In today’s post, I’m going to give you a beginner-friendly introduction to SAP S/4HANA, one of the most powerful enterprise software platforms available today.
But before we dive into what S/4HANA is, let’s take a quick look at the company behind it—SAP SE—and how its products have evolved over the years.
A Brief Background on SAP
SAP SE is a global software company that builds enterprise applications to help businesses of all sizes run more efficiently. While “SAP” originally stood for Systeme, Anwendungen und Produkte in der Datenverarbeitung (in German), it translates to Systems, Applications, and Products in Data Processing in English.
The company was founded back in 1972 by five former IBM employees. Its headquarters are in Walldorf, Germany, and it now operates in over 180 countries. As of 2016, SAP became the largest enterprise software company in the world, and today, it remains the biggest in Europe and the fourth largest globally, serving over 100,000 customers.
Evolution of SAP Products
SAP’s product line has grown alongside technological advancements. There have been four major releases of its core business applications:
- SAP R/2 – Launched in 1979, designed for mainframe computers.
- SAP R/3 – Released in 1992, introducing the famous three-tier architecture (client, application, and database).
- SAP ERP (ECC) – Introduced in 2004, replacing the R/3 name and forming part of the broader SAP Business Suite, which included tools like SAP CRM, SRM, and more.
- SAP S/4HANA – Launched in 2015, built to take full advantage of modern computing power and the SAP HANA in-memory database.
Let’s break these down briefly:
- SAP R/2 (1979): Ran on mainframes and served large organizations.
- SAP R/3 (1992): A game-changer that used a three-layer architecture, separating the interface, processing logic, and database.
- SAP ERP (2004): A more integrated version of R/3 that became part of the SAP Business Suite, allowing better integration with other applications.
- SAP S/4HANA (2015): The latest and most advanced generation, built natively on the HANA database for speed, simplicity, and real-time processing.
What is SAP S/4HANA?
SAP S/4HANA stands for SAP Business Suite 4th Generation on HANA. It’s the most recent version of SAP’s ERP system and is designed to take full advantage of the SAP HANA database.
Unlike previous SAP ERP systems that could run on various databases, S/4HANA only runs on SAP HANA. This allows for:
- In-memory processing (faster access to data),
- Column-based storage (efficient handling of large volumes of data),
- Simplified data models, and
- Real-time analytics and reporting.
This combination leads to faster performance, a smaller data footprint, and better decision-making for businesses.
Why Is It Called “4th Generation”?
You might wonder where the “fourth generation” comes from. It refers to the evolution path of SAP’s ERP systems:
- R/2
- R/3
- SAP ERP (ECC)
- S/4HANA
So, S/4HANA is literally the fourth major release of SAP’s ERP solution — hence the name.
The Road to S/4HANA: Key Milestones
Here’s a quick timeline of how we got to S/4HANA:
- 2010: SAP HANA was launched as an in-memory computing platform.
- 2011: HANA gained traction as a powerful database engine.
- 2012: SAP Business Warehouse powered by HANA was introduced for real-time data analysis.
- 2013: The full SAP Business Suite began running on HANA, bringing OLAP and OLTP together in real time.
- 2014: SAP Simple Finance (now known as SAP S/4HANA Finance) was released — enabling faster, simpler financial management.
- 2015: SAP S/4HANA was officially launched, representing a complete redesign of SAP’s ERP software.
New Technologies and Architecture in S/4HANA
S/4HANA isn’t just a backend upgrade — it also brings in a modern frontend. Here’s how the architecture looks now:
- Database Layer: SAP HANA
- Application Layer: SAP S/4HANA
- Presentation Layer: SAP Fiori (a modern, user-friendly UI replacing the old blue SAP GUI screens)
This setup allows for mobile-friendly, intuitive interfaces and supports cloud, on-premise, or hybrid deployments.
Key Benefits of SAP S/4HANA
Compared to SAP ECC (the older ERP), S/4HANA offers some clear advantages:
- Real-Time Analytics
Businesses can now analyze live data instantly, which supports faster, smarter decisions. - Smaller Data Footprint
Thanks to in-memory and columnar data storage, S/4HANA significantly reduces the amount of data storage needed.
These benefits translate into improved performance, greater agility, and a more streamlined IT landscape.