Historical Overview of SAP S/4HANA Finance
Organizations are usually faced with immediate need in embracing digital ages in order to match the evolving and new business models and provide decision markers with some instant insights. Some are even pushing for idea of modernization without a clear understanding of what this concept is all about (Salmon & Wild 2016). In this case, one has to be clear on what the fact is all about and may even be compelled to upgrade the systems with the aim of enhancing prospective value of the large-scale variations. As such, the paper aims to evaluate some of the issues related with SAP S/4HANA Finance as well as the chief benefits that it would give to businesses.
It is the solicitation in the S/4HANA ERP stand. Basically, S/4HANA Finance is a SAP ERP Suite that is usually fully able to ride on the SAP HANA catalogue. It is developed on the basis of SAP NetWeaver. Further, S/4HANA comprises of different set of the intersected fiscal management tasks which offers actual information (Kollár & Martiško 2015). It is considered as portion of the S/4HANA and is mostly founded on HANA in-memory catalogue stand. It assimilates the cross-structural roles into a single scheme which syndicates the transactional procedures as well as the analytics for actual applications. Basically, S/4HANA makes use of the SAP Fiori as well as modified UX for the user friendly experience. In other words, S/4HANA previously identified as the SAP Simple Finance was the chief corporate solicitation which was established for S/4HANA stand (Salmon & Wild 2016). This is usually designed in removing the traditional obstacles in between analytics, planning and transactional systems in providing instant insights as well as on-the-fly scrutiny through the utilization of various stages of the fiscal statistics. For instance, S/4HANA could be utilized by business decision makers in modelling data and creating the forecasts of the probable decisions through real-time financial information from numerous systems. The system is mainly aimed at helping the financial specialists and professionals in all sectors including the CFOS as well as others who are involved in tax and accounting, financial operations, treasury, compliance and risk evaluations. According to Plattner and Leukert (2015), SAP S/4HANA Finance is usually a holistic set of the financial accounting as well as management solutions, spanning financial planning and analysis, as well as compliance and enterprise risk management. Additionally, SAP S/4HANA Finance stands for the collaborative financial operations, financial and treasury risk management, as well as financial and accounting close.
S/4HANA Finance versus the SAP FICO
SAP S/4 HANA Finance developed by the mid-2011 and numerous Fortune 500 firms began considering this system as the only option in maintaining their corporate wants. By 2012, SAP Business Warehouse came in with the aim of supporting the real-time business, transaction and OLAP on similar system. By 2014, the SAP Simple Finance which was driven by the SAP HANA came in for the prompt monetary vision, single source and no combinations of the information for recording. Finally, by 2015, the SAP S/4HANA Finance was announced which gave totally new user experience, multi-tenancy, simplified data model as well as advanced processing (Missbach et al 2016).
The SAP S/4HANA Finance is usually based on native HANA platform in supporting simplified information or data models, no indices, no aggregates among others. The system has a very integrated role-based access and Fiori-based user interface for diverse purposes. Furthermore, SAP S/4HANA Finance is usually founded on a progressive in-memory stand and provides modified Fiori-based user friendly experience in accessing the role-based solutions. The system is deployable over the cloud setting or on-premise solutions. With these considerations, a good number of clients are currently moving from the SAP Business Suite into S/4HANA Finance. Furthermore, S/4HANA Finance provides SAP rapid deployment solution in performing fast relocation to HANA policy as well as to the SAP Simple finance (Kollár & Martiško 2015). With S/4HANA, the SAP is currently offering new products as well as next-generation businesses with simple enterprise software to be used for big data and in helping businesses run simple in this digital economy.
S/4HANA Finance |
SAP FICO |
S/4HANA Finance provides very similar ECC functionalities to individuals in a manner that would benefit from the data accessibility, speed and context (Rouda 2016). |
SAP FICO does not offer any ECC functionalities (Kaar Technologies 2018). |
S/4HANA utilizes new general ledgers accounting approach which is executed automatically. |
SAP FICO has two different general ledgers architectures (Kaar Technologies 2018). |
S/4HANA has a stretched warehouse management functionality which is embedded in its core-system (Kaar Technologies 2018). |
SAP FICO on the contrary has separate SAP SCM systems. |
The SAP S/4HANA Finance utilizes in-memory calculating powers of the HANA. This database reads the data much faster since it read the data directly from the memory. |
SAP FICO only runs on the Oracle (Kaar Technologies 2018). The data in this database is mostly retained in the hard disk; hence, take time for the user to read the data. |
S/4HANA Finance is mostly developed in a manner that makes it easy to use |
SAP ERP FICO which is very complicated making it hectic for an ordinary person to use the module (Salmon & Wild 2016). |
SAP S/4HANA Finance offers simplified data model, advance processing, new user experience as well as multi-tenancy. For instance, in the case of petroleum services industry where the sector used to experience complicated data processing and relatively low ROI, Kaar suggest use of the S/4 HANA where the sector ended up with simplified data model and relatively high ROI (Kaar Technologies 2018). |
SAP ERP FICO is very complicated and therefore offer complicated data model. |
SAP S/4HANA Finance is usually a comprehensive solution to financing based on the SAP HANA that has been relatively deployed on premise or in cloud (Kollár & Martiško 2015). This means that SAP S/4HANA Finance would offer capacity for the business to transition from On-Premise version to cloud |
SAP ERP FICO as the module are used in reporting both internally and externally with main idea being to record all the financial transactions posted by a company and producing the financial statements that are precise and accurate. |
S/4HANA utilizes revenue accounting and the reporting which is said to replace the SAP FICO revenue recognition |
SAP FICO revenue recognition technique is mostly based on the GAAP, FRS and IAS which offers option of recognizing the revenue on the basis of events like proof of delivery or over the period of time (Kaar Technologies 2018). |
Finance initiatives are usually in dire requisite of embracing digital era in order to tie with the evolving and new corporate simulations and give policy-makers with some instant insights. As such, S/4HANA offers numerous benefits to businesses. One, SAP S/4HANA Finance permits an individual business to create consolidated view of its financial and operational data in order to give some easy and flexible consumable reporting alongside with some automation to its processes (Ghattamneni 2016). Besides, SAP S/4HANA Finance enables evaluation of the financial applications of the business options alongside with the real-time analytics, forecasting and simulation.
Another benefits that SAP S/4HANA Finance might offer to the business is processing spend which is combined with its integrated features. Basically, S/4HANA Finance permits for much quicker resolution of the monetary procedures and offers single source of the financial truth for organization (Kollár & Martiško 2015). The system helps a business to keep its managerial and financial accounting automatically in the sync without any need for the time-consuming reconciliations and also enables seamless drill-through and drill-down in between both worlds.
Pros of S/4HANA in Businesses
Using SAP S/4HANA Finance is also beneficial to a business since it can speed up its planning cycles, boost its profitability as well as up its efficiency of the financial functions. This is based on the fact that the SAP S/4HANA Finance enables planners to get access to the real-time master information alongside with the accruals in the SAP ERP without any data replication issues (Salmon & Wild 2016). Such is made possible through optimization of the SAP BusinessObjects Planning as well as Consolidation which is a sort of the SAP NetWeaver for the S/4HANA. It also enables business to run the end-to-end simulations with accelerated planning cycles. Through SAP S/4HANA Finance business would be in a position to enhance compliance and control, minimize costs, closing workloads and close book faster for financial and accounting close (Ghattamneni 2016). Further, SAP S/4HANA Finance would make it possible for the business to accurately predict their cash flow, manage liquidity and mitigate probable risks. In essence, SAP S/4HANA Finance makes integration of the cash flows, market transaction and data possible along with optimization of the straight-through processing (Missbach et al 2016).
Another benefit of SAP S/4HANA Finance to business is its simplicity. Modification made in SAP S/4HANA Finance has simplicity at core. By eliminating the aggregate tables implied that ease and processing time within which systems used by businesses could respond to their transaction queries (Kollár & Martiško 2015). Time saved could mean greater organizational or strategic efforts and much lesser time is required to be increased on the application.
SAP S/4HANA Finance would also users or businesses with very similar ECC functionalities in a manner that would benefit from the data accessibility, speed and context which were not accessible previously. Further, SAP S/4HANA Finance would offer capacity for the business to transition from On-Premise version to cloud. Businesses can also benefit from SAP S/4HANA best combining tool. S/4HANA has the tool which is said to combines features as well as data from managerial accounting and financial accounting (Ghattamneni 2016). This speeds up end reconciliation and the closing using the real-time data.
SAP S/4HANA Finance also benefits the business with real-time reports. It has significant financial information as it utilizes power of the in-memory computing in generating detailed as well as real-time reports (Missbach et al 2016). Such feature helps in eliminating need for the batch jobs as well as data replication in the other systems such as Business Intelligence.
SAP S/4HANA Finance is also beneficial to business through its financial close. The SAP S/4HANA Finance prepares financial closes quarterly, monthly, semi-yearly and annually. This provides instant visibility on the profit and loss within the business which is crucial in decision-making on the analytics easy with numbers and trends (Missbach et al 2016).
SAP S/4HANA Finance would also beneficial to business through it new asset functionality. This functionality would help businesses in managing parallel assessment of numerous assets with accounts and ledgers using the real-time data or values (Missbach et al 2016). Furthermore, SAP S/4HANA Finance is beneficial since through this system, financial analysis could be operated on-the-fly at the desired levels of the granularity using individuals’ tables in the memory. Further, through SAP S/4HANA Finance businesses could easily create the simulations of ad hoc nature linking to the organizational variations or on the new business models in ERP systems straight (Rouda 2016). Additionally, the SAP S/4HANA Finance would enable business to fulfil closing functions and periodical procedures within the present data. In fact, through SAP S/4HANA Finance, a business would be in a position to operate actual recording with the full drill-down in accordance to any given measurement (Salmon & Wild 2016). SAP S/4HANA Finance also enables business to use unified and single data mode for the simplification of the processes with minimization of the risks and enhanced productivity. By using SAP S/4HANA Finance, business would be able to manage treasury and financial risks. In essence, by using the SAP S/4HANA Finance, a business could accurately and precisely predict the cash flow, manage liquidity and mitigate probable risks. This provides highly detailed analysis of the projected cash flows, which could bring about high levels of the consistency to the cash needs, liquidity strategies and cash balances (Vanstechelman 2016). Basically, through SAP S/4HANA Finance, enhanced executive engagement within a business is enabled with the modern user and intuitive interface.
Additionally, the SAP S/4HANA Finance enables the business to gain from the holistic central bank accounting management. Besides, SAP S/4HANA Finance enable business to respond to the fluctuating market environment at relatively higher speed compared to the previously thought possible. In addition, the SAP S/4HANA Finance makes automation of the payables and receivables processing, streamlining travel management and revolutionising the share service delivery possible while minimizing the costs (Kollár & Martiško 2015). In fact, the SAP S/4HANA Finance enhances financial health and working capital by using the real-time receivable information in evaluating client credit risk, settling disputes, prioritizing customer collections and streamlining billing in order to minimize the day sales outstanding. Basically, SAP S/4HANA Finance is beneficial to businesses in that it enable the business to handle monitoring of the client payment behaviours more easily in real-time (Vanstechelman 2016). It also enables businesses in making proactive decisions with the exception-based receivables management.
With SAP S/4HANA Finance, businesses are able to process high-volume of the information, which in turn enhance real-time error detection at transaction levels. In fact, SAP S/4HANA Finance enables business to centralize fraud management with the aim of optimizing assessment and monitoring (Ghattamneni 2016). In addition, SAP S/4HANA Finance makes it possible for the business to harmonize data in order to exposes the possible duplications or fraudulent entries. Furthermore, through the use of SAP S/4HANA Finance, businesses are able to reduce false alarms by calibrating detection strategies as well as executing the real-time simulations (Missbach et al 2016). Moreover, the SAP S/4HANA Finance is beneficial to business since it could help them in forecasting, budgeting and planning for ongoing processes. In essence, with its predictive analysis feature, it would be easier for businesses to forecast effect of the business decision on their financial reports (Missbach et al 2016).
SAP S/4HANA Finance would also benefit businesses in that it helps them in detecting financial risks. Through the use of the SAP S/4HANA Finance, businesses could establish risks in the financial processes at early period and come up with means to mitigate such risks (Plattner & Leukert 2015). Further, SAP S/4HANA Finance would help businesses in preventing any unauthorized access to the sensitive information. Basically, through SAP S/4HANA Finance, it is easy for businesses to detect any abuse or fraud within their operation and also helps them to proactively balance any risk for its financial processes (Ghattamneni 2016). Basically, SAP S/4HANA Finance is beneficial to businesses since it offer collaborative platform which enables the business in utilizing their core ERP together with the cloud-based applications in integrating and interacting with the external parties like suppliers and customers.
A number of companies have migrated to the SAP S/4 HANA Finance; nonetheless, their movement was really challenging. This is based on the fact that companies are expected to face different challenges whenever they wish to go with S/4HANA. Thus, S/4HANA Finance is heading on the right track, though it would be really challenging in adopting this innovation in a number of companies.
A case study about Deloitte while implementing SAP S/4 HANA shows that the company experienced some challenges on the way. Previously, Deloitte used the SAP ERP system. This systems was found to offer significantly high data footprint and slow data processing. This forced the company to look for alternative systems that would enhance greater transparency, increased ease of the employees’ self-service and optimal support for the personnel. To accomplish this, Deloitte transformed its finance system to S/4 HANA. During the transformation, several challenges were encountered.
One, it was challenging for the FP&A in Deloitte to understand the concept of the in-memory planning, management of the interdependencies with the other shareholders, need to agree on level of organizational readiness and planning as well as the new reporting tool which might lack the perceived functionality and flexibility. To curb the issue, Deloitte management enhanced technical enablement including replacement of the SAP by compatibility views implying that the data were not preserved at all the enabling seamless bottom-up and top-down planning scenarios. Deloitte also experienced the possibility of different report version in the transition period.
In a second scenario, Under Armour is said to have been experiencing bevy challenges while it was using the older accounting systems. This required the firm to become more digital, leverage-time analytics as well as keeping up with the quicker rivals which had already embraced the new techniques. To navigate such issues, the company invested heavily on the SAP S/4 HANA. Nonetheless, Under Armour is said to have encountered significantly huge challenges while transforming to SAP S/4 HANA. In the third-quarter earnings of the company, the firm’s COO and president stated that the struggles with 1st July launch of the integrated ERP or S/4 HANA negatively affected its third-quarter outcomes by causing some disruptions in the company’s supply chain. Besides, during the system migrations, the company encountered several changes in management issues affecting its manufacturing partners and workforces. This is said to have impacted on their manufacturing partners and their workforce, which is also said to have caused some delayed shipments as well as loss of the productivity. The transition was tough that it was expected, including its working with the vendors and inventory partners, trying to enhancement and training them on the new systems and getting all things in place. Despite these issues, after implementation, Armour’s inventory increased with 22% to $1.2 billion.
In spite of the above challenges, Under Armour has successfully adopted the S/4 HANA and is now stable. With these having been said, it is crucial for any firm to assess their HANA readiness and to engage with the HANA providers in describing the unique HANA roadmap which would best suite the business processes providing some clarity on the system preparedness, cost and time involved.
Conclusion
To sum up, S/4HANA is a SAP 6.0 suite fully able to ride in the SAP HANA catalogue. Besides, it can be stated that SAP S/4HANA Finance entails different set of the unified financial administration tasks offering actual information from enterprise resource planning or ERP solicitations. Through the research, the S/4HANA is interconnected to S/4HANA and has been mostly founded on the HANA in-memory catalogue stand. It is also evident that SAP S/4HANA Finance integrates the cross-organizational roles into a single system which combines the transactional processes as well as the analytical procedures for actual presentations. Besides, S/4HANA is said to differ from SAP ERP FICO in that SAP ERP FICO is used in storing financial transaction information while SAP S/4HANA Finance is a comprehensive finance solution deployed on the premise or in cloud. Furthermore, it was found out that SAP ERP FICO differs from SAP S/4HANA Finance in that SAP FICO is deployed in reporting both internally and externally to record all the financial transactions posted by a company and producing the financial statements that are precise and accurate while SAP S/4HANA Finance is usually a comprehensive solution to financing based on the SAP HANA that has been relatively deployed on premise or in cloud. SAP S/4HANA Finance is found to be highly beneficial to businesses in one, they are usually designed in a manner that embrace digital age and that match the evolving business environment; hence, provides some instant insights to businesses. Besides, it can be stated that S/4HANA offers permits businesses to generate consolidated sight of their financial as well as operative statistics which in turn offer some easy and flexible consumable reporting alongside with some automation to its processes. Further, it can be concluded that SAP S/4HANA Finance permits business to make much faster reconciliation of their financial processes and offers them single source of the financial truth. This is said to assists them in keeping their managerial and financial accounting automatically in the sync without any need for the time-consuming reconciliations and also enabling them to have seamless drill-through and drill-down in between both worlds. Additionally, it can be concluded that SAP S/4HANA Finance enable business enhance compliance and control, minimize costs, closing workloads and close book faster for financial and accounting close. This is said to help them accurately predict their cash flow, manage liquidity and mitigate probable risks. Basically, it can be stated that SAP S/4HANA Finance enables businesses to execute closing functions as well as inter-period processes within the real-time. Finally, it can be indicated that movement to SAP S/4 HANA is beneficial to both individuals businesses and their customers since it provides highly detailed analysis of the projected cash flows, which could bring about high levels of the consistency to the cash needs, liquidity strategies and cash balances.
Reference
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