Benefits Of SAP S/4HANA Finance: Examples And Overview In Essay.

SAP S/4HANA Finance allows an enterprise to create a consolidated view of all operational and financial data to offer flexible and easy reporting along with automation of processes. It also offers real-time analytics, simulations and forecasting with a great user experience. Benefits of SAP S/4HANA include but is not limited to ‘single source of truth, faster forecasting and planning, ‘on the fly capacities’, new reporting and analytic support, global regulatory and compliance abilities across all languages, currencies and industries, faster month closing, integrated with Fiori etc.

Discuss these statements using case study examples (from literature searches) to demonstrate the benefits of SAP S/4HANA Finance.

The SAP S/4HANA Finance

The SAP S/4HANA Finance refers to a financial application in the platform of SAP S/4HANA ERP. It is comprised of a collection of interrelated functions of financial management. It gives a real-time information from the applications of enterprise resource planning (ERP). The SAP S/4HANA Finance is portion of S/4HANA which is established on platform of in-memory SAP HANA database. The S/4HANA incorporates the cross-organizational business functions into a single system that collaborates the transactional analytics along with processes for real-time applications (Junnarkar and Verma 2016). The SAP S/4HANA Finance, previously was known as Simple SAP Finance, is the basic application of business established for the S/4HANA platform. It is made to eliminate the traditional hurdles of the analytics, transactional and planning systems to provide instant solutions and on-the-fly evaluation utilizing the financial data levels. A maker business decision can utilize the SAP S/4HANA Finance to find out the information and make various predictions of possible decisions using the real-time financial informations from various systems. The SAP S/4HANA Finance has the objective to provide guidance to the financial specialists and professionals in every industries that includes Chief Financial Officers and others included in treasury accounting tax and financial operations, compliance along with volatility. The user base includes small businesses to large businesses globally (Lorenc  and Szkoda  2015).

The primary benefit of SAP S/4HANA Finance has is trending at a high speed as it includes various integrated characteristics for the various pecuniary functions like the management accounting and financial accounting (Junnarkar  and Verma  2017). Due to this, the SAP S/4HANA Finance provides a easy reconciliation of the financial methods and gives a single source of financial truth for the business, as per the SAP. The other key benefit is the capability to utilize the real-time information with analytics to model and forecast the changes effect that an enterprise may consider, such as acquisitions (Umar,   Khan,   Agha,   and Abbas 2016). This make the financial professionals, that may include CFOs, to operate a more vital role in the corporations decisions.

For the past few years, SAP has been operating with several customers across the globe for helping them in becoming the best run businesses in this sector by solving challenges of information technology and complex businesses. SAP has identified the present business trends and developed digital business framework for supporting their customers as they attempts to make their way through digital transformation. After tier-architecture versions, SAP has changed its design completely with introduction of ERP central component in the year 2004. ERP central component enables the users to run Business Warehouse (BW) as well as Strategic Enterprise Management (SEM) applications within an instance (Assets.kpmg.com 2018). The first SAP solution was ECC (ERP Central component) that helped to extend the business applications to web browser. In the year 2011, SAP launched SAP HANA in-memory platform that is designed to be better simplifier for the customers in inventing and reinventing their business with timely insight. HANA is the new high- performing database of SAP that utilizes latest technological innovations for boosting business performance (Maheshwari 2017). SAP launched certain applications such as SAP Business Suite and SAP ERP in the year 2013 for facilitating the enterprises drive real- time businesses as well as simplify running these applications by bringing analytics and transactions together in single memory- platform.  In addition to this, SAP re- programmed this application logic for optimizing Business Suite performance combining with HANA. SAP Business Suite is the business application set that enables procedure to run within the SAP. SAP then turned its concentration to particular business line and customers have been able to increase real- time insight over the finance system. Moreover, these applications that are built on SAP HANA also facilitates to drive business procedure and framework. These SAP HANA applications for business lines leverage platform value by addressing vital requirements for business.

Primary benefits of SAP S/4HANA Finance

In the year 2015, SAP again launched high- generation business suite namely SAP S/4 HANA based on native HANA platform for supporting simplified data frameworks. This application contains functionality that permits enterprises to accelerate, optimize and simplify finance function (Vosough et al. 2016), Besides this, SAP S/4 HANA application operates on integrated basis with other solutions in SAP, which are again reprogrammed for optimization with HANA. Various new features have been included in SAP S/4 HANA such as streamlined design, real- time analytics and universal journal. SAP S/4 HANA also incorporated Flori- based user interface as well as role- based accessibility for various objectives. S/4 HANA depends on the advanced in- memory and provides personalized Flori- based customer experience for accessing role- based solution. It might be integrated over the cloud environment or on- ground solution. There are several customers who are moving from this SAP Business Suite to S/4 HANA owing to certain benefits offered by this new business suite. SAP also provides SAP deployment project for performing fast migration to HANA platform as well as to SAP Finance solution. Different partners of SAP provides incorporation of fixed price for some clients. With SAP S/4 HANA, SAP has been offering new products and future generation of the business applications - simple corporation software for big data and is also designed for facilitating to run in digital economy. Furthermore, with advanced characteristics of SAP HANA, SAP S/4 HANA has been designed for operations and planning of real- time business and analysis of BI. In addition to this, SAP Flori- based user interface of this S/4 HANA solution gives role- based experience to the users. SAP S/4 HANA generally delivers simplifications regarding customer adoption, user experience, data model, business procedure, decision making and helps in innovations for helping businesses run in digital economy. SAP S/4 HANA finance usually covers SAP accounting that is powered by SAP HANA as well as SAP Cash management. The benefit that SAP S/4 Finance provide is its features combined with processing speed for different financial functions that include- financial accounting as well as management accounting.  Owing to this, SAP S/4 HANA finance permits for faster reconciliation of financial procedure that include quarterly close, single financial source based on SAP. Installation of SAP S/4 HANA Finance aids to replace financial applications of the SAP enhancement package for SAP ERP. It also provides real- time version of truth that supports higher data transparency and offer users ability in drilling down to line- item as well as to have accessibility in real- time reporting.

Brief historical overview of the SAP S/4HANA Finance

The SAP FICO is the primary component  of functional in SAP ERP Central Component that allows the business enterprises to administrate its financial data. The objective of SAP FICO is to provide the organizations to manage and generate the pecunary statements for reporting and analysis and help efficient business planning along with making of decision (Al-Sabri,   Al-Mashari and Chikh  2018). The SAP FICO comprises of two modules that includes SAP Controlling (CO) and SAP Finance (FI) that are utilised specific financial processes. The SAP FICO deals with total financial accounting and reporting at that time the SAP CO highlights more narrowly on monitoring and planning the costs.

On the other hand SAP S/4HANA Finance is the more new technique of financial application in the platform of SAP ERP that comprises of a set of interrelated functions of financial management that gives a real-time information from the applications of enterprise resource planning (ERP). The SAP S/4HANA Finance is portion of S/4HANA and is established on the SAP HANA platform of in-memory database.

SAP S4 HANA is mentioned as the new a direct evolution and digital core from SAP FICO for existing customers. The new version SAP is now offering many discounts to nudge this adoption forward. But, it is not a direct replacement for SAP ERP with respect to the capabilities and functionalities (Hejazi,   Halpin and Biggs 2014). The S/4HANA integrates the cross-organizational business functions into one system that collaborates the transactional analytics and processes for applications that are real-time. The SAP S/4HANA Finance that was previously known as the SAP Simple Finance previously is the primary application of business made for the platform of S/4HANA. It reduces the outdated barriers of the transactional, analytics, and systems of planning to give instant solutions along with analysis using the levels of financial data (Narayanan 2017). A maker business decision can utilize the SAP S/4HANA Finance to find out data and generate various predictions of decisions with the help real-time financial information from several systems.

Businesses in digital era needs increased agility, capacity and proper real- time information to leverage full advantage of emerging technologies. SAP that emphasized advantages of new suite has provided customers proper insights into next generation of ERP systems that meet their demands in business.  S/4 HANA in SAP’s in future generation business suite provides support as well as real- time collaboration to digitalized business procedure. May, Bo?hm and Lehner (2017) has found out that SAP S/4 HANA has been proving to be SAP’s effective ERP systems.  This application provides unique benefits to every stakeholders of the business organizations. By using SAP S/4 HANA, enterprise can decrease complications of the SAP landscape with streamlined suite running on the platform of SAP HANA. The information technologies fraternity mainly realizes potential of S/4 HANA as driving force for decreased TCO (total cost of ownership) that relies on savings from the leaner databases and consolidations, simplifications and speed opportunities (Sun, Gregor and Keating 2016). This new business suite mainly focuses on giving decision support to end users in real time, which is data- driven and considers both external as well as internal sources of data. Most significantly, this SAP S/4 HANA permits the enterprises to work in the digital economy seamlessly. However, this application has been a vital driving factor for different businesses that uses SAP ERP over the past few years. This takes into account business benefits of the S/4 HANA and make decision whether they might adopt modernized ERP solution.

Difference between SAP S/4 HANA Finance and current SAP ERP FICO

The finance leaders are making investments in this technology for providing better insights to the organizations. By adopting this application, the finance leaders enhance their influence on making strategic decisions beyond core processes. There are some business benefits of SAP S/4 HANA that might be taken into account while deciding which ERP system is best fit for the business. These benefits are described below-

Performance- SAP S/4 HANA runs on SAP HANA that flagships in- memory estimating database. This signifies that running SAP solution namely S/4 HANA generally takes benefits of speed of the transaction reporting as well as processing native to SAP HANA. This SAP S/4 HANA permits an individual to experience better performance since it relates in complex finance activities including- execution, reporting, real- time planning and better forecasting. Furthermore, it also permits an employee to offer better service for consumer- centric applications.

Batch to real-time- This application helps to run financial closing in faster and effective way. SAP S/4 HANA Finance has been natively built on the SAP’s in- memory platform, permitting financial organizations to shift from lengthy batch –oriented procedure to the real-time procedure (SAP 2018).

No aggregation and duplication of data- This new business suite helps to better recognize what has better contributed to the cash movements. With this SAP S/4 HANA Finance, an individuals application work at line item level provides deeper insights of business.

Source of truth- This application helps to accelerate the intercompany reconciliation as well as enhance its efficiency. Apart from this, SAP S/4 HANA finance characterizes the Universal Journal for the management as well as financial accounting. Each finance applications generally access similar- up-to date.

Non-disruptive replacement- This SAP S/4 HANA assures seamless transition for the custom applications. However, transitioning to the SAP S/4 HANA finance do not disrupt any kind of present financial disruptions.

Centralized Finance- This tool centrally manages the group liquidity and cash of the business. Integration of SAP S/4 HANA Finance in the shared service framework, thereby centralizing the transactions of an individual into consolidated instance.

Smart Application- This tool automatically matches payments as well as invoices with the machine learning. The intelligent services like the IoT, machine learning along with modern analytics are now implementing to finance procedure for delivering automation as well as predictive insights.

While SAP S/4 HANA has been identified for its capability to create redefined users experiences, assists in the digitization processes and drive simplification, this application has faced with certain level of uncertainty for few enterprises (Burns 2018). The findings from HCL commissioned research survey of the SAP end users published that indecision persists among different companies with around 60% of the respondents are not committed to S/4 HANA roadmap within next few months. Other challenges involve lack of compelling business case for the SAP S/4 HANA migration, ambiguous migration flowchart, business disruption and unclear commodity roadmap (Pattanayak 2017).

One of the reputed multinational corporation TCS faced certain issues and challenges while migrating SAP S/4 HANA Finance. Based on the beginning of start point and systems, the two major paths exists in migrating to SAP S/4 HANA that include- greenfields and brownfield. But both these routes occurs with their own benefits and challenges. The deployment of brownfields might face huge difficult paths since they shift from systems that have not been updated in decades owing to customizations as well as fear of breaking critical business systems (Tcs.com. 2018). Greenfield SAP S/4 HANA installations did not created problems for this organization even though in any migration, there can be some vital decisions to be made. Some of the vital components to successful installation of SAP S/4 HANA include- designing of schedule, creating teams and assigning ownerships. On the other hand, in brownfield migration creates difficulty for this organization. This might take several months to assure that data is clean and system is ready. Moreover, other challenges that this company face while migrating SAP ERP to SAP S/4 HANA finance are given below-

• Inconsistencies of data- One of the critical part of the conversion to SAP S/4 HANA is financial data migration. During this stage, the transactional data is mainly transformed to new data framework of universal journal. One error that occurred in this organization during migration involve difference between common ledger and subledgers as well as document tables and inconsistencies in the asset accountancy.
• Huge changes in functionalities- With migration of SAP S/4 HANA , there can be some vital changes to functional scope of the SAP S/4 HANA as compared to SAP ERP. The finance managers of TCS faced problems regarding unavailability of liquidity management in SAP S/4 HANA and thus replaced with developed SAP S/4 HANA cash management (Menon 2016).

Another major multinational enterprise Infosys has also faces some challenges while migrating from SAP ERP to SAP S/4 HANA. This organization became the SAP global service based partner in the year 2008. It had also acted as co- development partner with the SAP for developing tools and sector specific extensions and thus act as SAP S/4 HANA value assurance partner. The main areas that this company focuses on is its own suite of sector- specific S/4HANA extensions, accelerators and migration tools. While migrating SAP S/4 HANA, this organization faced few challenges that include-

• Less concentration on its SMB client base that has been driving much of S/4 HANA adoption
• The workforce of SAP is mainly weighed towards other rivalries

As the SAP S/4 HANA has been providing defined functionality, this might not meet requirement of clients that presently utilize customized sector procedure and technologies. While finance functionality has been offered by SAP S/4 HANA finance, client specific requirement are met for facilitating adoption. The experts faces time limit issuers while understanding the ways to adapt to its. The finance mangers of this company also agreed with the fact that assessing the transition cost is the major challenge that Infosys has been facing during migration. Thus, the finance experts are required for detailed configuration as well as testing and monitoring during the project proceeding.

Conclusion 

The SAP S/4HANA Finance refers to a collection of software functions for business that enables the core business and business support processes beyond and inside the organisation boundaries. It’s built on the proprietary operational data base system of SAP. It based on the in – memory data base that refers to management system that is primarily dependent on the main memory for the storage of computer data. The SAP S/4HANA Finance is the Enterprise Resource Planning package of software that helps to cover a day long process of business and core capabilities that includes, procure-to-pay, order-to-cash, request-to-service and plan-to-product. SAP S/4HANA Finance integrates functions businesses and industry along with re-integration of SAP Business products Suite like the SAP SRM, SAP CRM and SAP SCM.

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