus was placed on simplification. Under the buzzword "Principle of One", redundancies from older versions were eliminated. In the past there was, for example, the old and the new general ledger, an ABAP and a Java stack, etc. This has been unified. So now, for example, there is only ABAP. As already discussed, redundant data storage was also eliminated. The digital core provides various applications and is divided into a cross-industry area, line-of-business products, industry-specific applications and compatibility packs. The cross-industry area is also called SAP S/4HANA Enterprise Management and, together with the line-of-business products, covers the following areas, among others: Sales, Service, Sourcing & Procurement, Supply Chain, Finance, Manufacturing, Asset Management, Analytics Technology and a simplified Human Resources with SuccessFactors connectivity. Industry solutions are available for the following industries: Agriculture, Automotive, Banking, Insurance, Oil & Gas, Professional Services, Public Sector, Retail & Fashion, Utilities, Waste & Recycling. In addition to the applications in the digital core, SAP also provides compatibility packs that can be operated in an SAP S/4HANA installation. These make certain functions known from SAP ECC 6.0 available for a limited period. This is intended to make the move from R/3 to S/4HANA easier. The compatibility packs extend across practically all areas, such as sales, accounting, plant maintenance and human resources. Sales can serve as an example here: this compatibility pack contains the sales information system, rebate agreements and the product catalogue.

Cloud applications

SAP S/4HANA no longer offers all the applications that were still included in SAP ECC 6.0.

We have already touched on which applications are included in the digital core. A complete list can be found in what is known as the SAP Simplification List.

In addition to the digital core, SAP offers cloud applications. These SAP Cloud Platform applications can be used to supplement or replace existing applications. They can be integrated into SAP S/4HANA.

Most of the cloud applications are based on SAP's acquisitions of specialist software vendors in the respective areas.

Below is a brief overview of the available cloud applications:

SAP SuccessFactors for HR

SAP SuccessFactors includes solutions for core HR processes, talent management and HR analytics. It covers the process from the job posting through hiring to training and succession planning.

SAP Concur for travel management

SAP Concur offers cloud-based travel management. It handles both travel planning and travel expense accounting. There is also reporting and location functions that show where each employee currently is.

SAP Ariba as a buyer/supplier network

SAP Ariba provides a cloud-based business network in which procurement and supplier processes can be optimised. This covers strategic procurement planning, supplier management, information exchange within the supply chain and invoice management.

SAP C/4 and SAP Hybris for CRM and e-commerce

SAP C/4HANA is the fourth-generation customer relationship management suite and the successor to SAP CRM and SAP Hybris. SAP C/4HANA enables interaction with customers in marketing, sales, service, commerce and billing, and also covers e-commerce.

SAP Fieldglass for external workforce services

With SAP Fieldglass, external staffing services can be optimised and external workers managed accordingly. SAP Fieldglass also includes a network of service providers to whom you can put the services you need out to tender.

SAP Leonardo as an innovation platform

SAP Leonardo is SAP's cloud-based innovation platform. It enables companies to integrate new technologies into their processes quickly. SAP Leonardo includes, among other things, six technology areas: machine learning, big data, analytics, data intelligence, Internet of Things and blockchain.

S/4HANA in practice: the example of 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 so far relied on SAP R/3 and is currently evaluating the move to SAP S/4HANA. One of the biggest triggers was that management wanted faster and dynamic analyses, which the HANA technology can make possible. In addition to the digital core, the plan is to handle customer relationships via C/4HANA. Furthermore, the possibilities that SAP Leonardo offers in machine learning and analytics have met with a positive response in several parts of the business. No sooner said than done: management approved the upgrade project from SAP R/3 to S/4HANA. After the project has been completed successfully, management in particular is looking forward to dynamic reporting of the data. Lederhosen AG's innovation department can now identify new trends more easily with the help of AI and machine learning and steer the company proactively.

At a glance

SAP HANA is a technology platform and includes, among other things, the in-memory database. The in-memory database can deliver an enormous performance boost, which opens up completely new possibilities in dynamic analytics. SAP S/4HANA is SAP's next-generation business suite. It is based on the in-memory platform SAP HANA and comprises a range of applications in what is known as the "digital core". In addition, the SAP Cloud Platform offers the option of a range of further applications in areas such as human resources, travel management and customer relationship management.