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SAP Smart Financials, Evolution towards HANA Optimized Solutions and Follow-Up Questions

When SAP announced SAP Smart Financials I was very excited because of the following reasons:

  • SAP uses HANA to add non-functional values to a part of ERP: a single source of truth, speed, new user experience and predictive features. The complete data model was simplified by removing aggregates and redundant data structures. As well the data footprint was minimized.
  • I consider the solution as non-disruptive. And if you reading my blog series on SCN you know that this is one of my topics that I feel very strongly about.
  • Hasso Plattner explained in detail in his blog why he thinks of this new solution as simplification.

This is really exciting and if you are not familiar with this new solution I recommend you to read the following blogs:

In SAPPHIRE NOW keynote Hasso Plattner sketched the vision of simplified enterprise business systems working this way: sales, logistics and so on. And again he emphasized that this transition will be non-disruptive.

Hasso emphasized that the new UI of the solution was added “in an incremental and parallel manner” to the old functionality according to the paradigm of sustainable innovation: nothing is replaced and so the users can decide when they use the new UI.

All above mentioned blogs and keynotes are fantastic since they answer many questions and clarify everything. But I got curious and looked into the new solution and new questions came to mind. I try to answer some of them and try to make suggestions for SAP.

How Can the Data Model be changed without Creating Disruption?

So how did SAP manage to change the data model and avoid disruption? The problem becomes even more severe since FI/CO is part of an integrated business solution and there are data flows from ERP applications like MM, SD, PP to FI/CO so incompatible changes will be harmful to ERP itself – and of course to add-on developed by customers and partners. But SAP found a smart solution which was described in many talks about Smart Financials – so look at you Youtube and search for “Smart Financials”.

Since a short time the documentation and OSS notes are online and there are of course many OSS notes like 1976487 – Smart Financials Package 1.0: Information on the adjustment of customer-specific programs in line with simplified data model of Smart Financials and 2017431 – sFIN: How to manually correct CDS Views. What can we learn from it?

  • SAP provided a new software component that requires New GL as prerequisite. In this software component transparent tables have been replaced by views. This means that all ABAP programs can still access the data but not update them by SQL.
  • Those views are mapped to HANA views and access a completely different data model. Of course we need a migration from the data in the old tables to the new data model which is described in above mentioned documentation, too.

  So I checked above mentioned notes against out system and I was surprised – I couldn’t find any source of disruption. So, at least for me, SAP did a good job.

Evolution of SAP Business Suite as Answer to the Inventor’s Dilemma

For me SAP TechEd && d-code will be the most important event since I want to learn about the product strategy of SAP Business Suite and details about the simplification process SAP started with the Smart Financials 1.0 solution which is, if I understand Hasso right, the road SAP will take. In fact in the same key note Bernd Leukert announced the new products that will be provided in the cloud.

I see two challenges, which I’ll explain. The key aspect of Hasso’s keynote was the inventor’s dilemma. If I understand Hasso right he chooses two strategies to avoid this:

  • He adds functionality to business systems but keeps the existing interfaces – think of UI.
  • This is also true for more drastic changes like changes of the data model which are done mostly non-disruptive which at first sounds like a paradox – but SAP found a solution for it.

Let’s see these aspects from the point of view of software evolution. Of course this is only an analogy but I think it is helpful. From Richard Dawkins books I learned that evolution is a slow process consisting of small steps and a revolutionary jump from one generation to another will most likely kill an individual. And this is also true for evolution of software system since the disruption will separate SAP from the ecosystem.

By the way, the strategy of evolution is nothing new and the analogy to evolution came to my mind when I worked with SAP in Trailblazer CEI together with Thorsten Franz and I blogged about it nearly two years ago. So SAP’s strategy is still consistent: SAP developed new solution, tested them in Customer Engagement Initiatives with people from the ecosystem and then rolled them out. And this is what SAP should do in the future, too, in my opinion.

Bringing Simplification to the Ecosystem

SAP is well aware of the danger of technical disruption and proved that the data model can be changed in a non-disruptive way. These are good news but I think it will become more difficult especially for customers and partners who have built add-ons to SAP Business Suite.

The question is interesting because SAP created development platforms and a huge ecosystem of customers, partners, integrators, consultancies and more. So they will ask how they can bring their solutions to the next level since their extension of the data model could be regarded in the simplification process as well.

At SAP TechEd&& d-code I will try to get as many information about the simplification SAP implemented. And I will listen to announcements of new simplified applications which I expect to come. So my questions are:

  • Is there a roadmap for those new products?
  • It is a wise decision to provide them in the cloud since SAP can deploy innovations much faster and with higher quality in this environment. But will they also be available onPremise and when?
  • Are there guidelines how to simplify add-on to SAP solutions?

It seems to me that this is not a technical problem. As well am well aware that SAP appreciates co-innovation with customers. So at least for me the next logical step in the evolution of business suite will be to start Customer Engagement Initiatives to test programming models for customers to simplify their add-ons to SAP Business Suite, too.

And finally those guidelines should be part of Best Built Apps guidelines that are a little bit outdated. In my opinion it is the time to update them since they a very important for software architects and corporate technology strategists.

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  • Hello Tobias,

    Excellent blog, as always.

    Where do you see the future of FI-CA within Smart Financials?  How do you see your company / company's clients possibly using FI-CA with Smart Financials?  Perhaps this is a question for SAP TechEd / d-code


    • Hi Tammy,

      you are absolutely right - FI-CA is tremendously important as everyone can see in the list of business cases: Moreover it is the cornerstone for so many industry solutions like Utilities or Insurance. I am really suprised that after Hasso's and Bernd Leukert's excellent keynote the people from the audience didn't started to enter the stage and shout out for more information. Or was this part deleted from the video? 😉

      Best Regards,


      • You know, Tobias, I have asked this same question on every single Smart Financials webcast - yes, we're excited for Smart Financials but where it will really bring value (in my opinion) is FI-CA (because we us this in the Utilities solution).  FI-CA is also used in the schools/universities solutions.

        Regarding the show floor - well the keynotes ran late (as they usually do), and many of us had to help get to/run ASUG Education sessions.

        To be honest, this news didn't sink in for me until I read Graham's excellent blog.

        Then I started asking these questions but it was post-event.


  • Hi Tobias,

    thank you for referencing the relevant notes in your blog.

    a few (7) points:

    1. neither smart financials nor sFIN are any longer official names, even though i still see them referenced, but that is cosmetics (or is it branding?).

    2. notes cannot be implemented outright until the SAP_FIN and its prerequisites are installed.

    3. the existing installations need to undergo upgrades (technical) and possibly migrations and conversions (functional).

    4. the actual end-user performance gains are a direct result of the amount of RAM at their disposal, which is depending on hardware the software is installed on.

    5. the notes, as usual, lead very quickly to other notes, eg 1718399 seems required and it brings other software (Eclipse) into the picture.

    6. HANA simple finance creates an opportunity to simplify financials, but simply copying all existing processes, especially those created by customers, defeats the main purpose, imho.

    7. creating (and maintaining) the tools environment for HANA is nothing but simple, especially when trying to keep Studio client versions (50+, 60+, 70+, 80+, etc.) separate from Eclipse client versions (Juno, Kepler, Luna?) and having them communicate with servers whichever cloud they may be at (SAP, Amazon, Microsoft, etc.).

    i share everyone's enthusiasm about the simple finance and how it's going to resolve their particular current pain points, but i would like to keep some things in perspective and be proven wrong about how simple the process is going to be.

    Best regards,


    • Hi Greg,

      thanks for your answer. I think I have some remarks, too:

      • So what is the correct name of Smart Financials? SAP’s “legal” documentation tells it “Smart Financials 1.0”.
      • Your are absolutely right – we need tools like ABAP in Eclipse & HDB studio. This is in fact an effort and you should take it into account when creating project schedules and budget calculations of the whole project. But this is not the problem with Smart Financials – today you need Eclipse for ABAP for HANA, Fiori and so on.
      • And yes – every HANA programmer knows that queries sometimes perform differently under different HANA systems according to sizes and table content and so on – but this is not the problem of Smart Financials.
      • There is an additional software component SAP_FIN and so far I know there is no switch that turns the new solution off and on. So it is comparable to an upgrade – when you install the component it is a deep change in the system on all tenants that can’t be made undone (unless you install an AOI – but I don’t know whether this is supported).

      But here I would like to know what you mean. Can you clarify it?

      6. HANA simple finance creates an opportunity to simplify financials, but simply copying all existing processes, especially those created by customers, defeats the main purpose, imho.

      And I have another question? Have you given your feedback to SAP? I think this would be very useful to make coming projects better installable.

      Best Regards,


      • Tobias,

        there's no real argument here and the whole eco-system, myself included, are putting a lot of faith into SAP Simple Finance. now, it's just a matter of getting us there and i have only listed some of the trees that i can see in the forest ahead of us.

        to address your specific points, naming for us is the least of the worry, but it's a whole dimension for those responsible for marketing. you may have missed the response to @rhirsch's blog Cloud for Financials (‘Deceased’), Smart Financials and the next generation of Cloud ERP offering: Stepping stones? by @SDenecken but i may have drawn too many conclusions about product naming from that.

        about the point 6 that you are referring to seems more important as it is about what most customers have to keep in mind as they may get swayed by the 'simplification' message. almost all custom development would include custom objects and most probably tables. some of those tables are used today to support the existing financial processes and may contain financial information. by definition and product warranty terms they are unknown to SAP and cannot be really supported, but they do add to the complexity of the whole ERP installation, including any third party tools and solutions.

        if customers expect SAP to simplify those custom objects for them by SAP may, i think, lead to disillusionment, so the old project management adage about managing expectations still holds true.

        if i dissimplified anything please feel free to correct.



        • Hi Greg,

          I completely agree with you. The blog by Richard Hirsch is really great and in fact I am not surprised by the speculation "Suite always wins (even in the Cloud!)": How many code lines SAP wants to maintain in the future?

          And I really agree with you when you asking what "simplicity" means. When Vishal spoke of "collapsing the layers" the consequence was that customers bought a new HANA database, then an SLT server, later Sybase IQ for nearline storage and so on. And when Hasso speaks about "simplicity" one aspect was removing aggregates. His vision of a ERP system based on a simplified data model that allows to create algorithmical models is fascinating. But you are right, we should not forget that upgrade, New GL implementation, migration and so on will be difficult for many customers especially when they are on an old release.

          And yes, I agree with you that we should SAP remind that the simplification of enterprise IT landscapes is most important otherwise customers can't afford new innovations. I think SAP made great steps in this direction f.e. by putting SAP Gateway into AS ABAP. But here is much potential and I expect that more will come. In fact SAP learned much about maintenance fo SAP systems by doing "SAP runs SAP". So if the speculation is right and "suite always wins even in the cloud" then this should provide an incentive for simplification in the meaning you described in you comment - but this is speculation since I'm not a cloud expert.

          Best Regards,


        • Hi Erich,

          thank you for the reference page. we can just google or bing it under 'HANA DOC-4263'. the page has even more links within it. it reminds of what collaboration (with comments to the referenced blogs) is supposed to be.



        • Hi Erich,

          I hope this will not set a bad example. SAP's naming efforts in the cloud Business have been a disaster - I still can't remember the difference between all those different clouds. I'll pray that SAP doesn't continue this strategy...

          Best Regards,


          •   Thank you Tobias,


            The way I try to keep the cloud offerings apart is by the standard Industry cloud definitions:

            • Managed Services and IaaS, currently branded as HEC HANA
              Enterprise Cloud
            • DBaaS and PaaS, branded as HPC HANA Cloud Platform
            • IPaaS - Cloud Integration or integration platform as a service = SAP HCI HANA Cloud Integration
            • SaaS for example SuccessFactors and C4C (cloud for
              customer – Sales Force Automation)

            thank you for not giving up the hope 🙂