An Overview of SAP S/4HANA Finance with a Focus on Asset Accounting

  • by Anurag Barua, Independent SAP Advisor
  • March 7, 2016
Learn how your organization can leverage the functionality of the new Asset Accounting (FI-AA) module in SAP S/4HANA Finance.
Learning Objectives

Reading this article, you will learn:

  • The evolution of SAP S/4HANA Finance (formerly SAP Simple Finance) and key features
  • Facts about the new Asset Accounting (FI-AA) module in SAP S/4HANA Finance, including differences with classic FI-AA, migration, implementation, and other key considerations
Key Concept

SAP S/4HANA Finance (formerly SAP Simple Finance) comes with a lot of features, such as the universal journal, streamlined design, and real-time analytics. The new Asset Accounting (FI-AA) module is one example of a financial module that has been redesigned in the S/4HANA suite to increase process efficiencies across the life cycle of an asset.

Since SAP announced the release of SAP S/4HANA Finance (then called SAP Simple Finance) in early 2014, there has been a lot of confusion on what this product was all about. Most people, including those who were SAP customers, thought that it was a Financial Accounting and Controlling (FI/CO) sub-module that was in some way simpler to configure than the effort currently required in the ERP suite.

Having encountered the confusion around SAP S/4HANA Finance, I decided to put together a summary of what SAP S/4HANA Finance means from a business perspective. First, to understand what SAP S/4HANA Finance is, it is essential to understand SAP’s journey with SAP HANA, as SAP HANA is inextricably linked to not only SAP S/4HANA Finance but also SAP’s DNA.

What Is SAP S/4HANA Finance?

Before I answer this question, let me explain what SAP S/4HANA is. It is the SAP ERP 6.0 suite that is fully capable of running on an SAP HANA database. SAP S4/HANA Finance takes that a step further. Certain key components of the former FI/CO suite have been recoded so that they can take full advantage of SAP HANA’s potential. SAP Simple Finance (version 1.0) that was released in 2014 was the add-on SAP HANA-optimized version for the Financial Accounting module in SAP Business Suite. In comparison, SAP Simple Finance 2.0 is part of the SAP S/4HANA product that was released in 2015. SAP Simple Finance 2.0 is the redesigned and recoded successor of SAP Simple Finance 1.0.

Today S/4HANA Finance is available as both on-premise and cloud versions. The cloud version is continuously enhanced in approximately quarterly releases. The 1503 release was followed by 1505, 1508, and 1511. (For those of you who have not figured this out yet, in the new numbering convention the first two digits are for the year (2015 in this case) and the last two digits pertain to the month of the year. The on-premise version is enhanced on a yearly basis.

As of September 2015, the term SAP Simple Finance is obsolete. It has been replaced with the term SAP S/4HANA Finance. For the rest of the article, I use the term S/4HANA Finance and focus on the S/4HANA Finance on-premise version, in particular the 1503 release formerly known as Simple Finance 2.0.

Since SAP S4/HANA Finance is part of the S/4HANA suite, it is important to understand what S/4HANA consists of. SAP S/4HANA consists of four components:

  • The functional/core component: SAP provides the various finance capabilities and enhancements as part of the functional/core component. You need to be on at least SAP NetWeaver 7.4, SAP ERP Central Component (ECC) 6.0 Enhancement Package 7, and SAP HANA version 1.0 to be able to consider a migration or upgrade to S/4HANA. A migration to S/4HANA from ECC 6.0 is a functional upgrade that involves the migration of transactional tables.
  • The presentation/user experience (UX) component: This SAP Fiori-based GUI component helps you interact with the core component through the user-friendly Fiori screens. It requires SAP NetWeaver 7.4 and SAP Gateway version 2.0. Note that this is an optional component and you can continue with your existing SAP GUI or NetWeaver Business Client as your user interface.
  • The reporting/analytics component: This component enables real-time reporting and analytics using pre-packaged HANA Live views. The prerequisites for installation are SAP HANA Live 1.0 for SAP ERP and SAP HANA. This too is an optional component.
  • App component: This component is a collection of analytical applications in the Financials suite for key financial decision-makers in an enterprise.

Let us now look at some of the key S/4HANA facts.

Anurag Barua

Anurag Barua is an independent SAP advisor. He has 23 years of experience in conceiving, designing, managing, and implementing complex software solutions, including more than 17 years of experience with SAP applications. He has been associated with several SAP implementations in various capacities. His core SAP competencies include FI and Controlling FI/CO, logistics, SAP BW, SAP BusinessObjects, Enterprise Performance Management, SAP Solution Manager, Governance, Risk, and Compliance (GRC), and project management. He is a frequent speaker at SAPinsider conferences and contributes to several publications. He holds a BS in computer science and an MBA in finance. He is a PMI-certified PMP, a Certified Scrum Master (CSM), and is ITIL V3F certified.

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