Computerized Accounting in ERP

This report provides a historical overview of SAP S/4HANA Finance and discusses the difference between SAP S/4HANA Finance and current SAP ERP FICO. It also outlines the benefits of SAP S/4HANA Finance for businesses and includes case studies of companies migrating to the software. The report is relevant for students studying computerized accounting in ERP.

Running head: COMPUTERIZED ACCOUNTING IN ERP
Computerized accounting in ERP
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COMPUTERIZED ACCOUNTING IN ERP
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Historical overview of SAP S/4HANA Finance:.......................................................................2
Difference between SAP S/4HANA Finance and current SAP ERP FICO:.............................2
Benefits of SAP S/4HANA Finance for businesses:..................................................................2
Case studies of the companies and the issues faced migrating to SAP S/4HANA Finance:.....2
Conclusion:................................................................................................................................2

COMPUTERIZED ACCOUNTING IN ERP
Introduction:
The report is prepared to provide a brief historical overview of SAP S/4 HANA
Finance and the difference between SAP S/4HANA Finance and current SAP ERP FICO is
also demonstrated. The benefits of the software is also outlined in the report and such benefits
is demonstrated using the examples of case study of companies. SAP S/4HANA Finance was
earlier known as simple finance of SAP and is a part of S/4 HANA suite which consists of
four components such as user experience, functional components, app components and
reporting components. The first application propelled by the SAP was S/4 HANA for the new
business suite and it helps the organization in accelerating, optimizing and simplifying the
finance function with the help of its functionality. In addition to this, the focus of SAP with
the introduction of S/4 HANA has been to simplify the model of data and application logic.
All the statements concerning the analysis of the SAP has been done by conducting a review
of literature.
Discussion:
Historical overview of SAP S/4HANA Finance:
The historical of SAP is associated when the first product was released in the market.
The building of first product of SAP relied on the system of one tier system which indicates
the requirement of three layers of ERP system by installing on single server or system.
Releasing of the second product was done on the two systems with the latest version of
architecture using three system or server. The building of SAP was changes completely after
the versions of three tier structure that resulted in the introduction central component of ERP
in 2004. Users are enabled to run the strategic management enterprise and business

COMPUTERIZED ACCOUNTING IN ERP
application and the business application was extended by the central component of ERP to
the internet or web browser. Until 2012, R/3 is considered to be the most innovative product
of SAP. However, with HANA came into existence, this changed and there has been
incremental innovation. The database of new HANA boosts its performance by using the
latest technological innovation. This database is positioned by the SAP as the data for central
location. With the progress towards S/4 HANA, the increased value of the software with the
stepping stone include refinement of the existing process, leveraging technological
performance of HANA DB, implementing new components, integration with the network of
business partners, flexible and user friendly mobility and interface. There is transformation to
the simplified and new table structure with every release of S/4 HANA. The functionality
becomes available in the module around logistics and finance with the release of 1610
The software is a part of enterprise management of SAP and is the latest solution for
the office of CFO. Organizations relying on the SAP S/4HANA Finance that creates a
consolidated view of all the financial and operational data that assist them in flexible
reporting along with the process automation. The software provides a solution in several of
finance as a part of financial planning, ERP environment, financial and treasury risk
management, enterprise risk, collaborative operations of finance, compliance management
and enterprise risk. Among both the Information technology and finance experts, SAP
S/4HANA Finance is considered as the hot topic as this platform of enterprise management is
maturing rapidly (Ahmad et al. 2014). There are four components incorporated in the SAP
S/4 HANA and they are discussed below:
Core/functional component- Being the software’s core component, SAP is engaged
in several finance enhancements and capabilities. In order to consider the migration or in the
event of upgrading to S/4 HANA, it is required by the user to be on at least SAP ERP
component, SAP Net weaver, SAP HANA version and enhancement package 7. The

COMPUTERIZED ACCOUNTING IN ERP
migration of transactional table involves a functional upgrade that involves movement from
ECC 6.0 to S/4 HANA.
Component of User experience - The component of SAP Fiori based GUI
component helps in interaction using Fiori screens with the core component that is user
friendly. It requires version 2.0 and SAP net weaver 7.4 of the gateway of SAP. This
component is considered as an optional component which the users can continue as their
interface (Hassan and Mouakket 2018).
App component- The app component is the assortment of analytics application in the
financial suite for enhancing the financial decision making in an enterprise.
Reporting component- Using the prepackaged HANA lives views, this components
enables the analytics and real time reporting. For the installation, there is prerequisite for the
SAP HANA and SAP ERP are SAP HANA Live.

COMPUTERIZED ACCOUNTING IN ERP
Difference between SAP S/4HANA Finance and current SAP ERP FICO:
The difference between SAP S/4HANA Finance and current SAP ERP FICO are
outlined in the table below:
SAP S/4HANA Finance SAP ERP FICO
SAP ERP is the SAP ERP 6.0 suite that is
capable of running on the database of SAP
HANA. It was the first application that was
launched by SAP that helps in organization
in quickening, augmenting and simplifying
the finance function.
SAP FICO is the crucial module of ERP and
the financial transaction data is stored in the
CO and FI modules where CO stands for
controlling and FI standards for financial
accounting and assist in the implementation
of all the SAP. FI and CO are the two
modules that is incorporated in the SAP and
each one of them is used for specific process
of finances.
Organizations are required to evaluate all
the prerequisites for deploying and
installing the database of HANA for
evaluating the migration possibilities to S/4
HANA finance.
This module helps in the integration of
several other modules of SAP such as sales
and distribution, material management,
project system, plant maintenance and
production planning.
The finance function delivery model is
positively impacted by the new S/4 HANA.
This positive impacts are measured in terms
of complexity of reduced data model,
enhanced functionality of the end user,
increasing speed of processing the
transactions and experience that allows
SAP FICO is considered as the core
functional SAP ERP component that assist
organization in management of all financial
data. The objective of the software is to
assist companies in generating and
managing the reporting and analysis of
financial statements which results in

COMPUTERIZED ACCOUNTING IN ERP
organization in improving the areas of
operations of finance, consistency of data,
ease of work, reporting capabilities and
storage (Rajšp et al. 2018).
effective decision making and business
planning (Toprak 2018).
The costs associated with S/4 HANA can be
described as the software and hardware. An
essential element that is required by
organization when accounting for the
hardware cost is the deployment option.
Moreover, software costs is divided into
implementation and license cists.
The monitoring and planning of the cost is
done by one of the components of the
controlling element. An overview of the
revenue and cost of the company is
provided by all the cost element and this
helps in describing the origin of the costs.
Benefits of SAP S/4HANA Finance for businesses:
Organization is required to assess and evaluate the technical capabilities and finance
function of S/4 HANA for each of the underlying operational and financial drivers for
assessing the benefits that is brings to business. The finance industry is revolutionized using
SAP S/4 HANA with the help of which the business firms are enabled to accelerate closing,
sharing and reporting with the analytics of deriving the decisions backed by the faster
transactions. The financial areas receives support from S/4 HANA Finance is a part of an
integrated financial planning, ERP environment, risk management of treasury, compliance
management, managing enterprise risk and collaborative operations of finance. Some other
benefits include less development and maintenance required due to the simplification of data
model and the landscape of IT for the planned innovation of SAP. An organization is required
to have more than a technical solution in order to fully leverage the benefits. In order to fully

COMPUTERIZED ACCOUNTING IN ERP
utilize the functionality of S/4 HANA, it is required by the CFO and its team to organize and
prepare the processes and departments (Tadic 2018). The strategy of organization is cascaded
into the requirements of reporting that is the determining factor in designing the financial
administration and this requires the harmonization and standardization of the processes which
makes them free from superfluous complexities. Some other added benefits to the business
are listed below:
User productivity- Efficiency and productivity is another important benefit offered by
fiori which is an improved user interface and this provides a simple and efficient way for
using the transactional and analytical applications that offers a huge gain in productivity.
Time saving is other benefit offered by the flexibility of S/4 HANA. A real time insight is
generated by the organization into the patterns of collecting cash when managing the working
capital and such insights can be used to make arrangements for different payments with the
customers (Ociepa 2017). The performance of receivable profile is pro-actively tracked that
helps in early detection of risks.
Flexibility- Flexibility in the business is the big improvement that is brought by the
introduction of SAP S/4 HANA and the flexibility helps in providing as single source of truth
that is useful and reliable. The software serve as the real time platform for servicing the
source of global truth at SAP. The managerial and financial accounting is automatically
synced that enables seamless drill through and drill down between the worlds without the
need for reconciliation that is time consuming. The data sheet centric is shifted to forecasting
and business central planning with the help of predictive forecasting, integrated planning and
simulation. Furthermore, the impact created on tightening the payment terms of revenue cycle
can be mitigated with the help of this information.

COMPUTERIZED ACCOUNTING IN ERP
Throughput- System throughput is also other benefits that is provided by SAP S/4
HANA that facilitates the development of various areas such as dramatic shifting of the
processing time. Some added benefits provided by the software is that there is enough time in
the hands of controller to support decision, quality control and core analytical tasks that add
value. This simplified real time reporting is the new capability that helps in reporting of the
transfer duties to the business line in a self-service manner. The personnel involved in
advising the business on improving the performance and analyzing the data has higher
capacity with the usage of SAP S/4 HANA.
Enhanced functionality of reporting- The process of doing business is dependent on
the particular insight that is available. It becomes possible to increase the profitability by
enabling the organizations to make the decisions that is driven by data and gaining a real time
insight into the profitability. It has also been found that the root cause of analysis is also
speed up and this results from the drilling down of the items to the individual line.
Monthly closing process becoming rapid- The existing logic of application can be
reprogrammed resulting from HANA speed and is performed in the real time. The next step
in the process of closing is not required to wait as there will be visible impacts of correct
postings. In addition to this, there will not be any requirement of reconciliation between the
controlling and financial accounting modules with the introduction of Universal journal
(Hassan and Mouakket 2018).
Furthermore, several other benefits are also provided due to the approach of central
finance. This is so because the S/4 HANA is gradually introduced into the complex
information technology platform and with the introduction, there is an increase in the speed
of reporting, replication of data to the central finance and without a long project
implementation.

COMPUTERIZED ACCOUNTING IN ERP
Case studies of the companies and the issues faced migrating to SAP S/4HANA Finance:
It has been surveyed that 60% of the companies are working with legacy system of
SAP and they have made heavy investment in customizing the environment of SAP. The
companies seeking migration to S/4 HANA is resulted due to number of factors such as
beyond and above the lack of support for ECC by 2025 and the migration to the software is
more than the system conversion and technical upgrade. Companies are increasingly taking
the advantages of the opportunity that helps in modernizing the solution and improving the
process of doing business (Krolczyk et al. 2015). The two case studies depicting the
migration to the S/4 HANA software and the issues faced by them are depicted below.
HTC global services is a service provider of information technology and is based on
the USA. The most demanding task that can be encountered by the organization is the
application environment, SAP database migration along with the unbundled products and
associated system software. The migration activities of the HTC global services are
performed in the other system such as quality and development. The challenge faced in
migrating to the production system is based on the acceptance of the user in the quality
system for all processes and functionalities and making the production system available for
consumption after migration. One of the initial challenges faced by the company was to
ensure that the building blocks is in place and the right decisions concerning the planning and
initial steps. Plan execution was another challenge that came with the multiple challenge.
Selecting the right strategy of migration is also considered one of the challenges while
adopting the SAP S/4 HANA. Under the chosen migration strategy by company, it was
considered to have requisite for Unicode and dual stack split from the technical perspective.
The major challenge with the onslaught of cloud technologies was to decide on cloud, hybrid

COMPUTERIZED ACCOUNTING IN ERP
and on premise strategy by HTC (Paulsson and Rosati 2017). However, this depends upon the
maintenance capabilities of infrastructure and security consideration pf HTC global services.
Another challenge that was faced by HTC while migrating to SAP S/4 HANA was
training and educating the staffs on changes and how to maintain and operate the new system.
It helped in ensuring that there is go live proper handover that happen between the
organization and partner. Transfer of knowledge is considered as essential challenge that
should be addressed with the required handover activities and training. Dedicated support
from the staffs and beyond go live was another challenge that HTC faced while migrating to
this particular software. In order to maintain the smooth functioning of the system, the
organization took adequate measures for optimizing and rectifying the issues (Ghattamneni
2016).
It has been found that the major concern across any organization regarding the
migration of project would be minimize the downtime that is the time taken to make the
system available without any interruptions to the users. While migrating to the software, it
should be ensured by the business that they should not face any issues in continuity which is
assured by the approach of minimum downtime.
Wipro limited is a global information technology company that is engaged in the
business process and consulting services company; it has its branches at various cities in
India. It harness the power of cognitive computing, hyper-automation, robotics, cloud,
analytics and emerging technologies to help our clients adapt to the latest digitalized world
and thereby making the world successful. Wipro has lately adapted to the SAP Technologies.
Wipro limited had also adopted to many purchase enterprise resource planning and plotting,
are also introduced into the organization particularly (ERP) systems for managing several
process of business in the organization – which takes into consideration various human

COMPUTERIZED ACCOUNTING IN ERP
resources, accounting and purchasing -- in one integrated system. SAP particularly concerns
with the analysis of the system and program development -- is a computer program which is
intensively in the use of businesses for the system of ERP (Fotso and Edoun 2017). Apart
from the several accounting and purchasing it also includes the features for nearly almost all
the business operations. SAP has several advantages as far as its implementation the Wipro
Limited is considered. It brings about flexibility as the making of the rules and regulations for
almost all the intra and inter transaction within and outside the company. For instance,
according to the system, the process of journal entry is not allowed in the account department
if there is no balance, whereas SAP implementation makes the ease of balancing the
transactions that can be accepted or unaccepted. Access to personnel data can be done only
by qualified employees. The integration of data within a variety of databases has become
flexible with the help of SAP. It has helped the organization to meet the demands as far as the
activities of supply chain and life of the product of Wipro limited is considered. Though it
has declared that the implementation of SAP has been a very costly affair for Wipro limited.
One of the major drawback of SAP is the high cost of purchasing and implementing this
program. As it requires the company to purchase the software and hardware necessary to run
the programs company-wide. Other peripheral costs include the costs include the overseeing
of the process by external consultant and information technology cost. Also in the training
process the employees (Cocca et al. 2018).
Ongoing costs include software maintenance and there is also need to periodic up
gradation in the programmes so eventually the total cost is risen to a great extent. Apart from
the high cost and maintenance issues there is a difficulty of complexity involved in its
implementation and functioning. As Wipro mainly faces difficulty in practicing any software
as it first implements one features of the software and only after the employee gets properly
familiar and well trained with the software so combined it creates complexity in the

COMPUTERIZED ACCOUNTING IN ERP
organization for this reason (Shalaby 2017). So consequently one can say that the adoption
SAP technologies in Wipro has faced many drawback as far as its cost and simplicity is
concerned.
Conclusion:
From the analysis of the facts about SAP S/4 HANA, it has been found that the
software offers the business with wide variety of benefits. There exist considerable
differences between ERP FICO and S/4 HANA. The report has also outlined the two case
studies related to the company Wipro and HTC global services that has adopted the SAP S/4
HANA. However, they faced several issues while migrating to the software which was
overcome by development of the measures that helped in addressing the challenges.

COMPUTERIZED ACCOUNTING IN ERP

COMPUTERIZED ACCOUNTING IN ERP
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COMPUTERIZED ACCOUNTING IN ERP
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COMPUTERIZED ACCOUNTING IN ERP