Prepare Your Landscape for the Migration to SAP S/4HANA Finance
Whether you are already implementing SAP S/4HANA Finance or you are still in the evaluation stage, you need to learn about the architecture considerations before making the move to better prepare your current SAP ERP system for the migration. Sonam Pawar, A speaker at the upcoming SAP Financials 2016 conference in Singapore, answered questions on how a migration to SAP S/4HANA Finance will impact your system landscape, including:
- Is a merging of ECC systems required or not? What are some reasons it would be or possible scenarios where this would be the case?
- What are the differences between S/4HANA and S/4HANA Finance?
- What is the recommended implementation strategy when multiple instances of SAP are involved?
- t are some possible deployment options with S/4HANA and ECC 6.0?
Meet the panelist:
Sonam Pawar, TruQua Enterprises
Sonam Pawar is a Functional Analyst, Model/Process/Data Designer and FI/CO Specialist at TruQua Enterprises. She has over 6 years of SAP FICO experience, including SAP S/4HANA Finance and Central Finance in different stages of SDLC. She has handled various phases of the project lifecycle and has conducted proactive analysis of SAP solutions, including SAP S/4HANA Finance, to propose improvements and optimization of business processes and SAP design. She also maintains an M.B.A in Finance with domain experience in financial analysis, credit analysis, and project financing.
Transcript:
Kendall Hatch: Hello, and welcome to today’s Q&A on preparing your landscape for the migration to SAP S/4HANA Finance. I’m happy to be joined today by Sonam Pawar, Senior FI/CO Consultant at TruQua Enterprises and speaker at the upcoming SAP Financials 2016 conference in Singapore.
Sonam, thanks for joining us today!
Sonam Pawar: Hi Kendall. Thanks for inviting me to this Q&A, and thanks to everyone who has taken the time to join this Q&A session and submit questions. I am glad to see there is so much interest in this topic, with a lot of questions already submitted. I will do my best to answer as many as possible in the next hour.
Comment From Julia Nikiforova: Hello. Could you give input on the following: Is a merging of ECC systems required or not? What are some reasons it would be or possible scenarios where this would be the case?
Sonam Pawar: Hi Julia, thank you for your participation.
The merging of ECC systems is not required to migrate to SAP S/4HANA per se, but there are scenarios where it might make sense to do so, such as global standardization or landscape consolidation. We had these scenarios and cases even before SAP S/4HANA. SAP S/4HANA can be the catalyst for merging systems by providing benefits such as faster business consolidation and period end processing.
There are 2 fundamental options. Option one is to merge all ECC systems into a singular S/4HANA system. The second option would be to use the ECC and S/4HANA system in a hub and spoke architecture – a deployment option known as Central Finance. Central Finance is most beneficial for shared services scenarios while also providing autonomy to business units using their individual ECC systems. Prior to Central Finance, SAP SLO (System Landscape Optimization) services would have been needed for complex merge scenarios (in fact, Central Finance leverages some technology that came from SLO). Central Finance can also merge non-SAP systems leveraging SAP Landscape Transformation (SLT) Replication Server and possibly SAP Data Services. In fact, there is a Rapid Deployment Solution/Best Practice that supports one time cutover for SAP S/4HANA.
Comment From Adeel: Is Central Finance a one way data flow, or can the data flow back to the source ECC box?
Sonam Pawar: Hi Adeel,
Thanks for your question. Currently the Central Finance model allows only one direction of data flow (i.e. from source systems to target S/4HANA system). The aim is to facilitate central processing as seen in shared services business scenarios, but that will not flow back to ECC.
Comment From Adeel: What month-end close activities can be done purely in the Central Finance system, and what activities must be done in individual ECC boxes (e.g. Depreciation, Manual journal entries, Foreign Currency Revaluation, Settlements)?
Sonam Pawar: Hi Adeel,
Thanks again for your participation. The Central Finance system is perfectly capable of processing the period end activities on the transactions posted from a source ERP. However, choosing the transactions to be centrally or locally processed is purely a business decision
Comment From Guest: If the conversion from SAP ECC 6.0 to SAPS/4 HANA is not successful, can the customer can revert the changes? Did SAP planned for this?
Sonam Pawar: Hello,
Thank you for your participation. Even though a complete reversal of the conversion process is not possible, the below SAP note advises on the steps to correct the conversion discrepancies.
https://launchpad.support.sap.com/#/notes/2138644/E
The SAP Activate methodology and best practices for solution deployment will guide you through the process to help mitigate the risk of not being able to revert the changes from conversion. Refer to https://go.sap.com/documents/2015/10/64bc4eb9-467c-0010-82c7-eda71af511fa.html
Comment From kumara: Could you please share the differences between the 1503 & 1605 release of SAP HANA Finance?
Sonam Pawar: Hi Kumara,
There have been quite a few changes in 1605 from 1503, few of which are highlighted below:
– Material Ledger functionality such as profit center and group valuation (which can now be migrated if this functionality is already turned on in your SAP ERP).
– New asset accounting
– Profit center valuation
In order to upgrade from SAP Simple Finance 1503 to SAP S/4HANA Finance 1605, please note many changes of Fiori applications. For more information, refer to SAP Note 2242596.
https://launchpad.support.sap.com/#/notes/2242596/E
https://launchpad.support.sap.com/#/notes/2255079
https://launchpad.support.sap.com/#/notes/2235268
In SAP Financials, legal and management ledgers were merged into a single coding block known as “Universal Journal” (a singular line item table named “ACDOCA”).
For materials management, the data model and tables were simplified into their own singular table named “MATDOC.”
Comment From Martin: SAP documents say that period end closing should be done before migration to S4. If MEND is not done, what are the implications and how will that affect the post-migration work?
Sonam Pawar: Thank you for the question. As part of any system migration or upgrade (SAP S/4HANA or not) it is advisable to close the books and move with a trial balance. If month end close has not been processed, there are open positions on orders, WIP valuation and results analysis impacts. The reconciliation effort for mid-month migration is much greater than the same for a period end migration.
Comment From Jephy Pothen: We need to activate CO-PA in SAP ECC6. We foresee that activating CO-PA in ECC6 will have potential performance issue. Can you advise on how to move only CO-PA to HANA?
Sonam Pawar: Hi Jephy,
Thank you for the query. If you only want to move CO-PA to HANA, you don’t need SAP S/4HANA or even Suite on HANA. There is an option known as CO-PA Accelerator that leverages SAP HANA as a secondary database connection, also known as the “Sidecar HANA” approach. The CO-PA Accelerator can accelerate not only reporting but also certain areas of processing.
Comment From Pornthep: What are the differences between S/4HANA and S/4HANA Finance?
Sonam Pawar: Thanks for your participation!
S/4HANA Finance is only focused on FI and CO functionality changes, while S/4HANA covers not only Finance but the rest of ERP. For example S/4HANA Finance merges FI and CO into the Universal Journal for transactional records (table ACDOCA), while S/4HANA includes not only the Universal Journal but also simplifications in logistics, such as the material document table MATDOC in Materials Management, that you don’t get in an S/4HANA Finance system. Note that because of these differences, these versions are on separate but related release schedules.
Comment From V K REDDY: Hi Sonam Pawar. I am from Cape Town, South Africa and am working at SAP Functional Support in Retail. I have experience with SAP FI as a Functional Consultant on 4.6 & ECC 6.0 but would like to learn more about S/4HANA Finance. Can you please share/forward some valuable materials & configuration documents? Also, I have some experience on data migration but would like to learn about migration processes for S/4HANA Finance. Your support in this is highly appreciated. Thanks.
Sonam Pawar: Hi Mr. Reddy,
I’d happy to help you find some pointers. Please see a few links posted below that you might helpful:
https://open.sap.com/courses/s4h4
www.sap-press.com/sap-simple-finance_3793/
https://discover.sap.com/S4HANA
Comment From Patti: What is the recommended implementation strategy when multiple instances of SAP are involved — 1) full migration, 2) migrating all financial transactions for one instance at a time, 3) migrating a subset of financial activity across all instances at one time, or 4) something else? What factors should be considered when determining an implementation strategy?
Sonam Pawar: Your options include: 1) Migrate each instance separately, 2) Standardize on a new greenfield implementation, 3) Merge all instances via Central Finance, or 4) Select a hybrid option of the above, such as migrating one instance and using Central Finance to bring in the rest. Central Finance also enables the subset scenarios you mention. Key factors include how much business process reengineering is needed and how many SAP (and non-SAP) instances are involved.
Comment From Patti: If fixed assets are maintained in individual ECC boxes, can month end depreciation process be executed in Central Finance? Or must that process be executed in individual ECC boxes?
Sonam Pawar: Hi Patti,
Thanks for your question. Ideally the depreciation run can be posted locally or centrally depending on the business decision. However, the benefit of doing it in Central Finance is that the S/4HANA Universal Journal ACDOCA is capable of recording depreciation amounts by asset. This improves the level of reconciliation between the asset sub-ledger and general ledger. In my previous ECC engagements, I have experienced accounts having to spend considerable hours in order reconcile the “Asset Balances” report with the “GL detail” report. With ACDOCA the effort is negligible since each depreciation line item contains the corresponding asset number.
Comment From Guest: Hi. What will be the impact of the developments that we have made to our processes after implementing HANA?
Sonam Pawar: Hi. Thanks for your question.
It is important to distinguish between the impacts of HANA and S/4HANA. For example, HANA can impact SQL written in custom developments, such as those around sorting and indexing. There are tools to support ABAP compliance to HANA such as checks in the SAP Code Inspector (transaction code SCI). Then there are S/4HANA impacts, such as the extension of a material number from 18 to 40 characters as of version 1511. If development was hard-coded to 18 characters in any way, this can break. Another example is that customers and vendors are treated as business partners as of 1511. Logic can break because of these changes. Typically, the data model changes (such as Universal Journal) get a lot of attention, but the old tables have been converted to compatibility views so programs that reference tables such as COEP and BSEG should be okay if they are only being queried.
Comment From Kee: What are the implications for the functional roles with the S/4HANA migration? Are the standard transactions becoming obsolete or having much less of an impact on the roles?
Sonam Pawar: Hi Kee,
Thank you for the question. There are certain transactions that are becoming obsolete in S/4HANA, e.g. cost element maintenance KA01/KA06, customer/vendor maintenance FD01/FK01, and bank account maintenance FI12. Since the technical structure of these transactions has been changed, the object mapping to the business role has become obsolete as well. Using one of the aforementioned examples, in S/4HANA the business role responsible for cost element maintenance would need access to the GL account.
Comment From Sanjay Motwani: What are some possible deployment options with S/4HANA and ECC 6.0?
Sonam Pawar:
Thanks Sanjay for your question. The various deployment options available are:
1. New implementation – For a customer moving from a non-SAP ERP system, the new implementation option is most suitable. For an existing customer, this option gives a chance to redesign business processes and implement SAP from scratch. Note that with this option you can have further options to implement either cloud or on-premise versions of S/4HANA.
2. Landscape transformation – For a customer who has multiple SAP ERP systems (with the same or different versions), the transformation option helps to consolidate the SAP landscape into one S/4HANA system.
3. System conversion – For an existing SAP customer, this options provides the opportunity to move to S/4HANA without disrupting their existing system. SAP provides easy conversion methodologies for FI, CO, AA, and ML modules.
4. Central Finance – Leave your ECC 6.0 system in place and replicate the financial postings into an S/4HANA system.
For more information on the deployment options and detailed steps for each one, please refer to below course:
https://open.sap.com/courses/s4h4
Comment From Sachin Rodrigues: What is the approximate time it takes to migrate from ECC 6 to S/4Hana Finance?
Sonam Pawar: Thanks Sachin for your participation.
Here are a few references that refer to project timelines and conversions:
It took the company Florida Crystals 8 weeks. Here is the video: https://www.youtube.com/watch?v=AKd9uya2ZvY
La Trobe Univeristy went live in 20 weeks. Here’s a video of their story: https://www.youtube.com/watch?v=pOUbh7GlCIw
Here’s an article that lists a few other companies: https://go.sap.com/docs/download/2015/08/aa95c1a6-3a7c-0010-82c7-eda71af511fa.pdf
The biggest time consideration for migration is not the migration itself – it is the preparation for it and the reconciliation before and after system conversion.
Comment From Misah: Please highlight the main differences in term of functionality between ERP6.0 and S/4HANA Finance.
Sonam Pawar: Hi Misah,
Thank you for your query. In terms of functionality, there are a few main points that differentiate S/4HANA Finance from ECC:
1. The Universal Journal replaces many transactional tables like BSEG, MSEG, ANLC, etc. This leads to faster processing, simpler reporting, and easier reconciliations
2. The totals tables in ECC are replaced by views of the same name in S/4HANA Finance
3. The secondary cost elements are now part of the FI Chart of Accounts
4. The extension ledger provides minimal duplication during journal entries
5. Cost components split by account in account-based CO-PA
6. New Asset Accounting
7. Material ledger is mandatory to be activated
Here is a link to the Simplification Guide.
Comment From Sachin Rodrigues: What is new in SAP S/4HANA Finance compared to Simple Finance?
Sonam Pawar: Thanks for another interesting question. If you are referring to the differences between SAP Simple Finance 1.0 and SAP S/4HANA Finance (starting with version 1503), then the biggest change was the introduction of table ACDOCA (and the Universal Journal). Another big shift was moving away from HANA Live for reporting and analysis to S/4HANA Analytics, predicated on ABAP Core Data Services technology as opposed to HANA views. New Asset Accounting and new Cash Management functionality was introduced in SAP Simple Finance 1.0, but there have been changes with each update. There has also been a lot of Fiori application changes.
Comment From Patti: With regard to Master Data in Central Finance, are there any new/unique fields available for Finance Master Data or within MDG for use only in Central Finance?
Sonam Pawar: Thanks again Patti for the interesting question.
Central Finance is an S/4HANA system, so there are new master data concepts to consider. For example, secondary cost elements become G/L accounts. Bank account management is done via Fiori apps. Central Finance only uses MDG as a master data mapping tool from source to target systems.
Comment From Kumara: Is today the day we have the online virtual training on Landscape for the Migration to S/4Hana Finance?
Sonam Pawar: Hi Kumara,
The training is not part of the current Q&A session but is accessible as an OpenSAP course. Please see this link: https://open.sap.com/courses/s4h4
Comment From Sachin Rodrigues: Is S/4HANA Finance available for all industry-specific solutions? I found that for IS Retail it is not yet released.
Sonam Pawar: Check out SAP note 2233539 to get a list of all SAP ERP Industry Solutions released with the SAP S/4HANA Finance 1605
Comment From V K REDDY: Hello Ms. Sonam. Thank you for suggesting links to follow for learning about S/4Hana Finance. How long will it takes to me to learn S/4Hana Finance completely? As I said earlier, I am working in SAP Retail Support where my organization is still using ECC 6.0 / ECC 6.5. They are busy migrating to S/4HANA currently, but they are not moving SAP Finance. Is it possible to run both ECC 6.5 for SAP FI and Retail with S/4HANA? If they decide to also move Finance to S/4/HANA or S/4Hana Finance, how long will it take to move? And how can I get the opportunity to work in a new S/4Hana Finance demo, which would be really beneficial to me for multiple skills like, MM, Retail, Finance etc., in the retail industry. Thank you in advance for your answers.
Sonam Pawar: Hello,
It is possible to run finance on SAP ECC 6.0 and SAP S/4HANA both by implementing SAP Central Finance. Please see an earlier answer to a similar question.
It took the company Florida Crystals 8 weeks. Here is the video: https://www.youtube.com/watch?v=AKd9uya2ZvY
La Trobe Univeristy went live in 20 weeks. Here’s a video of their story: https://www.youtube.com/watch?v=pOUbh7GlCIw
Here’s an article that lists a few other companies: https://go.sap.com/docs/download/2015/08/aa95c1a6-3a7c-0010-82c7-eda71af511fa.pdf
The biggest time consideration for migration is not the migration itself – it is the preparation for it and the reconciliation before and after system conversion.
Comment From Sachin Rodrigues: If we have ABAP reports on total tables, what will happened with that report post migration?
Sonam Pawar: Those reports should work due to the “compatibility view” concept in S/4HANA. The total tables have been replaced by the views of the same name.
Comment From Sachin Rodrigues: I read that on cloud we cannot change SAP standard things, but we have done so in our recent E2E project. Howeer, that cloud is not managed by SAP. Is it correct that if SAP is managing that cloud platform, standard things cannot be changed?
Sonam Paware: Hi Sachin,
Please take note that there is a difference between HANA Enterprise Cloud (HEC), HANA Cloud Platform (HCP), and SAP S/4HANA, Cloud Edition.
SAP’s HEC is Infrastructure-as-a-Service (IaaS) but comes with SAP-specific managed services as a full-service model that differentiates it from other third-party hosting providers like Amazon Web Services (AWS), which only rents you the infrastructure (e.g. transports and security are still owned by AWS customers as with on-premise SAP customers). But in either case (AWS or HEC), customization is the customer responsibility unless separately outsourced.
In contrast, SAP’s HCP is a Platform-as-a-Service (PaaS) offering that allows customers to side-by-side extend existing applications (either cloud or on-premise) or build new ones.
Meanwhile SAP S/4HANA, Cloud Edition is neither HEC or HCP but rather is Software-as-a-Service (SaaS), with three public (enterprise, professional services and marketing editions) and one private (enterprise edition) option. The extensibility options for these S/4HANA cloud versions are either “ex-app” (i.e. side-by-side as with HCP) or “in-app”.
In-app extensions can be categorized as: 1) Classic extensibility, 2) Key user extensibility, or 3) Managed extensibility. Classic extensibility is the functionality that has been traditionally available via ABAP Workbench and, more recently, via Eclipse for on-premise systems. The key user extensibility enables low impact but high value-add customizations like adding fields to tables or changing business logic. It is available for both on-premise and cloud solutions. Managed extensibility is a new concept where custom ABAP is developed and executed in a separate cloud environment but can be plugged into both on-premise and cloud editions without disrupting them (e.g. only API calls and no modifications allowed). More detailed reading can be found at https://go.sap.com/documents/2015/07/2ad59b27-347c-0010-82c7-eda71af511fa.html
Comment From Martin: Hi Sonam, thanks for all the replies. Of course for any upgrade/migration closing the books beforehand is the preferred approach. However, if that is not possible due to customer requirements and we need to do the migration near the end of the month (without closing the month), besides the additional effort for reconciliation, do you see any risks in terms of data consistency?
Sonam Pawar: Beside complicating the reconciliation effort, one risk is that you will not be able to migrate as you did not pass a migration pre-check program. To give an example, there is a new Asset Accounting module that needs to comply with the pre-check program RASFIN_MIGR_PRECHECK prior to migration. Amongst other things, it checks that no Periodic Asset Postings are hanging and reports errors if APC values in a company code are not completely posted. Therefore, asset-related close activities include performing closing for periodic asset postings (with program RAPERB2000) and executing the periodic depreciation posting run (with program RAPOST2000). To reduce risk, review the following period-end closing activities related to SAP S/4HANA system conversion here: https://help.sap.com/saphelp_sfin300/helpdata/en/31/6ed354b65ced05e10000000a4450e5/content.htm
Comment From Jephy Pothen: Thanks for the explanations. Can you let us know where we can get more details for this “Sidecar HANA” option?
Sonam Pawar: Hi Jephy,
Please see a few links that might be of help:
https://www.slideshare.net/davidcdixon/hana-finance-accelerators
Comment From Rob (Sydney): What are some key considerations if we choose to migrate SAP ECC Finance to S/4HANA Finance but leave our SAP IS-Retail/SAP POSDM on their current platform?
Sonam Pawar: Hi Rob,
Thanks for the question. If the SAP IS-Retail/SAP POSDM are retained on their current platforms, the systems can be connected in a hub and spoke architecture – a deployment option known as Central Finance. The S/4HANA Central Finance allows the user to post the data in the source system while replicating the accounting entries into Universal Journal ACDOCA.
Please check out SAP note 2233539 to get a list of SAP ERP Industry Solutions released with the SAP S/4HANA Finance 1605 (especially IS-Retail).
Comment From Sridhar: Could you tell us how CO-PA works with S/4 HANA
Sonam Pawar: In S/4HANA, Costing Based CO-PA is not impacted, since the CE-prefixed tables remain as before. However, activation of account-based CO-PA is mandatory for using the CO-PA features of the Universal Journal. In S/4HANA, the account-based CO-PA has been enhanced with COGS cost components split by accounts, production variances split by account, and invoice quantities for management accounting allocation.
Comment From Midhu: How is archived data handled when migrating ECC to S/4HANA FI?
Sonam Pawar: Hi Midhu,
Thanks for the question. Please see the link below that can be of help to you.
Comment From Misah: What’s are some key challenges and issues faced when implementing S/4HANA Finance?
Sonam Pawar: Hi Misah,
One of the key upfront challenges is defining your business case. Another challenge is scoping what you will take on first. SAP BPC, Fiori, new analytics and new applications (e.g. new Cash Management) are all example pathways to SAP S/4HANA. Also, there are a lot of misconceptions of what S/4HANA is or is not; time and diligence are needed in an actual SAP S/4HANA system to avoid ivory tower discussions.
Kendall Hatch: Thanks to all who posted questions and followed the discussion!
Sonam will be speaking at the upcoming Financials 2016 conference, 10-12 October in Singapore. For more information, click here.
This topic will also be covered in depth at the upcoming SAP S/4HANA Bootcamp events, running in the United States, Europe, and Australia. For more information on those events, click here.
Finallly, thanks to Sonam Pawar of TruQua Enterprises for taking the time to respond to these questions today!
Sonam Pawar: Thank you Kendall for setting up the Q&A and supporting me through it. Thank you all for your participation and the interesting questions!
Whether you are already implementing SAP S/4HANA Finance or you are still in the evaluation stage, you need to learn about the architecture considerations before making the move to better prepare your current SAP ERP system for the migration. Sonam Pawar, A speaker at the upcoming SAP Financials 2016 conference in Singapore, answered questions on how a migration to SAP S/4HANA Finance will impact your system landscape, including:
- Is a merging of ECC systems required or not? What are some reasons it would be or possible scenarios where this would be the case?
- What are the differences between S/4HANA and S/4HANA Finance?
- What is the recommended implementation strategy when multiple instances of SAP are involved?
- t are some possible deployment options with S/4HANA and ECC 6.0?
Meet the panelist:
Sonam Pawar, TruQua Enterprises
Sonam Pawar is a Functional Analyst, Model/Process/Data Designer and FI/CO Specialist at TruQua Enterprises. She has over 6 years of SAP FICO experience, including SAP S/4HANA Finance and Central Finance in different stages of SDLC. She has handled various phases of the project lifecycle and has conducted proactive analysis of SAP solutions, including SAP S/4HANA Finance, to propose improvements and optimization of business processes and SAP design. She also maintains an M.B.A in Finance with domain experience in financial analysis, credit analysis, and project financing.
Transcript:
Kendall Hatch: Hello, and welcome to today’s Q&A on preparing your landscape for the migration to SAP S/4HANA Finance. I’m happy to be joined today by Sonam Pawar, Senior FI/CO Consultant at TruQua Enterprises and speaker at the upcoming SAP Financials 2016 conference in Singapore.
Sonam, thanks for joining us today!
Sonam Pawar: Hi Kendall. Thanks for inviting me to this Q&A, and thanks to everyone who has taken the time to join this Q&A session and submit questions. I am glad to see there is so much interest in this topic, with a lot of questions already submitted. I will do my best to answer as many as possible in the next hour.
Comment From Julia Nikiforova: Hello. Could you give input on the following: Is a merging of ECC systems required or not? What are some reasons it would be or possible scenarios where this would be the case?
Sonam Pawar: Hi Julia, thank you for your participation.
The merging of ECC systems is not required to migrate to SAP S/4HANA per se, but there are scenarios where it might make sense to do so, such as global standardization or landscape consolidation. We had these scenarios and cases even before SAP S/4HANA. SAP S/4HANA can be the catalyst for merging systems by providing benefits such as faster business consolidation and period end processing.
There are 2 fundamental options. Option one is to merge all ECC systems into a singular S/4HANA system. The second option would be to use the ECC and S/4HANA system in a hub and spoke architecture – a deployment option known as Central Finance. Central Finance is most beneficial for shared services scenarios while also providing autonomy to business units using their individual ECC systems. Prior to Central Finance, SAP SLO (System Landscape Optimization) services would have been needed for complex merge scenarios (in fact, Central Finance leverages some technology that came from SLO). Central Finance can also merge non-SAP systems leveraging SAP Landscape Transformation (SLT) Replication Server and possibly SAP Data Services. In fact, there is a Rapid Deployment Solution/Best Practice that supports one time cutover for SAP S/4HANA.
Comment From Adeel: Is Central Finance a one way data flow, or can the data flow back to the source ECC box?
Sonam Pawar: Hi Adeel,
Thanks for your question. Currently the Central Finance model allows only one direction of data flow (i.e. from source systems to target S/4HANA system). The aim is to facilitate central processing as seen in shared services business scenarios, but that will not flow back to ECC.
Comment From Adeel: What month-end close activities can be done purely in the Central Finance system, and what activities must be done in individual ECC boxes (e.g. Depreciation, Manual journal entries, Foreign Currency Revaluation, Settlements)?
Sonam Pawar: Hi Adeel,
Thanks again for your participation. The Central Finance system is perfectly capable of processing the period end activities on the transactions posted from a source ERP. However, choosing the transactions to be centrally or locally processed is purely a business decision
Comment From Guest: If the conversion from SAP ECC 6.0 to SAPS/4 HANA is not successful, can the customer can revert the changes? Did SAP planned for this?
Sonam Pawar: Hello,
Thank you for your participation. Even though a complete reversal of the conversion process is not possible, the below SAP note advises on the steps to correct the conversion discrepancies.
https://launchpad.support.sap.com/#/notes/2138644/E
The SAP Activate methodology and best practices for solution deployment will guide you through the process to help mitigate the risk of not being able to revert the changes from conversion. Refer to https://go.sap.com/documents/2015/10/64bc4eb9-467c-0010-82c7-eda71af511fa.html
Comment From kumara: Could you please share the differences between the 1503 & 1605 release of SAP HANA Finance?
Sonam Pawar: Hi Kumara,
There have been quite a few changes in 1605 from 1503, few of which are highlighted below:
– Material Ledger functionality such as profit center and group valuation (which can now be migrated if this functionality is already turned on in your SAP ERP).
– New asset accounting
– Profit center valuation
In order to upgrade from SAP Simple Finance 1503 to SAP S/4HANA Finance 1605, please note many changes of Fiori applications. For more information, refer to SAP Note 2242596.
https://launchpad.support.sap.com/#/notes/2242596/E
https://launchpad.support.sap.com/#/notes/2255079
https://launchpad.support.sap.com/#/notes/2235268
In SAP Financials, legal and management ledgers were merged into a single coding block known as “Universal Journal” (a singular line item table named “ACDOCA”).
For materials management, the data model and tables were simplified into their own singular table named “MATDOC.”
Comment From Martin: SAP documents say that period end closing should be done before migration to S4. If MEND is not done, what are the implications and how will that affect the post-migration work?
Sonam Pawar: Thank you for the question. As part of any system migration or upgrade (SAP S/4HANA or not) it is advisable to close the books and move with a trial balance. If month end close has not been processed, there are open positions on orders, WIP valuation and results analysis impacts. The reconciliation effort for mid-month migration is much greater than the same for a period end migration.
Comment From Jephy Pothen: We need to activate CO-PA in SAP ECC6. We foresee that activating CO-PA in ECC6 will have potential performance issue. Can you advise on how to move only CO-PA to HANA?
Sonam Pawar: Hi Jephy,
Thank you for the query. If you only want to move CO-PA to HANA, you don’t need SAP S/4HANA or even Suite on HANA. There is an option known as CO-PA Accelerator that leverages SAP HANA as a secondary database connection, also known as the “Sidecar HANA” approach. The CO-PA Accelerator can accelerate not only reporting but also certain areas of processing.
Comment From Pornthep: What are the differences between S/4HANA and S/4HANA Finance?
Sonam Pawar: Thanks for your participation!
S/4HANA Finance is only focused on FI and CO functionality changes, while S/4HANA covers not only Finance but the rest of ERP. For example S/4HANA Finance merges FI and CO into the Universal Journal for transactional records (table ACDOCA), while S/4HANA includes not only the Universal Journal but also simplifications in logistics, such as the material document table MATDOC in Materials Management, that you don’t get in an S/4HANA Finance system. Note that because of these differences, these versions are on separate but related release schedules.
Comment From V K REDDY: Hi Sonam Pawar. I am from Cape Town, South Africa and am working at SAP Functional Support in Retail. I have experience with SAP FI as a Functional Consultant on 4.6 & ECC 6.0 but would like to learn more about S/4HANA Finance. Can you please share/forward some valuable materials & configuration documents? Also, I have some experience on data migration but would like to learn about migration processes for S/4HANA Finance. Your support in this is highly appreciated. Thanks.
Sonam Pawar: Hi Mr. Reddy,
I’d happy to help you find some pointers. Please see a few links posted below that you might helpful:
https://open.sap.com/courses/s4h4
www.sap-press.com/sap-simple-finance_3793/
https://discover.sap.com/S4HANA
Comment From Patti: What is the recommended implementation strategy when multiple instances of SAP are involved — 1) full migration, 2) migrating all financial transactions for one instance at a time, 3) migrating a subset of financial activity across all instances at one time, or 4) something else? What factors should be considered when determining an implementation strategy?
Sonam Pawar: Your options include: 1) Migrate each instance separately, 2) Standardize on a new greenfield implementation, 3) Merge all instances via Central Finance, or 4) Select a hybrid option of the above, such as migrating one instance and using Central Finance to bring in the rest. Central Finance also enables the subset scenarios you mention. Key factors include how much business process reengineering is needed and how many SAP (and non-SAP) instances are involved.
Comment From Patti: If fixed assets are maintained in individual ECC boxes, can month end depreciation process be executed in Central Finance? Or must that process be executed in individual ECC boxes?
Sonam Pawar: Hi Patti,
Thanks for your question. Ideally the depreciation run can be posted locally or centrally depending on the business decision. However, the benefit of doing it in Central Finance is that the S/4HANA Universal Journal ACDOCA is capable of recording depreciation amounts by asset. This improves the level of reconciliation between the asset sub-ledger and general ledger. In my previous ECC engagements, I have experienced accounts having to spend considerable hours in order reconcile the “Asset Balances” report with the “GL detail” report. With ACDOCA the effort is negligible since each depreciation line item contains the corresponding asset number.
Comment From Guest: Hi. What will be the impact of the developments that we have made to our processes after implementing HANA?
Sonam Pawar: Hi. Thanks for your question.
It is important to distinguish between the impacts of HANA and S/4HANA. For example, HANA can impact SQL written in custom developments, such as those around sorting and indexing. There are tools to support ABAP compliance to HANA such as checks in the SAP Code Inspector (transaction code SCI). Then there are S/4HANA impacts, such as the extension of a material number from 18 to 40 characters as of version 1511. If development was hard-coded to 18 characters in any way, this can break. Another example is that customers and vendors are treated as business partners as of 1511. Logic can break because of these changes. Typically, the data model changes (such as Universal Journal) get a lot of attention, but the old tables have been converted to compatibility views so programs that reference tables such as COEP and BSEG should be okay if they are only being queried.
Comment From Kee: What are the implications for the functional roles with the S/4HANA migration? Are the standard transactions becoming obsolete or having much less of an impact on the roles?
Sonam Pawar: Hi Kee,
Thank you for the question. There are certain transactions that are becoming obsolete in S/4HANA, e.g. cost element maintenance KA01/KA06, customer/vendor maintenance FD01/FK01, and bank account maintenance FI12. Since the technical structure of these transactions has been changed, the object mapping to the business role has become obsolete as well. Using one of the aforementioned examples, in S/4HANA the business role responsible for cost element maintenance would need access to the GL account.
Comment From Sanjay Motwani: What are some possible deployment options with S/4HANA and ECC 6.0?
Sonam Pawar:
Thanks Sanjay for your question. The various deployment options available are:
1. New implementation – For a customer moving from a non-SAP ERP system, the new implementation option is most suitable. For an existing customer, this option gives a chance to redesign business processes and implement SAP from scratch. Note that with this option you can have further options to implement either cloud or on-premise versions of S/4HANA.
2. Landscape transformation – For a customer who has multiple SAP ERP systems (with the same or different versions), the transformation option helps to consolidate the SAP landscape into one S/4HANA system.
3. System conversion – For an existing SAP customer, this options provides the opportunity to move to S/4HANA without disrupting their existing system. SAP provides easy conversion methodologies for FI, CO, AA, and ML modules.
4. Central Finance – Leave your ECC 6.0 system in place and replicate the financial postings into an S/4HANA system.
For more information on the deployment options and detailed steps for each one, please refer to below course:
https://open.sap.com/courses/s4h4
Comment From Sachin Rodrigues: What is the approximate time it takes to migrate from ECC 6 to S/4Hana Finance?
Sonam Pawar: Thanks Sachin for your participation.
Here are a few references that refer to project timelines and conversions:
It took the company Florida Crystals 8 weeks. Here is the video: https://www.youtube.com/watch?v=AKd9uya2ZvY
La Trobe Univeristy went live in 20 weeks. Here’s a video of their story: https://www.youtube.com/watch?v=pOUbh7GlCIw
Here’s an article that lists a few other companies: https://go.sap.com/docs/download/2015/08/aa95c1a6-3a7c-0010-82c7-eda71af511fa.pdf
The biggest time consideration for migration is not the migration itself – it is the preparation for it and the reconciliation before and after system conversion.
Comment From Misah: Please highlight the main differences in term of functionality between ERP6.0 and S/4HANA Finance.
Sonam Pawar: Hi Misah,
Thank you for your query. In terms of functionality, there are a few main points that differentiate S/4HANA Finance from ECC:
1. The Universal Journal replaces many transactional tables like BSEG, MSEG, ANLC, etc. This leads to faster processing, simpler reporting, and easier reconciliations
2. The totals tables in ECC are replaced by views of the same name in S/4HANA Finance
3. The secondary cost elements are now part of the FI Chart of Accounts
4. The extension ledger provides minimal duplication during journal entries
5. Cost components split by account in account-based CO-PA
6. New Asset Accounting
7. Material ledger is mandatory to be activated
Here is a link to the Simplification Guide.
Comment From Sachin Rodrigues: What is new in SAP S/4HANA Finance compared to Simple Finance?
Sonam Pawar: Thanks for another interesting question. If you are referring to the differences between SAP Simple Finance 1.0 and SAP S/4HANA Finance (starting with version 1503), then the biggest change was the introduction of table ACDOCA (and the Universal Journal). Another big shift was moving away from HANA Live for reporting and analysis to S/4HANA Analytics, predicated on ABAP Core Data Services technology as opposed to HANA views. New Asset Accounting and new Cash Management functionality was introduced in SAP Simple Finance 1.0, but there have been changes with each update. There has also been a lot of Fiori application changes.
Comment From Patti: With regard to Master Data in Central Finance, are there any new/unique fields available for Finance Master Data or within MDG for use only in Central Finance?
Sonam Pawar: Thanks again Patti for the interesting question.
Central Finance is an S/4HANA system, so there are new master data concepts to consider. For example, secondary cost elements become G/L accounts. Bank account management is done via Fiori apps. Central Finance only uses MDG as a master data mapping tool from source to target systems.
Comment From Kumara: Is today the day we have the online virtual training on Landscape for the Migration to S/4Hana Finance?
Sonam Pawar: Hi Kumara,
The training is not part of the current Q&A session but is accessible as an OpenSAP course. Please see this link: https://open.sap.com/courses/s4h4
Comment From Sachin Rodrigues: Is S/4HANA Finance available for all industry-specific solutions? I found that for IS Retail it is not yet released.
Sonam Pawar: Check out SAP note 2233539 to get a list of all SAP ERP Industry Solutions released with the SAP S/4HANA Finance 1605
Comment From V K REDDY: Hello Ms. Sonam. Thank you for suggesting links to follow for learning about S/4Hana Finance. How long will it takes to me to learn S/4Hana Finance completely? As I said earlier, I am working in SAP Retail Support where my organization is still using ECC 6.0 / ECC 6.5. They are busy migrating to S/4HANA currently, but they are not moving SAP Finance. Is it possible to run both ECC 6.5 for SAP FI and Retail with S/4HANA? If they decide to also move Finance to S/4/HANA or S/4Hana Finance, how long will it take to move? And how can I get the opportunity to work in a new S/4Hana Finance demo, which would be really beneficial to me for multiple skills like, MM, Retail, Finance etc., in the retail industry. Thank you in advance for your answers.
Sonam Pawar: Hello,
It is possible to run finance on SAP ECC 6.0 and SAP S/4HANA both by implementing SAP Central Finance. Please see an earlier answer to a similar question.
It took the company Florida Crystals 8 weeks. Here is the video: https://www.youtube.com/watch?v=AKd9uya2ZvY
La Trobe Univeristy went live in 20 weeks. Here’s a video of their story: https://www.youtube.com/watch?v=pOUbh7GlCIw
Here’s an article that lists a few other companies: https://go.sap.com/docs/download/2015/08/aa95c1a6-3a7c-0010-82c7-eda71af511fa.pdf
The biggest time consideration for migration is not the migration itself – it is the preparation for it and the reconciliation before and after system conversion.
Comment From Sachin Rodrigues: If we have ABAP reports on total tables, what will happened with that report post migration?
Sonam Pawar: Those reports should work due to the “compatibility view” concept in S/4HANA. The total tables have been replaced by the views of the same name.
Comment From Sachin Rodrigues: I read that on cloud we cannot change SAP standard things, but we have done so in our recent E2E project. Howeer, that cloud is not managed by SAP. Is it correct that if SAP is managing that cloud platform, standard things cannot be changed?
Sonam Paware: Hi Sachin,
Please take note that there is a difference between HANA Enterprise Cloud (HEC), HANA Cloud Platform (HCP), and SAP S/4HANA, Cloud Edition.
SAP’s HEC is Infrastructure-as-a-Service (IaaS) but comes with SAP-specific managed services as a full-service model that differentiates it from other third-party hosting providers like Amazon Web Services (AWS), which only rents you the infrastructure (e.g. transports and security are still owned by AWS customers as with on-premise SAP customers). But in either case (AWS or HEC), customization is the customer responsibility unless separately outsourced.
In contrast, SAP’s HCP is a Platform-as-a-Service (PaaS) offering that allows customers to side-by-side extend existing applications (either cloud or on-premise) or build new ones.
Meanwhile SAP S/4HANA, Cloud Edition is neither HEC or HCP but rather is Software-as-a-Service (SaaS), with three public (enterprise, professional services and marketing editions) and one private (enterprise edition) option. The extensibility options for these S/4HANA cloud versions are either “ex-app” (i.e. side-by-side as with HCP) or “in-app”.
In-app extensions can be categorized as: 1) Classic extensibility, 2) Key user extensibility, or 3) Managed extensibility. Classic extensibility is the functionality that has been traditionally available via ABAP Workbench and, more recently, via Eclipse for on-premise systems. The key user extensibility enables low impact but high value-add customizations like adding fields to tables or changing business logic. It is available for both on-premise and cloud solutions. Managed extensibility is a new concept where custom ABAP is developed and executed in a separate cloud environment but can be plugged into both on-premise and cloud editions without disrupting them (e.g. only API calls and no modifications allowed). More detailed reading can be found at https://go.sap.com/documents/2015/07/2ad59b27-347c-0010-82c7-eda71af511fa.html
Comment From Martin: Hi Sonam, thanks for all the replies. Of course for any upgrade/migration closing the books beforehand is the preferred approach. However, if that is not possible due to customer requirements and we need to do the migration near the end of the month (without closing the month), besides the additional effort for reconciliation, do you see any risks in terms of data consistency?
Sonam Pawar: Beside complicating the reconciliation effort, one risk is that you will not be able to migrate as you did not pass a migration pre-check program. To give an example, there is a new Asset Accounting module that needs to comply with the pre-check program RASFIN_MIGR_PRECHECK prior to migration. Amongst other things, it checks that no Periodic Asset Postings are hanging and reports errors if APC values in a company code are not completely posted. Therefore, asset-related close activities include performing closing for periodic asset postings (with program RAPERB2000) and executing the periodic depreciation posting run (with program RAPOST2000). To reduce risk, review the following period-end closing activities related to SAP S/4HANA system conversion here: https://help.sap.com/saphelp_sfin300/helpdata/en/31/6ed354b65ced05e10000000a4450e5/content.htm
Comment From Jephy Pothen: Thanks for the explanations. Can you let us know where we can get more details for this “Sidecar HANA” option?
Sonam Pawar: Hi Jephy,
Please see a few links that might be of help:
https://www.slideshare.net/davidcdixon/hana-finance-accelerators
Comment From Rob (Sydney): What are some key considerations if we choose to migrate SAP ECC Finance to S/4HANA Finance but leave our SAP IS-Retail/SAP POSDM on their current platform?
Sonam Pawar: Hi Rob,
Thanks for the question. If the SAP IS-Retail/SAP POSDM are retained on their current platforms, the systems can be connected in a hub and spoke architecture – a deployment option known as Central Finance. The S/4HANA Central Finance allows the user to post the data in the source system while replicating the accounting entries into Universal Journal ACDOCA.
Please check out SAP note 2233539 to get a list of SAP ERP Industry Solutions released with the SAP S/4HANA Finance 1605 (especially IS-Retail).
Comment From Sridhar: Could you tell us how CO-PA works with S/4 HANA
Sonam Pawar: In S/4HANA, Costing Based CO-PA is not impacted, since the CE-prefixed tables remain as before. However, activation of account-based CO-PA is mandatory for using the CO-PA features of the Universal Journal. In S/4HANA, the account-based CO-PA has been enhanced with COGS cost components split by accounts, production variances split by account, and invoice quantities for management accounting allocation.
Comment From Midhu: How is archived data handled when migrating ECC to S/4HANA FI?
Sonam Pawar: Hi Midhu,
Thanks for the question. Please see the link below that can be of help to you.
Comment From Misah: What’s are some key challenges and issues faced when implementing S/4HANA Finance?
Sonam Pawar: Hi Misah,
One of the key upfront challenges is defining your business case. Another challenge is scoping what you will take on first. SAP BPC, Fiori, new analytics and new applications (e.g. new Cash Management) are all example pathways to SAP S/4HANA. Also, there are a lot of misconceptions of what S/4HANA is or is not; time and diligence are needed in an actual SAP S/4HANA system to avoid ivory tower discussions.
Kendall Hatch: Thanks to all who posted questions and followed the discussion!
Sonam will be speaking at the upcoming Financials 2016 conference, 10-12 October in Singapore. For more information, click here.
This topic will also be covered in depth at the upcoming SAP S/4HANA Bootcamp events, running in the United States, Europe, and Australia. For more information on those events, click here.
Finallly, thanks to Sonam Pawar of TruQua Enterprises for taking the time to respond to these questions today!
Sonam Pawar: Thank you Kendall for setting up the Q&A and supporting me through it. Thank you all for your participation and the interesting questions!
Premium
