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S/4HANA Finance: More Than New Technology

Blog Posts | May 13, 2016

The groundbreaking attributes of S/4HANA, SAP’s new generation of business software, are most often characterized in technical terms: in-memory database processing, High-performance ANalytic Appliance (HANA), column-oriented processing engine and many more.

While this is very impressive from a technical perspective, the technology means very little to the user in front of an SAP screen. The majority of users interacting with the system simply want the software to work the way they prefer. They expect to be able to extract information that was entered as data in a timely, accurate, non-ambiguous way – and without needing IT people or consultants. The number of keystrokes and the number of screen changes needed to complete a transaction is of paramount importance to the user experience and the efficiency of the workforce.

For several decades, SAP has been working on bringing streamlined entry screens and ad-hoc reporting capabilities to users. While the former improved considerably from release to release, the latter was impeded by constraints of the data setup in the system. The need to report quickly and efficiently on data spanning several periods and even years was answered with aggregated information that resided in a variety of data tables. The user of the data had to know what table or combination of tables would produce a required report, most often exceeding the technical capabilities of most users. A solution to source reports out of the transaction system therefore was not realistic.

SAP’s major leap forward for reporting was the introduction of its data warehouse solution. This environment made information available that could be easily combined and reported by users. The introduction of HANA technology allowed for the transformation from originally aggregated data warehouse tables to line item based reporting over time. This proven HANA technology has been fully adopted for the transaction related S/4 HANA now, with the financial applications being the first layer of the software to be fully HANA enabled.

The redesign of the Finance and Controlling financial applications has led to a reduction of data tables down to only two: a document header table and a document line item table. All transactions that generate accounting and controlling documents now update their content into these two tables, which also now serve as the source for all financial and controlling reporting. There are no total tables anymore, no reporting tables to keep synchronized with the underlying line items. The phrase “single source of the truth” was used to describe SAP’s ability to provide a efficient way of storing entered data and immediately offering it for analyses, all while keeping the learning curve for users to a minimum.

The architecture of the S/4 HANA system will also alleviate the need for certain month-end processes, one of the most time-critical operations in any finance department. Complex batch processes—like closing out production orders, reconciling cross-company activity, and real-time absorption of labor confirmations—that are compressed into a few days every month have now been replaced by “soft closes.” Data from the controlling applications are no longer settled into accounting, as these boundaries no longer exist since both parts of the finance world update into the same two tables. What’s more, data review and analyses are instantaneous.

In terms that users care about, S/4HANA is much more than the sum of its highly advanced technology features. It is about enabling better and easier ways to do their jobs.

SAP S/4HANA Agenda:


Blog Author:  Uwe Kiewat, SAP FICO/MM Architect