SAP S/4HANA is based on the HANA database, which - unlike the exclusively row-based databases in R/3 or ECC - is also column-oriented. The in-memory database (use of main memory as data storage) accesses data both column-oriented and row-oriented. Column-oriented databases can be read more quickly and are therefore better suited for analyzing large data sets. SAP S/4HANA is therefore also referred to as a real-time ERP system.
The licensing model has also changed: Instead of calculating licenses according to the number of users, for some time now licensing has been based on the resources used (Digital Access Adoption Program). The new model differentiates between direct (human access) and indirect user access (digital access).
Another difference between SAP ECC and SAP S/4HANA: The basic functions (e.g., Finance, Manufacturing, or Supply Chain) are no longer referred to as "modules" in SAP S/4HANA, but as "Lines of Business" (LoB). Certain core functionalities of the respective LoBs are already integrated in each case - as basic equipment, so to speak; further functions require an additional license or even an additional installation and license.
"S/4" also makes a difference on the outside: The SAP Fiori user interface resembles conventional apps for consumers. Above all, it works role-based (switching between different screens is no longer necessary, among other things) and also for different end devices such as smartphones or tablets ("Any Device").
With SAP Fiori, SAP is making it much easier to use. Experienced users are able to operate the system almost without prior training.
Simplicity (the "S" in SAP S/4HANA stands for "Simple") is also a program in other respects: Because ERP systems are subject to natural growth over time (for example, through the addition of new applications), their complexity increases.
However, this also means that there are often several analogous functions for similar requirements - one could also say that certain requirements are covered several times. With SAP S/4HANA, however, the "Principle of One" now applies. There is now only one solution for each requirement in the entire S/4 system. And that also means less complexity.
SAP S/4HANA also eliminates the separation between OLTP functions (online transaction processing) and OLAP functions (online analytical processing).
The advantage for companies: Even complex analyses (e.g., for inventory monitoring in warehousing) are now possible in real time. In addition, certain applications (e.g. SAP Extended Warehouse Management) are now also directly integrated into SAP S/4HANA. Previously necessary interfaces are no longer required; redundant data can be avoided. As a result, the system landscape is significantly simpler than before.
Another significant difference is that the previous aggregation of data for postings no longer applies. Aggregation means that data is presented in summarized form, i.e. in the form of compact data packages. In this way, data could usually be processed more efficiently in the past. The problem: Each new query required a new aggregation, because each aggregated data package was specifically tailored to the one, specific query. With SAP S/4HANA, SAP is taking a new approach: instead of aggregating data in data packages, data is summed up in individual packages according to specific criteria. The advantages: more flexibility and speed in analyzing the data.