A Detailed Report on the Advantages of SAP S/4HANA Finance

This report analyzes the benefits of SAP S/4HANA Finance, an ERP financial software built on the SAP HANA in-memory database. It discusses the historical overview of SAP S/4HANA Finance, comparing it with SAP ERP FICO. The report highlights benefits such as business process simplification, contextualized insights, ease of use, increased performance, reduced total cost of ownership, and cost-effectiveness. The report also provides real-world examples like New York Life Insurance Company's implementation of SAP S/4HANA Finance. The report emphasizes the advantages of real-time data analysis, cloud-based solutions, and the ability to streamline financial processes, making it a valuable tool for businesses looking to improve their financial management and decision-making. The report concludes by summarizing the advantages of using SAP S/4HANA Finance.

Introduction
One of the most important tools used by business organizations, in general, is the SAP. Though
most organizations are happy with the performance and stability of the SAP solution, it is not
adaptable or agile to advances in new technology. Here is where SAP S/4HANA Finance steps in
.Industry experts believe if there is one software, which provides an all- round solutions to the
financial and accounting needs of the organization; it is SAP S/4HANA Finance (Greedy,
2019). Based on SAP HANA in-memory database, SAP S/4HANA Finance is an ERP suite that
allows businesses to analyses business data in real time and streamline their business processes.
Purpose: The purpose of the report is to discuss and analyses the benefits of SAP S/4 HANA
Finance and why business must consider SAP S/4HANA Finance. The report begins with an
introduction followed by a body. The body discusses and compares different perspectives and
presents arguments in support of the purpose of the report. Relevant business case studies are
also included in the report to further add credibility to the arguments in the study. Finally, the
findings of the research are concluded in the conclusion part of the report.
Historical Overview of SAP S/4HANA Finance
Launched in early 2014, SAP S/4HANA Finance is an ERP financial software that runs on SAP
HANA’s in-memory platform (Kumar, 2017). Formerly known as SAP simple finance, SAP
S/4HANA Finance supports accounting and financial closure, financial planning and accounting,
treasury and cash management, risk management, accounts payable and receivable and much
more. Based on SAP S/4HANA, SAP S/4HANA Finance is the financial module in S/4HANA

Suite is redesigned to surge process efficacies across an assets lifecycle. Certain key components
of SAP Simple Finance has been recoded to gain full advantage of SAP HANA’s potential.
As of September 2015, the term SAP Simple Finance is out dated as it is replaced with SAP
S/4HANA Finance (Kumar, 2017). SAP S/4HANA Finance is available as both cloud and on-
premise versions. The cloud versions are continually upgraded in about quarterly releases
whereas the on-premise version is enhanced every year. With every SAP S/4HANA release,
more and more functions are added to the Finance module of SAP S/4HANA for an easy end
user experience. In the front end, SAP Fiori is used by the SAP S/4HANA Finance for a
consumer like user experience (TechTarget, 2019). As outlined before, SAP S/4 HANA Finance
offers functionalities that allow organizations to simplify and optimize the finance function. In
addition, it operates seamlessly on other SAP solutions like supply chain, sales, etc. SAP
S/4HANA Finance applications can be implemented as bundled together or as standalone
products. Aimed at financial professionals and specialists in all industries, the user base of SAP
S/4HANA ranges from small companies to Fortune 100 companies.
One of the key features of SAP S/4HANA Finance is its ability to combine processing speed
with integrated features of the various finance functions like management accounting, financial
accounting etc. This allows quicker reconciliation of the financial processes and provides a
single source of financial truth for the organization as a whole, according to SAP (TechTarget,
2019). Another key benefit of SAP S/4HANA is its ability to combine real-time data with
analytics in order to model and predict the impact of decisions that a company may want to
make, such as acquisitions. For example, a business decision maker can use SAP S/4HANA
Finance to model data and forecasts potential decisions using real-time financial data from
several systems.
Ease of changing processes as business model evolves as well as redesigning and optimizing
processes to focus on exceptions and critical tasks makes SAP S/4HANA Finance a widely
preferred module to add value to the business processes
One of the largest life insurance companies in the world, New York Life Insurance Company
embarked on the digital transformation of its finance organization bracing new SAS S/4HANA
Finance to help steer its journey (Murphy, 2016). New York Life Insurance Company’s decision
to implement SAS S/4HANA Finance came from the inefficiencies arising from the database-

centric running of manual; spread sheet-based processes with SAP ERP have become more and
more noticeable over time. As solution to the prevailing problems, New York Life adopted this
new cutting-edge finance software and migrated off its SAP ERP to up and operational with SAP
S/4HANA Finance in July 2015 (Murphy, 2016). New York Life used SAP S/4HANA instance
for central finance and used SAP Insurance Analyzer as the source system for the movement of
its SAP ERP data to produce a single, centralized financial management system. New York Life
Insurance foray into digitization using SAP S/4HANA is a striking example of how increase of
digitization in the consumer world is making its way to businesses of every stripe, and businesses
realize that prompt insight is quickly becoming a requirement.
The difference between SAP S/4HANA Finance and current SAP ERP FICO:
SAP ERP FICO Stands for FI (Financial Accounting) and CO (Controlling). SAP FICO
is the important module of ERP and both FI and CO modules stores the financial transactions
data in Business.
SAP S/4HANA is a comprehensive finance solution based on SAP HANA, which can be
deployed in the cloud.
SAP HANA is Reporting tool in SAP and it is a technical module. Whereas SAP FICO is a
Functional Module, SAP HANA is a Database in cloud where it is used for Operational reporting
using SAP BI. S 4 HANA is used for reporting where the data is getting from straightly S4
HANA System. Now SAP HANA is simplified in all technical module even FICO as well that is
Simplified finance Functional Module.
SAP HANA: High Appliance Analytical Tool, one who is interested and making a career must
know that there is some technical stuff involved should working on SQL calculations or
computations. HANA is used as Database and Data Modeling for Business Intelligence. Many
people confused or calling SAP HANA also as big data, in fact SAP HANA combined external
tools that can give solution as SAP BIGDATA.
SAP FICO is a functional component in SAP ERP Central Component that allows an
organization to manage all of its financial data. The purpose of SAP ERP FICO help companies
generate and manage all financial statements for analysis and reporting with effective business
planning and decision-making. SAP FICO consists of two modules, SAP Finance (FI) and SAP
Controlling (CO), which is used for specific financial processes. SAP FI deals with financial
reporting and accounting while SAP S/4HANA focuses more make decision on cloud. SAP
FICO is based on premise (R3) database model. Here Database layer, Application layer and
presentation layer will be there. In addition, SAP S/4HANA was not able to dethrone Oracle
from the database layer even in application & presentation layers SAP functional and technical
modules are being used. To overcome this problem and to gain complete monopoly in ERP
landscape, SAP created HANA to push industries towards cloud side. SAP HANA can be on-
premise model / complete cloud model / mix of both depending on the client’s needs.

What are the benefits of SAP S/4HANA Finance for businesses?
SAP S/4HANA help to centralized Finance. SAP S/4HANA is quickly becoming SAP’s most
successful ERP system that we use in Finance for Businesses.
SAP S/4HANA Simple Finance is an updated version of SAP Simple Finance, which includes
many benefits that are below:
1. Business Process Simplification:
S/4 HANA acts as the digital core for business process simplification by using the power of its
HANA in-memory database. The best example of SAP S/ $HANA, The Soft Financial Close.
However, give these following benefits:

 Real-time system with key performance indicators (KPIs) to provide in-depth analytics
on important financial key performance indicators
 Continuous intercompany reconciliation (Reconciliation is an accounting process that
uses two sets of records to ensure figures are correct with agreement. It confirms whether
the money leaving an account matches the amount that has been spent, and ensures the
two are balanced at the end of the recording period).
 financial reporting
 Profitability analysis
2. Contextualized Insights at the Point of Decision:
The best example of SAP S/ 4HANA fiori 2.0 is a next generation UI. Its revolutionary tile-
based design allows users to access List Reports, Overview Pages and Work Lists. It is also
contain the intuitive user interface that allows triggering quick actions .These two benefits allow
the Finance organization to dynamically change of its business models. This helps the
organization to:
 Connect with customers through any channel to deliver value
 Access the IoT( Internet of Things) and Big Data
 Simplify the processes, drive them in real-time
 In real-time supporting with instant decision making
 Drive revenues and profits
3. Simplification: SAP S/4HANA has offers simplified methods of managing data; we might get
a consultant to set up the latest technology associated with it so we can adapt it to our business. I
like that it can be cost-effective that it can help drive better ROI, which we need. If we get SAP
S/4HANA, we might be able to stand better from our competition as a flower shop business that
it allows easy transition from on-premise to cloud so I will hire a consultant first before letting
the IT department take care of everything. SAP S/4HANA brings unparalleled simplicity for the
management and administration of the IT landscape, and coupled with cloud adoption potential
that its bring to the h/w and n/w resources have never been centralized.
SAP S/4HANA introduces a healthy simplification to management and
administration of the IT landscape. By SAP ECC and other older systems, enterprises often face
issues of multiple batch-run dependencies. However, by SAP S/4HANA, benefit from the
elimination we can aggregate tables and can reduce processing time. In addition, our systems can
easily respond to transactions and queries in Finance. All these ensures that we can spend our
efforts on strategic growth. SAP S/4HANA enables centralization of h/w and n/w resources. It is

the digital core for business process simplification with the power of the SAP S/HANA big-
memory database.
4. Ease of use: SAP Fiori provides a modern design innovative user experience that enables
users easily access Work Lists, Overview Pages, and List Reports. SAP Fiori’s User Interface is
designed to be personalized, centralized, responsive, intuitive, and simple. Users can prompt
questions regarding to decision making and get access required details, mode of payment or
mode of deployment. This allows finance organization to evolve and get new revenues,
connecting with customers at the deepest level, access IoT(Internet of things) and Big Data, and
most importantly, we have to gain relevant information into any data with in real-time. Hence,
finance organization can make decisions faster.
5. Increased performance for Business: S/4HANA runs only on SAP HANA, the SAP
S/HANA in-memory computing database. It means that when we running an SAP ERP solution
for such as S/4HANA. It will takes advantage of the speed of transaction processing and
reporting to SAP HANA. S/4HANA allows us to give better performance as it relates to
complexity and time drive business activities such as real-time planning, reporting execution,
and AI analytics based on the data. As well as we have to prompt period of closing and
improved forecasting for business decision making faster. It also allows us provide a better
service and solution for customer-centric applications. It also can trigger period closings and
provide improved predictions as well as forecasting.
6.Reduced Total Cost of Ownership: Its cloud based so we can say S/4HANA is a cost
efficient option when we consider the fact that we are able to combine all the analytical with
Artificial intelligence and transactional capabilities of different systems into a single source in
which drives acute and proactive business decision making.
7. Cost effectiveness:
SAP S/4HANA is a smart move, as far as cost efficiency is considered and S/4HANA is a cost
efficient option when we consider the fact that we are able to combine all the analytical you have
the ability to bring together all analytical and transactional capabilities of a plethora of systems
onto one location. SAP S/4HANA enables better, analytics informed decision making which can
help our business drive for better roll. Applications built on SAP S/4HANA
Applications has advantage speed, context and data accessibility. In addition, they drive cloud
adoption. The cloud platform enables organization to deliver business solutions.

8. Innovation: AI and Analytics based
SAP S/4HANA is products from SAP that is driving cloud adoption for Finance. SAP S/4HANA
sets the stage for future innovation. AI Technology is evolving rapidly. Therefore, ‘keeping up’
is no longer sufficient. Enterprises must stay ahead of the digitization curve and make decisions
by Analytics, which are future ready. The cloud offers platform for different s/w vendors to offer
innovative products that extends the capability of S/4HANA and integrates .While making the
decision for business, between traditional SAP ERP solutions cannot be made lightly, there is no
doubt that S/4HANA represents an offering from SAP ERP that is central to conducting business
in today’s complex and radically changing environment in Finance. SAP S/4HANA is provide
centralized finance.
9. Financial reporting: This feature replace many of SAP drill-down reports that are not
only infamously slow, but that also do not drives to provide in-depth analytics on important KPIs
(financial key performance indicators).In S/4HANA have simplified database table that holds all
required financial information and uses the data preprocessing power of SAP HANA to help
real-time and accurate reporting. This feature also eliminates the batch jobs and data replication
in systems, such as Business Intelligence. With SAP S/4HANA Finance, we needn't worry about
spending nights and weekends to ensure the timely closing of monthly, quarterly, half-yearly or
annual financial closes.(like for India Financially year start in April 2019 to April 2020) The
financial closing process is significantly improved every time, and the instant visibility of profit
and loss that ensures our business decisions can be made more quickly, based on emerging sales
and financial trends.
10. Easy transition by cloud: S/4HANA offers an easy transition to the cloud. Since a move
into the cloud can happen at any time in an organization. This is an important benefit for
business leaders to consider. Our data and financial data will always store in Cloud.
Case Studies of companies and the issues they faced migrating to SAP S/4HANA Finance:

Case Study of Companies that migrated to SAP S/4HANA Finance
Fujistu, a leading IT products and services used SAP S/4HANA Finance to meet the challenges
of s digital transformation and pave the way in the direction of a successful creation of value in
the digital economy (FUJISTU, 2016). One of the challenges faced by Fujistu while migrating
to SAP S/4HANA is the difficulty in estimating the requirements to migrate to SAP S/4HANA.
78 percent of companies surveyed showed that the requirements for migrating to SAP S/4HANA
are tough to estimate, according to PAC Study (FUJISTU, 2016). In addition, 76 percent of those
surveyed consider that the costs for new software licenses are simply too high. Lack of business
cases needed to validate the required investments was also a concern while implementing SAP
S/4HANA Finance at Fujistu. Migrating to SAP S/4HANA led to a fundamental shift in
company’s processes creating inconsistencies in the company’s processes and an inability to get
a total overview of the company. Added to this is the increasing level of complexity, particularly
at the reporting level. New regulations also increased the legal requirements for reporting at
Fujistu. As an outcome of the exponential growth in data volumes, Fujistu found it difficult to
analyse and evaluate this data, which made the reports preparation even more difficult.
The IT department, on the other hand had to provide an appropriate response to the new
challenges and propose well-thought-out solutions. Ensuring system consistencies and processes
to evade breaks was also a major concern for those in charge of the IT department in Fujistu.
Both internal and external stakeholders must be well versed with the using the IT applications.
However, often the front end and user interfaces are not updated. Lack of rapid response to the
user requirements is also one of the challenges faced by Fujistu while migrating to SAP
S/4HANA.
Another challenge, the IT teams at Fujistu faced was implementing and supporting disruptive
business models using the existing software system of the company. This required complete
reorganization of the software architecture to maintain consistencies in the systems and avoid
bottlenecks in the path of migration of SAS S/4HANA Finance.

SAP S/4HANA IMPLEMENTATION: METAL MANUFACTURER
SAP S/4 HANA Implementation: Metal Manufacturer Case Study will talk about the
business situation of a prominent metal manufacturer in the Middle East. In addition, why they
chose Kaar Tech for implementing SAP S/4HANA, their digital core, by replacing their legacy
system.
Business Situation: Metal Industrial Engineering is the bedrock of so many industries, and our
client is a recognized expert with operations in 20 countries. With focus on delivering the best
products at the best prices, the company recognized how to digital transformation could make it
simpler to get businesses and to ensure quality products to customers in worldwide.
SYSCO Technologies (for Metal Industry) implemented SAP S/4 HANA to replace the existing
legacy system and provide decision making for business. This enhanced the production process,
production rate, stock management, and report easier access to company HR data. Thus, the
Client was able to achieve better business growth
Business Challenges and Opportunities:
The client was working towards integrating their data with core business processes. As a result,
the company could standardize all the business process. However, a few challenges were:
 Centralize finance by SAP/4HANA and enhance the production process
 Optimize integration between HR, finance costing.
 Improve product cost, production rate and get the view of all costs
 Upgrade production planning and automate manual process
Value-Driven Results
Kaar Technologies (metal industry) replaced their existing legacy system with SAP
S/4HANA, and now the client has enhanced the production rate, stock management. Hence, this
improved the integration and processes throughout the Kaar Technologies (metal industry). The
following benefits were achieved:
 Transformed integration - all information now in one system
 Improved visibility by replacing manual spreadsheets with functionality for automated material
requirements.
 Reduced costs through a reduction in the number of resources required
 Decreased inventory levels & also improved inventory management

 Delivered centralized HR database
 Improved sales-order
 Centralized finance to one office, reducing the number of employees
 Additionally, provided mobile apps to allow any time updates, anywhere approvals by HR,
purchase orders and more services.
Conclusion:
The migration of enterprises towards to SAP S/4HANA is inevitable on some level worldwide
for Finance. In addition, even SAP S/4HANA is simple, making decision choices and the
migration .We need to consider this when we determine our SAP strategy for Business in
finance.
There are varied many justifications for migration to SAP S/4HANA. There is a lot more that
goes into the newest offering of ERP from SAP S/4HANA. To be successful enterprises needs
recognize pain points and measure the advantages as accurately as possible in terms of finances.
The enterprise Gartner has recently announced that over 20 billion connected devices will be use
throughout the world by the year 2020.Companies in all world will have a considerable amount
of time until year 2025 to take a decision on eventual SAP S/4HANA strategy. When Enterprises
come across business needs which cannot be met in the standard S/4HANA software package, it
is better to take a look to SAP HANA cloud offering .The SAP cloud platform can be classified
as a platform as a service or PaaS, which is achieving business agility and can generating an
integrated and optimized company with digital transformation. We have many Reasons to
Migrate to SAP’s Next Gen ERP System, S/4HANA for solve business problem for
finance .SAP S/4HANA simplify it to offering brand new productivity for Enterprises for
increasing production rate, reducing data volumes . Also offering greater throughput and higher
degrees of flexibility for finance. S/4HANA benefits from both reporting and transaction speeds,
which are given from SAP Hana. SAP S/4HANA also enables the reinvention of enterprise.

References:
1) FUJISTU, 2016. SAP HANA and SAP S/4HANA –The right steps towards a digital
advantage.
2) Greedy, H., 2019. S/4HANA – Why Upgrade?
3) Kumar, D., 2017. S/4 HANA Finance - An overview.
4) Murphy, K., 2016. New York Life Plans Bright Future for Finance.
5) Tech Target, 2019. SAP S/4HANA Finance.