What Is SAP S/4HANA? A Migration Guide for Finance Teams

In short: what is SAP S/4HANA?

SAP S/4HANA is SAP's next-generation ERP system, launched in 2015, which runs only on the SAP HANA database. It manages core processes such as finance, procurement, sales, production and logistics in a single system; compared with the previous-generation SAP ERP (ECC), it offers a simpler data model, real-time reporting on transactional data and a user experience based on SAP Fiori.

The “S/4” in the name comes from “SAP Business Suite 4”, and “HANA” from the database it runs on. In short, SAP HANA is a database; SAP S/4HANA is the ERP application that runs on that database. While ECC can run on various databases, including HANA, S/4HANA runs only on HANA.

The value of simplicity in the digital age and S/4HANA

In a business world reshaped every day by changing needs, it is hard for companies to keep pace with the digital economy and stay competitive without adopting new technologies. The way to keep up with this rapid change runs through simpler, faster solutions.

The foundation of S/4HANA: HANA, Fiori and simplified processes

Built entirely on SAP's in-memory HANA technology, designed around the user-friendly SAP Fiori interface and with every process simplified, SAP S/4HANA lets you rethink your business processes and reshape your company for the technology of today and tomorrow.

By simplifying complex processes, S/4HANA lets you run your business faster and more easily, make long-term forecasts, produce reports more quickly and carry out analysis.

What does SAP S/4HANA change for finance teams?

On the finance side, moving to S/4HANA brings not just a new screen but fundamental changes to how data is held and how processes are set up:

• Universal Journal (ACDOCA): General ledger, cost accounting, fixed asset and material valuation line items are held in a single table. The need for reconciliation between FI and CO is greatly reduced, laying the groundwork for a faster month-end close.
• Business Partner: Customer and vendor master data are managed in a single business partner structure. Cleansing master data before the migration is one of the critical tasks of the project.
• Fixed asset accounting: Depreciation areas are linked directly to accounting ledgers; parallel valuation under the Tax Procedure Law (VUK) and Turkish Financial Reporting Standards (TFRS), for example, can be set up more clearly.
• Material valuation: Material Ledger becomes mandatory and is a standard part of inventory valuation; Actual Costing, however, is optional. Inventory valuation at standard price or moving average price should not be confused with actual costing; this distinction directly affects the design of product costing.
• Cash and bank management: Bank accounts, the cash position and liquidity forecasts can be monitored with S/4HANA's cash management applications; treasury and bank integrations can be designed as part of the finance architecture. The capabilities of Bank Account Management, Cash Operations, Liquidity Management and bank communication, however, may vary by the S/4HANA product and release chosen, the licence and the integrations in place.
• Embedded analytics and Fiori: Many financial reports are produced directly from transactional data with role-based Fiori apps, without being transferred to a separate data warehouse.

These changes make S/4HANA less a version upgrade and more an opportunity to review the chart of accounts, the organisational structure and finance processes.

S/4HANA migration paths and deployment models

For a company running ECC, there are three main paths to S/4HANA:

• New implementation (greenfield): Processes are designed from scratch, mostly close to the SAP standard; open items and balances are migrated, while historical transactions are usually not. It suits companies that want to reorganise their processes.
• System conversion (brownfield): The existing ECC system is converted to S/4HANA together with its configuration and historical data. It suits companies that are satisfied with their current processes and want to keep historical data in the same system; the compatibility of old custom developments needs to be worked through separately.
• Selective data transition: A path between the two; for example, only certain company codes or years are migrated and the organisational structure is redesigned. It is usually carried out with specialised tools and expertise.

The deployment model is a separate decision. S/4HANA can run on the company's own infrastructure (on-premise) or in SAP's cloud offerings (Private Cloud and Public Cloud). Public Cloud offers a more standardised structure that is updated regularly, while on-premise and Private Cloud leave more flexibility for company-specific processes and developments.

The right path is chosen according to how much historical data is needed, how far processes are to be redesigned, the number of companies and systems, and the project timeline.

An example from practice: the S/4HANA finance transformation at Getir

In the comprehensive S/4HANA transformation at Getir, led by SAP Türkiye, Montag took responsibility for the financial applications. In the project, which took around 8 months, the following areas were designed and taken live not as independent modules but as parts of a single financial architecture:

• SAP FI: Financial transactions were managed in a standard, centralised accounting structure on S/4HANA; FI became the accounting layer for entries coming from treasury and banking transactions.
• SAP CO: Designed together with FI, it established the management accounting foundation that lets management monitor financial performance across different business dimensions.
• SAP Treasury & Risk Management: Treasury transactions were integrated into the finance architecture; the financial effects of the transactions were designed to work together with FI processes.
• Bank integrations and cash flow: Bank transactions were linked to SAP finance processes; finance teams can now assess the cash position and future cash movements on the same structure.

The key message of the case is that in S/4HANA transformations, accounting, cost management, treasury, banking transactions and cash management are not independent processes: a financial transaction arising in one area must be reflected in the others accurately and on time. For details, see the Getir S/4HANA case study.

Preparing for an S/4HANA finance transformation and how Montag supports it

Clarifying the answers to these questions before the first meeting makes it easier to plan the scope and duration of the migration realistically:

• Which migration path is under consideration: new implementation, system conversion or selective transition?
• Are any changes planned to the chart of accounts, company codes or organisational structure?
• How will parallel accounting (VUK, TFRS, group reporting) be set up?
• Are treasury, bank integrations and cash management within the project scope?
• Has an inventory of existing custom developments and reports been taken?
• Who is responsible for cleansing customer and vendor master data and moving it to the business partner structure?

Montag treats the finance function as a whole in S/4HANA transformations: FI, CO, treasury, cash management and bank integrations are designed within the same financial architecture. For details of the scope, see our services; for common finance needs, see the ready-made solution packages we have developed.

If you would like to assess the finance side of your S/4HANA migration together, you can reach us through the form on our contact page.

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