SAP HANA in ASE: experience of implementation and obstacle

Prerequisites of the Project

Software Selection. Why SAP S/4HANA

Expectations / the first results. The got experience of implementation

The first results: achievements

Since 1/1/2018 ISUP KS (I) is started in volume of KFSh (the first stage of implementation)

• Accounting and tax accounting: KFSh
• Income tax, VAT
• Fixed asset accounting and non-current assets, special clothes
• Treasury: maintaining requests for payment, control of payments, bank statements
• Purchasing management of Inventories for capital construction: lotirovaniye, holding competitive procedures, signing of the contracts
• Management of PIR, SMR, AHD, production: registration of economic profitable and account transactions in a system

As of 4/10/2018:

• Full-function closing of the period – January and February, 2018 in BU and NU is made, closing of March, 2018 is begun.
• The balance sheet for January and February, 2018 is received.
• PBU 18/01i income tax for January and February, 2018 is calculated.
• Information systems are taken out of service: 1S:USO (on processes of BU and NU), SIO (procurement processes for needs of capital construction
• Integration flows with the industry systems are configured: Purchase SAP HCM, EOS, RTsK (Treasury), EOS NSI. The next plans are EOS DO (document flow)

• During the project based on the carried-out GAP analysis more than 100 differences from KFSh on the SAP ERP platform were revealed.
• At the same time about 50% are features of implementation of processes of KFSh on the SAP S/4HANA platform (for example, fixed asset accounting, income tax).
• Since 1/1/2018. The main functionality of KFSh on the new platform is started.
• The actions plan on implementation of complete volume of changes is implemented.

Fixed asset movements

• Thanks to approach which uses S/4 HANA types of movements (in KFSh 387 types of movements were used) are reviewed and unified.
• In S/4 HANA the choice of areas of assessment does not depend on a type of the movement and is defined by the user in wiring.

Depreciation

• The separate run of depreciation on areas of assessment, according to instructions according to the reporting (BU/NU, MSFO) is possible
• The run of depreciation is executed according to correct OS, a system ignores wrong OS. After error correction the repeated run, but already on separate, earlier wrong subjects of OS is executed
• There is no magazine of a run of depreciation. Check of postings of calculation of depreciation is executed by standard reports of FI
• Depreciation is executed on each subject of OS

Closing of year

• All movements on VNA are executed in the Ledger (the flexible magazine) at once. The document at once registers in two lines (one on the Russian accounting, another according to IFRS). Thus conducting parallel accounting is received online
• Need to execute periodic postings and reconciliation of consistency of the FI-AA magazine and Ledger disappeared.

Integration with other system modules of SAP

• Fixed asset accounting in S/4 HANA is kept in the uniform universal magazine that allows us to use a full range the analyst of management accounting in one place that in turn reduces the number of necessary checks of mistiming of data
• The universal magazine allows to execute collecting of costs before input of VNA in operation. There is a possibility of an exception of the OS technical cards on the 07th account for IFRS.
• S/4 HANA allowed to optimize executed in ERP expansions and modifications of the standard (to minimize the number of Z-developments)

Fixed asset accounting

• In general we are satisfied with the organization and changes of fixed asset accounting in S/4HANA.
• Calculation of depreciation is expedited really and takes about 2-3 minutes.
• Practically there are no discrepancies with data of a historical system.
• A shortcoming – lack of the preconfigured standard control procedures.

Income tax

• After making decision on implementation of income tax on the universal magazine there was an open question connected with lack of standard settings on income tax for S/4HANA
• Practices recommendation which were complemented with specifics of the enterprises of nuclear sector that allowed to implement the full solution on income tax were provided to SAP CIS.
• The feature of this solution is that depending on specifics of activities of each specific enterprise of the industry, it can be adapted.
• Advantage of this solution also that it considers filial structure of AO IK of "ASE", including foreign subsidiaries and representations.

Registration of primary documents

• Reflection of data on the registered economic transactions regarding the tax appraisal (indicators of elements of tax accounting, indicators of differences of PBU 18/02) in the universal magazine happens in the online mode, i.e. at the moment preserving of an accounting entry

Formation of the magazine of tax transactions

• Data transfer is not executed of financial accounting, all data for creation of tax statements as in assessment of NU, and BU are stored in the universal magazine
• Correction of tax indicators is made for the posted accounting documents using the special program

Adjustments in NU at errors in primary documents regarding determination of a tax indicator

• The solution allows to adjust primary documents regarding tax indicators directly in the ledger without reopening of the period in BU and reversals of transactions

Check of correctness of formation on PBU 18\02 Reconciliation of data on registers WELL and a form

• Classification of differences according to PBU-18/02 happens at the time of preserving of the accounting document in the online mode
• Reconciliation is not required as data in accounting valuation are stored in one table
• The solution allows not to carry out reconciliation of data between the ledger and special registers for check of their correctness that saves a closing time

VAT

• For implementation of the VAT earlier developed industry solution on the VAT was taken as a basis.
• Main advantages of this solution for us in comparison with the standard of SAP is the following:

Filial accounting

For implementation of filial accounting we considered two options: accounting on balance sheet units (industry experience, including Rosenergoatom Concern) and accounting on MVP (the standard of SAP).

• Solution shortcomings on BE for branches without the isolated balance:
• Maintaining 79th account (existence of the advice)
• More difficult tracking the analyst on costs by transfer of costs which nevertheless is possible.
• Solution shortcomings on MVP for branches without the isolated balance:
• Maintaining and putting down of one more analytics
• Need use of the combined approach (foreign subsidiaries are BE)
• More difficult settings on unloading of postings from IASUP as ASE IK branches in IASUP are conducted on separate BE
• There is no possibility of obtaining the isolated balance of branch

Difficulties and obstacles

In the ISUP KS (I) project of AO IK "ASE" faced different difficulties and obstacles to which it would be desirable to draw the attention of those companies which only plan or begin implementation of the SAP projects.

There is no industry solution of SAP for construction with necessary detailing of analytics of accounting.

There is not enough experiment of other companies on implementation of S/4HANA in business areas, not only in the field of finance:

• in the field of construction
• in production
• in the field of portal solutions.

Absence preconfigured standard internal kontroly in a system, for example:

• Incorrect formation of the payment order: the amount in the payment order differed from the amount of the approved request for payment in view of a rebinding of primary settlement document in the user
• Wrong calculation of depreciation in later period. At the same time the previous period became blocked for calculation, reversal of calculation and carrying out correct transaction demanded a long period and was very labor-consuming. The user's error, but control in a system did not work / or it was not set.
• It is a lot of difficulties with printed forms of primary documents. Cases of non-compliance with mandatory regulatory requirements to filling, especially invoices take place.
• The standard does not support formation of printed forms for the enterprises with filial structure, on agency transactions.

Also in ASE faced difficulties with calculation of revenue "in process of readiness". For the company this functionality is especially critical – as almost all profitable agreements are or agreements with a long cycle, or construction contracts.

In view of scale of the project he assumes the organization of a great number of functional groups on the directions. Essential complexity is consolidation of work of functional groups:

• As it is elementary on joint work time synchronization,
• On development of the uniform consolidated opinion,
• And on motivation to work in the project.

The second corporate complexity – organizational changes and transformation of processes.

For overcoming we use all range of levers:

• Publication of orders, orders, regulations of work
• Maintaining sheets of presence with informing the management
• Problem definition within operational indicators of activity with the subsequent accounting of results in motivational payments in a month
• Additional encouragement and awarding for accomplishment of special and important tasks.

Project Development

• Industry project "Legally Significant Document Flow". A task – within the 2nd wave of the e-document flow YUZ industry project to put functionality of exchange of legally significant electronic documents with partners into operation
• Accounting by a SPP elements to the OSR level. A task – to organize a possibility of receiving a financial result by OEC (object estimate calculations), i.e. actually by separate objects as a part of a complex of the constructed NPP
• Thematic planning. A task – to develop functionality of thematic planning - a set of the works planned for accomplishment within the selected temporary period with the cost of their accomplishment proved by the design estimates. Contains the list of all local estimates (with detailing to points of estimates).
• Management of cost. A task – to develop functionality of management of cost of the constructed NPPs:
  • Formation and value assessment of a construction of the NPP
  • Establishment and control of limits of cost
  • Forecasting of cost, plan fact analysis

• Accounting of construction contracts. A task – creation of completely automated calculation of revenue in process of readiness in ISUP KS (I)
• Monitor of financial closure. A task – to implement in ISUP KS (I) the control panel closing for all divisions, legal entities, SAP and not - SAP systems
• Consolidation of the international activity. A task – development and replication of the solution for automation of remote foreign platforms with an opportunity for work in offline mode
• Creation of the uniform portal of work of external partners. A task – preserving of the existing functionality of portal solutions: the portal of the supplier, the portal of the contractor and the portal of the customer and also add-on modules of portals on quality management, management of discrepancies, management pretenzionno claim work.

In total this functionality and other functional units will become the Corporate prototype of capital construction of Rosatom State Corporation

Implementation project implementation stages

Contractor Selection

In the middle of October, 2016 Atomenergoproekt (NIAEP) entering into ASE group based on which the engineering division of Rosatom is integrated summed up the request for proposals results on creation of a project management system of capital construction of ISUP KS (I) based on the SAP solutions Purchase No. 31604053925^[1].

Applications for participation in purchase were submitted by Kabest companies (enters into the Asteros group), Sayner and ASAP Consulting. The greatest decrease - from 900 million to 808.3 million rubles - was recorded in the offer of Kabest. However, the request of the company was rejected on an absence reason of required experience. The projects of Asteros company provided as a part of the request were not considered because it is not a collaborator, and accounting of experience of affiliates documentation is not provided. Besides, the commission recorded in the documents "Kabest" mismatch to requirements of purchase regarding providing certificates of SAP and financial statements.

The cost of the request of Sayner company was nearly 870 million rubles, ASAP Consulting - 881 million rubles.

During the further selection Sayner procedures brought down the cost of the agreement to 861 million rubles, ASAP Consulting - to 860 million rubles. As a result the winner announced ASAP Consulting company.

Based on precontractual negotiations the final price of the contract was in addition reduced to 855 million rubles.

Scope of work

A system is created for cost reduction and reduction of terms of a construction of objects of nuclear power. It will have to replace partially the management systems for financial and economic activity used nowadays and managements of cost on foreign projects (based on "1C Enterprise 8") and also a project management system (ISUP NIAEP).

The last is developed on the basis of an information system of capital construction 4.2. (ISKS 4.2), the rights to which belong to ESK Center company. This system, in turn, is based on Oracle EE 10g DBMS [2] and the Oracle Application Server EE 10g application server.

The new solution should be implemented using a SAP software: SAP S/4 HANA, SAP EPC, SAP 3D Visual Enterprise, SAP ECTR, SAP QIM, SAP PI, SAP BPC, SAP Mobile Platform, SAP Enterprise Integration for Inventory Manager mobile app, SAP Enterprise Risk and Compliance Management, risk management. As DBMS it is required to use HANA SAP software.

It should be noted that a number of functions will work based on already installed solutions as before. In particular, in work there will be subsystems of ISUP drying starting blocks of the NPP 2016-2017. Besides, processes of the dining room, accounting of motor transport, accounting of business trips of employees and the portal of the employee will be executed in the system of 1C.

The organizational scope of all project includes the following organizations: To JSC NIAEP, VDMU LLC, SMU-1 LLC, JSC NIKIMT-Atomstroy, RosSEM Trust LLC, JSC Energospetsmontazh, JSC Atomstroyexport (AO ASYA), JSC Atomenergoproekt (JSC AEP), JSC Atomproyekt and also all branches and representative offices of these companies in the territory of the Russian Federation and abroad. The total volume of branches of the companies of organizational perimeter of the project does not exceed 35 Russian and foreign enterprises.

All project is divided into 12 main stages, last of which should be complete in July, 2019.

ISUP KS (I) should become the complex information management system processes of capital construction of the companies of the Engineering division at all stages of a construction of objects. A system should integrate in a common information space of all project participants of capital construction: companies of the Engineering division, customers, investors, subcontractors, suppliers.

Main stages of the project

Project stage	Organizational volume	Start	End
Stage 1. Techno design engineering of a prototype of ISUP KS (I)	The project of a construction of the NPP "Ruppur"	From the moment of agreement signature	12/15/2016
Stage 2. Implementation of a prototype of ISUP KS (I)	The project of a construction of the NPP "Ruppur"	From the moment of agreement signature	12/15/2016
Stage 3. Preparation for commercial operation of a prototype of ISUP KS (I) on the Ruppur project	The project of a construction of the NPP "Ruppur"	11/1/2016	12/15/2016
Stage 4. Maintenance of commercial operation of a prototype of ISUP KS (I) on the Ruppur project	The project of a construction of the NPP "Ruppur"	1/1/2017	1/15/2018
Stage 5. Adaptation of a techno detail design of a prototype of ISUP KS (I) regarding processes of KFSh and integration with external systems.	Pilot organizational volume	1/15/2017	10/31/2017
Stage 6. Adaptation of a prototype of ISUP KS (I) regarding processes of KFSh and integration with external systems.	Pilot organizational volume	1/15/2017	10/31/2017
Stage 7. Comprehensive tests of the adapted prototype of ISUP KS (I) taking into account requirements of KFSh and integration with external systems	Pilot organizational volume	6/1/2017	8/31/2017
Stage 8. Preparation for commercial operation of the adapted prototype of ISUP KS (I) on a pilot organizational scope	Pilot organizational volume	9/1/2017	12/15/2017
Stage 9. Maintenance of commercial operation of the adapted prototype of ISUP KS (I) on a pilot organizational scope	Pilot organizational volume	1/1/2018	7/15/2018
Stage 10. Solution circulation on other enterprises of the Division "Engineering	Complete organizational volume	4/1/2018	12/15/2018
Stage 11. Development of functionality of ISUP KS (I) regarding budgeting processes	Complete organizational volume	4/1/2018	12/15/2018
Stage 12. Maintenance of commercial operation of ISUP KS in full	Complete organizational volume	1/1/2019	7/15/2019

The memorandum of joint work between SAP CIS and ASE

In June, 2016 SAP CIS company together with AO ASYA group signed the memorandum of joint work over the partner solution based on SAP HANA.

According to the signed agreement, will be engaged in SAP CIS together with ASE in creation of prototypes of industry solution for Rosatom State Corporation based on SAP HANA. Development will be conducted taking into account the practician of a construction of projects of the NPP in Russia. Registration of a product as the partner solution of SAP supported by the company vendor will become logical continuation of this work.

The head of ASE group Valery Limarenko emphasized that it is very important for the ASE document. "SAP products already work in architecture of information space of our company in the field of management accounting. Today we signed the memorandum of cooperation in the long term to replace own corporate product in management of capital construction with the system market product developed by SAP company that will allow to increase effective management of investment process" — he said.

The SAP platform was selected by Rosatom state corporation as target in 2009 within the program of transformation of IT.

Notes

• Presentation materials "Implementation of a corporate financial prototype in the Engineering division of ROSATOM State Corporation" ASE Group Elena Samogorodskaya, the chief accountant are used. SAP Forum of 2018.