What is the license impact while migrating from SAP ECC to SAP S4HANA?

Kirthan - 4 Minute read


Among the many different questions that organizations have with respect to the move to SAP S/4HANA, the questions revolving around licenses seems to be the most critical. SAP S/4HANA may have several benefits including performance, speed, real-time transactions and reporting, but there are still many questions to be answered.

License Impact involved in conversion from SAP ECC to S/4HANA

We have tried to build a small matrix (refer the image), from our own experiences with our customers, to build a business case for SAP S/4HANA. This matrix provides the business and license impact of some of the key functions and processes in SAP S/4HANA. Now, if one looks at the Universal Journal, there is a significant business impact but there are no license implications. The same goes for New General Ledger, New Asset Accounting, and Account based segmentation. Account based segmentation is something that people who have used Costing based COPA in ECC will understand. However, it is no longer relevant in SAP S/4HANA as it has been replaced with Account based COPA and it provides much more flexibility for segmentation and reporting. Hence, segmental analysis is much more powerful in S/4HANA. New Asset Accounting feature in SAP S/4HANA also has significant enhancements. In SAP ECC, there was always differences between Asset Accounting and Finance (FI). With the new Asset Accounting in S/4HANA there is only one version of the truth. The sames goes for the General Ledger as well. There is no more differences between CO and FI because all the data and transactions goes into the Universal Journal directly.

Cash Management in SAP S/4HANA is separate process by itself. It covers Bank Account Management, Cash Operations, Liquidity Management, Treasury and Risk Management (TRM) among others. In SAP ECC, there were a couple of reports that could be used for cash management, but now that's gone into a new license package called S/4HANA Cash Management. Hence, there is a license impact on cash management, but it is completely integrated into the SAP S/4HANA Suite. Another interesting fact is that it looks into the previous patterns and tries to do some invoice matching and it’s possible only because of the Machine Learning component integrated to Cash Management.

Similarly, Spend Analytics and Supplier Performance Management don’t have any license impact. Embedded Analytics is one of the major improvements in SAP S/4HANA and it is completely integrated within the suite. Extended Warehouse Management and Embedded PPDS which were part of the Advanced Planner Optimizer (APO) have a license impact when they move to SAP S/4HANA. They already had a separate license when they were part of the APO. Several Fiori Apps of Transactional, Applicational and Fact Sheet types have been enhanced in the latest version of SAP S/4HANA but they do not have any license impact.

Transport Management, Financial Consolidation, and Integrated Business Planning have a small license impact in SAP S/4HANA, but they are all integrated to the suite. So, from this list, it can be inferred that we can safely rule out a couple of instances for which there were modules like SRM, APO, BPC, BI/BW in the past. And we all know how complicated it was, when the ECC system was connected with SRM, APO and BPC. Atleast, these applications are completely gone now because they have been integrated back to the core. SAP S/4HANA simplifies the complex landscape and it is one of the major drivers why organizations plan to move to SAP S/4HANA. To have an integrated scenario from Supply chain, Advanced Planning, Manufacturing to Freight forwarding, transportation management (where you can collaborate with all the transportation stakeholders) embedded into one single Digital Core is one of the huge advantages of SAP S/4HANA.

Watch the full on-demand webinar presented by Gaurdian George where he explains the cross-industry impact of digital disruption and how organizations are using SAP S/4HANA to boost business value.

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As an existing SAP ECC customer, if you want to know more about the project or about KTern and the SAP S/4HANA Readiness Assessment program, please get in touch with us through our contact form or connect with our product manager on or through .

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