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Difference Between SAP Business One and S/4HANA

Author: Sangita Nath

SAP remains one of the world’s leaders in the automation of business processes, offering a variety of enterprise resource planning (ERP) platforms. Among its portfolio of products, some companies find themselves needing to understand the difference between SAP Business One and S/4HANA.

Both are powerful and useful tools that will definitely help your organization automate processes, cut down on costs, and accelerate growth. Also, both SAP Business One (SAP B1) and SAP S/4HANA use SAP HANA for their in-memory databases.

This article will walk you through two of the most widely used ERP solutions—representing a major segment of over 404,000 businesses worldwide using SAP products. By understanding the unique strengths of these SAP releases, you can make better decisions on which can help your organization the most.

What Is SAP Business One?

Often marketed as a single, affordable solution for small and mid-size businesses, SAP Business One, or SAP B1, is a full business management software that covers key business operations—from sales and marketing to finance and even customer relationship management.

Apart from its native support for SAP HANA databases, it can also be used together with Microsoft SQL, further adding to its versatility. Some of the SAP B1 modules available include:

  • Financials
  • Human Resources
  • Purchasing Management
  • Inventory Management
  • Manufacturing Management
  • Product Technology
  • And More

SAP Business One on Cloud can be deployed in its entirety, or you can choose to deploy specific modules that meet your needs. Of course, in terms of scalability, this is an advantage since organizations can add or remove modules. However, as an ERP solution, it can only support companies with up to 500 users.

There is no fixed price for Business One, with its monthly subscription model. Generally, the Business One SAP price depends on the modules included and the number of users.

What Is S/4HANA?

SAP S/4HANA is the cloud-based alternative aimed at streamlining processes for a large enterprise. As the successor to SAP R/3 and SAP ERP, it provides more functionalities than its predecessors, although it also comes with steeper prices.

In terms of capabilities, it has pretty much every module you can expect from existing SAP platforms, letting you optimize all aspects of the organization. Furthermore, it introduces a more powerful ERP suite of business intelligence solutions on top of business automation. It leverages artificial intelligence and machine learning to create an improved user experience for all levels of your enterprise.

Also, to avoid confusion, SAP S/4HANA Cloud is a larger consolidated solution first released in 2017. This contains a cloud-based version of the S/4HANA platform plus the SAP ERP Central Component (SAP ECC), with the latter being a core part of the SAP Business Suite. S/4HANA cloud is available in both public and private cloud versions. The public cloud is less expensive with limited flexibility to customize processes to match business requirements, while the private cloud version allows ultimate flexibility while coming at a higher price.

What Is SAP Business One

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Major Differences Between SAP Business One and S/4HANA

While both platforms help companies achieve increased visibility and productivity, it is important to go deeper into the difference that sets one product from another. Below are the factors that highlight the difference between SAP Business One and S/4HANA.

1. Scale

The main difference between the two ERP software is in their target customers. SAP Business One is the recommended SAP solution for smaller organizations. It is perfect for small but rapidly growing organizations with under 500 employees.

On the other hand, SAP S/4HANA was particularly developed to address the needs of larger and more stable organizations with at least 500 members on board. It has been deployed in companies with 1,500 employees or more.

2. Features

In terms of features, it’s already a given that S/4HANA has more modules intended to meet industry-specific needs or more technical applications. However, SAP Business One is enough to satisfy most general business needs, keeping it a competitive ERP business suite for smaller enterprises.

To give you an idea, SAP B1 is categorically divided into 15 functional modules, each of them designed to cover business needs such as the following:

  • Administration: contains management and user settings for the entire platform
  • Customer Relationship Management (CRM): connects sales tasks with other active modules
  • Financials: acts as the digital repository of Chart of Accounts and Journal Entries
  • Project Management: defining specific parameters for each client or business account
  • Material Requirements Planning (MRP): helps in the procurement and projection relating to the supply chain.
  • Human Resources: contains employee information such as records, benefits, and roles.

On the other hand, it’s safe to say that S/4HANA has the same features as SAP B1 and more. However, a key difference is that instead of presenting its capabilities in terms of modules, SAP S/4HANA identifies different business “Areas” such as Asset Management, Manufacturing, Advanced variant configuration and commercial project management.

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More importantly, SAP S/4HANA offers a host of Country or Region-Specific Functions. On the other hand, its massive library of supported business areas means that it requires additional time and manpower to deploy this solution, from consultation to the S/4HANA installation, whether on-premises or from the cloud.

3. Pricing

Pricing is also a key difference between SAP Business One and SAP S/4HANA. For SAP B1, it’s a lot simpler since services are billed monthly, with the costs proportionate to the number of registered users within an organization. This straightforward computation is simple and easy to track, adding to its appeal toward small and mid-sized businesses.

With SAP S/4HANA, however, the pricing computations can get a bit more technical. For starters, there are different service packages available. The Enterprise Edition also follows a monthly billing scheme based on the number of users registered.

On the other hand, other packages, such as the Service Edition and Professional Services Edition, are billed based on the set percentage of the project’s revenue and the organization’s expenses. Apart from the support and features offered by each of the packages, their varying pricing mechanics should also be taken into consideration.

Choosing Between SAP B1 or SAP S/4HANA

SAP implementation is crucial in empowering an organization to meet its changing needs as well as existing industry standards. Now that we’ve introduced both SAP Business One and SAP S/4HANA, plus their key differences, you can now start creating an informed decision for your company.

The main difference between SAP B1 and S/4HANA is in the target organizations they cater to. Business One is ideal for small and mid-sized businesses with up to 500 users. Beyond that organizational size, SAP S/4HANA is the better solution. This reflects in each product’s services and capabilities and, more importantly, their pricing.

By adopting the ERP software that’s right for your business, you keep your costs manageable while optimizing the SAP benefits you and your team members enjoy.

Here at Ameri100, our experience puts us in a unique position to help your company design and deploy SAP systems, regardless of which software you intend to adopt.

Contact Ameri100 today and find out in more detail which of the two best suits your needs.

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Featured Photo Credit: Mikael Blomkvist