Using the Simplification Item Catalog

When an existing SAP customer is planning to migrate to SAP S/4HANA, the differences between the SAP S/4HANA system and the previous SAP system(s) (for example SAP ERP 6.0) need to be understood. The simplification item catalog for SAP S/4HANA is a very important and useful tool to help such an existing customer to understand these differences.

This unit introduces the simplification item catalog: where to find it and how to use it. Example simplifications from SAP S/4HANA Sales (including its billing functionality) will also be discussed in this unit.

The simplification item catalog focuses on the most important items (/topics) that an existing SAP customer must consider in an implementation or system conversion project, where the customer migrates from SAP ERP 6.0 to SAP S/4HANA.

The catalog contains many simplification items. These items describe in detail, mostly at a functional level, what changes in SAP S/4HANA for individual transactions and specific solution capabilities. If some transactions or capabilities are no longer supported, this does not mean that the functionality itself of those transactions or capabilities is no longer supported. It often means that the specific functionality is now supported by another transaction or a new solution or architecture.

Simplification items are grouped in the tool by application area (for example: Sales and Distribution or Finance).

The following demonstration will show you how to access (an example of) a simplification item for SAP S/4HANA using the Simplification Item Catalog, which can be found via the SAP ONE Support Portal:

The simplification item catalog can be found via the SAP ONE Support Portal (https://launchpad.support.sap.com/#/sic/). Choose the link for the version of SAP S/4HANA you are interested in (for example SAP S/4HANA 2023). In the Search field, enter one or more keywords related to the simplification you are interested in and press Enter. For example: SD Rebate Processing. You can also filter on line of business by using the field LoB/Technology. You can enter for example Sales. You then get a list of all available simplification items within that specific line of business.

For each simplification item, various categories of information are provided; source and target releases, successor functionality, and so on.

A simplification item can have a business impact, but it can also have a technical impact. An example of a technical impact of a simplification in SAP S/4HANA would be a change to the data model where an existing table is no longer filled by a certain application. If some custom code that an existing SAP customer developed in-house reads and maybe even writes to this table, the simplification impacts this custom code and is thus something that this existing SAP customer needs to deal with before or during the migration of their current system to SAP S/4HANA.

With every new release of SAP S/4HANA, the simplification item catalog is updated with release-relevant information. There is for example a collection of simplification items available labeled as SAP S/4HANA 2023 but also one for SAP S/4HANA 2022.

Existing customers that want to migrate to SAP S/4HANA need to review the simplification item catalog for all areas that are in use/relevant and they need to identify those simplification items for which actions need to be taken. These actions then need to be integrated into the overall conversion/migration project plan.

A wide variety of changes/simplifications and their impact needs to be analyzed and dealt with. To get an idea about the scope and level of detail of these simplifications, let's start with a list of some examples relevant for SAP S/4HANA Sales:

• Business partner master records replace the ERP customer (and vendor) master records. Related to this: Customer Vendor Integration (CVI). For more information, see SAP Note 2713963 (contains frequently asked questions for a system conversion scenario). See also lesson 3 of this unit.
• SAP S/4HANA Output Management using the BRF+ framework
• Data model changes, for example in Pricing
• Some SD transactions and BAPIs are deprecated. A custom code check tool to identify custom code using these deprecated objects is provided by SAP.
• Optimized parallel execution of conversion reports for SD, reducing downtime.
• SAP S/4HANA embedded analytics: ODATA and (Open) CDS views (Core Data Services) replace ERP LIS and are used for operational reporting in SAP S/4HANA.
• Migration of financial documents from SD-FT to Trade Finance in Treasury and Risk Management. For more information, see SAP Note 2520879.

What the above list shows, is that some simplifications are relatively small or technical or even very specific (pricing data model changes, custom code check tool related to deprecated objects, parallel execution of conversion reports, migration of financial documents from SD-FT to Trade Finance in Treasury and Risk Management). The are however also other simplifications that could potentially have a huge impact on the scope of the migration/conversion/upgrade project. Examples of these are shown next.

There are various simplifications that can be characterized as consolidating existing functionality: providing only one application for a certain area or topic, where in the past multiple applications were available.

And the following are more example of this consolidation:

• Credit Management:

  FI-AR-CR Credit Management is not available in SAP S/4HANA. The functional equivalent in SAP S/4HANA is SAP Credit Management (FIN-FSCM-CR).

• Revenue Recognition:

  SD Revenue Recognition is not available in SAP S/4HANA. SAP Revenue Accounting and Reporting should be used instead. This functionality supports the revenue accounting standards as outlined in the International Financial Reporting Standards (IFRS15) and adapted by local Generally Accepted Accounting Principles (GAAPs). Migration to the SAP Revenue Accounting solution is required to comply with IFRS15 even if an upgrade to SAP S/4HANA is not done.

• Pre-Sales/Sales Activities:

  Computer-Aided Selling (SD-CAS) is not available in SAP S/4HANA. SAP recommends that customers use the SAP Customer Experience portfolio: SAP Sales Cloud or SAP CRM on-premise (side-by-side with SAP S/4HANA).

In the next part of this unit, the following three examples of simplifications related to Sales and Billing are discussed in some more detail:

• Data model changes related to Sales an Billing

• The business partner approach

• Output management for billing documents: using the Business Rule Framework Plus (BRF+) when processing output

The first two of these simplifications are relevant for every SAP S/4HANA migration/conversion project.

Output management implemented in SAP ERP via output determination (based on the NAST table) is used widely in many areas in logistics. Output management based on BRF+ can be used as an alternative way of processing output in Sales and Billing and other areas likewise, and provides additional capabilities and flexibility.

The previous lesson introduced the simplification item catalog. In this catalog, all simplification items are clustered per Line-of-Business (LoB). When filtering the available simplification items on Line-of-Business Sales, it is possible to see that within this line of business, two so-called Business Areas (or also called Solution Areas) have been defined:

• Order and Contract Management
• Sales Force Support

This lesson takes a closer look at these business (or solution) areas and what kind of simplifications can be identified in SAP S/4HANA for them.

Within this business area, the following list of simplifications can be identified (presented at an overview level):

• Sales Master Data and Price Management:
• Sales Contract and Quotation Management:
• Sales Order Management and Processing:
• Sales and Solution Billing:

• Sales Rebate Management and Incentive and Commissions Management:

  Manage business volume-based sales rebates with condition contract management (settlement management).

• Claims, Returns and Refund Management:

  Reduce customer service and support costs by streamlining returns processes and customer returns analysis.

• Sales Monitoring and Analytics:

The classical Sales and Distribution pre-sales functionality (SD-CAS) is no longer available in SAP S/4HANA. SAP recommends that customers use SAP Sales Cloud (as part of the SAP Customer Experience portfolio) or SAP CRM on-premise (side-by-side with SAP S/4HANA).

For Service processing, SAP S/4HANA contains the SAP S/4HANA Service line of business solution. Or within the SAP Customer Experience portfolio, the SAP Service Cloud solution is available.

Business area Sales Force Support comprises the entire presales life-cycle. From an appointment, through the creation of leads and then opportunities:

• Sales Lead management:

  A streamlined link can be provided between marketing and sales to accelerate the process between initial interest and a sale.

• Opportunity management:

  A sales methodology can be created to suit specific sales processes. An opportunity describes the sales prospects, their requested products or services, budget, potential sales volume, and the estimated sales probability.

• Activity management:

  Various activities can be organized and recorded, such as appointments and tasks. These activities can also be linked with other business transactions, such as opportunities.

• Sales quotation and order management:

  Sales quotations and sales orders can be created and processed.

• Solution quotations:

  Solutions can be offered to customers by creating quotations for combinations of different types of products (services and tangible products). These combinations of products are modeled as product bundles when setting-up the master data.