Transition to S/4 HANA – Pre-checks and

whether migration or new implementation

February 3, 2016 | 9,158 Views |

S/4 HANA On-premise edition (1511 release) is out with hype. SAP clearly
says ‘It is a new product’ and the path to S/4 HANA from ERP ECC is not
an upgrade. Not sure whether existing SAP customers has any choice
rather than switch to S/4 HANA at certain point in time, the moot
question is When and How to move to S/4 HANA .

When: S/4 HANA is not fully released i.e developments are ongoing and
will continue for more years. SAP has a road map, but no completion
date. So, should the transition be started when it is fully released? SAP’s
marketing person says to start the journey as SAP is releasing its
functionalities over time.

How: SAP says 3 transition paths as in below screen shot.

If it is migration (System conversion or Landscape transformation), then

probably all old (and redundant) custom codes, existing order types also
will be carried over, then will the innovations or simplicity really be
achieved? Is new-implementation a better option to come out of legacy or
changed business processes? Or a mixed approach ( like System
conversion for core ECC functionality and then new implementation for
IBP) is better?.

There is no straight answers to ‘When’ and ‘How’ questions. But the most important is to analyze the
Simplification (or restriction) list as in
URLhttps://uacp.hana.ondemand.com/http.svc/rc/PRODUCTION/pdfa4322f56824ae221e10000000a4450e5/15
11%20000/en-US/SIMPL_OP1511.pdf , understand the impacted functionalities on conversion to S/4 HANA
and then decide considering the complexity , custom developments , dependency with other SAP applications ,
feasibility of streamlining businesses, industry specific solution , minimal disruption to business etc . Following
country specific versions / localisations are not yet supported in S/4 HANA 1511 release

Country specific versions / locations

There are restrictions for Brazil , Portugal , Russia , Chiili . Refer Note
2228890 S4H 1511 Country version release info and restriction lists for
specific details.

Highlighted below some of the On-premise functionalities which will be

different (and/or not available) in S/4 HANA and must be pre-checked for
migration or transition before deciding the path for S/4 HANA journey.

Finance : Migration from classic G/L to new G/L (using ledger to update particular valuation) is mandatory.
Secondary cost elements will now be G/L accounts and need to migrated to chart of accounts. Existing
functionality of parallel valuation needs to be adapted due to merger of FI & CO tables into universal journal.
Activation of material ledger is mandatory . Account based COPA is now the default option though Costing
based COPA is still available.Actual costing is optional. Some migrations are also needed if source system is
already active with material ledger.

Business partner : Customer and vendor master data will be replaced by Business partner . Customer /
vendor integration (CVI) is a Pre-requisite for transition to S/4HANA. Custom fields or code (if any) for auto
creation of customer or vendor master data etc need to adapted to Business partner.

Material number extension : Material number can now be 40 characters from existing 18. It is a optional
feature. Impact of this extension on custom coding, interfaces, other SAP applications need to be evaluated
before switching on 40 characters.

Foreign trade:
Functionality of foreign trade under SD (Sales & distribution)
has been deprecated with SAP’s GTS (Global trade service). There is an
option to integrate GTS natively in S&4 HANA or it can be separate
application / instance. Existing foreign trade processes need to be
analyzed.

Change in SD data model : There are several changes in SD data model including pricing (which is the heart
of existing applications). SAP has provided some migration options to move data from existing tables to new
tables, however it needs to be evaluated the impact of amendment / append of existing tables.
Credit management : SD credit management is replaced by Credit management under Financial Supply
Chain Management (FSCM).

SD revenue recognition: Revenue recognition is not supported. SAP’s Recommendation is to migrate to

‘Revenue accounting and reporting’. Not all functionalities of revenue recognition are available in release 1.1 of
Revenue Accounting and Reporting

SD Rebate Processing (excepting SAP CRM Trade Promotion

Rebate:
Management (TPM) is replaced by Settlement Management. Existing
rebate agreements must be closed by a final settlement before migration.

: Contract billing is not supported . Existing billing output (through

Billing

NAST ) needs to be migrated to Adobe , Smart forms etc.

Variant configuration , BOM Version: Certain functionalities are not supported

MRP : Material Planning only on plant and MRP area is possible , but not on storage location level (as a part of
simplification) . MRP will be run through MRP Live (optimized for HANA). Net change planning is not supported.

ATP & Scheduling : APO’s GATP & PPDS functionalities are expected to be bundled in future release of S/4
HANA for Availability check and production scheduling. MRP live is pre-requisite for PPDS functionality in S/4
HANA.

S&OP : Sales and operational planning will be replaced by IBP (Integrated business planning). Some
functionalities of APO are also being made available in IBP.

Product catalog : SAP is positioning Hybris for web / internet processes , Product catalog will not be in target
architecture.

SRM : S/4 HANA will have SRM bundled within it . Only limited SRM functionalities are included in 1511
release.

Quality management : ITS services for results recording , quality notifications & certificates are not
supported .

Project system : PRT (Production resources and tools) , texts , claim , Easy cost planning (ECP) , Work force
planning , project reports , OpenPS , cProjects will not be supported. Many transaction codes will not be
present as a part of simplification . Existing CJ20N is being enhanced for navigation to different reports. Needs
huge knowledge transfer to users. Archiving needs to be done through central SARA transactions i.e not by
individual transaction like CN80 etc.

Warehouse management: Standard WM functionality is available though it is

not in Target architecture. Existing warehousing (WM) functionality will be
replaced by EWM (Extended warehouse management). Migration for existing
EWM (running separately) customers to natively integrated S/4 HANA also
needs to be evaluated. QIE within EWM also will be made obsolete. It is
not clear how quality functions of existing EWM will work within S/4
HANA.
 Transportation : Existing Logistics execution transportation (LE-TRA) is also not in target architecture and
may be replaced by TM (Transportation management). TM has several advanced functionalities on
transportation planning , optimization , freight charge / settlement, carrier selection & procurement, but has
huge master data requirement. Is TM an overkill for customer (Shipper) with simple distribution requirement?

There are obvious advantages in unifying several applications within S/4 HANA as highlighted in other blog in
URLhttp://scn.sap.com/community/s4hana/blog/2015/11/19/sap-s-road-map-for-supply-chain-solution-with-
the implementationof EWM in place WM , TM
s4-hana-and-its-expected-benefits , however
in place of LE-TRA are separate projects by itself. So, the warm up (Pre-
check) for move to S/4 HANA will be a huge project spanning several years.
SAP’s innovations may be in right direction, but the journey towards unified
digital platform will not be that simple and that is probably the reason for
changing the name for ‘Simple finance’ to ‘S/4 HANA Finance’ or ‘Simple
logistics’ to ‘S/4 HANA Logistics’.

Update to Blog on 7th march’2016: Excel file in URL Simplification List for SAP
S/4HANA in XLS-based format

provides a very good snap shot on simplification list and also feasible to
filter on ‘ Functionality on available’ , ‘Change in existing functionality’ ,
‘Not in target architecture’ etc.

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11 Comments
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1. Sanil BhandariFebruary 4, 2016 at 6:28 am

Just a quick correction, account based COPA is optional and the functionality of costing based COPA still continues to work as it
is in SOH or ECC today.

like (0)

2. Former MemberFebruary 4, 2016 at 1:34 pm

The concept of this blog is good.

I think you have got a few points wrong here.

I would suggest reading the simplification list for more clarifications and update accordingly.

like (0)

3. Joachim ReesFebruary 4, 2016 at 2:44 pm

Hi Mrinal,
 thanks for sharing, I thing you provide a good overview here!

But with Transportation and Warhouse Management I think you drew the wrong conlusion: True, the Simplification List states
LE-TRA and LE-WM are “not the target architecture” – however, they are still there in
that
S/4 HANA!

So no need to got to TM / EWM, if you don’t want it’s features!

Best regards

Joachim

like (0)

1. Mrinal Kanti Roy Post authorFebruary 4, 2016 at 4:48 pm

Hi Sanil , Mark and Joachim,

Thanks for your review and comments . I have updated for Finance / COPA with Sunil’s comment. SAP’s product guide in
URL S/4HANA on Premise Edition Scope Guide 12/2015 says in page 27 that WM will be replaced by EWM. Probably, both WM
& LE-TRA will be available in initial editions of S/4 HANA though SAP has plans to replace them by EWM and TM respectively. It
will be good if SAP can clarify it for better understanding of all of us.

With regards,

Mrinal

like (0)

1. Former MemberFebruary 4, 2016 at 4:57 pm

Yes – the WM piece is interesting.

If you are converting to 1511 and you currently use WM, the current state of play is – there will be no conversion required
(worth noting there will not be any Fiori tiles for this)

However in the future, this wont be the case.

So the customer could GO to EWM to avoid future conversion programs, or do nothing as when they go live with 1511 – WM
will still work.

like (0)

1. Steve HollandMay 19, 2016 at 12:51 pm

Hi Mark/All,

re WMS/EWM.

I understand that the target (functional) architecture for warehouse management in S/4 is EWM.(albeit that WMS will still
exist).
 What I am not sure of is will this be fully integrated as part of S/4, or is it still run as a separate application? I’ve read that you
can still run it separately (i.e. on a different box), and that might be useful for organisations with very large, high volume
warehouses, but this is not always the case.

Thanks

Steve

like (0)

1. Mrinal Kanti Roy Post authorMay 19, 2016 at 3:39 pm

Hi Steve,

FAQ in URL https://websmp201.sap-ag.de/~sapidb/012002523100013116122015E/FAQ_EWM_S4_EXT_20150806.pdf

clarifies your query . As it appears there will be 2 options

 Native integration for EWM i.e inbuilt in S4H

 Side car option for decentralised deployment

With regards,

Mrinal

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2. Marc KorstanjeMay 30, 2016 at 10:09 am

https://websmp104.sap-ag.de/~sapidb/012002523100005164282016E.p

Hi Steve,

Find latest info regarding future warehouse mgt in above document.

Regards,

Marc

like (1)

4. Vincent RAUCAZMarch 14, 2016 at 2:42 pm

This thread is very interesting. Indeed, the simplification list is a great tool to begin to investigate S4. Nevertheless, when you
decide to dive deeper in the content of that new version of SAP Business Suite, there’s really a lack of valuable information. For
instance, we have been searching for weeks for information on settlement management (that replaces SD rebates). For the
moment we didn’t find nothing interesting (no customizing explanations, no process flows descriptions,…). Hope we have to
wait just a little while…

Best Regards.

Vincent

like (0)
5. Former MemberNovember 24, 2017 at 10:48 am

Hi Mrinal,

For me blog is good. Please update your blogs continuously. it would be more helpful to all consultants to know the recent
changes and updates in S4 HANA. Thanking you,

Regards,

G.V.Shivakkumar

like (0)

1. Mrinal Kanti Roy Post authorDecember 18, 2017 at 5:34 am

Hi Shiva,

Yes, good feedback. Blogs need to be updated as we go along the S/4HANA journey, will try (sometimes not feasible with other
priorities).

Thanks,

Mrinal

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