Finance in S/4HANA 1610 the What, Why and How: Part 2
Last week I shared the What and How on Finance in S/4HANA. In part 1, we have learned the product and understand the key benefits of Finance in S/4HANA. Now I will continue with possible migration scenarios.
The How… different scenarios and migration paths
One of the 5 pillars of S/4HANA is the choice of deployment. Both On-Premise as well as Cloud deployments are supported. In this blog you will gain an inside in the On-Premise deployment and migration scenarios.
When you go for the On-Premise deployment option there are 3 options; a completely new installation, a system conversion or a landscape transformation.
A new installation is quite straight forward since no migration activities are necessary except from bringing in your balances, stocks, open items and other standard cut-over activities. In a system conversion scenario however, there are additional steps to perform which will be explained further on.
The best strategy for your company, either new install, conversion, cloud or On-Premise depends on the requirements and complexity of the current IT environment / SAP systems. After reading this blog you will get more insights in de system conversion options and activities involved. A specific assessment and analysis should be performed on your individual situation to define the best path.
Currently there are 3 major migration scenarios for customers running SAP ERP 6.0 on any database. Starting from the bottom these are the following:
Migrate to Suite on HANA:
This scenario is purely a technical database migration. This can be an intermediate step if your company has to renew its hardware but there is no time and/or budget for an additional migration project to S/4HANA. Of course there can be more valid reasons. Maybe the company needs to upscale or renew hardware because of performance issues or expansion. In these situations going for an in memory HANA appliance is a no-brainer.
Since this is only a technical migration, no application migration is involved. However you still get the performance improvements and the data compression provided by the HANA technology.
The biggest advantage is that HANA Live will be available so you can make use of real-time in memory reporting.
Migrating to S/4HANA Finance:
Migration to S/4HANA Finance can be chosen for different reasons. Your company can move to S/4HANA Finance when only the innovations in Finance are relevant, you would like to enable specific functionality like Central Finance or you use this path to mitigate risk and shorten the lead time of the project. There can be many other reasons like these. If the last applies keep in mind that you still need to go for a migration to reach the final destination.
In this blog I will go further with the details of the S/4HANA Finance migration. These steps are also valid for a migration to S/4HANA 1610.
In S/4HANA Finance, I have already explained all the innovations in Part 1 of my blog. As mentioned in the previous blog, S/4HANA Finance 1605 and S/4HANA 1610 are now equal in terms of functionality in Finance. In terms of migration there are however still some deltas such as the business partner and the 40-digit material number.
Migrate to S/4HANA
If you want to enable all S/4 innovations including the ones in Supply Chain, Sales and Procurement a direct migration to S/4HANA 1610 is the preferred path. During this path, the Finance migration, which is also required for an S/4HANA Finance migration, is part of the game as well. And I can say that the finance migration part is the most difficult one (see below).
There are also additional migration activities like the migration of the customer/vendors to business partners. Along these, there are also transactions or even functionality which is replaced or removed to another module.
To capture this information and to be able to perform a fit-gap SAP provides a so called simplification list for each release where you can find all deltas compared to previous releases. I have more to say about the simplification list further in the blog.
The migration and system conversion process
SAP provides are clear process for the conversion to S/4HANA. In the below figure you can see the required steps and sequences. Along the technical migration steps, there are application specific preparation steps (from t2 to t4). For a successful migration it is important that functional expertise of all the relevant domains are involved in this phase of the project.
T1: you need to be aware of system requirements, start releases and data volume. All information is provided in the Conversion Guide.
T2: the maintenance planner checks your components, add-ons and business functions to ensure compatibility with S/4HANA.
T3: The Pre-check tools provide a detailed report about the technical readiness of your system to S/4HANA. There is separate pre-check available for the migration of financial data.
T4: the migration tool checks the code of your SAP Business Suite system where it does not comply with the scope and data structures of SAP S/4HANA.
T5: this is the technical step where the database migration (if needed) and the software update is performed.
T6: in the final part we perform the adoption of the innovations. E.g. adopting the new UI (Fiori 2.0), configuring and modeling the Fiori apps and enabling and modeling KPI dashboards based on CDS views.
More about the simplification list
The Simplification List provides the key information by application or functional area about the simplifications in SAP S/4HANA. Each simplification item details the steps that need to be taken for the conversion from a business and a technical point of view. Actually it is a collection of all business impact SAP notes. All items in the simplification list refer to a business impact note.
This is your entry document to an application conversion from the business suite to S/4HANA.
An example of an item in the simplification list is about master data and specifically the business partner. All related information is provided in detail. The purpose, the business process related information and obsolete transaction codes. But also the required actions. This document in combination with the relevant SAP notes really gives all the information for a smooth conversion.
The most tricky part: Migration of Finance
Now let us discuss the migration of finance. Whether you go for a full S/4HANA migration or only for an S/4HANA Finance migration, in both cases you always need to migrate your financials. The migration tasks consist of the following steps:
- Preparation and migration of Customizing (GL, CO, AA, ML, Banks)
- Data Migration (migrate transactional data into the new data structures and generating Compatibility Views of obsolete tables)
- Activities after migration (some last steps, enriching transactional data and releasing the system).
To give you an idea of some of the migrations in customizing you can think of defining document types for posting in Controlling, migration to New Asset Accounting or migrating your House Banks to the new structure. Check the previous blog to see the differences with Finance in R/3, it will clarify some of the necessary migrations steps.
For the preparation and migration for Finance a very clear path is provided in the IMG for the above mentioned steps. There is some guidance, however the steps in the IMG are not always in the correct sequence! Functional expertise is very essential.
Finally to control all migration activities a migration monitor is now provided in S/4HANA 1610. In the monitor you can keep track of all activities and the status of the individual steps.
As you can see a migration to S/4HANA should be taken as a project in which the involvement of both technical (ABAP and Basis) and functional application consultants is required. Especially for the Financial migration the expertise and experience of a SAP FiCo consultant is a must. In the last part (t6) experience and knowledge of Fiori UX and Embedded Analytics options is very welcome as well. These things will make the difference compared to your old R/3 system.
As mentioned before, a migration to S/4HANA is non-disruptive and backwards compatible. Compatibility views (CDS views) are generated for all obsolete tables meaning that old programs will continue to work. Even your custom programs, except when you have INSERT/WRITE statements to one of the obsolete tables. These should be redirected to the new data structure. All these necessary steps are captured in the migration path and tools are provided by SAP to make your system ready for S/4HANA.
I hope you have enjoyed part 2 of this blog and gained some insights in typical S/4HANA migration options and activities.
Stay tuned for more S/4HANA news and demo videos on specific topics.
This blog first appeared on my personal website www.s4hanablog.com