Computerized Accounting in ERP Systems

This article discusses the benefits and challenges of using SAP S/4HANA for financial management. It explores how companies like Commonwealth Bank Group and Center Point Energy have migrated to SAP S/4HANA and the challenges they faced. The article also explains the difference between SAP S/4HANA Finance and current SAP ERP FICO.

Computerized Accounting in ERP an Systems1
COMPUTERISED ACCOUNTING IN AN ERP SYSTEM
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Computerized Accounting in ERP an Systems2
TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
Introduction......................................................................................................................................3
Benefits of SAP S/4HANA to Customers.......................................................................................4
The Difference Between SAP S/4HANA Finance and Current SAP ERP FICO...........................6
Companies` Migration to SAP S/4HANA and Challenges Encountered........................................8
The Commonwealth Bank Group................................................................................................8
Center Point Energy...................................................................................................................10
Challenges Faced by the Two Companies while Adopting the SAP S/4HANA.......................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

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Introduction
SAP S/4HANA which has been in existence since 2011 as SAP HANA has its inception
as an advanced version on February 2015 by the New York Stock Exchange. It is a broad group
of financial accounting and management remedies surrounding risk together with compliance
management, treasury, and economic threat control, collaborative finance endeavors, accounting
as well as financial close, covering financial analysis and planning all these are made possible by
the hyper-efficient SAP HANA database memory in the software. The rising demand for this
software in business has led to the extensive training for many beginners. By October 2015, over
1200 customers had purchased and implemented the software due to it flexibility to be
customized to fit the financial needs of the premise, and in 2016 April the number had risen to
5400. The remedies have phased away the traditional barriers that existed between, transactional,
planning and analytical systems in business because of its instant delivery of insights in financial
information. India which is the pioneer country and other countries abroad that have recognized
the software efficiency in financial management have endeavored to offer Certification of SAP
Simple Finance through training (Sebastian G., 2018,np.).
The software is very convenient in the whole portfolio of financial management, but the
adoption and recognition have been enhanced in some areas than others. For instance, the
Financial Planning and Analysis (FP&A) enables the customer to improve profitability,
transform functions and speed up the planning processes while the Accounting and Financial
Close enhances the control and compliance, the capability to accelerate the closing of books
hence minimizing the workloads in the method of accounting and financial close. Besides, the
prediction of cash flow and management of risk and management of liquidity associated with
treasury risk management has been earned by Treasury and Financial Risk Management which is

Computerized Accounting in ERP an Systems4
integrated with the SAP S/4HANA. The version of SAP has been relevant and considered the
most significant update of SAP ERP tactic and platform for at least two decades (Elahi, T., 2015,
np).
Benefits of SAP S/4HANA to Customers
The conceptual adoption and implementation have been beneficial to the users in many
ways and digitalized financial management making it not only convenient but also convenient.
First, it can combine analytics and transaction hence enabling analysis, simulation, reporting,
and prediction. The question related to finance is gathered and answered at the client`s disposal
anytime anywhere as long as the customer implemented the software in the premises. The
predictive, simulational and analytical nature of S4HANA data enables doctors in big hospitals
to manage by keeping track of diseases through clinical indicators. The extensive data in the
health center can be used to monitor results while prescribing the proper treatment. Such
techniques have been employed by big organizations like National Center for Tumor Diseases to
manage and counteract cancer diseases by identifying the patient`s particular molecular profile
and integrating with the research findings and hence prescribing the best treatment based on facts
( Vosough et al., 2016, np).
Furthermore, the analytical transactions, as well as high-volume processes (OLTP and
ALAP) respectively, is reduced and made easier by the SAP S/4HANA, unlike the traditional
model whose data was redundant and thereby the new model creates opportunities by increasing
enterprise `s volumes in the existing investment (Missbach et al., 2016,pp.8). The simplified
version of has significantly decreased the footprint on the solutions almost ten times compared to
the previous model, as shown by benchmark studies, and critical processes of the company have
enhanced as a result. In the case of companies dealing with consumable goods, the software is

Computerized Accounting in ERP an Systems5
instrumental in the sense that it improves customer satisfaction and helps the firm anticipate the
demand and supply trend on the products and services.
The industry solutions and all types of businesses have registered an exemplary level of
technological and innovative advancement that is facilitated by the faster processing of data and
simplifications. Again, the re-integration of functionality that is industry specific with those
created outside the industry aids the companies to function in a variety of contexts within the
industry and facilitated the flexibility of the company to adjust to the situations and challenges
(Nica et al., 2017,pp.1667). New applications in SAP S/4HANA architecture makes the system
landscape convenient and hasten cloud deployment on the commercial scale being the simplified
information model that focuses on a single approach on a business challenge creates a conducive
foundation for implementation as well as of such like transactions. Construction corporations
like Swiss Property can reinvent the wealth creation that is associated with real estate
investment.
SAP S/4HANA has sophisticated automation for single based processing, predictive or
simulative abilities and text mining that is tailored to deal with the contemporary challenges like
industry 4.0, internet of things, big data scenarios, unstructured data among others. The
management and processing of complex and voluminous data are possible with the use of the
software. The IT to adapt and view configuration settings due to its ability to use a guided
configuration that is relevant scope as well as allowing the clients to change enterprise
configuration. SAP S/4HANA cloud platform which is leveraged to provide service can open to
JAVA development and Cloudfoundry only to mention a few (Sun, R., Gregor, S. and Keating,
B., 2015, np). The data from various sources are connected and leveraged faster and creates
insights into actions that enable the business transactors to avoid performing exceptions by

Computerized Accounting in ERP an Systems6
preventing them. The speed at which SAP S/4HANA performed transactions cannot be matched
with any other software and hence enable the customer to get solutions on SAP Business
Warehouse and will allow them to access Customer Relationship Management as well as the
whole ERP framework (Fahn et al.2017,pp.94).
The Difference Between SAP S/4HANA Finance and Current SAP ERP FICO
SAP FICO is a functional unit of SAP ERP central that mandate a company to manage all
the financial information in reporting and analyzing financial statements used in the decision
making of the company. The two modules that makeup SAP FICO are SAP Finance and
controlling,(FI) and (CO) respectively. The first one deals with financial reporting as well as all
the accounting while CO concerns itself with both planning and monitoring of expenses. The
modules due to the closeness in their functions have been treated as one although they were
launched differently (May, N., Böhm, A. and Lehner, W., 2017.np).
SAP FICO is an older version of SAP ERP while the S4 HANA is a modern version. The
database design between the two is different with S4 HANA offering an advanced solution with
the help of its components such as Fiori. While SAP FICO is restricted to only reporting and
analyzing and planning and monitoring of financial statements, S4 HANA is a comprehensive
software that deals perform many functions giving attention to the customers(Gualtieri, 2017,
np). SAP FICO deals with such tasks as monitoring the cash flow, formulation, and analysis of
balance sheet as well as evaluating income statements. SAP CO on the other side is mandated to
deal with the internal requirements of the company like the formulation of cost center reports and
aids in sales and profit analysis. The module stores the data of the company in SAP FICO while
in S4 HANA the information of the company including financial information is transmitted on-

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premise or to the cloud. The functions and solutions of the company are integrated into the same
software (Wang, Syaiful and Nurul , 2017,np.).
SAP S4 HANA is an in-memory database which deals mainly with the solution on
financial management by offering a central view of financial information that is consistent with
all the company`s activities in all the departments reducing expenses which have used in
reconciling the functions (Plattner and Leurkert, 2015, np). It also enables one current finance to
consolidate numerous back-end information resources. On the other side, SAP FICO is a
component of SAP ERP central unit which allows the company manages its financial data,
centrally deals with generating as well as analyzing statements that are related to accounting. S4
HANA can be both on the cloud or on-premise according to the needs of the customers while
SAP FICO is restricted in on the assumption only (Lee et al., 2017,pp.1600). Without the use, S4
HANA SAP cannot dethrone Oracle in the database layer despite both technical and functional
modules of SAP being used in the application as well as presentation. Therefore, the advanced
version of SAP ERP that can overcome such a task is S4 HANA, that have made most industries
move towards the cloud and have dethroned databases that are associated with Oracle from SAP
customers.
S4 HANA is a faster database that cannot be compared to any database in existence while
FICO is the functional module that is instrumental to any organization regardless of the kind of
the database that the company is using. HANA was commonly known as pure or S4 HANA the
extra option given to companies, and therefore no version of the two can replace another in the
market. SAP S4 HANA enables you to create an integrated view of operational together with the
financial data, provide secure, flexible and consumable reporting (Menon, 2016,np). It is also
crucial in automating the process and providing an instant evaluation of the impacts of business

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options with real-time prediction, analytics, and simulations in a user-friendly experience. SAP
FICO through sap finance upgrades the manner in which funding is managed in companies. It
helps the firms to review the financial status of a firm in real time market (Howell, 2015, np.).
The components that makeup FI module include asset accounting, asset payable, account
receivable, general ledger and account consolidation.
Companies` Migration to SAP S/4HANA and Challenges Encountered
The Commonwealth Bank Group
The Commonwealth Bank Group is among the successful corporation that has employed
the use of SAP S/4HANA in the running of almost all its activities. The banking institution based
in Australia was established in the early 1900s with the current shareholdings standing at 800000
and over 52000 employees. Beginning as a central bank then Commonwealth Banking
Corporation in the 1960s, the institution was privatized in 1991 (Lee, 2016, pp.57). It offers
services to Australians that pertains all aspects of finance. With the use of SAP S/4HANA, the
company has modernized customer services by contacting a comprehensive program that has
enhance the manner in which the company does business with the client at the center. The
platform that the software creates for customers is world class and was part of the organization`s
strategic plan (Brunswig et al., 2017,pp.362).
The company has been the leader in customer satisfaction through the creation of variety.
The end to end systems that simplifies banking and make the process more convenient. SAP
S/4HANA is beneficial for the customers in that enable access to improved and new products,
exposure to wide choice and favors flexibility by its real-time 24 7 processing. The firm has

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registered a 30% reduction in error processing within the network and 97% simplification on its
products with 75% decrease in time to market commodities (Fleig, Augenstein, and Maedche,
2018, pp). The company has selected the SAP solution due to its advanced technology platform
like SAP Net Weaver that was facilitated by the appointment of Accenture to aid its
implementation. The integration of the two features led to the creation of customer systems like
CommSec, CommSee, Customer Information Facility (CIF), CommBiz and NetBank that offers
an extensive experience on the satisfaction of the customers and their needs as well as the
implementation of the whole changes (Vosough et al., 2016,np.).
The institution management has invested in the program preparation and research for two
years to realize its fruits of $200 efficiency annually. The implementation is an ongoing process
that focuses on the company`s its IT capability that entails reorganizing the functions of the
company. The simplicity in IT management has guaranteed an advanced customer avenue
platform, business services, operational profits as well as cost savings and the infrastructure. The
agility, openness, and flexibility have enabled the customers to enjoy a friendly customer tailored
banking (Roztocki and Weistroffer, 2015.pp,660).
The installation of the software has rendered the legacy systems that have traditionally
been used for over 45 years by the company and other sizeable monetary organization which not
had the courage to adopt SAP S/4HANA. Therefore the Commonwealth Bank Group is placed at
a strategic position and ahead of their rivals not only in Australia but also around the globe. The
management of data systems and the use of insights from the research findings make the
company up to date, and the modernized company was hence turning to be a destination for all
the banking services (Bartoletti and Rymer, 2016,np ). The software which has continued to be
discovered and adopted by companies has seen the growth and modernization of the

Computerized Accounting in ERP an Systems10
Commonwealth Bank Group. The combination of both Accenture and SAP S/4HANA has
contributed to the transformation witnessed in the firm `s ability and agility that has seen an
increase in efficiency, quick response to competition in the market and enhanced customer
experience (Sebastian, 2018,np.).
Center Point Energy
Another company that has succeeded in the use ofy SAP HANA is CenterPoint Energy
(CNP). The company is based in Houston, Texas, United States OF America and is restrained to
serving a full, market on natural gas and Fortune electric utility. Predictive analytics in SAP S/4
HANA technology enable the customers' services agents in the company to identify the needs of
the customers quickly and more efficiently. The calls can be routed to the relevant
representatives of the company for attention and solution that is accessible from the nine systems
that are integrated into one data warehouse. The company has recorded a 15% rise in the
responses handled by the use of Interactive Voice Response (IVR) instead of an agent; credit
goes to predictive analytics, a component of y SAP S/4HANA.
The productivity of the company has increased to 200% because of the easy access to the
information in the SAP S/4HANA warehouse. The rate of prediction of data in the system has
improved from 90 seconds to one second, representing a 98.8% increase rate (Fleig, Augenstein
and Maedche, 2018,pp.230). The user experience through the adoption of Fiori as well as cloud
offerings has significantly been improved. The real-time analysis and reporting that provides
details of the company have given the company the morale to non-disruptively adopt and evolve
along the recommendation of SAP S/4HANA. The values of the company that is exemplary and

Computerized Accounting in ERP an Systems11
flexible have facilitated the transformation of the company in line with SAP S/4HANA doctrines
and provisions.
Challenges Faced by the Two Companies while Adopting the SAP S/4HANA
Migrating to S/4HANA is very traumatizing for the companies because they require a
business-linked roadmap that outlines plans for transitions to avoid business recession periods
and operation risks. Any strategy needs resources that require extra budgeting. There three main
scenarios and strategy involved in the movement to S/4HANA. First, New implementation also
called green field for new companies which had not implemented the first version SAP ERP or
those ready and willing to re-install the core solution. Secondly, system conversion where there
is no system upgrade to S/4HANA. The process is tedious as it involves the transformation of
data that require consideration before being done. Lastly, landscape transformation that includes
migration of chosen applications and system consolidation to S/4HANA done when there is a
need to combine SAP systems into one functionality (Menon,2016,np).
The significant challenges are in the architectural installation and activation of SAP
S/4HANA components like CDS, HANA Studio, Gateway, Analytics, Fiori, among others. The
new and updated versions and packages need to be installed as it is continuously released to
make improvements. The system requires appropriate checks on the components versions as well
as an enhancement or support packages, and hence the company should put in place strategies to
keep in check the processes of SAP S/4HANA (Schneider, 2017,pp.165). Due to law regulation
as experience in Mexico, localization, customization, and development of codes from standard
functionality are difficult.

Computerized Accounting in ERP an Systems12
Change and migration from the traditional approaches to accounting for the adoption of
SAP S/4HANA is easy to say but hard to adopt due to the human resistance to change. The
consultants, IT specialists, sponsors, and directors, as well as the business analysts, should take
the innovational and changes made in the business organization. The company on top of
investing in the adoption of the new technology should also consider change management and
how to go about it. The purpose of preparing for the smooth inception and implementation by the
company is to is to align the firm`s stakeholders to the transition and innovation. Therefore little
communication the parties involved may result in the friction towards the change and hinders the
final objectives and goals of the company (Kolarića and Vukomanovića, 2017, pp). The adoption
of SAP S/4HANA requires prior considerations and preparation which may cost the company in
motivating and training the personnel who are going to manage and facilitate not only the
implementation but also the use. Being an innovation in business, their limited number of experts
who can handle the comprehensive and sophisticated software and hence the organizations are
reluctant to implement for fear of the unknown.
Conclusion
To sum it up, SAP S/4HANA is the current and most relevant software and advanced
component of SAP ERP. The companies using this version of the SAP have registered
tremendous improvement regarding csustomer experience, increased efficiency and advanced
management of financial statements. Consequently, the productivity of the firms is significantly
noticed. SAP S/4HANA has some importance that ranges from simplification and processing of
data, prediction of solutions to problems, massive storage, and handling of information in the
cloud to the creating custom tailored experience. There are distinctions between SAP S/4HANA

Computerized Accounting in ERP an Systems13
and SAP FICO despite being the components and version of SAP ERP. SAP FICO is made up of
two aspects as indicated by its initials FI and CO. SAP FI deals with the external requirements
of a company like center reporting and analyzing of profits while SAP deals with internal
elements of the company that involves the parsing of cash flow and balance sheet. The two
concepts were launched independently, but the closeness in the usage has made it be treated like
one. The SAP S/4HANA.
On the other hand is an in-memory database that is tailored to meet all the requirements of the
company hence advanced in functions compared to SAP FICO. However, there are distinct
challenges that come with the adoption of this software. For example, there is a reluctance to
change by the stakeholders ranging from managers to sponsors who would wish to maintain the
status quo that they are used.

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