If your business uses an SAP ERP system and has yet to upgrade to S/4HANA, it’s time to start thinking about the future.
That’s because SAP has announced it will end support and maintenance of its legacy ECC platform in 2027 – extending a previous deadline of 2025 but reaffirming its position that ECC will no longer be supported within the next five years.
SAP’s recommendation to businesses is to upgrade to its S/4HANA platform; the most powerful and advanced ERP technology designed by the company that uses SAP’s own HANA database. That’s a step we expect most SAP customers to eventually take.
But nobody said it is entirely straightforward. For starters, a migration to S/4HANA involves upgrading ERP systems while simultaneously adopting a new database.
A migration of this scale is inevitably a major logistical challenge and requires expert support. Beyond the conversions and data transfers you’d expect, ECC and S/4HANA have entirely different system architectures.
This isn’t a simple update; it’s investing in and adopting a brand new system; one that will provide you with the best SAP technology on the market and future-proof your business
It’s also worth noting that SAP’s commitment to S/4HANA is unwavering (it recently confirmed support and maintenance for its flagship solution will be available until at least 2040) so organisations will need to consider their options and plan appropriately with the 2027 deadline in mind.
SAP has previously spoken of respecting customers’ current investments in ECC while “allowing them the time they need to re-engineer business processes and systems so they can tap into the full business opportunities of SAP S/4HANA”.
With more large businesses set to upgrade to S/4HANA over the next five years, it’s time for tax professionals to familiarise themselves with the challenge that awaits.
To help get you started, here are 10 differences between S/4HANA and ECC that you should consider before embarking upon your migration:
1) S/4HANA will operate only on a HANA database. That’s a significant change from ECC, which can be run across multiple databases, including Oracle.
2) S/4HANA can run on the cloud or on premise.
3) S/4HANA features database tables in columns, driving unprecedented processing power.
4) S/4HANA does not use summary tables, index tables or history tables. In their place are line item tables.
5) S/4HANA consolidates the 26 tables used for inventory management in ECC into a single one.
6) S/4HANA offers an increased 40 characters in material numbers.
7) S/4HANA makes the material ledger mandatory, improving its valuation functionality when used across multiple currencies.
8) S/4HANA also makes a parallel ledger a prerequisite for new asset accounting.
9) S/4HANA includes a new table, PRCD_ELEMENTS, replacing the pricing table, KONV.
10) S/4HANA’s Business Technology Platform changes the way you integrate solutions; you may need to consider your existing technology and how that fits into the new world of S4/HANA. It includes hundreds of pre-built integrations for third-party applications, creating a platform that brings together the best of enterprise applications and data management, analytics and extension capabilities.
What should you do next?
2027 might seem like a long way off, but it’s worth beginning to plan your migration now. After all, even a medium-sized migration can take 12 to 18 months to complete.
You’ll need to appoint a system implementation partner and, if you want to maximise the immense tax potential of your new set-up, a tax technology specialist too. That’s where we come in!
For more information on how we can support your upgrade to S/4HANA by making tax a priority of your migration, get in touch with us today.
Tom Witham
administrator
Tom is Editor-in-Chief for Digital Content at Innovate Tax. With a background in content production and a degree in journalism, Tom instinctively keeps his ears to the ground for tax industry news and trends. Tom authors and produces many of Innovate Tax’s most popular recurring features, such as country-specific VAT infographics, industry updates and monthly VAT round-ups.
