Investigating SAP S/4HANA Finance: Benefits And Features For Businesses
Introduction to SAP S/4HANA Finance
Discuss about the On-Demand SAP Consulting and Help.
This research ensures to focus on SAP S/4HANA Finance and underlines a thorough investigation on related companies. Generally, the future of all the organization is, SAP S/4HANA Finance. It is an ERP software. It was earlier known as, SAP Simple Finance. What is so special about it and how it will help the organization, and effective is this new SAP S/4HANA solution will be discussed. Technology has always facilitated its users and also benefited them. Some of the aspects of SAP S/4HANA Finance includes that, it is a smart ERP suite. It is especially designed for, in-memory computing. The feature of SAP S/4HANA is that, it can be personalized and it can help any industry, irrespective of its business size. Then, it is believed to increase the business value. It lets the enterprise in creating consolidated view of all operational and financial data. This is done to provide flexible and simplify the reporting which comprises of automated process. Therefore, related details has to be investigated, determined and shared in the report. The general goals includes to become capable of identifying, analyzing and interpreting related information, to solve any specific problems in the organizations. However, it will further help in drawing conclusion and determining appropriate recommendations.
The objective of this report is to investigate and research from multiple sources about SAP S/4HANA Finance. A brief understanding about this topic will be studied. Next, the difference between SAP S/4HANA Finance and current SAP ERP FICO will be represented. Further, the benefits of SAP S/4HANA Finance for businesses will be listed. Finally, at least a couple of companies’ case studies will be presented in the report, along with the challenges or problems the companies faced while migrating to SAP S/4HANA Finance.
The SAP HANA platform is present from the year 2010. The SAP applications such as, SAP ERP and SAP Business Suite could be easily run on either the SAP HANA database or other database. S/4HANA was launched in 2015 and the location was New York Stock Exchange. This was an event where cloud was introduced for on premises editions. The highest update of the ERP strategy and platform is SAP S/4HANA. The customers were satisfied with the purchase of S/4HANA and saw positive growth got SAP was confirmed. During, October 2015 the confirmation from SAP was sent that, the S/4 HANA has crossed more than 1300 customers. This growth was constant till 2015’s third quarter. Then, at the end of the fourth quarter in 2016, it was announced that SAP has 5,400 customers, who have implemented the SAP S/4HANA. However, in market, there are several ERP systems which has similar intentions. Oracle, Microsoft and Workday and Inc are the competitors, in the Software as a Service space.
Differences between SAP S/4HANA Finance and SAP ERP FICO
Before knowing about S/4 HANA Finance, let’s check what SAP ERP 6.0 suite is. SAP ERP 6.0 suite has the capacity to run on an SAP HANA database, whereas the SAP S4/HANA Finance is one step ahead. Certain key components of the former FI/CO suite have been recoded so that they can take full advantage of SAP HANA’s potential. SAP Simple Finance (version 1.0) that was released in 2014 was the add-on SAP HANA-optimized version for the Financial Accounting module in SAP Business Suite. In comparison, SAP Simple Finance 2.0 is part of the SAP S/4HANA product that was released in 2015. SAP Simple Finance 2.0 is the redesigned and recoded successor of SAP Simple Finance 1.0.
Earlier, SAP S/4 HANA Finance it was known as, SAP Simple Finance. It comprises of plenty of new features like, streamlined designs, universal journals along with real-time analytics. The new SAP Asset Accounting (FI-AA) module is an example for the financial module which is redesigned in the suite of S/4HANA. This helps to improve the efficiency of the process throughout the asset’s life cycle (Salmon and Wild, n.d.).
S/4HANA represents what can be called the power of one. To me, the introduction of the universal journal (table ACDOCA) moves SAP closer to a single accounting transaction repository. It means that the posting to various individual ledgers, such as the material ledger, Asset Accounting (FI-AA), and CO, has been replaced by posting to one unified journal. In operational terms, every business transaction in the SAP General Ledger or classic General Ledger, CO (except costing-based profitability analysis), FI-AA, and the price determination component of the material ledger generates a journal entry in table ACDOCA. Why is this big deal? With one fell swoop, SAP has reduced the numerous instances of data redundancy and duplication across all FI modules. For those of you who are thinking what this does to the coding block, do not despair. ACDOCA can be extended to include the coding block. One of the most painful aspects of implementing FI/CO in any organization has been the (delayed and manual) reconciliation of CO postings to FI. This is now instantaneous and automatic (Kumar, 2017).
It is observed that, S/4HANA is the next-generation of SAP Enterprise Resource Planning (ERP) Suite. It helps in organization planning for implementing real-time digital core for the needs of the business, so as to select among either to migrate (brownfield) or to start a new one (greenfield) (Delvat, 2017).
Benefits of SAP S/4HANA Finance for businesses
The SAP S/4HANA is an add-on for SAP ERP. It is a standard product that is designed for working on SAP ERP. For ERP, SAP is a significant module, where both the FI and CO modules store the data of financial transactions. Simple Finance is the initial part in the Business Suite which is rewritten for running on SAP’s new superfast in-memory HANA database. S/4HANA came to existence, by following Simple Logistics and linking the new product, with the New GL and New Asset Accounting, as its preconditions. The primary benefit of SAP S/4HANA Finance is that, its speed of processing is connected with the integrated features, which helps several financial functions like, the financial accounting and the management accounting. Due to which, the SAP S/4HANA Finance permits an extremely faster reunion with financial processes like, quarterly close. Thus, it allows to have a single source related to the organization’s financial truth (Flanagan, 2017).
The short form, SAP S/4HANA denotes to SAP Business Suite 4 SAP HANA. It indicates that it’s the version number 4, of SAP Business Suite. It can only run on SAP HANA. There is no difference in transition of the SAP users to the SAP S/4HANA, like from ERP versions, SAP R/2 to SAP R/3. It is especially designed to exchange the SAP ECC/ERP.
SAP S/4HANA was designed to ease the usage and administration with the help of resolving maximum complicated issues. Additionally, it could manage wide range of data when compared to the early versions. It doesn’t need batch processing. SAP Simple Finance targets to streamline the financial processes and allow financial data’s real-time analysis (Zarantech.com, 2017).
The SAP ERP FICO is famous, where SAP FI denotes the Financial Accounting, which is the significant modules of SAP ERP. Its function is to store organization’s financial data. Moreover, it supports in analyzing the organization’s financial conditions, in the marketplace. It has the capacity to be integrated with the other SAP modules such as, SAP SD, SAP PP, SAP MM, SAP SCM, and so on. Moving further, SAP Controlling (CO) refers to the other significant module of SAP, for the organization. SAP CO helps in monitoring, coordination and optimizing each process of the organization. It also comprises the features to manage and configure the master data which covers the cost and profit centers, internal orders, and other cost elements and functional areas (tutorialspoint.com, 2018).
SAP deals with the process that releases the components of S/4HANA, for the customers. The Simple Finance is one of the very first functional component besides the Simple Logistics which is anticipated in the coming days. This new tool has re-designed the business application suite, for taking all the advantages of performance benefits of the database HANA. Such tool becomes capable to work in “real time” and it integrates all the operational reporting with the business processes. The major differences in the architecture refers to data base structures’ radical simplification, to discard the aggregates. Thus, it decreases the database footprint. However, it significantly lets “HANA Live” reports to actually work in real-time. Therefore, in the core finance applications, allowing the real-time reporting could allow produce extraordinary benefits while making decisions. Moreover, the processes which run long, it decreases the time. For instance: month end closing. SAP S/4HANA as well wishes to be on customer’s radar, because it is one of the strategic replacement for both SAP R/3 and ECC. In future there will be a point, where it will no more be able to support the older products. Hence, a new plan is required in the medium term (Edyvane, 2015).
Case studies of companies migrating to SAP S/4HANA Finance
SAP HANA has the benefits of GUI (graphical user interface) which is flexible and could be customized. The benefits it provides to the business includes, the suite allows to immediately increase the value of the business in all its divisions, irrespective of size and industry. Moreover, SAP S/4HANA has been designed uniquely, where it could be operated either on, a company’s on-premise basis or using the Cloud. The apps of SAP Fiori product line when used could let the users to personalize their user interface and allow to access the applications flexibly using various devices like, tablets and smart phones (White paper SAP HANA and SAP S/4HANA – The right steps towards a digital advantage, 2016). The new design compels to discard all the traditional barriers with respect to transactional, analytics, and system planning for generating quick insights and on-the-fly analysis, by utilizing each levels of financial data.
Therefore, the decision makers of the businesses could utilize the SAP S/4HANA Finance for modelling the data and creating the potential decisions’ forecast, by utilizing the real-time financial data present in different systems.
Wipro is the first case study considered in this report, to analyze the issues it faced while migrating to SAP S/4HANA Finance. Wipro with SAP consulting implemented S/4HANA, where the areas were S/4HANA Finance, SAP Fraud management, SAP Financial cockpit, SAP Cash Management, SAP Treasury and the risk management. This implementation took place during 15th Janauary, 2015 (*Brightwork, 2018).
SAP HANA is a more mature product with a clearer value proposition than S/4HANA. Currently, the majority of existing large enterprise SAP business suite clients are migrating to HANA rather than directly to S/4HANA. With significant cost sunk in customizing objects within legacy ERP systems (including processes, interfaces, reports, and forms), clients are looking to IT service vendors to undertake shorter consulting projects to define the value to be realized by migrating to HANA or S/4HANA, and the level of effort required. The majority of S/4HANA adopters engaging IT services vendors to date have been electing to implement a greenfield S/4HANA environment. As the end of support deadline looms for ECC clients, the market for S/4HANA services will evolve toward more migrations. Many HANA and S/4HANA initiatives are still in progress, in the early days of production, or represent a single phase on a multi-phase journey. Realizing the full benefits of these initiatives will generally require a longer-term perspective, as multiple phases are completed and softer changes such as business process changes mature. In addition to HANA being introduced earlier than S/4HANA, the biggest driver of the difference in adoption is the less clear business case for migrating to S/4HANA. HANA’s business case relies on direct cost reductions (infrastructure footprint) and clear improvements in data and analytic capabilities. The S/4HANA business case focuses on softer benefits such as user experience, shorter business process cycle time, and providing a foundation for further investment in digital transformation.
The challenges are listed below:
- Small proportion of workforce with HANA and S/4HANA certifications
- Limited adoption among large clients
- Limited North American HANA and S/4HANA client presence
- Limited HANA cloud hosting footprint.
For consistent growth of SAP HANA and S/4HANA services practice, Wipro concentrates on the below mentioned growth strategies:
- Expand the industry focused offerings.
- Expand the presence in Latin America and Africa.
- Invest both in platform and cloud migration.
- Expand the skilled resource pool.
Wipro’s longstanding relationship with SAP and experience acting as co-development partner for HANA and S/4HANA capabilities has provided it with early insight into the capabilities being offered. This has not only enabled Wipro to develop insight into the capabilities of HANA and S/4HANA, but also to understand the capabilities not included in the core offering, which gave it a head start in building its complementary offerings. These tailored solutions (specifically targeting industry needs), complementing HANA and S/4HANA, represent Wipro’s greatest strength in its HANA and S/4HANA practice. Wipro has been able to leverage these solutions in targeting SMB clients and emerging markets within its target verticals. These have formed the core of its experiences in this still immature market. The next key step will be expanding its client base and utilizing its proprietary solutions to target both larger clients and a broader set of industries and geographies. Another evolution of the market as it continues to grow and mature will be the expanded use of cloud over on-premise solutions. With multiple SAP-certified cloud data centers, Wipro is positioned well to take advantage of this evolution (NEAT EVALUATION FOR WIPRO: SAP HANA & S/4HANA Services, 2017).
Conclusion
The investigation is completed successfully. The topic considered in this report was SAP S/4HANA Finance, whose related details are determined and shared in this report. The difference between SAP S/4HANA Finance and current SAP ERP FICO are identified and represented. Where it is determined that, SAP S/4HANA Finance supports the organization planning to implement the real-time digital core for the business needs, so as to select among either to migrate (brownfield) or to start a new one (greenfield).
Further, the benefits of SAP S/4HANA Finance for businesses are also listed. One of the benefit is, the decision makers of the businesses could easily utilize it for modelling the data and for creating the potential decisions’ forecast, with the help of the real-time financial data present in different systems. The other benefits includes, SAP HANA benefits with a graphical user interface, which is flexible and could be customized. Then, it benefits the business to immediately increase the business value, in all the divisions of the business, irrespective of size and industry.
Finally, the companies namely, Wipro is considered and their case studies are studied in this report. It doesn’t end here, moving further all the challenges and problems these companies have faced while migrating to SAP S/4HANA Finance are represented.
As a final view point, the aim of this report is to become capable of identifying, analyzing and interpreting related information for resolving the problems in the organizations. Additionally, it is required to draw conclusion from the gathered information and provide suitable recommendations.
References
*Brightwork. (2018). The WiPro S/4HANA Case Study. [online] Available at: https://www.scmfocus.com/saphana/2017/08/17/wipro-s4hana-case-study/ [Accessed 12 Jun. 2018].
Delvat, J. (2017). SAP S/4HANA migration: greenfield, brownfield, or phased?. bluefin. [online] Available at: https://www.bluefinsolutions.com/Bluefin/media/Bluefin/PDFS/SAP-S4HANA-Migration-Greenfield-Brownfield-or-Phased-Whitepaper-Bluefin-Solutions-2017.pdf [Accessed 12 Jun. 2018].
Edyvane, R. (2015). SAP S/4HANA – the benefits and challenges of a Central Finance adoption approach. [online] Bluefin Solutions. Available at: https://www.bluefinsolutions.com/insights/robert-edyvane/october-2015/sap-s-4hana-the-benefits-and-challenges-of-a-cen [Accessed 12 Jun. 2018].
Flanagan, O. (2017). Finance Differences in SAP S/4HANA. [online] SAP Consultants | SAP Experts | On-Demand SAP Consulting & Help. Available at: https://www.erpfixers.com/blog/finance-differences-in-s4hana [Accessed 12 Jun. 2018].
Kumar, D. (2017). S/4 HANA Finance – An overview. [online] Michaelmanagement.com. Available at: https://www.michaelmanagement.com/blog/an-overview-of-s4-hana-finance [Accessed 12 Jun. 2018].
NEAT EVALUATION FOR WIPRO: SAP HANA & S/4HANA Services. (2017). NelsonHall. [online] Available at: https://www.wipro.com/content/dam/nexus/en/analyst-speak/pdfs/wipro-saps4-hana-neat-report-081217.pdf [Accessed 12 Jun. 2018].
Salmon, J. and Wild, C. (n.d.). First Steps in SAP S/4HANA Finance.
tutorialspoint.com. (2018). SAP FICO Tutorial. [online] Available at: https://www.tutorialspoint.com/sap_fico/index.htm [Accessed 12 Jun. 2018].
White paper SAP HANA and SAP S/4HANA – The right steps towards a digital advantage. (2016). Fujitsu. [online] Available at: https://www.fujitsu.com/dk/Images/Fujitsu_Whitepaper_SAPHANA_FINAL_English.pdf [Accessed 12 Jun. 2018].
Zarantech.com. (2017). Differences between SAP HANA & SAP S/4HANA. [online] Available at: https://www.zarantech.com/blog/differences-sap-hana-sap-s4hana/ [Accessed 12 Jun. 2018].