If it is clear that the journey in the company should continue with SAP, then it is important to bring the existing SAP solution into the new S/4 world. Since this means a big change for most companies, as already outlined in the last blog post , it is worthwhile to think about the “how” and “what” in the second step and to evaluate existing options.
At the beginning there is the decision to stick with the current implementation model, i.e. today usually in your own data center or with a service provider, or to use the transformation and switch to an alternative. Knowledge of the basic different scenarios (so-called “deployment options”) is required for this. In this context, cloud solutions have been marketed for years, either directly at or from SAP in the “SAP Cloud” or via or with the three major cloud providers (Amazon Web Services, Microsoft Azure, Google Cloud Platform), the so-called “hyperscalers”. They share 75% of the global “public cloud” market among themselves.
What specific options does SAP (as of Q4 2020) offer?
SAP S/4HANA Implementation: The 4 Implementation Options at a Glance
Option 1: “on premise” – the classic
“On premise” is the usual implementation of SAP. Here, the SAP customer has his own system, which he operates himself or has operated by a service provider if he does not have his own application support.
In this model, the customer is responsible for further development and updates of the system, which is why there are still systems today that have a status of 10 years ago.
Option 2: “Private Cloud” – also known as “HANA Enterprise Cloud” (“HEC”)
Born as the “HANA Enterprise Cloud”, this form of implementation was created to establish SAP not as a product but as a service. The idea behind this is to hand over basic activities and most of the application support and to use the standard offered by SAP as far as possible.
This scenario offers the option of using your own Customizing settings and structures. There are also options for the updates provided annually and you don’t have to take the latest version with you every year.
Option 3: “Public Cloud” – the trendsetter
The increased form of option 2 is the “public cloud”, in which there are few or no degrees of freedom. Here, SAP (as of Dec. 2020) distinguishes between the Essentials and Extended Editions.
A significant difference between the editions for companies is probably the possibility of connecting peripheral systems. While the Essentials “only” allows you to choose from a catalog, the Extended allows greater degrees of freedom with regard to the connection of the systems.
Both editions receive updates every three months, which are installed automatically. Conversely, this also means that surfaces and process flows could change “overnight”.
Option 4: Hybrid – a mix of the previous options
SAP’s “solution” for systems with components that are not yet S/4HANA-capable or that contain many in-house developments is a hybrid of the status quo and a cloud variant. If, for example, accounting is to be standardized, the system for general ledger accounting can be brought to the cloud without abolishing the highly specialized system for production. Another example of the hybrid option could be the subsidiary, which may still be too small for the parent company’s large ERP system. For example, a small instance can be rented from the hyperscaler for this purpose and the annual financial statements are then consolidated “upwards”.
Opportunities for accounting
After we have roughly presented the scenarios from a technological point of view, the question naturally arises as to what “I” as head of accounting or department do with them.
The first and most important answer to this is to face the transformation, together with IT, instead of simply letting the change happen. Only those who are actively involved can shape the future and are not faced with a fait accompli.
In addition, within the framework of such a project, I also have the opportunity to think about the questions of reinforcement and reliability. If I then see that I am facing a generational change in accounting, then that is the time to think about reinforcement and consider accounting outsourcing as an option.
The same applies if I want to manage my growth and maybe I’m already having problems because my accounting doesn’t scale with my growth. Here is the opportunity to use a hybrid solution to map the accounting of my little daughter or my new business area directly in a cloud solution with standard processes and “only” report to the main system. Here, the technology can also be an opportunity to bring new partners on board.
Another starting point where modern implementation scenarios can help to reduce or at least keep the workload of my specialist staff is the concept of the “extended workbench”. This means that standard processes with a lot of volume (e.g. invoice receipt workflow) can be handled by a reliable partner, while tax specialists or accountants can focus on their core work. The argument “they don’t sit with me then” has also become somehow obsolete since Corona at the latest.
Result
SAP will continue to support the old system until 2027, and even with a fee-based extension to 2030, the end of R/3 is on the horizon. The possibilities are sometimes overwhelming and feel like they are constantly changing.
Therefore, don’t miss the time to face the topic of S/4HANA and perspectives for accounting! And if you are looking for competent partners who communicate with you on an equal footing and do not use advertising foils, please feel free to contact us.
Image source: iStock.com, Photographer: marchmeena29
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