S/4 HANA – Right time and transition path for implementation
Many SAP customers (if not most of them) are now debating on the time for migration or transition to S/4 HANA considering its business benefit and end of SAP’s support for ECC by 2025. It is ‘Wait and watch’ policy for many customers . This blog makes certain recommendations for transition to S/4 HANA (S4H).
Present state of development of S/4 HANA
Simple Finance SFin (now known as S/4 HANA finance) was first released in Q1’2015 and is quite stable . S/4 HANA Enterprise (or Logistic version) was released in Q4’2015 and is not complete with all its functionalities. There are several limitations / restrictions in functionalities mainly with Enterprise (Logistic) 1511 edition. Refer simplification list vide https://uacp.hana.ondemand.com/http.svc/rc/PRODUCTION/pdfa4322f56824ae221e10000000a4450e5/1511%20000/en-US/SIMPL_OP1511.pdf for the details on the changes and also its limitations. SAP has plans to release new versions for cloud (quarterly) and On-premise (yearly) on an incremental basis for next few years.
Recommendation for small customers
‘Small’ is a relative word , it means less complex functionalities in this context. They can now either go for Cloud or On-premise option. SAP has provided the option of Trial to evaluate whether their business requirements meet present functionalities of S4H or not.
Recommendation for big customers
In this context , ‘Big’ indicates customers with complex system functionalities i.e ECC with other applications like SCM (APO, EWM, TM ) , SRM , CRM , HCM etc in their landscape. SAP has plans to merge applications like APO (GATP & PPDS) , EWM , TM , SRM as a part of digital core , however those are not ready as of now . A major release on Enterprise edition is expected at Q4’2016. They can think for cloud solutions like IBP for APO (DP & SNP) or Success factor for HCM , but 2016 may not be the right time to go for Enterprise 1511 edition for digital core (ECC part of S4H). Implementation of Enterprise functionality may be decided after evaluating the scope & limitations of 1611 release.
However, they can
- Upgrade to Ehp7 and Migrate the database to HANA (as Ehp7 and HANA database are pre-requisites for S4H)
- Plan for S/4 HANA Finance (as SFin is a pre-requisite for S/4 HANA Enterprise (Logistic) edition)
There are 2 options for SFin – ‘Central finance’ or ‘Add on to ECC’. Central finance is supposed to be non-disruptive option for multiple SAP / Non SAP instances. Otherwise, they can go for SFin as ‘Add on’ to ECC.
There is a myth in industry that ‘New GL’ is mandatory for SFin . It is not true that new GL functionalities like document split , parallel accounting etc are pre-requisites for SFin installation / migration. Database structure for SFin is very similar to new GL and hence technical activation of new GL is required in SFin. Only certain additional functionalities like concept of Ledger , Merger of secondary cost element with GL account etc need to be implemented in SFin as a part of new GL. Yes, new asset accounting solution also needs to be implemented in SFin if (classic) asset accounting is present in ECC.
Below is a pictorial presentation for transition paths to S/4 HANA for small and large clients
Please note that this recommendation is purely from my personal experience/ knowledge, interactions with different customers and information gathered from different SAP documents, blogs etc. Will appreciate comments & reviews on this blog / recommendations.