SAP S/4HANA Finance: Explore Deployment Scenarios, Architecture Considerations, and Impacts to Your System Landscape

Transcription

1 SAP S/4HANA Finance: Explore Deployment Scenarios, Architecture Considerations, and Impacts to Your System Landscape David Dixon TruQua Enterprises Produced by Wellesley Information Services, LLC, publisher of SAPinsider Wellesley Information Services. All rights reserved.

2 In This Session Attend this 3-hour comprehensive session to get a solid understanding of SAP S/4HANA Finance from deployment scenarios to system landscape and architecture. This session will take you under the hood of SAP S/4HANA Finance and will explore the available adoption and migration scenarios and their implications for your system landscape, including the migration paths for moving to the latest version of SAP General Ledger and Asset Accounting. Attend this session to: Learn how to move your data from SAP ERP 6.0 to SAP S/4HANA Finance as well as review what is required to move your SAP BW data into an SAP S/4HANA Finance system Compare and contrast the different deployment options for cloud, on-premise, and hybrid scenarios, including the pros and cons of each Examine the most common migration challenges that companies moving to SAP S/4HANA Finance have experienced and the steps you can take to avoid them Receive a high-level introduction to the Central Finance deployment option and SAP HANA Enterprise Cloud for SAP S/4HANA Finance Review the new master data governance considerations for integrated transactions and analytics, such as cross-system document flows and drill-back into SAP ERP source systems 1

3 What We ll Cover Understanding What SAP S/4HANA Finance Is Strategizing on the Landscape and Deployment Options Assessing the SAP S/4HANA Functional Impacts Understanding the Key Considerations for System Conversion Wrap-up 2

4 What Is SAP S/4HANA Finance? Well, what is SAP S/4HANA Finance really? Short answer: It s FI/CO redesigned for HANA and Fiori (while SAP S/4HANA is SAP ERP redesigned for HANA and Fiori) Many past SAP design challenges now addressed like CO-PA reconciliation with FI-GL Simplifications include: Real-time reporting access to transactional tables eliminates batch scheduling and design complexities Data convergence into singular and integrated tables enabling simplified information delivery options and reduction in reconciliation efforts New user experience with SAP Fiori UX modernizes and simplifies tasks 3

5 Following the Journey to SAP S/4HANA Finance First innovation was CO-PA accelerator that expanded into FI and CO accelerators Used HANA as a secondary connection which became primary with Suite on HANA Simple Finance 1.0 was an add-on with new Assets, Cash, and BPC for planning SAP Simple Finance 2.0 became SAP S/4HANA Finance 1503 Version 1503 introduced the Universal Journal 2012 HANA Accelerators for FI and CO ( Sidecar HANA ) 2013 Suite on HANA (no sidecar needed) 2014 Simple Finance (financial add-on to Suite on HANA) 2015 S/4HANA Finance (first major S/4HANA application) 4

6 Moving from SAP S/4HANA Finance to SAP S/4HANA SAP S/4HANA Finance 1605 is the latest release All new finance functionality is in SAP S/4HANA 1610 and future releases of the broader code line SAP Simple Finance to SAP S/4HANA Finance SAP S/4HANA Finance to SAP S/4HANA Source: SAP Product Availability Matrix at 5

7 Differentiating SAP S/4HANA Finance and SAP S/4HANA SAP S/4HANA Finance has evolved into SAP S/4HANA SAP S/4HANA Finance 1605 is the last release of finance-only SAP S/4HANA SAP S/4HANA Finance migration path must eventually be to SAP S/4HANA SAP S/4HANA has annual releases (SPS every 3 months with FPS versions) Source: SAP Product Availability Matrix at S/4HANA Core SFIN SAP S/4HANA Finance 6

8 Improving SAP S/4HANA Finance Processes New opportunities for technology enablement exist across different process areas: Continuous control monitoring Fraud detection Continuous monitoring of Key Risk Indicators Accelerated audit search and management Universal Journal and Extension Ledgers SAP BPC optimized for S/4HANA Analytical Fiori applications (e.g., margin analysis) SAP S/4HANA Operational Analytics Risk and Compliance Planning and Analysis Fiori applications for A/R and A/P Accelerated financial transactions Central Finance Operations Treasury Accounting Universal Journal and Extension Ledgers New Asset Accounting Merge of CO and FI master data and processes Account-based CO-PA with COGS and variance splits Acceleration in transactions such as settlements Transactional Fiori applications (e.g., payments) Central Finance Upcoming Real-Time Consolidation in version 1610 New Cash Management with Bank Account Management, Cash Management, and Liquidity Planning Treasury and risk management (IFRS 9 and trade finance) Fiori applications for Cash Management One Exposure: Universal Journal for financial risks 7

9 Taking a Look at How SAP Finance Is Being Transformed Simplifications require changes to the SAP ERP code line and fundamental design Financial Planning and Analysis Accounting and Financial Close Treasury and Financial Risk Management Finance Operations Enterprise Risk and Compliance Management Develop and Translate Strategy Accounting Payments and Bank Communications Receivables Management Enterprise, Risk Management Planning, Budgeting and Forecasting Entity Close Cash and Liquidity Management Collaborative Invoice to Pay Controls and Compliance Management Profitability and Cost Management Corporate Close Debt and Investment Management Travel Management International Trade Management Monitoring and Reporting Reporting and Disclosure Financial Risk Management Real Estate Management Fraud Management Financial Close Governance Commodity Risk Management Financial Shared Services Audit Management SAP S/4HANA Finance New or significantly renewed solutions Solutions that are planned for renovation with SAP HANA SAP S/4HANA Finance solutions that have not been re-architected for SAP HANA Source: SAP Value Map,

10 Leveraging SAP S/4HANA Industry Support Select industries are available as part of the core SAP S/4HANA solution Source: SAP Road Maps ( under Industry SAP S/4HANA Industry 9

11 Depth Leveraging the Universal Journal Redesigning FI and CO for SAP S/4HANA Finance resulted in the Universal Journal Not only a wider coding block but also a deeper database table without financial document summarization (i.e., no 999 line item limit except for prima nota postings for now) Primary key is the same (except ledger) but now can contain sales and logistical depth of detail May vary with CO-PA but here, in an 1610 SP01 system, it is 383 fields wide 6 characters instead of 3 for line items Width 10

12 Other Single Source of Truth Tables in SAP S/4HANA For merging Cash and Liquidity Management, One Exposure (FQM_FLOW) exists One bank GL posting used to update totals and line items tables for cash and liquidity separately (i.e., FDSB, FDFIEP, FLQSUM, and FLQITEMFI instead of one FQM_FLOW) For integration of SAP BPC planning cube structures with fixed CO planning tables, an integrated plan line item table (ACDOCP) was introduced For financial consolidation, a Consolidation Journal (ACDOCC) was introduced For materials management, the data model and tables were simplified into their own singular table named MATDOC and inventory valuation tables (xbew[h]) redirected to Material Ledger and Universal Journal Material Ledger Actual Costing data model was simplified with a Material Ledger document (MLDOC) and Cost Component Split detail (MLDOCCCS) 11

13 Applying Fiori User Experience (UX) Design Principles Portal concepts redefined where the user interface design shifts from the function to the individual user SAP Fiori are role-based with the tiling within its launchpad being the new point of entry Source: SAP 12

14 Making Users More Productive Simplification of SAP transactions by eliminating the need for so many fields and screens in order to accelerate tasks Reduction in mouse clicks, fields filled, screen changes, and overall duration needed to perform an activity Source: 13

15 Learning More on SAP Fiori for SAP S/4HANA For more information on SAP Fiori for SAP S/4HANA, TruQua will be presenting the following session later this week: SAP Fiori applications for SAP S/4HANA Finance Scott Cairncross, TruQua Enterprises Simplify your finance user experience on any device by delivering a personalized, role-based user experience with SAP Fiori. Walk through the SAP Fiori applications for SAP S/4HANA Finance that run on the SAP Fiori launchpad. Attend this session to: Learn the design principles behind SAP Fiori and the key applications that are currently available to finance teams Gain insights into the 3 different kinds of applications that SAP Fiori provides to SAP S/4HANA Finance users, including transactional applications, analytical applications, and fact sheets, and learn how and when to use each Hear tips for creating a personalized, modern, and consistent user experience across applications and for any device desktop, tablet, or mobile that users will love Learn how SAP Fiori makes use of the latest advances in web technology embodied in the SAPUI5 library 14

16 Understanding the Initial SAP S/4HANA Value Proposition Significant IT benefits come with SAP S/4HANA Finance All aggregate and summary tables replaced with HANA views SAP case study: Source: 15

17 Realizing the Promise of SAP S/4HANA Today Now being able to embed robotics and machine learning into enterprise processes like cash application SAP S/4HANA Source: 16

18 What We ll Cover Understanding What SAP S/4HANA Finance Is Strategizing on the Landscape and Deployment Options Assessing the SAP S/4HANA Functional Impacts Understanding the Key Considerations for System Conversion Wrap-up 17

19 Choosing Your SAP S/4HANA Landscape SAP S/4HANA deployment options include on-premise, cloud, or a combination On-Premise Traditional licensing Customer controlled Hybrid Both license models Governance mix Cloud Subscription licensing SAP controlled Image sources from (left and right) and (middle) 18

20 Choosing Your SAP S/4 Cloud Edition SAP S/4HANA Finance Cloud integrates with the other SAP Cloud solutions The latest SAP S/4HANA Cloud Edition is 1702 *PLANNED Source: SAP Road Maps ( under Line of Business Products Financial Management Finance in SAP S/4HANA Cloud 19

21 Scoping SAP S/4HANA Finance Cloud Currently, functionality is not as comprehensive as the On-Premise Edition but innovating more quickly with quarterly release cycles Source: SAP Road Maps ( under Line of Business Products Financial Management Finance in SAP S/4HANA Cloud 20

22 Extending SAP S/4HANA On-Premise with SAP Cloud Applications Example SAP Cloud Platform applications for SAP S/4HANA include: SAP RealSpend, Cloud Edition SAP S/4HANA Finance Cloud for credit integration SAP S/4HANA Finance Cloud for customer payments SAP Financial Statement Insights SAP S/4HANA Finance Cloud for customer payments 21

23 Choosing Your S/4HANA Migration Strategy Key strategic question to ask is if you want to modernize or transform your business The approach you take depends on the level of business process reengineering and change management desired and the number of ERP systems impacted Greenfield, brownfield, and split landscape projects are all very different terrains Greenfield Investment (New Implementation) For Cloud or On-Premise Business Transformation Oriented Brownfield Investment (System Conversion) For On-Premise Only System Modernization Oriented Split Landscape Investment (Landscape Transformation) For Cloud or On-Premise Transformation or Modernization Image sources from (left and right) and (middle) 22

24 Utilizing Central Finance for Landscape Transformation Central Finance is a product and a deployment option for SAP S/4HANA Finance formerly known as Central Journal It breaks out the Finance and Controlling (FI/CO) applications (modules) from the rest of SAP ERP via Application Link Enabling (ALE) as a sidecar It is a way to implement SAP S/4HANA Finance without disrupting your existing source SAP ERP systems (but does require installing a DMIS software component and SAP Notes) SAP ERP SAP ERP SD FI CO ALE FI CO MM PP QM QM HR BC CA 23

25 Consolidating Systems into SAP S/4HANA Central Finance creates a new migration option that was not available before Source: SAP 24

26 Studying How Data Is Integrated into Central Finance SAP and non-sap data can be integrated via SAP Landscape Transformation (SLT) Master data management is handled by Master Data Governance (MDG) Errors and corrections are addressed by the Application Integration Framework (AIF) Replaced by AIF Source: SAP, 2015 * SAP Simple Finance is now called SAP S/4HANA Finance 25

27 Integrating Master Data Rapid data migration to SAP S/4HANA and MDGF not included with Central Finance but can be leveraged 26

28 Mapping with Master Data Governance Key vs. value mappings Identifiers via key mappings Codes via value mappings MDG separately licensed but this functionality comes with Central Finance 27

29 Reviewing a Central Finance Posting Looks the same as an SAP ERP financial posting but is linked back to the source system via reference to the primary key of the source document and logical system to which it belongs Relationship Browser shows the document lineage 28

30 Reviewing the Relationship Browser in a Central Finance System Central Finance document shows the replicated accounting document it is linked to and the entire document flow (including sales and logistics) In this case, an order-to-invoice flow is illustrated with the ability to drill on any of the documents back into source system seamlessly 29

31 Drilling Back to the Source Document Depicted is the source document (note the document number, logical system, and logon system) after it was drilled into from the Central Finance system 30

32 Use-Case Scenarios for Central Finance Corporate Reporting and Planning Platform Value Establish a Central Financial system as single source of truth across entities and units with harmonized master data using the flexible new data model of S/4HANA Finance with new reporting tools and with the speed of HANA Central Operational Processing Let your finance team benefit from simplification and standardization in the new SAP S/4HANA Finance system by centralizing financial processes by standardizing and harmonizing processes across units by simplifying the work in Shared Service centers by simplifying the IT landscape SAP S/4HANA Finance Migration Option Central Reporting System for Mergers and Acquisitions Financial Shared Services Platform Effort 31

33 Envisioning Central Finance as an Integrated Payment Factory Subsidiary SAP ECC 6.0 Cash Management Subsidiary AP/AR/HR Treasury SAP Bank Communication Management (BCM) SAP In-House Cash Non- SAP BCM Connector* SAP PI Middleware SAP Financial Service Network Source: SAP,

34 Comparing Central Finance to Legacy SAP Landscapes Standalone BW and BPC investments require data transfer via batch Extract, Transform, and Load* (ETL) jobs while Central Finance is via real-time replication of FI/CO documents SAP BPC SAP BW SAP ERP Batch ETL* SAP BPC Any BI Legacy SAP Landscape SD FI CO SAP ERP Real-time FI CO SAP BW HANA Live Central Finance MM Replication PP QM QM HR BC CA Any DB SAP HANA 33

35 Comparing SAP BW Standalone vs. SAP S/4HANA SAP BW is inside your SAP S/4HANA system (been there since mysap ERP 2004 ECC 5.0) But only now can SAP BW perform without issues and is, in fact, what SAP BPC tightly integrates into But the SAP BW content inside of SAP S/4HANA is not the same as for standalone systems! SAP S/4HANA content has its own namespace /ERP/ (instead of 0 in SAP BW) As a result, any SAP BW development in a standalone system looking to be carved out should not be transported or otherwise migrated to SAP S/4HANA but instead should be redesigned and replaced 34

36 Evaluating Fundamental SAP BW Design Differences In SAP S/4HANA, master data and actual transactional detail are real-time and virtual, while in SAP BW standalone systems, the data is loaded and persisted redundantly In cases where the data is sourced from SAP ERP, the redundant data doesn t need to be migrated anyway In cases where the data is non-sap, then data federation scenarios may be possible 35

37 Learning More on SAP BW vs. SAP S/4HANA Considerations For more information on SAP BW vis-à-vis SAP S/4HANA, TruQua will be presenting the following session later this week: Do I still need SAP BW with SAP S/4HANA Finance? How to leverage SAP BW within SAP S/4HANA Finance for an all-in-one operational and analytical environment David Dixon, TruQua Enterprises Gain a better understanding of the role SAP BW plays with SAP S/4HANA Finance. During this session you will: Learn how it is possible to activate and leverage the SAP BW components directly on SAP S/4HANA to create a virtual data warehouse for performing reporting and analytics directly in your operational system Understand the key use cases and scenarios where a separate, standalone SAP BW instance still makes sense See a live system demo of SAP BW running in SAP S/4HANA to understand the new capabilities and see the new design paradigm in action Gain an expert s perspective of the future of SAP BW and how it fits into the SAP road map 36

38 What We ll Cover Understanding What SAP S/4HANA Finance Is Strategizing on the Landscape and Deployment Options Assessing the SAP S/4HANA Functional Impacts Understanding the Key Considerations for System Conversion Wrap-up 37

39 Redefining the Chart of Accounts New field GL Account Type introduced with merge secondary cost elements Cost element auto-creation along with the assignment to a cost element category T-codes for cost element KA01/KA02/KA03 now point to FS00 38

40 Adding COGS and Variance Splitting Details COGS cost component and production variance splitting by accounts is possible New BAdI functionality in version 1610: FCO_COGS_SPLIT_RELEVANCE Allows the split COGS even if there is no sales order on goods movement (a restriction before) FCO_COGS_SPLIT_BASIS Allows different basis for split than the unit cost estimate for the sales order item or the standard cost estimate for the material/plant combination (prior restriction) For example, you could use a past or future standard cost estimate or the actual cost estimate of the previous year. Also, you can use a different cost component structure as the basis for the split, such as an auxiliary split. 39

41 Adding More Currencies In version 1610, you can configure all currency types for each ledger and assign up to eight freely definable currency types supplementing the two fixed SAP currency types (local and global currency) The new currencies are converted in real time for each journal entry according to the specified currency conversion settings The following business processes can handle the new currency types: Open Item Management in FI-GL, FI-AP, FI-AR Allocations in FI and CO Currency Type Coverage Source: SAP Simplification Guide for

42 Adding New Extension Ledgers The extension ledger contains postings depending on the underlying leading ledger or non-leading ledger When postings are made to the Leading Ledger, the Extension Ledger contains only the adjustment entries Only manual postings to the extension ledger would be stored separately in the database Benefits: No storage of redundant data Reduced reconciliation effort between ledgers 41

43 Utilizing Profitability Analysis In S/4HANA, costing-based CO-PA is not impacted Activation of account-based CO-PA is needed for using CO-PA with Universal Journal Doesn t replace costing CO-PA and its reconciliation efforts As of version 1603, adding characteristics in CO-PA automatically updates the Universal Journal In version 1610, CO-PA realignments are supported as a key consideration Note that extending the Universal Journal coding block via customer include CI_COBL will not realign as would CO-PA characteristics Up to three additional quantities can be defined per controlling area via BAdI FCO_COEP_QUANTITY 42

44 Controlling and Reporting on PA Segments and Cost Objects Also, a PA segment (e.g., customer) and cost object (e.g., cost center) can be simultaneously posted to without the need for settlements (as a design option) Approach: Take all information that is available and known at any point in time. Post to a cost object and fill CO-PA segment attributes all in one step. SAP stores CO-PA segment information to each P&L line immediately (such as salary costs posted to a product line and cost center) Example: Posting of salaries and immediate assignment of the respective market segment GL Account Cost Center PA Segment Debit Credit Salaries and wages Development BRAKES CARS Source: SAP 43

45 Planning in SAP S/4HANA with SAP BPC CO-OM planning, P&L planning, and profit center planning are now covered by SAP BPC Optimized for SAP S/4HANA (SAP Note ) MultiProvider VirtualProvider InfoObjects HANA Views HANA Views In-Memory Cube: Plan Data ERP Tables: Actual Data ERP Tables: Master Data 44

46 Consolidating with SAP BPC in SAP S/4HANA Real-Time Consolidation (RTC) complements SAP BPC Optimized for SAP S/4HANA utilizing the same SAP BPC Embedded functionality and pre-delivered content Source: SAP 45

47 Learning More on SAP BPC For more information on SAP BPC in general, TruQua will be presenting the following session later this week: Key success factors guaranteed to drive optimal utilization of SAP BusinessObjects Planning and Consolidation JS Irick, TruQua Enterprises Attend this session and learn how key factors, including performance, training, product knowledge, data, user experience, process, and alignment, impact the success of your SAP BusinessObjects Planning and Consolidation implementation project. Attend this session to: Walk through an analysis of 5 SAP BusinessObjects Planning and Consolidation implementation projects and learn what role these factors played in the success of each project Get tips for optimizing the SAP BusinessObjects Planning and Consolidation experience for the occasional user and the most common bottlenecks that are likely to arise View examples from successful performance assessments, seeing how real-world performance issues were solved Learn how to utilize automated load testing to ensure the health and stability of your SAP BusinessObjects Planning and Consolidation implementation 46

48 Managing Cash and Liquidity in SAP S/4HANA Use of new cash management functionality required for bank account management, cash operations, and liquidity planning (via BPC optimized for SAP S/4HANA) SAP Accounting powered by SAP HANA Aligned Single Source of Truth Separately licensed (see SAP Note ) Bank Account Management Lite version is available without the separate license (see SAP Note ) SAP BPC Cash Management optimized powered for by S/4HANA SAP Business Suite on HANA SAP HANA Platform Agile Real time finance processes Payments and Bank Communications Cash and Liquidity Management Debt and Investment Management Financial Risk Management Suite Capabilities Predictive Insight and foresight Integrated Business Planning Payment Operations Electronic Bank Statements Front Office Deal capture Risk Identification Type and Origin of Risk Shared Service Center Workflow and Signatures Monitoring and Status Tracking Cash Operations Mid Office Risk Controlling Working Capital Management Risk Quantification Exposure Mgmt Risk Analysis Payment Factory Liquidity Management Back Office Correspondence & Settlement Foundation Cloud HANA Platform Analytics Mobile SAP Cash Management powered by SAP HANA Governance Risk and Compliance Source: SAP Bank and SWIFT Connectivity Bank Account Management Accounting Risk Management Hedge with Financial Instruments Commodity Risk Management Rapid Deployment Solutions (RDS) Treasury Solution Map, Edition

49 Valuating Materials with Material Ledger in SAP S/4HANA Material Ledger mandatory for inventory valuation as of version 1511 Inventory valuation tables (EBEW, EBEWH, MBEW, MBEWH, OBEW, OBEWH, QBEW, QBEWH) point to Material Ledger and Universal Journal via Core Data Service views Parallel valuation of Cost of Goods Manufactured (business function FIN_CO_COGM) supported as of 1610 SP01 Only for the ledger (and not the accounts) approach In 1610, further data model changes made for Actual Costing New tables MLDOC, MLDOCCCS, MLDOC_EXTRACT, and MLDOCCCS_EXTRACT introduced Material Price Analysis (CKML3) and ML Actual Costing Cockpit (CKMLCPAVR) functionality impacted SP01 recommended 48

50 Valuating Materials with Material Ledger in SAP S/4HANA (cont.) In 1610, parallel valuation and transfer pricing are also supported New functionality to add parallel valuations (i.e., profit center or group views) as new ledgers in addition to valuation views within the same ledger 49

51 Accounting for Assets in SAP S/4HANA Data (tables ANEK, ANEP, ANEA, ANLC, ANLP) is now stored in the Universal Journal Reduces data redundancy between GL and asset sub-ledger, improving reconciliation The depreciation postings are recorded in ACDOCA at the individual asset level, thus making depreciation analysis easier and reporting at asset-controlling object level possible Level of detailed reporting for multiple valuations (e.g., IFRS versus Local GAAP) achieved via new postings against a technical clearing account For an asset document in ACDOCA the depreciation area 01 no longer dominates to be the Leading Valuation Area (just because it is mapped to the leading ledger) Source: SAP Help 50

52 Defining and Analyzing a Multi-Dimensional Balance Sheet Carry-forward can be configured to keep the detail for selected dimensions Balance sheet breakdowns with sub-ledger details to facilitate reconciliation Balance Sheet Fixed Assets by Assets by Cost Center by Profit Center Receivables by Customer by Profit Center Inventory by Material by Profit Center 51

53 Learning More on SAP S/4HANA Functional Changes For more information on SAP S/4HANA impacts to FI and CO, TruQua will be presenting the following session later this week: Going under the hood: How SAP S/4HANA Finance will streamline your accounting and controlling activities Sonam Pawar, TruQua Enterprises This session will give you a deeper understanding of how SAP S/4HANA Finance will change your day-to-day financial accounting and controlling processes. During this session, you will: Learn how, by using SAP S/4HANA Finance, data will be sourced from 1 table known as ACDOCA to reduce the need for data replication and facilitate the harmonization of internal and external accounting activities Assess what impact SAP S/4HANA Finance takes on core controlling processes, such as cost-based and accountingbased profitability analysis Hear firsthand how, from master data to hierarchies, the convergence of general ledger accounts and cost elements impacts accounting processes Examine the extension ledger and how it streamlines the way in which organizations can adjust and report on their financial accounting (FI) and controlling (CO) data 52

54 A Demo Walkthrough of SAP S/4HANA Step through some key SAP S/4HANA concepts in the system Highlight a few key differences with configuration and functionality Review the new SAP Fiori and SAP BPC user experience Understand how to directly slice and dice on the Universal Journal with a pre-delivered Fiori Trial Balance application 53

55 What We ll Cover Understanding What SAP S/4HANA Finance Is Strategizing on the Landscape and Deployment Options Assessing the SAP S/4HANA Functional Impacts Understanding the Key Considerations for System Conversion Wrap-up 54

56 Understanding What Happens In a System Conversion As opposed to an upgrade or migration, an SAP S/4HANA system conversion involves: Database tables get deleted and replaced with views or used differently (e.g., summary and index tables) Data models are simplified and data gets migrated into those new data models (e.g., Universal Journal) Old applications are migrated to new ones (e.g., Classic GL to New GL) Configuration that gets migrated into new tables (e.g., ledger and currency configuration See SAP Note ) Codeline and logic gets deleted, modified, replaced, or added (e.g., replacing Credit Management functionality or adding SAP BPC functionality) Some Business Functions need to be turned off and are no longer supported (e.g., FIN_GL_REORG_1 and FIN_GL_REORG_SEG for profit center and segment reorganization See SAP Note ) 55

57 Understanding What Happens In a System Conversion (cont.) As opposed to an upgrade or migration, an SAP S/4HANA system conversion involves: (cont.) Transactions get deprecated or replaced with new user interfaces and experiences (e.g., GL Account Maintenance and CO Planning See SAP Note ) Some functionality becomes no longer supported (e.g., general cost objects and hierarchies as per SAP Note or smoothing method for depreciation posting as per SAP Note or Activity Based Costing delta versions as per SAP Note ) Or transaction and configuration behaviors change perhaps even slightly due to the new Universal Journal data model (e.g., top-down distributions in CO-PA see SAP Note ) 56

58 Migrating to the New Finance Applications in SAP S/4HANA New General Ledger is not so new (circa 2004 and ECC 5.0) but is required New Asset Accounting is more of an adaptation than completely new (began as business functions FIN_AA_CI_1 in EhP6 and FIN_AA_PARALLEL_VAL in EhP7) also required SAP Cash Management is probably the newest with Bank Account Management (BAM) options for either the light (BAM Lite) or full version (see SAP Note ) New Application New General Ledger New Asset Accounting SAP Cash Management Explanation Classic General Ledger is mostly automatically transformed into a basic implementation of New General Ledger (GL in SAP Accounting powered by SAP HANA) Classic Asset Accounting is mostly automatically transformed into the New Asset Accounting Classic Cash Management is replaced by the new SAP Cash Management. SAP Cash Management requires a separate license. Refer to SAP Note

59 Migrating Credit Management in SAP S/4HANA Credit Management (FI-AR-CR) is not available as part of SAP S/4HANA. The functional equivalent in SAP S/4HANA is SAP Credit Management (FIN-FSCM-CR). All IMG activities for SAP Credit Management are listed in Customizing under the following path: Financial Supply Chain Management Credit Management As part of migration, deactivate BAdI UKM_R3_ACTIVATE (SAP Note ) For details on how to adapt user-defined customer code that relies on the changed objects, see the following SAP Notes: (Financials) and (SD) 58

60 Deleting and Replacing Tables with HANA Views Multiple legacy totals and aggregate tables are replaced with HANA compatibility views Enables removal of physical table to reduce data footprint and eliminate redundant data HANA view persists to ensure no programs or code breaks which previously referenced physical tables Any custom programs that update these tables directly must be rewritten Source: SAP Help Migration to SAP Accounting Powered by SAP HANA, 59

61 Deleting and Replacing Tables with HANA Views (cont.) Tables replaced by HANA Views include: The line item, totals tables, and application index tables of General Ledger Accounting (GLT0, BSIS, BSAS, and FAGLFLEXA, FAGLFLEXT, FAGLBSIS, FAGLBSAS) The totals tables and application index tables of Accounts Receivable and Accounts Payable (KNC1, KNC3, LFC1, LFC3, BSID, BSIK, BSAD, BSAK) The line item and totals tables of Controlling (COEP for certain value types, COSP, and COSS) The material ledger tables for parallel valuations (MLIT, MLPP, MLPPF, MLCR, MLCD, CKMI1, BSIM) The Asset Accounting tables (ANEK, ANEP, ANEA, ANLP, ANLC) Source: SAP Help Migration to SAP Accounting Powered by SAP HANA, 60

62 Converting Data into the New Universal Journal Data Structure As of SAP S/4HANA Finance 1503, document line items are migrated to the Universal Journal Integrates and moves relevant data from the various FI and CO modules All new transactions post to ACDOCA after migration is completed Source: SAP Help Migration to SAP Accounting Powered by SAP HANA, 61

63 Noting SAP S/4HANA Functionality Not Available After Conversion Note that not all SAP S/4HANA functionality described earlier is available after system conversion (i.e., only applicable for new implementations) such as: Balance sheet splitting if migrating from the classic General Ledger (parallel ledger support was introduced in version 1610) Additional currencies aside from what is already defined in General Ledger and Material Ledger (see SAP Note ) In addition, for reconciliation purposes, projects should minimize configuration and master changes until a subsequent phase after system conversion Notwithstanding the above, as of 1610, New General Ledger (with use of Universal Journal), Material Ledger, New Asset Accounting, New Cash Management, Credit Management (from Financial Supply Chain Management) are all mandatory (meaning the replaced applications are no longer available) FI, CO, and PCA planning is replaced with SAP BPC but can be reactivated via SAP Notes 62

64 Evaluating a Common Challenge with Document Splitting Customers on Classic GL can still migrate to SAP S/4HANA Finance Migration to New GL for SAP S/4HANA Finance will occur as part of migration, which can occur at any period-end close If additional functionality of New GL is desired, then care needs to be taken with document splitting (not yet supported) and parallel ledgers (now supported) Source: SAP,

65 Evaluating a Common Challenge with Currencies and Valuation If system converting from SAP ECC 6.0, SAP S/4HANA Finance 1503, or SAP S/4HANA 1511, old currency configuration is migrated to universal journal without changes of the used currencies The SAP S/4HANA system conversion process is not able to introduce new currencies SAP ERP systems using transfer pricing, the currency types (e.g., 11, 12, 31, and 32) used for parallel valuation views (profit center and group) will be migrated into the Universal Journal Afterwards, usage of additional currencies is not possible without a different type of data conversion project with SAP support Cannot simply configure additional currencies, as the existing data does not contain the new currencies, and some open processes would not work properly, if the currency configuration was changed (see SAP Note ) 64

66 Evaluating Other Common Challenges Prior to System Conversion There may be scenarios where a project is needed prior to an SAP S/4HANA project such as: Activating customer and vendor integration (CVI) mandatorily see SAP Note Implementing the new depreciation calculation from the Enterprise Extension Financials Extension (EA-FIN) mandatorily Implementing archiving prior to system and data conversion To update charts of depreciation and assigned depreciation areas with the same currencies and currency types as available in FI-GL (see SAP Note ) To implement SAP BPC before the SAP S/4HANA implementation (see SAP Note ) 65

67 Migrating Your On-Premise Brownfield Investment Your pathway to SAP S/4HANA can have many steps and disruptions to consider such as: Material number extends from 18 to 40 characters but not in SAP S/4HANA Finance SAP HANA Live not supported past Simple Finance (see SAP Note ) ECC 6.0 EHP x Any DB Same ECC product but with any DB and Fiori UX options requiring technical upgrade ECC 6.0 EHP 7 Any DB Same ECC product but with HANA as the DB with Fiori UX options requiring database migration Suite on HANA Simplification of SAP financials and not logistics requiring a conversion and possible database migration if not on HANA Simple Finance Introduction of the Universal Journal as part of system and data conversion while logistics remains the same S/4HANA Finance Simplification of both SAP financials and logistics requiring a system conversion and database migration if not on HANA S/4HANA Core 66

68 Comparing SAP HANA Live to SAP S/4HANA Analytics Implement Suite on HANA (SoH) and SAP HANA Live Before SAP S/4HANA and SAP S/4HANA Analytics? SAP S/4HANA SAP Business Suite powered by SAP HANA (SoH) Hybrid Transactional and Analytical Applications e.g., SAP Smart Business cockpits Analytical Apps and BI Clients e.g., SAP BusinessObjects BI SAP S/4HANA Analytics SAP HANA Live SAP BW Application Layer Transient BEx Queries ABAP Application Layer Virtual Data Model based on ABAP Core Data Services HANA Database Layer SQL Runtime Views on Physical Tables Virtual Data Model on Physical Tables 67

69 System Converting to SAP S/4HANA Leveraging Best Practices Converting a brownfield investment to SAP S/4HANA is also supported by SAP Activate via SAP Best Practices The SAP Best Practices for system conversion has the following building blocks: BG4 is the Master Configuration Guide stepping through the technical conversion procedure and listing all relevant steps in the right sequence. BG4 cross-references BG5. BG5 is the Application-Specific Configuration Guide describing the application-relevant steps BG6 details the technical and functional pre-checks and post-checks for both finance and logistics 68

70 Walking Through the SAP S/4HANA System Conversion Steps A system conversion is not just a technical upgrade (in-depth functional tasks needed)! There are FI and CO preparedness checks (and potentially new configuration to perform)! Tables and transactions get deleted (change management is needed)! A review of the new simplifications and their impact to your current environment is needed up front Source: Conversion Guide for SAP S/4HANA 1610 Feature Package Stack 01 under Product Documentation for SAP S/4HANA On- Premise via the SAP Help Portal ( 69

71 Preparing for the System Conversion Reconcile and check consistency (e.g., ledgers and sub-ledgers with each other) Perform period-end closing (e.g., lock current MM period, periodic asset postings, etc.) Document posting data (i.e., run reports and verify balances) Archive data (if needed) Prepare Asset Accounting with new depreciation calculation (EA-FIN Business Function) if not already active (mandatory) Perform Pre-Checks For SAP S/4HANA Enterprise Management, run R_S4_PRE_TRANSITION_CHECKS (See SAP Note ) For SAP S/4HANA Finance, run FINS_MIG_PRECHCK_CUST_SETTNGS For both, run RASFIN_MIGR_PRECHECK for Asset Accounting pre-checks 70

72 Technical Migration Steps Available in IMG New updates to the IMG provide step-bystep guide for migrating accounting to SAP S/4HANA Application-specific steps to take into consideration Program FINS_MIG_PRECHCK_CUST_SETTINGS 71

73 Checking Prerequisites CO Configuration and Currencies Program FINS_MIG_PRECHCK_CUST_SETTNGS checks CO configuration and currency settings to allow for migration to SAP S/4HANA Finance Details of program can be found in SAP Notes and Some of the items checked in this program include: Consistency of currency settings across ledgers Compatibility of currency settings for both company codes and ledgers with the new SAP S/4HANA Finance tables Fiscal Year Variants containing identical master data (number of special periods) between company codes and controlling areas Unsupported scenarios (e.g., ABC Delta Versions) Additional checks for specific User Exits or BAdIs that are possibly incompatible with the universal ledger concept of SAP S/4HANA Finance 72

74 Checking Prerequisites Asset Accounting Program RASFIN_MIGR_PRECHECK performs prerequisite checks for New Asset Accounting Details of program and how to implement can be found in SAP Note Checks include: On New GL or not If on classic, provides option to move to New GL as part of migration to Simple Finance Joint Venture Accounting (JVA) must not be active on company code level Lease Accounting Engine (LAE) must be not active Classic Real Estate (RE) must be not active In component PSM-FM, IS-PS: the request with reference to Asset must not exist No Periodic Asset Postings are hanging Depreciation area for parallel currency must exist 73

75 Additional Considerations for SAP S/4HANA Finance Conversion Moving to SAP S/4HANA Finance is a business-led project even if a system conversion From a finance perspective, the following dependencies must be resolved: System conversion must occur at a fiscal period end System conversion will require a short system downtime and a longer freeze of all transactions during the full migration window (business downtime) Any archived documents will not be migrated to the new Universal Journal and special archive tables generated at time of migration to store archive documents Migration must occur for all active company codes together in the system It is not possible to only migrate certain company codes All controlling areas and operating concerns associated with those company codes must also be migrated The system must be reconciled before and after system conversion 74

76 What We ll Cover Understanding What SAP S/4HANA Finance Is Strategizing on the Landscape and Deployment Options Assessing the SAP S/4HANA Functional Impacts Understanding the Key Considerations for System Conversion Wrap-up 75

77 Where to Find More Information SAP S/4HANA Finance on the SAP Help Portal SAP Line of Business Solutions Page Central Finance on the SAP Help Portal e5/frameset.htm Janet Salmon, SAP Accounting powered by SAP HANA Frequently Asked Questions (ERP Corp, July 2014). 76

78 Where to Find More Information (cont.) Jens Krüger, SAP S/4HANA Finance: An Introduction (SAP PRESS, 2016). SAP S/4HANA Enterprise Management Product Page SAP Enterprise Performance Management Solutions Page 77

79 7 Key Points to Take Home SAP S/4HANA Finance is an innovative new solution which can simplify enterprise financial processes, reduce complexity, and provide real-time analytical and planning capabilities It is possible to deploy SAP S/4HANA Finance in various scenarios, including on-premise, cloud, and hybrid, as well as with different approaches to the migration The migration to SAP S/4HANA Finance is a major migration that involves many configuration steps to consolidate GL, CO, AA, and ML into a single Universal Ledger table Central Finance offers a unique deployment approach in which a new instance of SAP S/4HANA Finance is deployed to receive FI postings from multiple heterogeneous ERP systems 78

80 7 Key Points to Take Home (cont.) SAP BW and BPC are integrated directly into SAP S/4HANA Finance to allow for real-time reporting, analytics, and financial planning activities SAP S/4HANA system conversion requires preparatory activities and system pre-checks before starting the actual migration process there are unsupported scenarios to be aware of Moving to SAP S/4HANA Finance requires a mix of functional and technical skills, including deep functional knowledge of FI/CO, GL, and AA to properly implement 79

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