In our latest ASUG Asks the Authors feature, we sit down with a team of finance transformation leaders at Deloitte: Usman Ajiaz, managing director; Sam Parikh, managing director; Maunil Mehta, partner; and Sanjib Chattopadhyay, finance transformation leader specializing in process optimization. All four leaders are the co-authors of the second edition of SAP S/4HANA Finance: An Introduction, a new SAP Press publication.

For organizations initiating financial transformations with SAP S/4HANA, this must-read publication details the suite’s architecture and various capabilities for core finance processes, including financial accounting, management accounting, treasury and risk management, planning, consolidation, and close. Covering such topics as reporting and analytics, deployment options, and implementation planning, the book is structured as a beginner’s guide to SAP S/4HANA Finance.

Below, ASUG asks the authors about recent evolutions in the SAP ERP landscape, the structure of their publication, and the new transformation areas top of mind for CFOs at the modern enterprise.

This interview, conducted jointly with the authors over email, has been edited and condensed.

Q: So much has changed since the first edition of this book was published in 2019. What inspired and motivated you to write this second edition now?

A: SAP announced the end of mainstream maintenance for SAP ERP Central Component (ECC) as December 31, 2027, and also offered to provide optional extended maintenance until the end of 2030. This will impact many existing SAP ERP 6.0 customers who are in the latest three Enhancement Packages (EhPs)—i.e. EhP6, 7 and 8—as they need to migrate to SAP S/4HANA. The path to SAP S/4HANA could be through a system conversion of the existing ECC system or implementation of a new SAP S/4HANA system. Some organizations may also adopt a selective data transition from ECC to a newly built S/4HANA system. This had created a lot of interest and, at the same time, confusion for the finance community. Our goal with this second edition was to provide clarity on the SAP S/4HANA functionality to make the finance community more comfortable.

Additionally, SAP has released a lot of new functionality that we wanted to explore in this new version of the book. Some of this functionality includes a focus on central processing, in areas such as central assets and central projects. We also addressed SAP Business Technology Platform (BTP), migration to the cloud, financial planning, reporting and analytics in SAP Analytics Cloud, and information on tax and statutory reporting that is more relevant to today’s leaders.

Q: Can you walk our readers through how you structured this book and the thinking behind that?

A: This book starts with a general introduction to finance transformation processes, then moves into defining the high-level SAP S/4HANA system architecture and the underlying user interface. The core finance processes—namely, financial and managerial accounting areas that include general ledgers, accounts receivable, accounts payable, fixed asset accounting, general overhead accounting, product costing, and profitability analysis—are included next.

The book continues to explain the financial planning, treasury, and risk management areas and wraps up with discussions on financial close and reporting. We have also included potential deployment options during an SAP S/4HANA finance transformation journey and project planning, including exploration of the process of selecting a system integrator. This structure provides a novice finance practitioner with the option of starting from the beginning and going all the way to the end, whereas more seasoned practitioners can pick and choose the topics they are interested in.

Q: As noted in the preface, this book is for “finance executives, end users, consultants, and anyone who wants to better understand intricacies of a finance transformation enabled by SAP S/4HANA.” How did you pinpoint this target audience for the book?

A: The whole finance ecosystem can benefit from this book. Oftentimes, finance executives and non-finance leaders are faced with questions about finance transformation, and this book can steer them towards the appropriate responses for their audiences. 

A seasoned executive will be able to gain insights into creating an effective IT infrastructure to serve as the foundation of all finance-related systems and processes, as well as what a successful roadmap should look like to do so. End users will benefit from understanding how to utilize common SAP Fiori Apps for finance business processes and how to define value for the work they are performing. Consultants will gain deeper understanding of utilizing industry-leading practices to standardize complex financial business requirements and transform a company using the functionality present in S/4HANA.

Q: SAP S/4HANA Finance was first released in 2014, and you write in your preface that it has since “redefined the ERP landscape for finance.” Looking back on nearly a decade of SAP S/4HANA Finance, what have been its biggest impacts on the ERP landscape, and what factors allowed it to be so transformative?

A: While there are so many areas to mention, let us attempt to touch upon a few key areas that impact business process owners, end users of SAP, consultants, and senior leaders within organizations. The Universal Journal, a central financial steering model for SAP S/4HANA, emboldened the business process owners to rethink how they can restructure their finance organizations. SAP S/4HANA Finance has also facilitated migration to a shared services model, leading to homogenous business process across the organization and thereby deriving business value. User experience has undergone a sea change with the introduction of SAP Fiori. Migration to the cloud has allowed leaders to rethink their technology landscape, thereby creating cost-saving opportunities.

Q: Finance transformation is often poorly defined, and so you open the book by defining it as “a methodical approach that assists chief finance officers and finance organizations in driving business performance and shareholder value while simultaneously improving operational efficiencies.” Tell me about coming up with this definition and how doing so informed your approach to writing the book.

A: In our experience, we have noted that many organizations embark on a transformation journey to modernize their aging IT infrastructures. However, in doing so, they tend to ignore that their users' experiences, either good or bad, are an after-effect of poorly defined processes within. 

It is imperative that business processes be aligned with strategic differentiators, often referred to as business process segmentation, and that this drives strategic processes. Once business processes are optimized, they can be implemented utilizing the fit-to-standard SAP S/4HANA functionality to drive business performance. User satisfaction is an inherent byproduct of this process optimization, created through this methodical approach.

Q: What have been the biggest developments in finance transformation since SAP S/4HANA Finance was first introduced? How did you address those in this second edition?

A: Finance has moved toward centralization of everything: through the emphasis on central processing, on Universal Journal (ACDOCA), non-centralized payables, receivables, assets, and so on. We see improved decision-making through real-time embedded analytics and drill-down capabilities. Improved financial closing processes are some of the key developments we've observed in recent years. Our book introduces these functionalities and explains their interaction with existing business processes to derive maximum value during the finance transformation journey.

Q: What are the “new” transformation areas (i.e. ones that have emerged in the past decade) that the next generation of CFOs consider to drive shareholder value?

    A: CFOs can generate shareholder value by taking advantage of the central finance and the central processing functions to restructure their finance organizations, bringing about process standardization, efficiency, real-time insights, and transparency in reporting. The ability to consolidate financials across distributed systems—and to establish shorter monthly, quarterly, and year-end close cycles with shorter audit periods—will go a long way in creating an intelligent enterprise. 

    The rise of artificial intelligence (AI) and machine learning (ML) capabilities will enable automating manual processes and optimizing data quality, thereby reducing errors and maintenance requirements. Improvements in user experience in SAP S/4HANA via SAP Fiori will foster a happy finance organization, allowing them to do more meaningful work with real-time insights available through S/4HANA.

    QAre there any common misconceptions about finance transformation, or specifically about SAP S/4HANA Finance, that you sought to address and clarify within this book?

    A: Human beings are slaves to our experiences and habits, and we avoid change. This resistance comes from the misconception that “our ways of doing things” are the best ways and cannot be changed, and in this context from the misconception that organizations will lose key finance processes if they switch systems to SAP S/4HANA. This book shows how key finance processes can be adapted, integrated, and improved into one S/4HANA system. Simplification and standardization is the key that  keeps business processes and accounting in compliance with the governance requirements.

    Q: What do you want readers to, in the end, learn and do differently, having read the book?

    A: The key takeaway from the book for readers will, we hope, be that they should become agile and look at the big picture during their finance transformation journey. We would also encourage our readers to continue learning as they embark on the finance transformation journey. One thing is certain: the design that anyone embraces with the tools and technology available at a particular point  in time will soon become outdated, but a standard approach to the design will eliminate much risk and make the solution nimble.

    Q: Any parting thoughts for the ASUG community?

    A: SAP is committed to continuous improvements to finance capabilities in S/4HANA, and each version has newer capabilities. So, be bold enough to challenge the current processes, whether those within your own organization or those of your trusted clients. Newer functionality has improved efficiency within the finance module and cross-functionally with integration to other modules. Outdated custom business processes within the finance organization can be replaced by standard functionality available in SAP S/4HANA. Finally, we would like the ASUG community to share their feedback so that we can grow our collective understanding of SAP S/4HANA Finance.

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