Face it! Or Get Disrupted - Change is Coming Fast

SAP Changes

Complexity Challenge

Today almost all businesses are gearing up. Business is becoming complex and needs a higher degree of connectedness to be more integrated. Firms have to identify the main bottlenecks in each business process to avoid complexities hidden in each operation. These complexities may cause missing opportunities and inefficiencies. Business cannot afford inefficiencies in operations as they are the hindrance for growth. Many firms are following outdated business processes and outdated technologies which are contributing to process complexities and inefficiencies. Now it is the time to re-architect firms infrastructure to meet tomorrow’s requirements to avoid and ensure optimization & simplicity to perform critical processes in a simple way. To cope up with Complexities in process and optimize the simplicity and to achieve real time visibility across the enterprise, one of the best options is SAP S/4 HANA.


Simplicity is the Ultimate Sophistication

The 21st Century is the most easy to use Business suite released by SAP during November, 2015 to reimagine business and run with ultimate sophistication & simple with SAP S/4HANA. SAP customers will discover complete ERP system emerged with functionalities beyond Financials & into areas of Logistics (Production Planning, Inventory Management Etc..). The New ERP is “SAP S/4 HANA Enterprise Management” that includes SAP S/4 HANA Finance, HR, Manufacturing, Supply Chain, Sourcing & Procurement, Marketing, Sales, Service, Asset Management, R&D. 

SAP S/4 HANA 1511 core comes with new names. For Example: SAP Simple Finance is now named as SAP S/4 HANA Finance. Now there are no names like Simple Finance, Simple Logistics, because SAP S/4 HANA Enterprise Management is expanding with set of core S/4 HANA business suite functionalities that will link to different S/4 HANA lines of Business applications that are built on SAP’s advanced in-memory platform. 

 SAP S/4 HANA offers a personalized user experience with SAP Fiori & deployable in the cloud or on-premise.  This is designed to drive instant value across all lines of business and industries. Using this solution, it is simple to connect to people, Business networks and devices in real time. It is simple to get insight from anywhere on any data in real time with the highest level of granularity and easy consolidation. It is also flexible and has agility to change business process to get more efficiencies. 

Business users will enjoy the simplicity to get the job done and employees will focus on high value tasks, this leads to sky-high employee productivity. It will reshape the firm with most recent trends like Hyper connectivity Super Computing Cyber security, Cloud Computing.. Etc. It helps in reduction in storage cost, increased speed with real time data, decreasing monthly closing to a few hours, role based and web based user Experience, optimized processes to improve productivity. 

SAP S/4 HANA’s simplified data model helps in increasing throughput also breaks down barriers among departments and will enable firms to operate proactively and collaboratively with all business partners (Vendors and Customers). Table simplification begun in S/4HANA. This will eliminate redundant data, such as aggregates, indexes and history. This will lead to reduction of the memory footprint & helps in better performance and lower hardware cost. Improved & speedup processes allow customers to take advantage of the extra time created, thereby creating value for the enterprise. 


Effective Decision-Making and Forecasting

With SAP S/4 HANA Finance, you can ensure single source of truth for your operation data and real time insight into Finance processes. Prediction and simulation are easy now. As we have one source of truth, errors will be minimized and less efforts needed for reconciliation. This will enable firms to take quick and relevant strategic business decisions with no time lag. This new solution is your Decision Support System.

I would like to provide some important insights into recent innovations & capabilities of SAP S/4 HANA with respect to Finance, also try to give some insight about simplification in other modules too.


Planning Challenges

Plan today for tomorrow using SAP’s Integrated Business Planning for Finance. If your business is a car, what would you prefer to have on the dashboard? Warning lights or gauges?  I would personally feel better to have “gauges” as they provide incremental information, while a light is either on or off. Business gauges may be numbers from P&L accounts, Balance Sheet, Cash flow statements, Funds Flow statements or may be some Ratios that anticipate attention may throw some warnings but, lights often may not reveal exact problem until it’s too late.  Companies that survive long-term have gauges on their dashboard, not warning lights.

Business needs to align operations and strategies with organization’s performance, now SAP’s IBPF can be used as a strategy for connecting planning functions of each department in an organization. When SAP introducing SAP Simple Finance, things took a dramatic turn for Planning and Forecasting, bringing SAP Business Planning and Consolidation, powered by SAP HANA deeply integrated directly with SAP ERP. In SAP S/4 HANA-Finance (formerly Simple Finance) has SAP Accounting powered by SAP HANA, SAP Cash Management powered by SAP HANA & SAP Integrated Business Planning for finance powered by HANA. The IBPF is new capability for Business Planning and Consolidation. IBPF helps to reduce or even eliminate, uncertainties and improve efficiency of operations, and find smarter ways to attain business objectives

Some of SAP BPC capabilities, like financial planning, can be enabled using Integrated Business Planning for finance and this new feature is well integrated in SAP ERP user interfaces and workflows replacing the present planning capabilities in ECC, also can overcome limitations (Data replication) in ERP planning. Actuals, Plan &Variance data is available in Real time. 

Content required for Integrated Business Planning for Finance will be enabled when we install Simple Finance Add-On for SAP Business Suite powered by SAP HANA. So contents include, Cost Centre & Internal order Planning, Profit Centre planning… Etc.  So SAP S/4 HANA Finance allows users to leverage FI/CO documents and HANA views for real time access to actual transactional data and ERP master data. Actual data will be aggregated on fly leveraging SAP HANA views. So users can quickly do necessary financial data analysis.  IBPF comes embedded within SAP HANA Finance, it provides important functional content & templates covering multiple planning scenarios. IBPF support direct real time access to ERP Master Data and document tables.


The New IBPF Suite Capabilities

Every business requires ability to capture, interpret, plan & quickly act on real-time information in a fast, efficient and profitable way. The IBPF applications enable companies to develop and execute integrated business plans with real-time information to meet challenges. The new SAP Integrated Business Planning comprises with SAP Integrated Business Planning for sales and operations, SAP IBPF for inventory, SAP IBPF for Response & supply, SAP Integrated Business Planning for demand and for Supply Chain Control Tower. The IBPF applications are developed to deliver analysis and share alerts of real-time information across the end-to-end supply and demand network, with the speed of the SAP HANA platform.

SAP Supply Chain Control Tower: SAP Supply Chain Control Tower for End-to-End Visibility, Monitoring and Alerting Supply chain data and processes. Now, using this, we can identify and react to the supply chain problems quickly. This real time visibility helps for better decisions. It helps in Increase in on-time delivery performance to customer, decreases overall inventory levels while reducing risk, reduces supply chain costs and increases supply chain agility.

SAP IBPF for Sales & Operations helps in Strategic and Tactical Decision Processes. It helps in creatingthe optimal business plan to drive revenue growth and increase market share, Effectively balance demand and supply and attain financial targets, Increase speed and agility of planning and drive most profitable responses, Improve forecast accuracy and on-time delivery.

SAP’s Integrated Business Planning for demand helps in developing more accurate mid-term statistical forecasts. Reacts faster to short term demand changes with pattern recognition based algorithms, drives more accurate deployment of product based on short term demand, Collaborate to ensure the most accurate forecast. IBP for Demand will help in Demand Sensing and Statistical Forecasting. A world class, integrated business planning for Finance (IBPF) solution enables supply chain leaders to balance demand plans with network constraints and attain profitability goals.

SAP’s IBP for Inventory is designed for Multi-Stage Inventory Optimization. It helps to improve customer service levels, Maximize the efficiency of inventory and working capital, to improve planner productivity, standardize planning processes, to standardize the inventory target-setting process at each tier within the supply chain to feed operational plans & reduce production and distribution costs.

Now, Business plans are no more Complex

So, employing these most effective SAP Integrated Business Planning tools therefore becomes essential, for avoiding complexities in planning and also for forecasting & estimates for identifying trends and deviations along the way.


SAP Cash Management Powered By HANA

After about a year or so, we may realize that there will be questions like:

"What should we do with whatever excess cash we might have?"

"How will we really know for sure, if we will have any excess cash in future?"

If I am a cash Manager and if I don’t consider such questions, I may be undermining my company's long-term prospects--and even its short-term stability. Every cash manager knows why Cash Management is key to business Success. So, maintain right balance between having too much cash on hand, and having an inadequate supply to avoid losing opportunities and paying interest on borrowing, or sell off its liquid investments to generate the cash it needs. 

SAP Cash management powered by SAP HANA is mainly designed and developed to manage and control the Bank, cash and liquidity related activities. With this business function, firms can enable to Manage bank accounts using Bank Account Management which supports the opening, changing, closing, and review processes for bank accounts with the new user interfaces based on the NetWeaver Business Client (NWBC).

Cash Management Powered By HANA designed to gain control of your Cash and Liquidity with Real-time analytics and forecasting, It is closely integrated with Bank Accounting, so payments and bank statements can be included into the cash position calculation. It is also integrated with Accounts Payable and Accounts Receivable as invoices can be included in the short-term liquidity forecast. It is also integrated with Treasury and Risk Management as the treasury transactions (including Money Market transactions and foreign exchange transactions) and the posted values can be included into the liquidity forecast and cash position calculation. It also integrated with Materials Management as Purchase orders can be included into the liquidity forecast calculation.

With this new Cash Management solution powered by HANA, you can have real-time, accurate visibility into cash and liquidity positons across the company. Plus, you can analyse large volumes of financial data – in SAP and non–SAP software systems – at many levels of granularity & dimensions. This new solutions eliminates the limitations of current cash management systems, it also delivers advanced, flexible cash forecasting and collections analytics withpowerful insights based on customer-specific payment behavior

This is designed to minimize liquidity risk, maximize the utilization of cash and working capital & accelerate conversion of revenue to cash, to have quick access to analytics & data such as customer and vendor payment information as your AR & AP data exists in the same system. This Cash Management Powered by HANA helps for consolidate scattered data, to accurately forecast cash positions and to manage liquidity.

Many hours of manual work in Excel may not result in to real time visibility, may be restricted in terms of granularity. What every business needs is, a way to provide real time, in-depth visibility in to cash and liquidity across the business. New solution provides visibility including Bank Balances, Purchase orders, Sales orders, Payments, Money Market balances and many more. As HANA handles massive amount of data complex analysis are simple and available at your fingertips. Consequently business decisions can be taken quickly. Collections specialist can easily analyze days sales outstanding (DSO) and other financial metrics for each and every customer to determine the best collection strategy. This resulting to bring in cash faster. 

With Bank Account Management, customers in cash or treasury departments are able to centralize the management of bank accounts by using Hierarchy view and table view of bank and bank accounts. Bank account master data now supports for common properties of bank accounts, for example external bank account number, description, contact person in company side and in bank side, signatories for payments approvals, overdraft limits, Workflow processes for opening, closing, changing, and reviewing bank account master records and Status monitor for bank statement imports.

The new capabilities of Centralized Bank Account Management are Approval process for Bank Account Opening, changing and Closing. Cash Position analysis on Bank Accounts instead of G/L Accounts. Signatory integrated with BCM Payment Approval .Plenty of attributes reflecting controls on both bank side and internal side. Bank Account yearly review process. Merge House Bank Account into BAM. You can have Bank & Bank Account Hierarchy, Fast Search & Bank Account can be maintained easily.

House Bank and House Bank ID (Master Data), will have Status, Company Code & Beneficiary Name, Account Number, IBAN & Description, and Bank & SWIFT code, Signatory and Limit, Overdraft Limit, Connectivity Path. Account Type, Profit Centre & Business Area, Contact Person, Bank Details, User-Defined Fields & Attachments etc. You can easily upload the important documents of the bank account. An easy-understanding change history is provided for each bank account. It creates a change document, including normal change document and plan change document. Bank Account Management (BAM) in SAP Cash Management powered by SAP HANA leverages SAP’s NetWeaver Workflow to standardize the process and link all people involved together. (Subsidiary financial manager > Group Cash Manager > Bank Relationship Manager > Key user) 

You can have workflows for bank account. Bank Account Approval Workflow from Opening a bank account to closing bank account. You can define work flow for Sensitive Attributes Change Approval, Batch Signatories change, Approval Review Process Approval, Display existing Bank Accounts. Etc.  

The Integration with Bank Communication Management is well integrated with large variety of Fiori Apps like “Bank Payment Approval”….. . you can define everyone’s payment approval limit., it also support for configuringSingle Sign and Joint Sign, no need of ABAP magic, Support both sequential and non-sequential Signatory approval patterns.  

New Capability “cash pooling”. The bank account structure maintenance is done via the new bank account group, which is easy to use for business user, without configuration. The cash pool detail settings like “expected amount” and “minimal movement amount” for every bank account, can be set directly by business user, without configuration When doing concentration, it’s possible to see the balance (Balance means the forecasted closing balance of cash position)  before concentration and the simulated balance after the concentration, and also able to adjust transfer amount if necessary.

Create Bank Account Group > Create Cash Pool > Do Concentration

Fiori and Smart Business Tools: Most of the Cash Management features works with Fiori Launchpad. We have Manage Catalogs, Groups, and Fiori App Tiles. You use the tool to create, modify, or view the Catalog and Group content (including the Catalog and Group for Smart Business apps), or define or modify the tile definition of Fiori apps. You can refer Fiori Launchpad Designer help document when you define Fiori app for Cash Management.

You can also use Smart Business KPI Modeler to define Smart Business KPIs and drill-down. You may see Smart Business apps as a special kind of Fiori apps. You use this tool to define the KPI definition, including drilldown dimensions, key figures, views, chart type, and so on.

How it works technically? SAP Smart Business content is in SAP HANA Live installed in HANA DB. A Remote Catalog is needed to bring the content into Fiori Launchpad. (Why is it “Remote”? Because the Gateway is a “remote” system to HANA DB). Create Remote Catalog in Fiori Launchpad & link it to the HANA Live content. Then assign Remote Catalog to the Role (e.g. SAP_SFIN_BCR_CASHMANAGER) for users. Then, create a Group in Fiori Launchpad with tiles added from the Remote Catalog and Assign Group to Role for users. Remote Catalog is just a special type of Fiori Catalog which is linking to the content from a “remote” system. 

SAP Cash Management powered by SAP HANA also deigned to deliver Cash Operations functionality, this functionality can be used for Centralized Cash Management. You can monitor incoming bank statements. Prepare daily forecast of cash receipts, disbursements & expected closing balances, you can oversee bank risk, you can Initiate bank transfers and payments and Approve and monitor payments.


Most of the Cash Management functionalities works with Fiori apps. I would like to provide some functionalities with SAP Fiori Apps.


Bank Statement Monitor (Fiori ID: F0514): This “analytical” app displays the Key Performance Indicator (KPI) Bank Statement Monitor. With Bank Statement Monitor, business can monitor import status of bank statements for all the bank accounts that are set to be monitored. This KPI provides overall status of the bank statements and also allows to identify bank accounts that are not imported successfully. Then, you can communicate the issue to the responsible officer by an email when you find a bank account in an error status.  

Cash Position (Fiori ID: F0511) and Cash Position Details (Fiori ID: F0737): This “analytical” app displays the Key Performance Indicator (KPI) Cash Position. With Cash Position, you can check cash positions by location, by company code, and by currency. This KPI allows you to filter & drill down by various dimensions. 

With the “transactional” app Cash Position Details, you can monitor the cash position trend in your company & analyse cash position details using different dimensions and filters, based on transaction data from accounting, memo records, and the Exposure Hub. 

Analyze Payment Details (Fiori ID: F0735): With this “transactional” app Analyze - Payment Details you can track problematic payments that are booked. For example, outgoing payments that are rejected by stakeholder or bank, or expected incoming payments that do not arrive on time. You can also check the detailsand analyze the root cause of unexpected cash flows. 

Make Bank Transfer (Fiori ID: F0691): With this “transactional” app Make Bank Transfers you can conduct bank-to-bank transfers of cash. You can view information about the bank account from which or to which you want to make the transfer. You can filter or search for bank accounts by several dimensions. 

Track Bank Transfers (Fiori ID: F0692): With this “transactional” app Track Bank Transfers you can view information about the bank-to-bank transfers of cash that you have made . 

Approve Bank Payments (Fiori ID: F0673): ŸWith this “transactional” app Approve Bank Payments, you can approve or reject outgoing payments before payment orders are sent to the bank. This allows you to quickly get access to the payment information to avoid delays in the process. 

Payment Statistics (Fiori ID: F0693): This “analytical” app displays the Key Performance Indicator (KPI) Payment Statistics. You can have an overview of the recent payments being made and the total amount of payments according to different filtering criteria. 


Disrupt Your Thinking and Plan for Transformation

Growing data volume, cumbersome and complex processes, non-integrated systems, heterogeneous entities, static reporting functionalities, changing customer behavior and needs, outdated technology, poor planning capabilities creating challenges for any firm. Depending upon the degree of agility, this can be a threat or an opportunity. In my opinion, This new SAP S/4 HANA can help the Finance and Logistics functions work in a much more agile way allowing dynamic & real time planning close to fingertips. SAP S/4 HANA Leverage new technologies to enable new business processes with highly flexible UI’s, End-to-end visibility on strategic, tactical, operative and execution level. You can Focus on what's important for your business and repurpose the resources focused on firefighting instead, react faster to changes in the business through complete integration, one user experience with faster planning cycles & State-of-the-Art business processes.

If you are thinking about transformation, please ask your business partner to conduct a feasibility study. It will help to identify the potentials of SAP S/4 HANA by analysing strengths and weakness of your processes. They will do cost benefit analysis and submits you with implementation roadmap. They can also explains you how your processes cab be simplified. During the process of evaluation, your implementation partner will submit a questionnaire in order to evaluate if transformation helps your firm or not. 

As per my opinion, if you have lot of complexities in month end & year end closing processes, complex system landscape, taking long time to close your books of accounts, no business transparency, complex and unorganized reporting data models, ineffective controls, complex reporting, and multiple sources of data, then it is right investment for your business to implement SAP S/4 HANA.

So your Finance vision closer to reality with timely evaluation of options, more efficient and accelerated transaction processing with data integrity and compliance, will finally lead to better results



SAP S/4 HANA helps organizations and run simple. Simplicity is the ultimate sophistication! By re-architecting new solution say goodbye to indices, aggregates and data redundancies once for all and attack on Complexities in Financial systems, heterogeneous reporting solutions with static content. Decisions needed today can be taken today itself using real time reporting capabilities. This will resulting in to simplicity and sophistication Finance & IT can hereafter operate business more strategically. Now business is free from technology limitations. New technologies enable new business processes with highly flexible UI’s, End-to-end visibility on strategic, tactical, and operative and execution level, you can focus on what's important for your business. One user experience with faster planning cycles & State-of-the-Art business processes.  SAP S/4 HANA helps the world run better & improve people’s lives and to help customers run at their best with world class, well integrated business planning solution, Cash Management Powered by HANA and SAP Accounting Powered by HANA to attain organizational goals!! SAP S/4 HANA -- It’s Simple. It’s Fast, It’s SAP.

Author: Dr. Ravi Surya

Dr. Ravi Surya Subrahmanyam is an expert Fixer for ERPfixers and a technical and Financials writer with a background in SAP Financial Accounting, Funds Management, Financial Supply Chain Management, Cash Management & in-house cash, SAP S/4 HANA Finance. He has been working as Director – SAP Practice for The Hackett group India Ltd, GDC- India. He completed his Master’s degree in Finance from Central University, Master of Commerce from Osmania University, Master of Commerce from Andhra University, and Ph.D.in Finance from one of the best universities in India. His research Papers have been published in National and International magazines. He has been a Visiting Instructor for SAP India Education and SAP Indonesia – Education. He has been working on Conversion and Upgradation projects. He has been a Certified Solution Architect for SAP S/4 HANA and SAP S/4 HANA Certified Professional.