Busting Myths about the Deployment Modes of SAP S/4HANA Finance
How do myths get started?
Remember the game “telephone” from grade school? The first person whispers something – preferably a longer phrase – into the ear of the person sitting next to him or her. That person whispers (presumably the same) content to the next person. The longer and more complex the idea, by the time you get to the end of the line, the less the information received by the last person resembles the original phrase.
For all of us, this can easily happen because we tend to focus on the specific data points that are the most relevant to our own needs, our companies’ needs, and that of our individual implementations. For example, if you are interested only in a cloud implementation, you likely care less about the roadmap for on-premise.
In that context, let’s take a look at the three most common myths that surround SAP S/4HANA Finance.
Myth: SAP S/4HANA Finance refers to just innovations for Finance
Truth: SAP S/4HANA Finance actually refers to the entire portfolio of SAP solutions for Finance.
SAP S/4HANA Finance (previously known as SAP Simple Finance) encompasses solutions across all portfolios that support Finance processes, including SAP ERP; SAP solutions for enterprise performance management (EPM); and SAP solutions for governance, risk and compliance (GRC). These capabilities have been organized along five end-to-end processes, as shown in the diagram below, and leverage analytical tools and the in-memory capabilities of SAP HANA.
There are particular aspects of SAP S/4HANA Finance that have been re-architected to take advantage of in-memory technology. Most notable is SAP Accounting, which introduces the Universal Journal, combining transaction tables across finance and controlling, and eliminating the need for totals tables and indices. In addition, with SAP Fiori, SAP Smart Business cockpits are available for various finance roles, from the CFO to finance operational roles such as A/R and A/P. These cockpits include on-the-fly calculations of KPIs for management summaries, with the ability to drill down into granular details within the Universal Journal. Keep in mind that this innovation is only one aspect of SAP S/4HANA Finance.
Myth: SAP S/4HANA Finance can only be deployed in the Cloud
Truth: SAP S/4HANA Finance can be deployed on-premise, in the Cloud, and a hybrid of the two
In terms of deployment, you have several options, from completely on-premise, to completely in the cloud, to a hybrid of the two, as shown in the diagram below.
- On-premise. The scope available on-premise, where the systems infrastructure is managed in-house, is the entire portfolio of SAP S/4HANA as described above. For existing SAP ERP customers, migration tools are available to move to SAP S/4HANA Finance. Of course, this typically involves an upgrade of the entire SAP ERP system, which may affect other lines of business and capabilities, such as the extended supply chain. And of course new customers can directly start their implementations on SAP S/4HANA.
- Hybrid. A hybrid scenario means that while core finance capabilities are executed in the core system, specific capabilities and processes may be implemented in the cloud. Within the Finance area, there are two options:
- An on-premise system, whether it is a SAP ERP system or a SAP S/4HANA system, can be integrated with cloud processes and capabilities for specific scenarios. Examples include supplier management and invoice management with SAP Ariba; travel and expense management with Concur; and human resources capabilities with SAP SuccessFactors which then links back to payroll transactions in the core.
- A special case for Finance is the Central Finance scenario. If you have multiple back-end systems, either SAP or non-SAP, and are not yet ready to implement SAP S/4HANA, you can implement a separate SAP S/4HANA Finance system. You then map financial information from those back-ends to this Central Finance instance. For reporting and disclosures, the Central Finance instance becomes your system of record, where you process eliminations across legal entities, and generate reports. You can still drill down to the source systems if you need additional granularity for analysis.
- Cloud. SAP S/4HANA Finance can be implemented in the cloud; these cloud offerings are on SAP S/4HANA, where the infrastructure is managed by SAP. You can migrate all, or a portion, of your processes into either a private of public cloud. And especially new customers may be interested in starting their implementations directly in the cloud.
Myth: SAP S/4HANA Finance is only available in the public cloud
Truth: SAP S/4HANA Finance can be deployed in a private cloud or a public cloud
Let’s look at the differences between the private and the public cloud options.
- Private cloud. The scope of a private cloud deployment for Finance encompasses all SAP solutions, across the aforementioned ERP, EPM and GRC portfolios, and across all industries, Configurations and extensions are available and supported. The primary difference is that the systems infrastructure is management by SAP and not in-house. And as with the on-premise deployment mode, innovations are released on an annual basis.
- Public cloud. The scope of the public cloud, with a product name of SAP S/4HANA Finance Cloud, includes core accounting and the entity close; cash management; and accounts receivables and payables (including an integration to SAP Ariba). Planning is available through standard SAP HANA extension modules such as SAP RealSpend; optionally, you can leverage a batch interface to planning provided by SAP BPC. Currently there is no integration into GRC processes. Innovations are released on a quarterly basis.
- Hybrid within the cloud. A hybrid scenario between private and public cloud is also possible, for example with integration of procurement scenarios in a private cloud, but leveraging SAP Ariba in the public cloud. Another popular option is running subsidiaries or acquired companies in the public cloud, integrating into the overall SAP S/4HANA system.
If you are interested in detailed conversations, join us at the SAPPHIRE and ASUG conference; sample agendas for the CFO, Finance and Digital Core with S/4HANA are available here. And for detailed conversations, visit our demo stations:
- Business Applications Campus, for deep-dives into Finance topics, organized by end-to-end processes as shown in the initial diagram
- Data, Analytics, and Cloud Platform Campus, for deep-dives into SAP S/4HANA Finance innovations, as well as SAP Enterprise Management, and Cloud solutions and platforms
And for more information about our solutions for Finance, please visit: