Jun 5, 2024
by Ajit Pokharkar
IT Manager - ERP & Enterprise Systems
Ajit is an IT Manager experienced in delivering and managing Enterprise IT systems & Projects in the Consumer Goods & Manufacturing industry. Key functional delivery areas include Sales & Supply Chain execution systems; focal points being SAP ERP & S/4HANA.
This post is an attempt answering the WHAT – by entailing a broad outline of key technical & functional topics around which most S/4HANA projects will be scoped.
As a starting point it is useful to understand what is at the heart of the most technical & functional changes & innovations that come with S4 – it is the massive simplification of the Data Model. And examining the image below tells the difference. For instance, 26 inventory management tables are merged into 1 MATDOC. Similar is the case where FI-CO tables being merged to ACDOCA
Now, let us dive into the scope topics..
Technical Topics
| Topics | Key Pointers/Considerations |
|---|---|
| Understanding data model changes, migration & implications | ● Understand Data migration & conversion plan ● Transactional & master data converted to new Data model ● MATDOC - more than 26 ECC tables merged to this 1 table ● ACDOCA - merges FI & CO tables to 1 universal journal ● Use SAP tools - SAP Data migration cockpit & Software update manager ● Over 100 migration objects for cloud editions & over 80 objects for on-prem editions |
| Customer vendor Integration (CVI) - Business Partner (BP) | ● With S4/HANA, Business partner becomes the Leading central object for managing organization’s business partners - thus mandatory ● Can be done before project starts ● Masters like vendors, customers cannot be directly updated but only via BP object - so all masters need to be linked to this ● SAP readiness check will help with scope & runtime for conversion ● Pre conversion Steps involve Data cleanup, setup, test runs followed by Activation & Synchronization with BP object ● Post-conversion (S4 Go-live), BP becomes leading object ● SAP Provides tools & CVI cockpit to automate process significantly ● Fix custom reports & external integration interfaces impacted - For eg, SAP CRM (if used) Business partner integration to be rebuilt ● Rework the MDG Master data synchronization for Customers, Vendors, Employees as applicable |
| User Experience transformation - Fiori adoption | ● Detailing of Fiori deployment architecture & security ● Decide & configure relevant business catalogs for apps ● Choice of activation of apps from more than 10K apps across all functional areas |
| System Conversion | ● Understand the scope of conversion - usually covers data conversion from old ERP to HANA DB data model and Application level standard ABAP code conversion ● The process largely handled by SAP tools |
| Custom ABAP code adaptation | ● Analyze custom code in whole system landscape using S4 tools for scoping, identify objects to be changed ● Great deal of scoping can be done prior to project start ● Determine use cases where functionality no longer available, data model or data type changes etc ● Determine DB operation related ABAP changes eg, native SQL or Select statements without ‘Order by’ etc. ● Verify current use of aggregation tables & check for availability of compatibility views ● Significant testing effort involved |
| Analytics & Reporting | ● Scoping Analytics as a part of ERP S4 project - to be overlaid with existing analytics solutions in your landscape and longer term organizational Analytics strategy - should be started prior to S4 project (eg. Answer long term BW usage in your organization) ● Usually will have series of follow-on projects after S4 conversion ● Remediation of existing reporting solutions - readiness check useful ● Determine extent of immediate appetite & practical aspects for ‘embedding’ analytics into S/4HANA ERP ● Determine use of standard/custom CDS views for existing custom ERP reports ● Potentially significant testing & Change management effort |
| Obsolete transaction codes | ● SAP readiness check gives the list ● Significant change management topic |
| Authorization adjustments | ● Changes to authorization object fields, new objects ● Modify/Rebuild existing roles for object changes & replace obsolete transaction codes with new ones |
| Integrations with satellite applications | ● To work as a separate track in conjunction with ‘ABAP Code conversion’ & ‘Custom ABAP Code adaptation’ topics above ● Refer SAP recommendations for SAP applications in your landscape eg, CRM, Ariba ● Closely coordinated testing for non-SAP application integrations |
| System landscape & Infrastructure planning | ● Landscape planning - dev, test, sandbox, production ● Parallel systems for mock runs ● HANA DB management activities ● Infrastructure & Basis activities |
| Downtime planning & data migration | ● Multiple sandbox runs of conversion & data migration to form the view ● Use migration planning workshop to choose from for downtime optimization approach incl Near Zero downtime (consulting service) |
Functional Topics:
Finance & Controlling
| Topic | Key Pointers/Considerations |
|---|---|
| Universal journal | ● Combines many transactional finance sub-ledgers to single table leading to reduction of time-consuming reconciliation activities ● Advent of ACDOCA as merger of multiple tables referred in figure above |
| New G/L | ● Conversion from Classic G/L - technically converted to new G/L as a part of conversion ● Can be done before S4 project |
| Accelerated Close | ● Continuous intra-month processes ● Soft close - to give better insight at any time ● Hard close - accelerated month-end closing tasks |
| Margin Analysis | ● Based on Universal Journal - replaces many capabilities of account based & costing based profitability analysis ● Review your options & path for ‘Profitability Analysis’ (PA) on S4 ● Margin analysis based PA recommended on S4 On-prem & mandatory on cloud ● Costing based CO-PA is NOT available in Cloud and Account based CO-PA NOT available in both On-prem & Cloud |
| Credit Management | ● FSCM based, replaced earlier FI-AR based ● Options include - Basic, Advanced managements ● Cloud for credit integrations available |
| Material Ledger | ● Activation of Material ledger is mandatory ● Use for actual valuation optional |
| New SAP Cash Management | ● Replaces classic cash management, contains variety of new features based on FSCM functionality |
| New Asset Accounting | ● Replaces classic asset accounting reducing significant complexities ● Need to activate New Depreciation engine |
| Financial planning | ● Recommended Options - SAP analytics cloud OR BPC |
| New real Estate | ● Replaces classic real estate |
| Global Trade services | ● Replaces Foreign trade in SD/MM |
| Other Innovations | ● New version of Optimized contract management in Revenue accounting ● Intercompany matching and reconciliation ● New accrual engine - using historical purchase order & accruals ● Intelligent Robotic process automation |
Logistics Essentials
| Topic | Key Pointers/Considerations |
|---|---|
| MM-IM Data model | ● Most critical is introduction of MATDOC for Inventory management ● Understand the follow-on effects of this on project scope |
| SD Data model | ● Recognize elimination of index tables & simplified document flow |
| New Output management | ● New unified (but optional) framework ● More capabilities like flexibility, templates etc ● Optional - old framework under NAST still available ● Unified across all modules viz. SD, MM, FI & so on ● Innovations will only be made on new S4 framework ● Activated by object eg, Purchase contract ● Main object of communication is Business partner |
| Condition contract Management (CCM) | ● Old SD rebate management replaced by CCM ● Allows rebate settlement in both Order-to-cash & Procure-to-pay |
| MRP at MRP area level | ● Moving MRP from Storage location level to MRP area level in S4 ● Changes in configuration for conversion |
| Mandatory Production version | ● Production version mandatory for all materials in S4 ● Maintain for all active materials & ensure the same post conversion |
| SRM co-deployment | ● SRM add-on not supported. De-installation required before conversion |
| MRP Live | ● Many tables are read in parallel using HANA’s parallelization capabilities - making MRP processes super fast & efficient ● Allows MRP runs several times a day as opposed to once a day/week in ECC. Opens up operational efficiencies opportunities like reduction of safety stock levels leading to improved working capital ● MRP Live along with Fiori gives visual, real-time user experience |
| Scoping of ‘Fiori’ roadmap at functional level | ● Critical Change management topic ● Assess scope of Fiori apps for each functional area based on your appetite for change, timelines etc. Can be phased for later too ● Find your sweet spot for Fiori adoption in Phase 1 ● Explore out of the box ‘Lighthouse apps’. Some Examples below ● Sales - Manage Sales plans, Sales Management Overview ● Quality Management - Manage Usage Decision, Quality technician ● Manufacturing - Schedule production, Manage buffer levels ● Procurement - Overview app, Manage Purchase orders ● Warehousing - Transfer stock cross-plant, Overdue materials-In-transit ● Search Fiori app library for more lighthouse apps |
Logistics New Features
These invariably can be and recommended as later phases/projects
| Topic | Key Pointers/Considerations |
|---|---|
| Planning - Predictive MRP (pMRP) | ● New tool for mid-long term demand simulation - evolution of classic ERP long-term planning ● Based on Demand version of finished goods, will have plant centric simulation of future demand & capacity availability with propagation of long term results |
| Planning - Demand driven MRP (DDMRP) | ● One more option to manage short-mid term demand (apart from MRP Live) ● Used in scenarios when demand is volatile & supply chain has rigidities |
| Sales | ● Mass change of sales documents - Fiori apps ● New capability for managing Sales plans & Performance - plan vs actual ● Advanced ATP (aATP) - mass & fast availability checks and backorder processing. Successor of APO GATP ● Pre sales - options for embedded CRM in S4 |
| Sourcing & Procurement | ● Flexible workflow for approvals ● Central procurement - new capabilities along with suite of Fiori apps ● Some examples include Central requisitioning, Central contracts |
| Vendor Evaluation - options | ● Enhanced criteria for vendor scoring in S4 ● More real time (not based on aggregate tables) and better visualization |
| Manufacturing | ● Production planning & Detailed Scheduling (PP/DS) -Historically part of APO - Embedded in S4 |
| Warehousing - Deployment options | ● Business Suite Decentral EWM - no further development ● EWM Embedded in S/4HANA ● Decentralized EWM on S/4HANA |
| Transportation - Deployment options | ● Decentral Business Suite TM - no further development ● TM Embedded in S/4HANA ● Decentral S/4HANA TM |
| Special attention topics implementing EWM in S/4HANA | ● Significant changes in EWM-QM integration for stock movements ● Reversal of Goods Receipt possible only before put-away ● Migration of WM master data to EWM with export/import tools |
| Plant Maintenance | ● New concept of phases, sub phases added to maintenance life cycle ● Enhanced capability & user experience with Fiori apps |
To conclude, Technical & Functional topics outlined here give flavor of what a typical S4 project will be scoped around & are not one-size-fits-all for all projects. The true scope for each project is specific to each scenario & dependent on multitude of factors like
- Transition path you take and organizational change appetite for each project – Number of functional topics can be optional to start with for a Brownfield implementation but most technical topics will be mandatory as they are driven by overhaul in the underlying data model
- SAP Readiness check & simplification tools give relevant & detailed object level list for your SAP instance with Mandatory vs Optional topics and what steps can be done before conversion
- Topics & Key considerations listed will vary significantly for a Greenfield implementation. For example, System conversion, ABAP code adaptation won’t be relevant more so when your current ERP is non-SAP or SAP ERP version not supported by SAP’s conversion tools. Modified Data migration will still have to be designed
- Use discovery phase (1st phase in SAP Activate methodology) to pin down exact project scope & waves of innovation – refer below image as an example of Fiori adoption waves. Similar view should be built in the discovery phase for the whole multi-year roadmap
- And finally, New innovations may need additional new licenses & engagement with SAP
