At the Controlling 2016 conference, Janet Salmon presented a plenary session called SAP S/4 HANA – Let’s get under the covers. Dive into an excerpt of Janet's presntation focused on SAP S/4HANA migration options and get access to the recorded presentation.
So migration, assuming most of you are not doing a greenfield, how do you get from A to B? Essentially there are different ways of doing it. You can go straight from Business Suite straight through to the latest and greatest, and some people say, "Great. That's what I want to do, one set of testing, one set of hassle, and then I'm done." Other people go, "No, it's a bit scary. We want to take bite-sized steps. We're going to go first to Business Suite on HANA, and then we're going to S/4HANA Finance, and we're going to take teeny, tiny steps." We support both, and we'll pick you up along the way if you've done step one and you'd like to move. SAP themselves have hopped through every single version of it, which we're incredibly grateful for. Other people are going straight to the new world.
Some of these steps here are nothing to do with the migration to S/4HANA. They're the sort of thing you do everything, preparation, understanding what you're doing, getting a snapshot of your data. It's what you do for any kind of data migration. Get a system. Clear the rubbish out. You would not believe during the migration how much old stuff we find from previous migrations. All the sins that are in there we'll find them in the data.
What happens technically during the installation is all those tables you'll see we've eliminated we actually put them into backup tables. We just parked them just in case so that we can actually look at the end of the day and say, "It said it would do a million. Oh, yeah, it's a million. Good."I mean really, really important. This isn't a technical upgrade. It's not like doing Unicode or something like that where the people can come in and test. The business people can come in on tests just before the end just to make sure it really works. You want business people in this right from the start, because you're talking ledger settings, you're talking currency settings, you're talking how do you want to do controlling.
What do you actually want to see in CO-PA? How are you going to run asset accounting? You have to have business people in from the start understanding what you're up to. Then during the migration itself this is where the cost elements and accounts go back together and marry each other where the two tables come together. This is where the enrichment happens so all the things that we chopped up and put into lots of little tables along the way, so your cost center, your profit center table and so on, we roll those into one. We then take the line items and merge them into one.
If you think about what we're doing we're always taking the most detailed data we can find so if I've got this little thin FI document in this huge CO document, I grab the CO document because that's got the most detail, and then I extend it left to have all the FI documents there. Then at the end of the day we look and we say, "Mm. Do the line items matched the totals?" They almost never do because you've nearly always migrated some of your line ... archived some of your line items.
So we say, "Ah, I don't know what to do with them," so we take what totals are left, and we say, "Here's the old stuff. Here's the stuff from 1995. All I know is you had a balance of 500 there, but I'll give you that as a document," so the same for things like carry forwards and so on. Then afterwards we store it in a higher like manner. I'll leave you that to read. That's just what you can migrate from where.
This is really the case for why you need business people onboard. You need business people onboard to think about what your currency settings should be. You don't want anybody technical saying, "These are the currencies we'd like going forward." You don't want anybody technical being the one who sets up your profit center valuations. That's something business has to be involved with. Then we're always doing this leap back into the past where we say even though we've gone to this new world we still need to store things in the old world. It's the old version.
We've now got one big migration activity in this big migration monitor. There's a lot of myths out there that are still hanging over from the new General Ledger migration, because if you remember the new General Ledger migration you could only do it at the end of the fiscal year, and so on. There were all sorts of limits on it. You can actually do this any period, but obviously not just willy-nilly. You have to have closed the periods before. This monitor really guides you through the process, and I can walk you through what actually happens, how you would typically clone your data, experiment, explore, make sure that everything's right, and then press the big red button and migrate.
Now if that still sounds horribly scary, and I did write a book last year about how to do it with migrating, the other option if you multiple instance, and one that I'm seeing a lot of POCs at the moment, is around central finance. The idea with central finance is you go to this brave new world but you leave your old world where it is. All of those of you who are a little bit conservative, and a little bit, "Ah, will get this past the auditors?" this is a great option.
The idea is that you're connecting your existing legacy systems, and legacy can be in the latest and greatest of S/4HANA as well. It doesn't have to be old. Bring it into one structure. What I said about inventory management we have a lot of projects going along at the moment where people are trying to get all their systems onto one box. This can be the gentle way of going to one box. You've got one box with accounting documents in there, and you're connecting your existing systems against it. People are sitting there going, "But my existing systems, they're all in this old-fashioned form. They've got the FI documents. They're all thin, and we haven't got profit center accounting on there, and we've got costing-based COPRA on there," and so on.
What we do is actually we sit at the interface before the document that gets created so we can give you that detail. We can give you all the lines, all the detail, and most people if they're looking at this they're also looking at corporate reporting requirements, consolidation requirements. They're looking at shared service frameworks and that sort of thing. That's a little bit more detail. The pipeline that brings everything in is this software and lifetime system landscape transformation. That's really cool.
It was originally designed, actually, to do the euro conversion, so to take a whole load of documents and convert them at database level. That's quite significant, because it's taking the data at database level. It's listening to the key transactional databases so it's listening for changes to CO-AP, the CO line item table. It's listening for changes to the FI line items. It's listening to changes in the orders, and that's the trigger that pull things through so particularly if you're looking at non-SAP systems you don't have to understand exactly how that other system works. You just have to understand where the tables are.
Then what happens is it comes through and it's created again. This isn't a BW sort of take it and dump it scenario. It's take it and create a new document. Take it and create a new document actually means everything in that document has to be there as master data. I need the accounts in there. I need the cost centers in there. I need the profit centers in there. Everything that I'm going to post against needs to be there so guess what? Master data governance comes into play. You're typically going to do this because you're cleaning up, because you're going through a single chart of accounts, because you're going to a common cost center structure, because you're going to a common profit center structure.
You don't have to use our master data government solution, but you are typically going to want to get to some kind of common structure from an accounting point of view to get the real benefit from central finance, otherwise you're just kind of tipping things into together and hoping that magically it'll be easier to analyze afterwards. The other thing, of course, you need to think about is what happens if things go wrong? You need some kind of error correction in there because this stuff is all going through the accounting interface. It's creating accounting documents, which means that once it's clean it's fantastic. You have the document you wanted, but there's work involved. There's work in the mapping, there's work in defining your master data, and there's working being sure that you've got everything connected properly.
People have done this to a certain extent before so if you think about what happens in consolidation people have been collecting financial statements for as long as I've been SSAP, but they usually at a much more aggregated level. This is going right down to the nitty gritty data. You've got every single cost center in there, every single order, every single project, an awful lot of nitty gritty data. It's coming in in near real time, which means that we're starting to work with customers to say, "Well how much consolidation could you do before you ever get into the consolidation period?" Instead of everything arriving on period close plus three you can start to move some of those steps earlier.
Most people are doing this in some form using a data warehouse. The difference here is you're posting documents so you're validating and checking and making sure they're clean before you post them. It's going to give you a document-based reporting after a certain amount of work, and it's going to give you the base layer for consolidation. An important piece here is with 1610. The stuff that I talked about in planning we have a similar model for consolidation where we're going to have set BPC being used not just a planning solution, but it's also as a consolidation layer that sits on top either of your central finance or of your S/4HANA Finance and allows you to consolidate on top of that, completely in its infancy, but great way forward.
Anybody who thinks this sounds like a data warehouse I typically show this one slide. You've got what looks like a journal entry. It's been recreated in the new system, but it's got that all important audit link back. I can double-click on that document, and it does an RFD into the other system assuming it's an SAP system, and I can see every detail behind that. That wasn't very exciting, that was only a settlement document, but if you can imagine if that was a sales order I'd see all the transport. I'd see all the detail behind it. I don't have that typical situation of having to be double where somehow magically everything's got transformed and landed there, and you go and explain why it doesn't match. You've got that all important audit link back.
Watch the entire presentation!
The universal journal is the heart of SAP S/4 HANA Financials, but what would it mean for your organization? This recorded plenary session from Controlling 2016 explores the migration process to S/4 HANA Finance and discusses considerations for a greenfield implementation, or a move to Central Finance. We will cover the following topics through the lens practical lessons learned from SAP S/4 HANA implementation projects:
This recorded presentation covers how to:
• How does the universal journal relate to the classic General Ledger and the new General Ledger?
• What does it mean to merge G/L accounts and cost elements?
• What does using new asset accounting functionality imply for your organization?
• If you are currently running costing-based CO-PA, do you have to switch to account-based CO-PA? Or, can you run the two side-by-side?
• If you are currently running SAP Material Ledger will there be any changes for you?
We will explore how these changes could affect your organization’s approach to planning and reporting.
Janet Salmon is the Chief Product Owner for Management Accounting at SAP AG. Janet is known to many SAP Financials professionals for her writings on Controlling and related subjects. Janet has overseen many SAP Controlling functionality product developments both as a Product and Solution Manager. Most recently she spearheaded changes to the user interfaces within Controlling and data transfer from Controlling to SAP HANA.