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

David DixonTruQua Enterprises

1

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

2

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

3

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

4

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

HANA Accelerators for FI and CO (“Sidecar HANA”)

Suite on HANA (no sidecar needed)

Simple Finance (financial add-on to Suite on HANA)

S/4HANA Finance (first major S/4HANA application)2012

2013

2014

2015

5

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

Source: SAP Product Availability Matrix at https://support.sap.com/release-upgrade-maintenance/pam.html

SAP Simple Finance to

SAP S/4HANA Finance

SAP S/4HANA Finance to

SAP S/4HANA

6

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 https://support.sap.com/release-upgrade-maintenance/pam.html

SFIN 1.0

1511 1610

1503

1605

1709

….

S/4HANA Core

SAP S/4HANA Finance

7

Improving SAP S/4HANA Finance Processes

• New opportunities for technology enablement exist across different process areas:

Planning and Analysis

Accounting

Treasury

Operations

Risk and Compliance

Universal Journal and Extension Ledgers

SAP BPC optimized for S/4HANA

Analytical Fiori applications (e.g., margin analysis)

SAP S/4HANA Operational Analytics

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

Fiori applications for A/R and A/P

Accelerated financial transactions

Central Finance

Continuous control monitoring

Fraud detection

Continuous monitoring of Key Risk Indicators

Accelerated audit search and management

8

Taking a Look at How SAP Finance Is Being Transformed

• Simplifications require changes to the SAP ERP code line and fundamental design

Collaborative

Invoice to Pay

Travel Management

Receivables ManagementEnterprise,

Risk Management

Controls and Compliance

Management

Accounting

Entity Close

Corporate Close

Develop and Translate

Strategy

Planning, Budgeting and

Forecasting

Profitability and Cost

Management

Payments and Bank

Communications

Cash and Liquidity

Management

Debt and Investment

Management

Monitoring and Reporting Reporting and Disclosure

Financial Close

GovernanceCommodity Risk Management

Real Estate ManagementFinancial Risk

Management

International Trade

Management

Fraud Management

Audit ManagementFinancial Shared Services

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

Financial Planning

and Analysis

Accounting and

Financial Close

Treasury and

Financial Risk

Management

Finance Operations

Enterprise Risk

and Compliance

Management

Source: SAP Value Map, 2016

9

Leveraging SAP S/4HANA Industry Support

• Select industries are available as part of the core SAP S/4HANA solution

Source: SAP Road Maps (www.sap.com/solution/roadmaps.html) under Industry SAP S/4HANA Industry

10

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)

Width

Dep

th

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

Primary key is

the same

(except ledger)

but now can

contain sales

and logistical

depth of detail

11

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)

12

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

13

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 activitySource: https://youtu.be/_morrLqAZTQ

14

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

Learning More on SAP Fiori for SAP S/4HANA

15

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: http://blogs.saphana.com/2014/09/30/how-simple-finance-removes-redundancy-2/

16

Realizing the Promise of SAP S/4HANA … Today

• Now being able to embed robotics and machine learning into enterprise processes like

cash application

Source: https://blogs.sap.com/2017/03/02/s4hana-cloud-use-case-series-4-machine-learning-with-sap-s4hana-cloud/

SAP S/4HANA

17

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

18

Choosing Your SAP S/4HANA Landscape

On-Premise

• Traditional licensing

• Customer controlled

Hybrid

• Both license models

• Governance mix

Cloud

• Subscription licensing

• SAP controlled

• SAP S/4HANA deployment options include on-premise, cloud, or a combination

Image sources from www.pexels.com (left and right) and www.publicdomainpictures.net (middle)

19

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

Source: SAP Road Maps (www.sap.com/solution/roadmaps.html) under Line of Business Products Financial Management Finance in SAP S/4HANA Cloud

*PLANNED

20

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 (www.sap.com/solution/roadmaps.html) under Line of Business Products Financial Management Finance in SAP S/4HANA Cloud

21

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

22

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 www.pexels.com (left and right) and www.publicdomainpictures.net (middle)

23

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

FI COSD

MM

PP QM QM HR BC CA

SAP ERP

FI COALE

24

Consolidating Systems into SAP S/4HANA

Source: SAP

• Central Finance creates a new migration option that was not available before

25

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

26

Integrating Master Data

• Rapid data migration to SAP S/4HANA and MDGF not

included with Central Finance but can be leveraged

27

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

28

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

29

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

30

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

31

Use-Case Scenarios for Central Finance

SAP S/4HANA Finance Migration Option

Central Reporting System for Mergers and Acquisitions

Financial Shared Services Platform

Effort

ValueCorporate Reporting and Planning Platform

Central Operational Processing

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

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

32

Envisioning Central Finance as an Integrated Payment Factory

Subsidiary

Non-

SAP

SAP Bank

Communication

Management (BCM)

SAP In-House Cash

Treasury

AP/AR/HR

Middleware

SAP PI

SAP ECC 6.0Subsidiary

Cash Management

SAP Financial Service

Network

BCM Connector*

Source: SAP, 2016

33

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

FI COSD

MM

PP QM QM HR BC CA

SAP ERP

FI COReal-time

Batch SAP BPC

SAP BW

HANA Live

Any BI

Replication

ETL*

Central

Finance

Legacy

SAP

Landscape

Any DB SAP HANA

34

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

35

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

36

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

Learning More on SAP BW vs. SAP S/4HANA Considerations

37

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

38

• New field “GL Account Type” introduced with merge secondary cost elements

• Cost element auto-creation along with the assignment to a cost element category

Redefining the Chart of Accounts

T-codes for cost

element

KA01/KA02/KA03

now point to

FS00

39

• 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.

Adding COGS and Variance Splitting Details

40

• 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

Adding More Currencies

Currency Type Coverage

Source: SAP Simplification Guide for 1610

41

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

42

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

43

Controlling and Reporting on PA Segments and Cost Objects

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 CARS20.000 €

• 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)

Source: SAP

44

Planning in SAP S/4HANA with SAP BPC

HANA Views

ERP Tables: Actual

Data

MultiProvider

VirtualProvider

HANA Views

InfoObjects

ERP Tables: Master

Data

In-Memory Cube:

Plan Data

• CO-OM planning, P&L planning, and profit center planning are now covered by SAP BPC

Optimized for SAP S/4HANA (SAP Note 2081400)

45

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

46

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

Learning More on SAP BPC

47

Managing Cash and Liquidity in SAP S/4HANA

Business Suite on HANA

SAP HANA Platform

Aligned Single Source of Truth

Agile Real time finance processes

Predictive Insight and foresight

Integrated Business Planning

SAP Cash Management powered by SAP HANA

SAP Accounting powered by SAP HANA

Payments and Bank Communications

Payment Operations Monitoring and Status

Tracking Payment Factory

Bank and SWIFT Connectivity

Cash and Liquidity Management

Cash Operations Bank Account Management Electronic Bank Statements

Debt and Investment Management

Financial Risk Management Risk Identification

Type and Origin of Risk Risk Quantification

Exposure Mgmt Risk Analysis

Risk Management Hedge with Financial Instruments

Treasury Solution Map, Edition 2014

Workflow and Signatures

Liquidity Management

Front Office Deal capture

Mid Office Risk Controlling

Back Office Correspondence & Settlement

Accounting

Foundation Cloud Analytics Mobile Rapid Deployment Solutions (RDS)

HANA Platform

Suite Capabilities Shared Service Center Working Capital

Management Governance Risk and Compliance Commodity Risk Management

SAP Cash Management powered by SAP HANA

BPC optimized for

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)

• Separately licensed (see SAP Note 2044295)

• Bank Account Management Lite version is available without the separate license (see SAP Note 2165520)

Source: SAP

48

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

49

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

50

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

51

Defining and Analyzing a Multi-Dimensional Balance Sheet

Balance Sheet Fixed Assets by Assets by

Cost Center by Profit Center

Receivables by Customer by

Profit Center

Inventory by Material by Profit

Center

• Carry-forward can be configured to keep the detail for selected dimensions

• Balance sheet breakdowns with sub-ledger details to facilitate reconciliation

52

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 accounting-

based 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

Learning More on SAP S/4HANA Functional Changes

53

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

54

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

55

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 2344012)

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 2257555)

56

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 2270335)

Some functionality becomes no longer supported (e.g., general cost objects and

hierarchies as per SAP Note 2270411 or smoothing method for depreciation posting

as per SAP Note 2270388 or Activity Based Costing delta versions as per SAP Note

2270408)

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 2236046)

57

Migrating to the “New” Finance Applications in SAP S/4HANA

New Application Explanation

New General Ledger

Classic General Ledger is mostly automatically transformed into a basic

implementation of New General Ledger (GL in SAP Accounting powered by SAP

HANA)

New Asset AccountingClassic Asset Accounting is mostly automatically transformed into the New Asset

Accounting

SAP Cash ManagementClassic Cash Management is replaced by the new SAP Cash Management.

SAP Cash Management requires a separate license. Refer to SAP Note 2044295.

• 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 2165520)

58

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 2196823)

• For details on how to adapt user-defined

customer code that relies on the changed

objects, see the following SAP Notes:

2227014 (Financials) and 2227014 (SD)

59

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, http://help.sap.com/saphelp_sfin100/helpdata/en/87/2f6152b82bf35fe10000000a423f68/frameset.htm

60

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, http://help.sap.com/saphelp_sfin100/helpdata/en/87/2f6152b82bf35fe10000000a423f68/frameset.htm

61

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, http://help.sap.com/saphelp_sfin100/helpdata/en/87/2f6152b82bf35fe10000000a423f68/frameset.htm

62

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 2344012)

• 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

63

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, 2014

64

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 2344012)

65

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 2265093

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 2180591)

To implement SAP BPC before the SAP S/4HANA implementation (see SAP Note

2243472)

66

ECC 6.0 EHPx Any DB

ECC 6.0 EHP7 Any DB

Suite on HANA

Simple Finance

S/4HANA Finance

S/4HANA Core

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 2270382)

Same ECC

product but

with HANA

as the DB

with Fiori

UX options

requiring

database

migration

Simplification

of SAP

financials and

not logistics

requiring a

conversion

and possible

database

migration if

not on HANA

Same ECC

product but

with any DB

and Fiori

UX options

requiring

technical

upgrade

Simplification of

both SAP

financials and

logistics requiring

a system

conversion and

database

migration if not on

HANA

Introduction of

the Universal

Journal as

part of system

and data

conversion

while logistics

remains the

same

67

Comparing SAP HANA Live to SAP S/4HANA Analytics

HANA Database Layer Virtual Data Model on Physical Tables

Analytical Apps and BI Clients

e.g., SAP BusinessObjects BI

SAP Business Suite powered by SAP HANA

(SoH)Hybrid Transactional and Analytical Applications

e.g., SAP Smart Business cockpits

SQL Runtime Views on Physical Tables

ABAP Application LayerVirtual Data Model based on ABAP Core Data Services

SAP BW Application Layer Transient BEx Queries

SAP S/4HANA

SAP S/4HANA Analytics SAP HANA Live

Implement Suite on HANA (SoH) and SAP HANA Live Before SAP S/4HANA and SAP S/4HANA Analytics?

68

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

69

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)!

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 (https://help.sap.com/viewer/p/SAP_S4HANA_ON-PREMISE)

A review of the new

simplifications and

their impact to your

current

environment is

needed up front

70

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 2182725)

For SAP S/4HANA Finance, run FINS_MIG_PRECHCK_CUST_SETTNGS

For both, run RASFIN_MIGR_PRECHECK for Asset Accounting pre-checks

71

Technical Migration Steps Available in IMG

• New updates to the

IMG provide step-by-

step guide for

migrating accounting

to SAP S/4HANA

• Application-specific

steps to take into

consideration

Program

FINS_MIG_PRECHCK_CUST_SETTINGS

72

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 2129306 and 2245333

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

73

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 1939592

• 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

74

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

75

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

76

Where to Find More Information

• SAP S/4HANA Finance on the SAP Help Portal

https://help.sap.com/viewer/p/SAP_S4HANA_FINANCE

• SAP Line of Business Solutions Page

http://go.sap.com/solution/lob/finance.html

• Central Finance on the SAP Help Portal

https://help.sap.com/doc/saphelp_sfin300/3.5/en-US/93/54c0540cf5ef05e10000000a

4450e5/frameset.htm

• Janet Salmon, “SAP Accounting powered by SAP HANA – Frequently Asked Questions”

(ERP Corp, July 2014).

www.erpcorp.com/sap-controlling-blog/entry/sap-accounting-powered-by-sap-hana-

frequently-asked-questions

77

Where to Find More Information (cont.)

• Jens Krüger, SAP S/4HANA Finance: An Introduction (SAP PRESS, 2016).

www.sap-press.com/sap-simple-finance_3793/

• SAP S/4HANA Enterprise Management Product Page

http://discover.sap.com/S4HANA

• SAP Enterprise Performance Management Solutions Page

www.sdn.sap.com/irj/bpx/epm

78

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

79

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

80

Your Turn!

How to contact me:

David Dixon

david.dixon@truqua.com

@TruQuaE

Please remember to complete your session evaluation

81

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