SAP Accounting powered by SAP HANA
SAP Accounting powered by SAP HANA was specifically developed for fully leveraging the power and benefits of a column-oriented, in-memory database such as SAP HANA. It is an alternative offering to the accounting functionality in SAP ERP Financials and overcomes its architectural boundaries.
The Situation in SAP ERP
Accounting in SAP ERP has been built incrementally over more than 20 years and consists of a large number of applications (for example, general ledger, asset accounting, and profitability analysis) with dedicated, partially redundant data repositories. Users spend significant time and effort on reconciliation, delaying important processes such as the financial close and financial forecasting, and hampering fast business decisions. Further, financial transaction data is typically stored in line-item and total records, limiting analysis and flexible simulations, while data extraction into separate data warehouses creates data latencies and a need for further reconciliation.
The Benefits of SAP Accounting powered by SAP HANA
In contrast, SAP Accounting powered by SAP HANA fosters a single source of truth through multiple innovations. Financial accounting (FI) and controlling (CO) are linked not just on the header level, but on the line-item level. Thus, by enforcing the same summarization logic in FI and CO, customers benefit from comprehensive, multi-dimensional reporting across FI and CO.
Accounting and account-based profitability analysis (CO-PA) are now fully aligned by links from CO line items to market segment information. This allows for the easy breakdown of profit and loss (P&L) accounts by regions, customers, distribution channels, or custom-defined dimensions. Account-based CO-PA has been enhanced to post the cost components of cost of goods sold (COGS) and the reasons for production variances onto separate accounts, again providing more insight into the P&L. There are also additional quantity fields for capturing not only delivery units (boxes, for example), but also other units of measure common across a portfolio of products (tons, for example). Overall, SAP Accounting powered by SAP HANA shifts the focus to account-based CO-PA without removing any functionality from cost-based CO-PA.
The ultimate step toward convergence in SAP Accounting powered by SAP HANA is the planned introduction of a “universal journal.” Each universal journal entry stores — without redundancy — all information needed from multiple finance applications. On the master data level, this leads to the convergence of general ledger accounts and cost elements into a combined account, with hierarchies. One of the most radical changes in SAP Accounting powered by SAP HANA is the removal of totals tables, index tables, and aggregates. When leveraging SAP HANA, any data required in reporting or processing is aggregated from line items on the fly at a very high speed. This allows for unprecedented slice-and-dice functionality on any account and flexibility for simulations. The architectural change has been implemented non-disruptively for existing customers; each dropped table is replaced by a compatibility view of the same name, ensuring that all read functions of custom programs or custom reports will continue to work.1
SAP provides multiple options for real-time, intuitive access to the finance information stored in SAP HANA. Analytical and transactional SAP Fiori applications deliver a modern HTML5 user experience across multiple devices, advanced collaboration, insight to action, and drill-down to a high granularity of line items. An example for this approach is the smart business cockpit for receivables management. The full suite of SAP BusinessObjects business intelligence (BI) solutions can be applied seamlessly. As an example, with SAP BusinessObjects Analysis, edition for Microsoft Office, users can leverage the power of Microsoft Excel for native, real-time exploration of FI, CO, and CO-PA data, and create their own personalized reporting without any redundancies.
Instant insight requires near-real-time process execution. Therefore, SAP is investing in accelerating process steps, changing from periodic to continuous execution, and introducing automation and other efficiency means. In those areas, SAP Accounting powered by SAP HANA inherits all the improvements of accounting functionality already delivered via SAP HANA accelerators and SAP Business Suite powered by SAP HANA. Examples include continuous intercompany reconciliation on SAP HANA, high efficiency through SAP Invoice and Goods Receipt Reconciliation, and many process and reporting performance improvements. In addition, several long-running period-end tasks (such as work-in-process calculation and results analysis for sales orders) are now faster because they are performed directly in the database layer.
SAP Integrated Business Planning for Finance
Providing a new, real-time planning experience, SAP Integrated Business Planning for finance is based on SAP Business Planning and Consolidation, version for SAP NetWeaver, tightly integrated with SAP Accounting powered by SAP HANA. The solution comes with a common financial planning model and comprehensive pre-configured content for several financial planning areas.
The Situation in SAP ERP and Planning Solutions
Financial planning in SAP ERP is characterized by multiple planning applications that store data in different planning tables (for example, for cost centers, profit centers, and projects). As a consequence, the planning process itself is sequential, requiring a transfer of plan data from one repository to the other (for example, from cost center plan to profit center plan). In recent years, customers often conducted planning outside of SAP ERP, including in the Integrated Planning component of SAP Business Warehouse (SAP BW) and SAP Business Planning and Consolidation, for instance. Both solutions use SAP BW as a repository and provide advanced web and Microsoft Excel user interfaces, better planning technology, and in-memory planning capabilities when running on SAP HANA. These products have converged into SAP Business Planning and Consolidation 10.1, which supports a “standard model” or an “embedded model.” For organizations that want to plan with source data and structures from SAP ERP, there is a more advanced solution.
The Benefits of SAP Integrated Business Planning for Finance
SAP Integrated Business Planning for finance provides a powerful planning solution that is closely aligned with SAP ERP — or more precisely with SAP Accounting powered by SAP HANA (see Figure 1). The solution is based on SAP Business Planning and Consolidation 10.1, embedded model, and comes with pre-delivered content (such as workbooks, queries, and planning functions) for the planning of cost centers, internal orders, projects, profit centers, cost of sales, P&L, and market segments. SAP Integrated Business Planning for finance offers an advanced user experience, relying on Microsoft Excel and web user interfaces rather than the standard SAP GUI.
With SAP Integrated Business Planning for finance, there is no longer a need to replicate actual master data and actual transaction data. Instead, when calling up a planning workbook, actuals are read in real time from the SAP HANA views for accounting and aggregated to the required planning level (for example, total per cost center). Any new transaction or master data in SAP Accounting powered by SAP HANA is immediately visible in the planning. This architecture and the capabilities of SAP Business Planning and Consolidation provide new end-to-end simulation capabilities.
A key advantage of the new solution is the common financial planning model that supports the parallel execution of planning tasks. If a sales manager enters planned revenue by product group or a line manager enters functional cost per cost center, then these amounts are immediately and automatically visible on the account level in the P&L planning. On the other side, in-memory planning and monitoring functionality allow you to achieve fast and efficient planning cycles.
To use these new solutions, customers running a single SAP ERP system need to switch their primary database to SAP HANA, install SAP ERP 6.0 enhancement package 7, and then install the SAP Simple Finance add-on. The last step is a straightforward data migration from SAP ERP into some new data structures of SAP Accounting powered by SAP HANA, which is supported by standard migration programs and guides. All inbound interfaces and almost all transaction codes remain the same,2 allowing for the immediate benefit of higher speed and more flexibility while new UIs and process innovations can be introduced step by step. The planning functionality of SAP Integrated Business Planning for finance does not require a separate installation as it is already included in the SAP NetWeaver layer.
Customers with heterogeneous, multi-ERP system landscapes or heavily customized SAP ERP systems on old releases can choose the Central Finance deployment option of SAP Accounting powered by SAP HANA, SAP Integrated Business Planning for finance, and other SAP Simple Finance solutions on top. This option is fully non-disruptive — it keeps existing systems untouched, while introducing a new central instance with real-time replication of financial information from source systems.
All functionality discussed is available for customers on premise in their own data center. Alternatively, customers can use a subscription model and have the systems run and applications managed by SAP in SAP HANA Enterprise Cloud.
1 See SAP Note 1976487 for more information. [back]
2 For a few exceptions, see SAP Note 1946054. [back]