V1 - Synchronous update
V2 - Asynchronous update
V3 - Batch asynchronous update

These are different work processes on the application server that takes the update LUW (which may have various DB manipulation SQLs) from the running program and execute it. These are separated to optimize transaction processing capabilities.

Synchronous Updating (V1 Update)-->>
The statistics update is made synchronously with the document update.
While updating, if problems that result in the termination of the statistics update occur, the original documents are NOT saved. The cause of the termination should be investigated and the problem solved. Subsequently, the documents can be entered again.

Asynchronous Updating (V2 Update)-->>
With this update type, the document update is made separately from the statistics update. A termination of the statistics update has NO influence on the document update (see V1 Update).

Asynchronous Updating (V3 Update) -->>
With this update type, updating is made separately from the document update. The difference between this update type and the V2 Update lies, however, with the time schedule. If the V3 update is active, then the update can be executed at a later time.

If you create/change a purchase order (me21n/me22n), when you press 'SAVE' and see a success message (PO.... changed..), the update to underlying tables EKKO/EKPO has happened (before you saw the message). This update was executed in the V1 work process.

There are some statistics collecting tables in the system which can capture data for reporting. For example, LIS table S012 stores purchasing data (it is the same data as EKKO/EKPO stored redundantly, but in a different structure to optimize reporting). Now, these tables are updated with the txn you just posted, in a V2 process. Depending on system load, this may happen a few seconds later (after you saw the success message). You can see V1/V2/V3 queues in SM12 or SM13.

V3 is specifically for BW extraction. The update LUW for these is sent to V3 but is not executed immediately. You have to schedule a job (eg in LBWE definitions) to process these. This is again to optimize performance.

V2 and V3 are separated from V1 as these are not as realtime critical (updating statistical data). If all these updates were put together in one LUW, system performance (concurrency, locking etc) would be impacted.

Serialized V3 update is called after V2 has happened (this is how the code running these updates is written) so if you have both V2 and V3 updates from a txn, if V2 fails or is waiting, V3 will not happen yet.

BTW, 'serialized' V3 is discontinued now, in later releases of PI you will have only unserialized V3. 

In contrast to V1 and V2 Updates , no single documents are updated. The V3 update is, therefore, also described as a collective update.

1. Application tables (R/3 tables)
2. Statistical tables (for reporting purpose)
3. update tables
4. BW queue 

Statistical tables are for reporting on R/3 while update tables are for BW extraction. Is data stored redundantly in these two (three if you include application tables) sets of table?

Yes it is.

Difference is the fact that update tables are temporary, V3 jobs continually refresh these tables (as I understand). This is different from statistics tables which continue to add all the data. Update tables can be thought of as a staging place on R/3 from where data is consolidated into packages and sent to the delta queue (by the V3 job).

Update tables can be bypassed (if you use 'direct' or 'queued' delta instead of V3) to send the updates (data) directly to the BW queue (delta queue). V3 is however better for performance and so it is an option alongwith others and it uses update tables.

Statistical table existed since pre BW era (for analytical reporting) and have continued and are in use when customers want their reporting on R/3.

The structure of statistical table might be different from the update table/BW queue, so, even though it is based on same data, these might be different subsets of the same superset.

V3 collective update means that the updates are going to be processed only when the V3 job has run. I am not sure about 'synchronous V3'. Do you mean serialized V3?

At the time of oltp transaction, the update entry is made to the update table. Once you have posted the txn, it is available in the update table and is waiting for the V3 job to run. When V3 job runs, it picks up these entries from update table and pushes into delta queue from where BW extraction job extracts it.

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