SAP S/4HANA Simple Finance 1

This article discusses the differences between SAP S/4HANA and SAP ERP FICO, benefits of SAP S/4HANA Simple Finance to businesses, and a case study of Sokotow Group. It also highlights the challenges faced by companies when implementing SAP S/4HANA Simple Finance and how it can help streamline financial processes and improve real-time reporting.

SAP S/4HANA Simple Finance 1
SAP S/4HANA Simple Finance
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SAP S/4HANA Simple Finance 2
Introduction
The availability of SAP S/4HANA Finance can be traced back in the year 2010. There are some
applications that have been able to run on the database of SAP HANA database like SAP ERP
and what many calls as the SAP Business Suite. The official launch of SAP S/4HANA happened
on 3rd of February 2015 at the popular New York Stock Exchange. Despite the introduction of
both cloud and on premise editions, there was only the launch of the on premise edition. On the
6th of May 2015, there was a launch of cloud edition which happened at SAPPHIRE. Over two
decades, SAP S/4HANA has emerged as the biggest update to its ERP strategy. About 370
customers had purchased this system by 21 of April 2015. By the end of October 2015, there was
a record of over 1300 customer getting the services of S/4HANA. However, it was during the
fourth quarter earnings announcement in 2016 that it emerged that customers estimated to be
about 5400 had made an implementation of SAP S/4HANA.
Differences between SAP S/4HANA and SAP ERP FICO
Despite the fact that there are a lot of options for computerized systems, there are some
features that are basic which tend to be more of the same across almost all the programs. Most of
the companies go for the off-the-shelf accounting software systems which are least expensive.
Some businesses are forced to change their operation processes so as to adapt to how the
software works. There are also some accounting software packages which are best suited for
small businesses like QuickBooks, Bookkeeper, and sage (Gellaw 2016, p.85). The company
must set up income and also expense accounts upon purchasing any of this software.
SAP S/4 HANA Finance which was formerly called SAP Simple Finance and is
comprised of some feature that is new like a universal journal, real-time analytics, and
streamlined design (Pattanayak 2017, p.5). SAP Asset Accounting (FI-AA) has been modified to

SAP S/4HANA Simple Finance 3
S/4HANA with the efforts to increase the efficiency of the process. In the year 2014, SAP
announced the release of SAP S/4HANA which came with a lot of confusion about why it came
about. It was one of the Financial Accounting and Controlling (FI/CO) and was so simple in
terms of configuring than the ERP suite. SAP S/4HANA is basically a SAP ERP 6.0 suite which
is compatible with a SAP HANA database. SAP Simple Finance which was version 1.0 came as
an add-on SAP HANA basically for the Financial Accounting module (Singh 2017). SAP Simple
Finance 2.0 is known to be part of SAP S/4HANA that was launched in 2015. SAP Simple
Finance 2.0 outfaced SAP Simple Finance 1.0.
SAP S/4HANA also is accompanied by a component called the user experience or the
presentation. It is a GUI component that assists in the process of interaction with the core
component. It only requires SAP Gateway version 2.0 and SAP Net Weaver 7.4. The other
component is the analytics or the reporting component which plays an important role in real-time
reporting with the help of HANA Live views. SAP HANA Live 1.0 which is for SAP ERP and
SAP HANA are the prerequisites for installation although this tool is an optional component
(Walker, Pathak & Patkar 2016). The last component is an app component that consists of
analytical applications that are so essential for those who are seen to be decision-makers in a
company concerning financial issues.
There are notable differences between SAP ERP FICO and SAP S/4HANA. SAP FICO
has the best configuration both internally and externally for accounting processes (Nica et al.
2017). It is seen to represent both the Financial Accounting (FI) and Controlling (CO). When it
comes to real time transactions, SAP FICO is of great importance in the process whereby it
assists in integrating the SAP modules so as to yield better results. It is also embraced by most
professionals in the field of finance and accounting. High sophisticated ways of financial

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transaction services and best handling of accounts is offered by SAP Financial Accounting. Tax
Authorities and Banks among others are making maximum use of SAP FICO (Finance 2015).
SAP Controlling Module is seen to be behind internal users and data while SAP FI is tasked with
generating a lone system for the whole organization and integrating assorted modules. SAP
S/4HANA is, on the other hand, an ERP software which is known to run the in-memory platform
on the SAP HANA. This comes with more options like it can run on-the-fly analysis, processes
can be optimized, it is designed more for easy usage, and it can also be used by financial
professionals to deliver instant insight (May, Böhm &Lehner, 2017 ).
SAP S/4HANA comes as a comprehensive set of accounting solutions and financial
management taking care of both financial planning and accounting, analysis, financial risk
management, risks occurring as a result of enterprise, and collaborative finance operations
among others. SAP FICO, on the other hand, stands for Financial Accounting (FI) and
Controlling (CO). The financial transaction of data is stored by the FI and CO modules since
SAP FICO is a very important module ERP. Simple finance basically operates on HANA
environment but the module FI operates on ECC 6.0 platform and CO is just but another
financial sub module. SAP S/4HANA runs on HANA DB but on the other hand SAP FICO is
capable of running on Oracle or SQL server that is also a compatible database version (Plattner
& Leukert 2015). Again looking at SAP S/4HANA, all king of information that is functional is
usually stored in one table called Universal journal (ACDOCA) unlike in SAP FICO where
consultants have to mug up n-number of tables.
Benefits of SAP S/4HANA Finance to businesses
SAP S/4HANA Finance comes with a lot of benefits for businesses that makes a choice
of trying it in business. Some businesses view it as a tool that is essential when it comes to real-

SAP S/4HANA Simple Finance 5
time processes of reporting operations of a business. The good thing about SAP S/4HANA is that
it has one of the highest processing speed compared to other financial programs. SAP S/4HANA
is also very portable and it can also be implemented on any premises either in the cloud or even
any other environment that you wish (Schfer & Melich 2016). The products also where this
program is implemented may be on a bundled basis or standalone. The finance industry is being
revolutionized with SAP S/4HANA simple finance since those firms with a lot of data sharing
are all depending on it fully.
Being a core component, SAP S/4HANA there are various financial enhancements and
benefits that come as a result of its existence. For you to upgrade you only need SAP Net
Weaver 7.4 or version 1.0 of SAP HANA. There is an added advantage of a good user interface
that comes with SAP S/4HANA which is Fiori-based GUI. This user interface component can
also be upgraded optionally with NETWEAVER CLIENT to serve as a user interface. There is
also a benefit that is brought about by the enhanced reporting component and the APP
component (Morillejo 2016). This pre-packed component serves a user of the system with real-
time analytics and reporting which is compatible with components like SAP HANA and SAP
ERP. This component serves the financial decision makers of a company with the services of
analytical applications.
SAP S/4HANA is more of a warehouse into one accounting transaction where posting is
directed to one single unified journal rather than multiple balance sheets. It operates so well that
the component that determines the price usually generates a direct entry straight to the journal
table. There is reduced data and duplication across all the FI modules of SAP which is a very
important factor (Rouda 2016). Clients with this system have the joy of transacting and reporting
at the same time whereby the need for offloading and analytics is not necessary. Clients have

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also the liberty to take tactical and strategic decisions basing on the very recent data due to the
capability to combine historical and transactional data at the same time.
There is also a good view of simplifies data as a result of a graphical user interface
powered by SAP Fiori. It was time consuming and a tiresome task for many tables to be updated
for a single transaction. Since SAP S/4HANA was released, financial experts have been relieved
from the tasks of complex data models that used to exist. Fiori is also the user interface for the
cloud version and it can work for both laptops and mobile phones whereby it can perform on
both SAP S/4HANA analytics and HANA live content (Missbach et al. 2016). Also in terms of
financial planning and account analysis, there is freedom to take decisions at any time. Users can
enjoy end-to-end simulations together with the go financial analysis a model provided by SAP
S/4HANA Simple Finance. There is also the generation of real-time reporting leading to
reporting dimensions and closing of the book in a faster way which is an incredible feature.
There is also a reduction on the part of cash management as a result of real-time flow
access to an enterprise cash flow which is provided by SAP S/4HANA. Your decisions are not
affected at all by the fluctuating dynamics in the market since they are standardized by SAP
S/4HANA tools (AG 2018). Therefore, there is a reduction in time spent waiting for payment
with the help of SAP S/4HANA which is automated to enable accounts to receive and at the
same time pay. Compliance and enterprise risks are automated making it easy to keep an eye on
any fraud that may take place in the finance department of an organization. There is real-time
detection and mitigation of any fraud activities with the help of SAP S/4HANA Simple Finance
tool before it gets worse. The SAP S/4HANA has too helped by removing tables that may be
unwanted leading to increasing in the time required to respond to queries and transactions

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(Mayer et al. 2018). This leads to high level of democrat sized data access on those applications
that run on this platform.
ECC applications can now run in a web-based format that is more advanced as a result of
Fiori user interface that is so innovative. The perspective of modern design of redesigned user
experience has been changed with the use of Fiori (Kalaimani 2016). Fiori has qualities that are
highly responsive, simple and personalized making it the best among all irrespective of whatever
device. There is a benefit of data accessibility, speed, and also context which cannot be achieved
by most applications but with SAP S/4HANA, all is at your disposal. It is free unlike other
applications to users who may wish to upgrade to other versions for those using SAP S/4HANA
Simple Finance since it is optional for these updates to all customers.
The SAP S/4HANA application is future oriented in nature with the ability to
synchronize with the latest technology and as the users may demand. SAP S/4HANA Simple
Finance is able to go with today’s changes that are being witnessed in the world of technology
that most firms are not able to catch up with. With SAP S/4HANA, firms are able to match with
the latest technology making it most favorable (Schweinfurth, Bieser, & SE 2016). With the use
of SAP S/4HANA Simple Finance, there is an approach that leads to the development of
management and financial accounting solutions and also guiding and planning a firm’s
compliance and risk management. SAP S/4HANA also has a supporting tool that helps in
treasury management, finance operations that are collaborative, and even with giving support to
financial close.
Planning cycles are profitability are boosted with the help of efficient financial functions
which are analysis and financial planning. By accessing real-time master data, planners can now
deal with data replication problems very efficiently with the use of SAP S/4HANA Simple

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Finance (Riesner & Sauer 2017). Real-time operational data can help clients in linking up their
planning which helps in getting rid of unnecessary data and possible time lags. There is a choice
of desired levels of granularity when it comes to an exercise of financial analysis where by an
individual table in memory is used. The financial planning lifecycle of an organization cannot be
separated from development, updates, and reporting.
There is also an easy way to migrate from on-premise version for those users who may
wish to go to the cloud bases platform while they benefit from the SAP S/4HANA products
(Ghattamneni 2016, p.8). This in most cases to reduce the cost overhead for most organizations
where not only applications can be moved but also infrastructure. Businesses can, therefore,
benefit from this news since this migration can be implemented in either of the versions and is
also pertinent in a fusion manner.
Case Study of Sokotow Group
There are some challenges that we cannot go without mentioning that a company may go
through while trying to implement SAP S/4HANA Simple Finance program. Considering a
company that is starting from the ground and is totally new to SAP and willing to have SAP
S/4HANA, or on the other hand, doing away with the old system and only moving its data. For
instance, the Sokotow Group implemented the SAP in the year 2010 which was intended to
cover almost all areas of the company as far as business is concerned. The tasks like finance,
reporting, and logistics among others were the main aim of the company bringing in the system
(Hofmann 2016). The company had to create a roadmap to lead them through since the process
included testing that is so extensive to any organization which is installing the system from the
ground (Sun, Gregor & Keating 2015). The overall migration started in the year 2013 and it
completed including the upgrade by the end of the same year 2013. The migration is said to have

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taken more time as a result of an inability to freeze other system charges and the longer periods
of tests that were unnecessary (Collignon 2017).
Case Study of Hershey’s
Despite being the largest Chocolate manufacturer in North America, Hershey’s also faced
a lot of challenges migrating to SAP S/4HANA.There were challenges to start with like, lack of
documentation from SAP which was to help in the migration process, the information is said to
be found on a variety of places and not a single place. The company also had a challenge where
by a report was not reconciled properly as a result of pre-migration activities. Before go-live,
everything will have to be tested in a more extensive manner and even after you have deployed
SAP S/4HANA, you will have to continue testing so that you make sure that nothing has been
left behind accidentally in the process. An organization has to appreciate the fact that a
brownfield migration is by no means a quick path to SAP S/4HANA Simple Finance program
(Kö nig & Milanov 2017). Usually, it is the work of an organization to ensure that its data is clean
and that their system is ready.
Conclusion
More compliance and control will be enhanced by organizations hence the workloads
and costs will be minimized with the help of SAP S/4HANA Simple Finance. Financial and
management accounting are integrated by SAP accounting to form a single journal that is
universal (Maheshwari 2017, p.44). This leads to the elimination of totals, indices, and other
aggregates that are pre-defined while at the same time relying on line items as the only source of
truth. Fixed Asset Accounting is enclosed into the Universal journal design for SAP S/4HANA
Simple Finance leading to the elimination of data redundancy. The correctness of values is
assured due to the posting of parallel documents for every stage in real time.

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In summary, there will be the real-time execution of closing tasks together with processes
that are inter-period for users of SAP S/4HANA Simple Finance. A user will be able to witness
enhanced productivity and minimal risks through real-time reporting using a unified model that
is single. There is a smooth execution of downgrading alongside popularization of dispensation
logic and data configurations are made to be real. Each individual asset will be leveraged by
users leading to detailed reporting hence resulting in the success of SAP S/4HANA Simple
Finance. Basing on the facts in this article from the start as I have stated, it is to my believe now
that there is no way the path to migration can be termed to be single as much as the truth about
SAP S/4HANA Simple Finance is concerned (Maheshwari 2016, p.123). There are more and
more pieces of SAP S/4HANA that are now being released day after day. For instance, the
previous year we had just what many knew as Simple Finance but now it is being called SAP
S/4HANA Enterprise Management which is actually the move that is next in the SAP HANA
suite.
What was known to be the perception of SAP HANA has totally been changed by SAP
S/4HANA Simple Finance. According to a survey done by ASUG, there is a good percentage of
around 32 that have plans to direct their investments in technology in the near future. For
example, two famous companies like Sapphire Now which is based in Orlando and Lexmark
have all plans set to migrate to SAP S/4HANA Simple Finance and they already have welcomed
people so that soon after their migration they share their success stories as a result of the
migration. This is a clear indication that SAP S/4HANA Simple Finance will get there as far as
the market and competition is concerned. An organization only needs to ensure a smooth
transition path to SAP S/4HANA Simple Finance. There are challenges and benefits that come

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with both brownfield and greenfield but from the research, most organizations opt going with
greenfield over brownfield with best of their reasons as I have earlier explained in this article.

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