BAO6714 - SAP S/4HANA Finance: Comparative Analysis & Case Study

This report provides a comprehensive analysis of SAP S/4HANA Finance, highlighting its differences from SAP ERP FICO, the benefits it offers to businesses, and the challenges companies face during migration. The research includes a historical overview of SAP S/4HANA Finance, emphasizing its evolution and key features like the universal journal. Case studies of companies like Wipro are examined to illustrate real-world implementation issues. The report concludes by underscoring the strategic importance of SAP S/4HANA as a replacement for older SAP systems and its potential to enhance decision-making through real-time reporting. Desklib provides access to this and similar solved assignments for students.

Masters in Enterprise
Resource Planning
Assignment number:
Student Name:
Register Number:
Unit:
Tutor:
Date:

Executive Summary
The spot light of this research is SAP S/4HANA Finance. The research ensures to review and
examine this ERP software suite. Subsequently, related details are studied and represented in the
report. The objective of this report is identify the differences between SAP S/4HANA Finance
and current SAP ERP FICO. Then, its benefits for the business are identified. Finally, two
companies are considered namely, Wipro. The case studies of these two companies is studied.
Consequently, the challenges and problems faced by these companies, while migrating to SAP
S/4HANA Finance are represented. The general goal here is to become capable of identifying,
analyzing and interpreting related information for resolving the problems in the organizations.
Then, draw conclusion and provide recommendation.

Table of Contents
1. Introduction............................................................................................................................................................ 1
2. A Brief Historical Overview of SAP S/4HANA Finance............................................................................................1
2.1 SAP S/4 HANA Finance.................................................................................................................................. 2
3. Difference between SAP S/4HANA Finance and Current SAP ERP FICO................................................................3
3.1 SAP S/4HANA Finance or Simple Finance......................................................................................................3
3.2 SAP ERP FICO............................................................................................................................................... 4
4. What are the Benefits of SAP S/4HANA Finance for Businesses...............................................................................4
5. Case Studies of Companies and the Issues they Faced Migrating to SAP S/4HANA Finance.....................................5
6. Conclusion............................................................................................................................................................... 7
References........................................................................................................................................................................ 8

1. Introduction
This research ensures to focus on SAP S/4HANA Finance and underlines a thorough
investigation on related companies. Generally, the future of all the organization is, SAP
S/4HANA Finance. It is an ERP software. It was earlier known as, SAP Simple Finance. What is
so special about it and how it will help the organization, and effective is this new SAP S/4HANA
solution will be discussed. Technology has always facilitated its users and also benefited them.
Some of the aspects of SAP S/4HANA Finance includes that, it is a smart ERP suite. It is
especially designed for, in-memory computing. The feature of SAP S/4HANA is that, it can be
personalized and it can help any industry, irrespective of its business size. Then, it is believed to
increase the business value. It lets the enterprise in creating consolidated view of all operational
and financial data. This is done to provide flexible and simplify the reporting which comprises of
automated process. Therefore, related details has to be investigated, determined and shared in the
report. The general goals includes to become capable of identifying, analyzing and interpreting
related information, to solve any specific problems in the organizations. However, it will further
help in drawing conclusion and determining appropriate recommendations.
The objective of this report is to investigate and research from multiple sources about
SAP S/4HANA Finance. A brief understanding about this topic will be studied. Next, the
difference between SAP S/4HANA Finance and current SAP ERP FICO will be represented.
Further, the benefits of SAP S/4HANA Finance for businesses will be listed. Finally, at least a
couple of companies’ case studies will be presented in the report, along with the challenges or
problems the companies faced while migrating to SAP S/4HANA Finance.
2. A Brief Historical Overview of SAP S/4HANA Finance
The SAP HANA platform is present from the year 2010. The SAP applications such as,
SAP ERP and SAP Business Suite could be easily run on either the SAP HANA database or other
database. S/4HANA was launched in 2015 and the location was New York Stock Exchange. This
was an event where cloud was introduced for on premises editions. The highest update of the
ERP strategy and platform is SAP S/4HANA. The customers were satisfied with the purchase of
S/4HANA and saw positive growth got SAP was confirmed. During, October 2015 the
confirmation from SAP was sent that, the S/4 HANA has crossed more than 1300 customers.
This growth was constant till 2015’s third quarter. Then, at the end of the fourth quarter in 2016,
1

it was announced that SAP has 5,400 customers, who have implemented the SAP S/4HANA.
However, in market, there are several ERP systems which has similar intentions. Oracle,
Microsoft and Workday and Inc are the competitors, in the Software as a Service space.
2.1 SAP S/4 HANA Finance
Before knowing about S/4 HANA Finance, let’s check what SAP ERP 6.0 suite is. SAP
ERP 6.0 suite has the capacity to run on an SAP HANA database, whereas the SAP S4/HANA
Finance is one step ahead. Certain key components of the former FI/CO suite have been recoded
so that they can take full advantage of SAP HANA’s potential. SAP Simple Finance (version 1.0)
that was released in 2014 was the add-on SAP HANA-optimized version for the Financial
Accounting module in SAP Business Suite. In comparison, SAP Simple Finance 2.0 is part of the
SAP S/4HANA product that was released in 2015. SAP Simple Finance 2.0 is the redesigned and
recoded successor of SAP Simple Finance 1.0.
Earlier, SAP S/4 HANA Finance it was known as, SAP Simple Finance. It comprises of
plenty of new features like, streamlined designs, universal journals along with real-time
analytics. The new SAP Asset Accounting (FI-AA) module is an example for the financial
module which is redesigned in the suite of S/4HANA. This helps to improve the efficiency of the
process throughout the asset’s life cycle (Salmon and Wild, n.d.).
Facts: S/4HANA
S/4HANA represents what can be called the power of one. To me, the introduction of the
universal journal (table ACDOCA) moves SAP closer to a single accounting transaction
repository. It means that the posting to various individual ledgers, such as the material ledger,
Asset Accounting (FI-AA), and CO, has been replaced by posting to one unified journal. In
operational terms, every business transaction in the SAP General Ledger or classic General
Ledger, CO (except costing-based profitability analysis), FI-AA, and the price determination
component of the material ledger generates a journal entry in table ACDOCA. Why is this big
deal? With one fell swoop, SAP has reduced the numerous instances of data redundancy and
duplication across all FI modules. For those of you who are thinking what this does to the coding
block, do not despair. ACDOCA can be extended to include the coding block. One of the most
painful aspects of implementing FI/CO in any organization has been the (delayed and manual)
2

reconciliation of CO postings to FI. This is now instantaneous and automatic (Kumar, 2017).
3. Difference between SAP S/4HANA Finance and Current SAP ERP FICO
3.1 SAP S/4HANA Finance or Simple Finance
It is observed that, S/4HANA is the next-generation of SAP Enterprise Resource
Planning (ERP) Suite. It helps in organization planning for implementing real-time digital core
for the needs of the business, so as to select among either to migrate (brownfield) or to start a
new one (greenfield) (Delvat, 2017).
The SAP S/4HANA is an add-on for SAP ERP. It is a standard product that is designed
for working on SAP ERP. For ERP, SAP is a significant module, where both the FI and CO
modules store the data of financial transactions. Simple Finance is the initial part in the Business
Suite which is rewritten for running on SAP’s new superfast in-memory HANA database.
S/4HANA came to existence, by following Simple Logistics and linking the new product, with
the New GL and New Asset Accounting, as its preconditions. The primary benefit of SAP
S/4HANA Finance is that, its speed of processing is connected with the integrated features,
which helps several financial functions like, the financial accounting and the management
accounting. Due to which, the SAP S/4HANA Finance permits an extremely faster reunion with
financial processes like, quarterly close. Thus, it allows to have a single source related to the
organization’s financial truth (Flanagan, 2017).
The short form, SAP S/4HANA denotes to SAP Business Suite 4 SAP HANA. It
indicates that it’s the version number 4, of SAP Business Suite. It can only run on SAP HANA.
There is no difference in transition of the SAP users to the SAP S/4HANA, like from ERP
versions, SAP R/2 to SAP R/3. It is especially designed to exchange the SAP ECC/ERP.
SAP S/4HANA was designed to ease the usage and administration with the help of
resolving maximum complicated issues. Additionally, it could manage wide range of data when
compared to the early versions. It doesn’t need batch processing. SAP Simple Finance targets to
streamline the financial processes and allow financial data’s real-time analysis (Zarantech.com,
2017).
3

3.2 SAP ERP FICO
The SAP ERP FICO is famous, where SAP FI denotes the Financial Accounting, which
is the significant modules of SAP ERP. Its function is to store organization’s financial data.
Moreover, it supports in analyzing the organization’s financial conditions, in the marketplace. It
has the capacity to be integrated with the other SAP modules such as, SAP SD, SAP PP, SAP
MM, SAP SCM, and so on. Moving further, SAP Controlling (CO) refers to the other significant
module of SAP, for the organization. SAP CO helps in monitoring, coordination and optimizing
each process of the organization. It also comprises the features to manage and configure the
master data which covers the cost and profit centers, internal orders, and other cost elements and
functional areas (tutorialspoint.com, 2018).
4. What are the Benefits of SAP S/4HANA Finance for Businesses
SAP deals with the process that releases the components of S/4HANA, for the customers.
The Simple Finance is one of the very first functional component besides the Simple Logistics
which is anticipated in the coming days. This new tool has re-designed the business application
suite, for taking all the advantages of performance benefits of the database HANA. Such tool
becomes capable to work in “real time” and it integrates all the operational reporting with the
business processes. The major differences in the architecture refers to data base structures’
radical simplification, to discard the aggregates. Thus, it decreases the database footprint.
However, it significantly lets “HANA Live” reports to actually work in real-time. Therefore, in
the core finance applications, allowing the real-time reporting could allow produce extraordinary
benefits while making decisions. Moreover, the processes which run long, it decreases the time.
For instance: month end closing. SAP S/4HANA as well wishes to be on customer’s radar,
because it is one of the strategic replacement for both SAP R/3 and ECC. In future there will be a
point, where it will no more be able to support the older products. Hence, a new plan is required
in the medium term (Edyvane, 2015).
SAP HANA has the benefits of GUI (graphical user interface) which is flexible and could
be customized. The benefits it provides to the business includes, the suite allows to immediately
increase the value of the business in all its divisions, irrespective of size and industry. Moreover,
SAP S/4HANA has been designed uniquely, where it could be operated either on, a company’s
on-premise basis or using the Cloud. The apps of SAP Fiori product line when used could let the
4

users to personalize their user interface and allow to access the applications flexibly using
various devices like, tablets and smart phones (White paper SAP HANA and SAP S/4HANA –
The right steps towards a digital advantage, 2016). The new design compels to discard all the
traditional barriers with respect to transactional, analytics, and system planning for generating
quick insights and on-the-fly analysis, by utilizing each levels of financial data.
Therefore, the decision makers of the businesses could utilize the SAP S/4HANA
Finance for modelling the data and creating the potential decisions’ forecast, by utilizing the
real-time financial data present in different systems.
5. Case Studies of Companies and the Issues they Faced Migrating to SAP
S/4HANA Finance
Wipro is the first case study considered in this report, to analyze the issues it faced while
migrating to SAP S/4HANA Finance. Wipro with SAP consulting implemented S/4HANA,
where the areas were S/4HANA Finance, SAP Fraud management, SAP Financial cockpit, SAP
Cash Management, SAP Treasury and the risk management. This implementation took place
during 15th Janauary, 2015 (*Brightwork, 2018).
SAP HANA is a more mature product with a clearer value proposition than S/4HANA.
Currently, the majority of existing large enterprise SAP business suite clients are migrating to
HANA rather than directly to S/4HANA. With significant cost sunk in customizing objects
within legacy ERP systems (including processes, interfaces, reports, and forms), clients are
looking to IT service vendors to undertake shorter consulting projects to define the value to be
realized by migrating to HANA or S/4HANA, and the level of effort required. The majority of
S/4HANA adopters engaging IT services vendors to date have been electing to implement a
greenfield S/4HANA environment. As the end of support deadline looms for ECC clients, the
market for S/4HANA services will evolve toward more migrations. Many HANA and S/4HANA
initiatives are still in progress, in the early days of production, or represent a single phase on a
multi-phase journey. Realizing the full benefits of these initiatives will generally require a
longer-term perspective, as multiple phases are completed and softer changes such as business
process changes mature. In addition to HANA being introduced earlier than S/4HANA, the
biggest driver of the difference in adoption is the less clear business case for migrating to
S/4HANA. HANA’s business case relies on direct cost reductions (infrastructure footprint) and
5

clear improvements in data and analytic capabilities. The S/4HANA business case focuses on
softer benefits such as user experience, shorter business process cycle time, and providing a
foundation for further investment in digital transformation.
Challenges
The challenges are listed below:
1) Small proportion of workforce with HANA and S/4HANA certifications
2) Limited adoption among large clients
3) Limited North American HANA and S/4HANA client presence
4) Limited HANA cloud hosting footprint.
Strategic Direction
For consistent growth of SAP HANA and S/4HANA services practice, Wipro
concentrates on the below mentioned growth strategies:
a) Expand the industry focused offerings.
b) Expand the presence in Latin America and Africa.
c) Invest both in platform and cloud migration.
d) Expand the skilled resource pool.
Outlook
Wipro's longstanding relationship with SAP and experience acting as co-development
partner for HANA and S/4HANA capabilities has provided it with early insight into the
capabilities being offered. This has not only enabled Wipro to develop insight into the
capabilities of HANA and S/4HANA, but also to understand the capabilities not included in the
core offering, which gave it a head start in building its complementary offerings. These tailored
solutions (specifically targeting industry needs), complementing HANA and S/4HANA,
represent Wipro's greatest strength in its HANA and S/4HANA practice. Wipro has been able to
leverage these solutions in targeting SMB clients and emerging markets within its target
verticals. These have formed the core of its experiences in this still immature market. The next
key step will be expanding its client base and utilizing its proprietary solutions to target both
larger clients and a broader set of industries and geographies. Another evolution of the market as
it continues to grow and mature will be the expanded use of cloud over on-premise solutions.
6

With multiple SAP-certified cloud data centers, Wipro is positioned well to take advantage of
this evolution (NEAT EVALUATION FOR WIPRO: SAP HANA & S/4HANA Services, 2017).
6. Conclusion
The investigation is completed successfully. The topic considered in this report was SAP
S/4HANA Finance, whose related details are determined and shared in this report. The
difference between SAP S/4HANA Finance and current SAP ERP FICO are identified and
represented. Where it is determined that, SAP S/4HANA Finance supports the organization
planning to implement the real-time digital core for the business needs, so as to select among
either to migrate (brownfield) or to start a new one (greenfield).
Further, the benefits of SAP S/4HANA Finance for businesses are also listed. One of the
benefit is, the decision makers of the businesses could easily utilize it for modelling the data and
for creating the potential decisions’ forecast, with the help of the real-time financial data present
in different systems. The other benefits includes, SAP HANA benefits with a graphical user
interface, which is flexible and could be customized. Then, it benefits the business to
immediately increase the business value, in all the divisions of the business, irrespective of size
and industry.
Finally, the companies namely, Wipro is considered and their case studies are studied in
this report. It doesn’t end here, moving further all the challenges and problems these companies
have faced while migrating to SAP S/4HANA Finance are represented.
As a final view point, the aim of this report is to become capable of identifying, analyzing
and interpreting related information for resolving the problems in the organizations.
Additionally, it is required to draw conclusion from the gathered information and provide
suitable recommendations.
7

References
*Brightwork. (2018). The WiPro S/4HANA Case Study. [online] Available at:
http://www.scmfocus.com/saphana/2017/08/17/wipro-s4hana-case-study/ [Accessed 12 Jun.
2018].
Delvat, J. (2017). SAP S/4HANA migration: greenfield, brownfield, or phased?. bluefin. [online]
Available at: https://www.bluefinsolutions.com/Bluefin/media/Bluefin/PDFS/SAP-S4HANA-
Migration-Greenfield-Brownfield-or-Phased-Whitepaper-Bluefin-Solutions-2017.pdf [Accessed
12 Jun. 2018].
Edyvane, R. (2015). SAP S/4HANA - the benefits and challenges of a Central Finance adoption
approach. [online] Bluefin Solutions. Available at:
http://www.bluefinsolutions.com/insights/robert-edyvane/october-2015/sap-s-4hana-the-benefits-
and-challenges-of-a-cen [Accessed 12 Jun. 2018].
Flanagan, O. (2017). Finance Differences in SAP S/4HANA. [online] SAP Consultants | SAP
Experts | On-Demand SAP Consulting & Help. Available at:
http://www.erpfixers.com/blog/finance-differences-in-s4hana [Accessed 12 Jun. 2018].
Kumar, D. (2017). S/4 HANA Finance - An overview. [online] Michaelmanagement.com.
Available at: https://www.michaelmanagement.com/blog/an-overview-of-s4-hana-finance
[Accessed 12 Jun. 2018].
NEAT EVALUATION FOR WIPRO: SAP HANA & S/4HANA Services. (2017). NelsonHall.
[online] Available at: https://www.wipro.com/content/dam/nexus/en/analyst-speak/pdfs/wipro-
saps4-hana-neat-report-081217.pdf [Accessed 12 Jun. 2018].
Salmon, J. and Wild, C. (n.d.). First Steps in SAP S/4HANA Finance.
tutorialspoint.com. (2018). SAP FICO Tutorial. [online] Available at:
https://www.tutorialspoint.com/sap_fico/index.htm [Accessed 12 Jun. 2018].
White paper SAP HANA and SAP S/4HANA – The right steps towards a digital advantage.
(2016). Fujitsu. [online] Available at:
8

https://www.fujitsu.com/dk/Images/Fujitsu_Whitepaper_SAPHANA_FINAL_English.pdf
[Accessed 12 Jun. 2018].
Zarantech.com. (2017). Differences between SAP HANA & SAP S/4HANA. [online] Available at:
http://www.zarantech.com/blog/differences-sap-hana-sap-s4hana/ [Accessed 12 Jun. 2018].
9