Semester 1, 2024: An Analysis of SAP S/4HANA Finance

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BAO6714 Research Report
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Table of Contents
Introduction......................................................................................................................................2
Historical overview of SAP S / 4 HANA Finance..........................................................................3
SAP S / 4 HANA Finance and SAP ERP FICO..............................................................................6
Benefits of SAP HANA Finance for business.................................................................................9
Case Study.....................................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
The research paper is used to mark the importance of SAP S/ 4 HANA Finance. It helps
organization and enterprises to build a unified and single structure of all the operational,
financial, accounting data present in the enterprise or concerned company. SAP S/ 4 HANA
helps in making the data more flexible, reliable and also help in providing the reporting with the
self-automation of all the process containing the data. SAP S/ 4 HANA has various benefits in
the business and offer a great advantage to business and industries, for example, it helps in
planning and forecasting capability which make the various operation of a business easier. This
all features and its benefits is the main of this report.
The report highlights the four sections: Section one give the brief of historical overview and the
various previous version of SAP S / 4 HANA Finance. Section second distinguishes between the
SAP S / 4 HANA Finance and ongoing current SAP ERP FICO. Next section gives the
importance of SAP S / 4 HANA Finance in the business and how it enhances various operation
tasks in the business. The last section will give the case studies of companies which have taken
use of SAP S / 4 HANA Finance and the problem and which is faced while moving towards this
new technology.
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Historical overview of SAP S / 4 HANA Finance
It is important to interpret what does SAP S / 4 HANA Finance stand for. It is the Enterprise
Resource Planning (ERP) system by SAP. The main motive of using this package is to keep
check of all the activities happening during the day and operations conducted on the processes. It
helps to manage the problems functions keeping insight into the solution.
SAP S / 4 HANA Finance is also recognized with the name SAP Simple Finance formerly,
which is one of the biggest modules for the accounting and the finance. It had first come in early
2014. It only runs of the SAP HANA databases. The SAP HANA is existed for use from 2010
but the real use of SAP S / 4 HANA marks its arrival on the early months of 2015. SAP HANA
is SAP ERP 6.0 which is the successor of SAP Simple Finance. It takes advantage of the entire
previous version with great optimization functionality. The first version is (version 1.0) and the
second 2.0 is redesigned and re-evaluated functionality of the former version. SAP S / 4 HANA
have been released with 2 editions: on-premise and on cloud edition. The cloud versions of it are
1503, 1505, 1508 and 1511. The on-premise comes once in a year after amendments of the
additional and new feature. The cloud versions have quarterly releases.
Figure 1: Architecture view
[Source:]
SAP S / 4 HANA finance second version i.e. 2.0 is nothing but 1503 release version which was
named later. It is easy to migrate from the HANA platform to finance solution. It was named
SAP S / 4 HANA finance after the release of version 1605 consisting of various front and back –
end tools and components. SAP Net Weaver (which contains the features of ABAP technology)
and SAP ERP business suite form the basis of SAP S / 4 HANA finance. It is installed with the
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support of Software Update Manager (SUM) and it is very important to migrate first to SAP
HANA before installation as it uses the computing power of it.
SAP Asset Accounting (FI-AA) is the newest development of SAP finance to increase the
efficiency and effectiveness of the operation during the life cycle of operation or asset.
SAP S / 4 HANA Finance is mainly developed to maintain and (Missbach, et.al, 2016) manage
the accounting solution of the business integrated with a user interface based on Fiori. It is
designed to perform real-time analytics and business intelligence analysis and enable the user to
experience role-based operations. It basically contains four main components which are as
described below:
 The functional part consists of three main basics: version first of Sap HANA, SAP ECC
(6.0) suite and SAP Net Weaver version 7.4
 The second component is specified for the user and presentation which consist of SAP
Fiori GUI and Net Weaver.
 The third components are used for analytics purpose and make use of version 1.0 and
SAP ERP which helps in analysis and reporting of the data.
 The fourth component is used for an application that is used for making the decision for
the business.
Figure 2: Roadmap
[Source:]
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Besides taking look at the history of SAP S / 4 HANA finance, it is very important to consider
the useful feature which helps in conducting the business operation. It helps the business to make
a decision and forecast the impact it can have on the business. It helps to plan and decide the
ongoing budget for the process and company. It helps companies to prepare the accounting and
finance chart and report with its feature. One of the main concerns of business is handling the
risk and finding technology to mitigate the risk. SAP S / 4 HANA finance helps in finding the
risk that too in the early stages to reduce its impact on the whole project by applying predictive
Analysis. Security is the greatest concern of any (MENA Report 2018) ERP or databases. SAP S
/ 4 HANA Finance help in detecting the fraud easily and prevent external unauthorized parties
from accessing the crucial and critical data. It helps and facilities in managing compliance and
risk management. It is also integrated with Fiori for the user experience and consists of many
other applications of sale, distribution and management of material. It helps in saving a large
amount of time and cost. With HANA manifesto, now it became easier to perform the replication
of data and improve the compliance activities as it is present in all languages and conducting
operations on different currencies.
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SAP S / 4 HANA Finance and SAP ERP FICO
SAP FICO SAP S / 4 HANA Finance
 It helps to manage the Finance and
controlling the cost in SAP ERP
module. FI in SAP FICO stands for
Financial Accounting and CO is used
for controlling. It is one of the most
widely used and implemented robust
for processing the various business
activities.
 It is a type of functional module.
 It is composed of various sub-
modules which are interconnected
with each other for performing and
integrating in the real world time. The
sub-modules help in the accounting of
bank, general ledger (GL) and asset.
 It aims at reporting all the transaction
externally as well as internally and
gives the financial statement after the
completion of the quarterly period.
 It has the following sub-modules:
Account payables – It is used for
managing all the transactions which
happen with the vendors and create a
separate account for every vendor. It
includes generation of Invoice, down
payments, vendor’s reports.
 It is the extended version of the SAP
HANA which is mainly used for the
analysis and finding the financial
solutions in the business.
 It is a tool which is used for
reporting.
 It is the SAP own database.
 It helps to enable and unify the
consolidated view of databases
decreasing reconciliation. It has
Central Finance for helping back-end
processes. It consists of a Universal
Journal for maintaining and
controlling data.
 It is designed with an aim to reduce
the constraints faced during the
analysis and planning (MENA Report
2014) to make an instant look out of
the database and perform easy
analysis. It helps in forecasting the
impact of the decision by taking help
of real-time and predictive analysis.
 One of the biggest advantages it has
is, it has the highest speed for
processing and the ongoing addition
of new features makes it convenient
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Account Receivables – It is used for
managing customer transactions and
manages their accounts. When
transactions are conducted it is shown
in customer account with the help of
general ledger.
Bank Accounting – It is used for
maintaining the bank transactions. It
helps in maintaining all the bank
statement and reconciliation is done
with the recorded transaction in the
database.
Asset Accounting – It is related to all
the transactions which happen in
regards to an entity. It includes sale,
transfer, acquisition, retirement,
revaluation, depreciation of all the
asset of an entity.
 Fiori is not supported in SAP FICO.
 It supports all the databases.
 It is traditional databases examples
includes Oracle and SQL.
 On-premise edition forms the basis of
SAP FICO consisting of presentation,
application and database layer.
 It contains backend databases for the
Net Weaver Application version 7.4.
 It takes a lot of time when reporting
data from larger databases as it
requests data from all the three layers
which take a lot of time hence it is
for management and financial
accounting.
 It has been taken use by small
companies to large companies and
enterprise around the globe.
 It has faster reconciliation which
makes it famous for providing
financial truth and has early closing
of the quarterly reports.
 It includes various ERP
functionalities for conducting sales,
supply chain and many activities.
 Fiori is supported in SAP S / 4
HANA Finance for the user
experience
 It supports databases which are built
in SAP HANA platforms.
 Cloud editions form the basis of all
SAP S / 4 HANA Finance and also be
on-premise according to the
requirement and need of clients.
 It is marked with rapid development
and marks the invention of Fiori, IOT
and SDA.
 It has faster speed as well as faster
responding time as data come directly
from presentation to the application
layer.
 It supports the tables which have
column orientation.
 CPU is used to fetch and extract data
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time-consuming.
 It supports the orientation of row
tables.
 Data in SAP FICO is fetched directly
from hard disk.
 It is based on the ECC 6.0 platform.
 All tables are stored in different
tables like MSEG and BSEG.
 It helps in conducting and inspecting
the inner operations by scheduling
and creating the reports.
from the RAM.
 It is based on the HANA
environment.
 It stores all the information in a single
table known as universal journal
named as ACDOCA.
 It helps to understand and inspects the
cloud solutions used in financial
operations.

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Benefits of SAP HANA Finance for business
SAP S / 4 HANA Finance contains various features which have provided business with a large
number of benefits and advantages. General ledger, HANA databases and universal journal with
the streamlined design it has widely popular among the business companies. It is created to solve
the problem of analytics and system planning. Predictive analysis and forecasting capabilities
help to identify the various risks associated with the business decision. It provides risk
management and assessment with an accounting (Maheshwari,,2017) solution for the business.
To enhance the experience of the user and give attractive presentation it is integrated with the
new technologies like cloud, Fiori, Business Intelligence (BI) and IOT. Strength of SAP S / 4
HANA Finance are briefly listed below:
 It helps business at the time of financial closing to conduct faster in the real-time
processor as it is constructed in the platform of SAP in-memory.
 It has a unified single database known as Universal journal for all the financial
accounting hence providing a single source for all the business.
 It helps to increase efficiency and accuracy and increases the reconciliation.
 It helps the business to avoid the problems of aggregation and duplication of the data.
 It helps to plan data accordance with the real world scenario with the feature of dynamic
planning and presenting data in the same view for historical, current and the data which
has been predicted by the analysis.
 Due to the advancement of technologies like Cloud computing, machine learning and
IOT SAP S / 4 HANA Finance have made the automatic automation of process
generating and matching the payments and hence proving to be as one of the smart
application.
 It helps in transferring transactions without any disruptions and interference in the current
ongoing operations.
 Its cloud and on-premise facility makes the data model and user experience consistent.
 It helps users to adopt the changes with the help of Fiori technology to deliver the finance
application in a more attractive form.
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 It has helped the business to collaborate and increase automation in the core functionality
of the business.
 It has provided a unique platform to solve the business problem and find a solution.
 It helped the business to increase its flexibility, throughput and user productivity.
 It delivers the products without taking much time and helps to reduce the cost and time of
performance.
 It focuses on making a financial decision by facilitating the composition of analytical
application.
 With the help of predictive analysis, it helps the business to predict the nature and
behaviour of risk and also identify the impact of business Decision on the overall project.
 It has helped the business to go hand in hand with the latest technology and helps
businesses to cope-up with the latest trend and technology.
 Analysis and financial planning with reporting all the transaction statements are one of
the biggest advantages that boosted the efficiency of the business.
 It helps to find the risk and also avail the mitigation process to reduce the risk at the early
stages of the life cycle.
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Case Study
One of the biggest tasks any company can face is the conversion of databases from one to
another. And the migrating to SAP HANA databases is one of the most demanding migrations
done by the organization. Before conducting any migration process it is very necessary to keep a
few things in the mind like what are the challenges and issues and the ways to identify it, Listing
all the requirements and needs of the resources, planning and creating the plan, building the
architecture, deciding the framework, assessing the infrastructure and conducting the migration,
it is necessary to validate and verify the migration function.
Companies are migrating to SAP S / 4 HANA Finance but why they are only choosing this
technology only? The answer to this question is as follows: SAP S / 4 HANA Finance is the next
generation and innovative solution which provide business with enormous advantages and
benefits. It has helped to bring together planning and analytics to work parallel to provide the
benefits and mitigate the risks.
Case study 1
One of the constructions companies having 75,000 employees and 600 companies is the largest
company which has migrated from SAP HANA to SAP S / 4 HANA Finance. It completed its
migration process in three days and required 10 months for the culmination process concerning
SAP environment to come in action. The CIO of the company told that it has boosted the
response time of the transaction by 30% but faced a problem in fixing old reports so that it can fit
into new SAP S / 4 HANA Finance to check the performance. The CIO also told to consider the
realistic approach and expectation before migrating. The new system consists of single unified
databases while the databases they were using were divided into different databases which
created various discrepancies and to clean up such activity it took a lot of time. They also
encountered various mitigation errors due to this transformation. They have a total of 44,000
open items which faced mitigation error and it took three weeks to solve that error and confirm
the migration process.
Case study 2
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