SAP has extended the time frame to move into S/4 HANA to 2027, giving companies more breathing space in financially and economically tough times. Back in 2015, SAP launched a fantastic, futuristic solution in Central Finance which will provide a glide path to enterprises to reap the full benefits of SAP Digital offerings. With the Finance department playing a vital role in every company and especially those that have SAP as their ERP provider, here’s a white paper on Central Finance, a solution that would pave way for business transformation.
Customers who are not using SAP for their ERP needs can also leverage the benefits of Central Finance, but that’s something that’s not going to be covered in this white paper.
In this white paper, you will get to know more about Central Finance, it’s features, benefits it offers to different stakeholders. I sincerely hope this would make enterprises adopt Central Finance or at least make them consider using this solution provided by SAP.
Chapter 1 : Current IT Landscape supporting core business processes of large global enterprises worldwide
SAP is a pioneer in ERP and is considered the market leader when it comes to providing the best solutions for businesses by supporting core business processes. Every business process that is unified or structured for use by various units or divisions of a company would definitely find the use of SAP very productive.
SAP in its current state is using SAP ECC 7.3 which is their legacy system with the landscape and features being old fashioned and redundant in times of super cool design features and attractive UI’s that other such ERP providers like Oracle or SFDC provide. The need for SAP is to enable their customers to smoothly migrate into their latest offering S/4 HANA and remove all the redundancy and issues existing in systems that have been running for decades now.
The migration to S/4 HANA can be tough, as plenty of customers using SAP worldwide have customized codes, tables etc. which cannot be transformed that easily. Moving to a new software solution should offer business value or it will be difficult to justify. SAP S/4 HANA gives you access to new innovations such as embedded real–time analytics, the latest user experience across all devices with SAP FIORI, as well as faster response times and a better performance.
We live in a world where most of the Fortune 500 companies are into some form of Mergers & Acquisitions to strengthen and broaden their business. Warren Buffett once famously quoted on M&A’s by saying,” Wall Street is the only place that people ride in a Rollys Royce to take advice from those that take a subway,”. Mergers & Acquisitions are never easy, and along with the various other complexities it brings in, the integration of IT systems gets less prioritized over other aspects.
A large chunk of the 437,000+ customers across 180 countries are still are in legacy version SAP ECC. With multiplicity of systems and multiple master data files, it is not easy for the enterprise to optimize as single source of truth is completely missing. Very difficult to trust the data as each business unit is particular about saying that their data is accurate when questioned.
The ideal solution is to upgrade all the business units into S/4 HANA digital stack and decommission all the old legacy systems. This is highly complex, time and cost consuming and will require major change management. Due to this reason, many companies may have not attempted full scale migration, and/or living with the multiple source data and not optimizing their enterprise performance.
But the question that needs to be asked is whether moving to SAP S/4 HANA is the final destination. S/4 HANA equips companies to meet SAP’s vision for a digital, integrated, flexible, scalable architecture with provision of viewing and analyzing real time data for analysis, predictive capabilities and also allow everyone in the value chain to use the latest AI/ML techniques and features.
CFO and Finance department spends most of their time in data reconciliation, data corrections and producing manual reports and are unable to play a major role in the business enablement. Finally, I am happy to say that SAP through its Central Finance solution has given a very neat tool that can leverage an enterprise’s performance by providing a single source of truth that would sort out lot of inefficiencies in various business units within a company.
Central Finance solution provides an easy, non–intrusive step–by–step gradual way for the enterprise to implement S/4 HANA infrastructure and get the best use of single source of truth and make use of S/4 HANA’s architecture.
This phased solution gives a glide path to enterprises to continuously upgrade and reach an ideal state of adopting full suite SAP S/4 HANA and decommission their legacy ERP systems. In this white paper I will be describing the various features, products and tools and how an enterprise can adopt a phased approach into implementation of Central Finance. Hope everyone reading this finds it useful and informative.
Chapter 2 : What exactly is SAP’s new solution Central Finance?
As we have discussed in Chapter 1 of this white paper, all enterprises need and want to move to a new Digital ERP infrastructure to maximize the firm’s efficiency. However, the cost, time and change management challenges have always delayed or derailed any Central corporate initiatives.
I will not go deep in to SAP S/4 HANA benefits in this white paper. In brief, the benefits are HANA in–memory database with OLTP/OLAP data in the same tables with speedy access, Fiori GUI user interface, end user launch pads, major functional improvements in many processes etc.
While change is always a tough decision, every business unit leaders in all enterprises agree on need for a single source of truth in terms of financial performance of units, geographies and products & services. They also agree on need for a strong Master Data management function and consistency in key mater data such as customer, Vendor, Products, Accounts etc.
The ideal solution is a massive technical migration project involving new system development of all financial and non–financial modules such as MM, SD, PP, QM etc. and large data migration in to new ERP environment and decommissioning of old ERP systems.
Thousands of end users in every business unit need to be retrained on new screens, new process and reporting paradigms directly leading to high cost, long time and major change management issues. This is the primary reason many enterprises have taken a compromise of staying with their old ERP systems, even spending money in improving it and living with multiple sources of truth and not able to optimize their business processes.
Imagine a brand–new solution which can help enterprises to go from the current state to a desired state in incremental small steps that would provide benefits and ROI in each step.
Let me elaborate on this ideal solution: –
With SAP’s offering of Central Finance, you need not imagine but you can actually implement these 10 steps!.
Neil Armstrong, the first man to land and walk on the Moon said “That’s one small step for a man, one giant leap for mankind”. This small step taken by enterprises to go to the Moon (S/4 HANA infrastructure) and take a small step ( Analytical / Financial Reporting from Central Finance system as opposed to old ERP systems) will be a giant step for the enterprise in achieving their higher performance goals.
Chapter 3: How do enterprises gradually move to the summit or the end desired state?
The effort taken to implement the SAP S/4HANA central Finance infrastructure and defining the
Master Data, configurations and the Data Mapping is not small. However, this is very manageable
compared to the large task of full scale ERP technical migration due to clear focus on Financial data
migration and not MM, SD, PP, QM etc. and other non–financial data.
In case the Enterprise has five legacy ERP systems, the first step could be mapping and migration of
say two systems. The remaining three systems can be migrated in next phases. This also gives the
enterprise to pick and choose and prove the benefits of the CF solution and success stories to get better
buy–in from difficult business units who are usually suspicious about initiatives coming from Corporate.
What else we can benefit in the early phase of the Project?
We already talked about reporting. Standard out–of–the box FIORI applications supporting various
analytical reports itself is a big step. Over a period of time, the migrated BUs will stop producing
reports in the legacy system and start using the CF reports as the single source of truth.
Next step could be Financial Planning, prediction and simulations. These powerful tools are
available in S/4 HANA CF and for all the migrated entities, one can produce analytical reports can be produced to improve operational efficiency.
Tax Reporting and Compliance is becoming a major risk issue discussed at Board levels. With
continuous acquisition of new entities through M&A and opening up new countries to operate, this issue becomes very critical for the CFO as non–compliance could mean disruption of business and legal
penalties etc. S/4 HANA’s Tax reporting & compliance functionality can be easily turned on in CF and
the legacy processes and reports can be turned off.
Closing of accounting Books is always a difficult task involving lots of manual reconciliations and
Re–postings and takes up lots of time and effort in every reporting period. Also the number of staff
involved in this process is limited and is mostly a finance department function.
Hence, the next step in our CF journey is to move Financial closure of the BUs in the CF system rather than legacy system. The financial closure cockpit and various other great tools available in the S/4 HANA
infrastructure will improve the accuracy and speed of the process. One can also do many closing
activities such as intercompany postings and reconciliations on a daily basis and not wait for the
period end.
The success stories in terms of better planning, single source of truth reporting,
better tax and regulatory compliance and last but not the least ease & speed of closing, will create
lots of optimism and fast track the acceptance and collaboration for future steps in the journey.
One of the major operational efficiency lever is Centralized shared service across many Business
entities. This not only reduces cost of tools & technologies and resources, but also helps in
standardization and use of best practices and boosts customer satisfaction. Best candidates
are Central Accounts Payable i.e central payments and Account Receivables i.e. credit collection
and dispute management.
Usually Accounts Payable or Central payments is a good process to migrate to shared service as a
starting point before migrating Customer Credit collection & disputes. BUs are little sensitive about
their customers and think a central handling will upset their long built customer relationships.
This will require some additional non–financial data such as Banks, payment type etc. to be mapped
between Legacy ERP systems and S/4 HANA Central Finance system. The MM, SD, PP, QM transaction will happen as–is–where–is in the legacy ERP system but will stop before the line item is open for
payment or collection.
This will be a technically closed transaction in the Legacy system and will become an
open line item to be processed for payment in the CF system. The automatic payroll run will happen
in CF system and payments will be made as per the rules mentioned in the configuration.
Any vendor queries and status updates need to be done at the CF system as legacy ERP will not have
this data. By transferring some of BU AP Payment process employees to the Central payment team,
BUs can keep the continuity and manage the transition to the Central processing.
Similar efforts are needed for credit collections and disputes management. Each customer’s
sensitivities, language requirements etc. can be configured and hence will be managed by CF
system.
Various other steps such as Bank & Cash management, Group reporting, IFRS like compliance
could be added on top of this to make CF more enriched. The beauty of the CF architecture is that enterprises can implement all of these steps for only selected legacy ERP systems and need not wait for all the legacy systems to be migrated.
For e.g. out of five BUs only three are migrated and the three BUs can benefit from shared services. The fact that the other two are still in the legacy ERP does not matter for this architecture.
Here’s highlighting and summarizing the steps of moving into Central Finance Solution for enterprises:
The next level of steps is use of cool digital products from SAP such as Success Factors for HR, Ariba for
Central purchasing, SAP Cloud Analytics for IOT, AI/ML which will not be discussed in detail in this white paper.
Chapter 4 : The technologies involved in implementing Central Finance solution
The basic technical components are similar to standard S/4 HANA implementation consisting of HANA database, S/4 Core ERP Finance and Risk Modules and SAP Master Data Governance (SAP MDG) and the S/4 HANA Central Finance module.
The additional key piece of technology we need is the SAP Landscape Transformation replication server. This technology is the glue between the legacy ERP systems and S/4 HANA Central Finance. This pulls in financial transactions from the source system, uses the data mapping and transforms the data and sends it to the CF systems for “re–posting”. Even for non–SAP systems this technology is required.
However, you need additional SAP data Services. SAP Application Interface Framework, part of the S/4 HANA architecture is used for day–to–day management of errors identified real time during the data replication. This provides a single error database and dashboard which can be used both by business and IT and resolve the errors and re–process the transactions.
Central Finance and basic SAP LT replication server architecture
In addition, the front end tools such as SAP GUI which is the graphical user interface client in SAP’s three tier architecture of database, application server and client to SAP FIORI which is a new user experience (UX) for SAP software and applications. It provides a set of applications that are used in regular business functions like work approvals, financial apps, calculation apps and various self–service apps.
System Deployment
Central Finance is a cloud compatible code in S/4 HANA release and hence can get best use from Cloud deployment. However, all the options such as on Premise, Private cloud or public cloud versions are available and users can select the right options for their use.
It is also recommended to use very similar deployment architecture such as Sandbox, Development, QA and Production. In each area, Legacy ERP systems, SAP replication server and Central Finance will be available.
Central Finance with Only SAP Sources
Chapter 5: Conclusion
Most large enterprises have legacy baggage of many older ERP systems with lack of Master data
governance and it is very difficult for the Group or corporate office to benchmark, review and push for performance improvements. There is no single source of truth and each business unit, many of them acquired via M&A, run their systems independently with their own inefficiencies and resist any change.
The ideal solution to the problem is large migration of all these systems in to a single ERP system which could be S/4 HANA. However, the sheer change management across Business Units and cost & time for this migration is high and hence seldom undertaken by enterprises forcing them to work on “Band–Aid” solutions.
The S/4 HANA Central Finance is a very good solution that enables a step by step approach to manage this big problem. In small steps, without making changes to many functions/people in the business units, it is possible to get to a single source of truth and get key financial reports from the single source and really understand the business dynamics to improve performance.
After demonstrating success in the initial steps, one can keep increasing the scope of CF to include many other key functions such as central closing and even shared payment or credit collection systems.
This is a very novel and bold concept from SAP and I am sure this will succeed in helping the enterprises.
Okumaya devam et...
Customers who are not using SAP for their ERP needs can also leverage the benefits of Central Finance, but that’s something that’s not going to be covered in this white paper.
In this white paper, you will get to know more about Central Finance, it’s features, benefits it offers to different stakeholders. I sincerely hope this would make enterprises adopt Central Finance or at least make them consider using this solution provided by SAP.
Chapter 1 : Current IT Landscape supporting core business processes of large global enterprises worldwide
SAP is a pioneer in ERP and is considered the market leader when it comes to providing the best solutions for businesses by supporting core business processes. Every business process that is unified or structured for use by various units or divisions of a company would definitely find the use of SAP very productive.
SAP in its current state is using SAP ECC 7.3 which is their legacy system with the landscape and features being old fashioned and redundant in times of super cool design features and attractive UI’s that other such ERP providers like Oracle or SFDC provide. The need for SAP is to enable their customers to smoothly migrate into their latest offering S/4 HANA and remove all the redundancy and issues existing in systems that have been running for decades now.
The migration to S/4 HANA can be tough, as plenty of customers using SAP worldwide have customized codes, tables etc. which cannot be transformed that easily. Moving to a new software solution should offer business value or it will be difficult to justify. SAP S/4 HANA gives you access to new innovations such as embedded real–time analytics, the latest user experience across all devices with SAP FIORI, as well as faster response times and a better performance.
We live in a world where most of the Fortune 500 companies are into some form of Mergers & Acquisitions to strengthen and broaden their business. Warren Buffett once famously quoted on M&A’s by saying,” Wall Street is the only place that people ride in a Rollys Royce to take advice from those that take a subway,”. Mergers & Acquisitions are never easy, and along with the various other complexities it brings in, the integration of IT systems gets less prioritized over other aspects.
A large chunk of the 437,000+ customers across 180 countries are still are in legacy version SAP ECC. With multiplicity of systems and multiple master data files, it is not easy for the enterprise to optimize as single source of truth is completely missing. Very difficult to trust the data as each business unit is particular about saying that their data is accurate when questioned.
The ideal solution is to upgrade all the business units into S/4 HANA digital stack and decommission all the old legacy systems. This is highly complex, time and cost consuming and will require major change management. Due to this reason, many companies may have not attempted full scale migration, and/or living with the multiple source data and not optimizing their enterprise performance.
But the question that needs to be asked is whether moving to SAP S/4 HANA is the final destination. S/4 HANA equips companies to meet SAP’s vision for a digital, integrated, flexible, scalable architecture with provision of viewing and analyzing real time data for analysis, predictive capabilities and also allow everyone in the value chain to use the latest AI/ML techniques and features.
CFO and Finance department spends most of their time in data reconciliation, data corrections and producing manual reports and are unable to play a major role in the business enablement. Finally, I am happy to say that SAP through its Central Finance solution has given a very neat tool that can leverage an enterprise’s performance by providing a single source of truth that would sort out lot of inefficiencies in various business units within a company.
Central Finance solution provides an easy, non–intrusive step–by–step gradual way for the enterprise to implement S/4 HANA infrastructure and get the best use of single source of truth and make use of S/4 HANA’s architecture.
This phased solution gives a glide path to enterprises to continuously upgrade and reach an ideal state of adopting full suite SAP S/4 HANA and decommission their legacy ERP systems. In this white paper I will be describing the various features, products and tools and how an enterprise can adopt a phased approach into implementation of Central Finance. Hope everyone reading this finds it useful and informative.
Chapter 2 : What exactly is SAP’s new solution Central Finance?
As we have discussed in Chapter 1 of this white paper, all enterprises need and want to move to a new Digital ERP infrastructure to maximize the firm’s efficiency. However, the cost, time and change management challenges have always delayed or derailed any Central corporate initiatives.
I will not go deep in to SAP S/4 HANA benefits in this white paper. In brief, the benefits are HANA in–memory database with OLTP/OLAP data in the same tables with speedy access, Fiori GUI user interface, end user launch pads, major functional improvements in many processes etc.
While change is always a tough decision, every business unit leaders in all enterprises agree on need for a single source of truth in terms of financial performance of units, geographies and products & services. They also agree on need for a strong Master Data management function and consistency in key mater data such as customer, Vendor, Products, Accounts etc.
The ideal solution is a massive technical migration project involving new system development of all financial and non–financial modules such as MM, SD, PP, QM etc. and large data migration in to new ERP environment and decommissioning of old ERP systems.
Thousands of end users in every business unit need to be retrained on new screens, new process and reporting paradigms directly leading to high cost, long time and major change management issues. This is the primary reason many enterprises have taken a compromise of staying with their old ERP systems, even spending money in improving it and living with multiple sources of truth and not able to optimize their business processes.
Imagine a brand–new solution which can help enterprises to go from the current state to a desired state in incremental small steps that would provide benefits and ROI in each step.
Let me elaborate on this ideal solution: –
- 1. Let us invest in S/4 HANA platform infrastructure and all the great tools inside it.
- 2. Let us work with Corporate Finance team, Business unit Finance teams, business unit leaders and agree on a Master Data Management philosophy and create a single or multiple MDMs as per agreement.
- 3. Let us agree on data mapping and corrections needed to make old ERP data compatible with new master data templates.
- 4. Let us agree on various configurations, substitutions and validations for all financial transactions and configure the S/4 HANA instance with the agreed data.
- 5. These steps will get full support from all BU leaders as these are the characteristics of the desired state anyway and all will agree that we have to reach this state someday. At the end of this, we will have a full template of a brand–new desired system. But empty database with no transactions.
- 6. Let us use some magical tools supplied by SAP to extract data from SAP ECC systems and populate the brand–new S/4 HANA template as an initial load.
- 7. Let us also use the magical tools to real time repost all the FI transactions happening in old ERP systems in to the new template without any extra load on the BU users.
- 8. What do we have now? Now we have a fully populated Central Finance database using new Master data, new configurations and FI transaction data up to the lowest level of detail in a much cleaner state than even the old ERP system.
- 9. The Various old ERP system users continue to post their MM, SD, FI transactions on their existing system screens doing their day–to–day work. Absolutely No change and hence no need for massive retraining. But, without their involvement the Central Finance database is getting populated by these Data interface tools.
- 10. 200+ Analytical Fiori reports are available on the Central Finance as standard offerings from SAP. Being OLTP/OLAP, there is no need for data extract, transform, create a data warehouse and report. These reports are available on touch of a button to provide single source of truth to measure and optimize unit performances. This makes Finance teams great business enabler function and not a support or a regulatory function.
With SAP’s offering of Central Finance, you need not imagine but you can actually implement these 10 steps!.
Neil Armstrong, the first man to land and walk on the Moon said “That’s one small step for a man, one giant leap for mankind”. This small step taken by enterprises to go to the Moon (S/4 HANA infrastructure) and take a small step ( Analytical / Financial Reporting from Central Finance system as opposed to old ERP systems) will be a giant step for the enterprise in achieving their higher performance goals.
Chapter 3: How do enterprises gradually move to the summit or the end desired state?
The effort taken to implement the SAP S/4HANA central Finance infrastructure and defining the
Master Data, configurations and the Data Mapping is not small. However, this is very manageable
compared to the large task of full scale ERP technical migration due to clear focus on Financial data
migration and not MM, SD, PP, QM etc. and other non–financial data.
In case the Enterprise has five legacy ERP systems, the first step could be mapping and migration of
say two systems. The remaining three systems can be migrated in next phases. This also gives the
enterprise to pick and choose and prove the benefits of the CF solution and success stories to get better
buy–in from difficult business units who are usually suspicious about initiatives coming from Corporate.
What else we can benefit in the early phase of the Project?
We already talked about reporting. Standard out–of–the box FIORI applications supporting various
analytical reports itself is a big step. Over a period of time, the migrated BUs will stop producing
reports in the legacy system and start using the CF reports as the single source of truth.
Next step could be Financial Planning, prediction and simulations. These powerful tools are
available in S/4 HANA CF and for all the migrated entities, one can produce analytical reports can be produced to improve operational efficiency.
Tax Reporting and Compliance is becoming a major risk issue discussed at Board levels. With
continuous acquisition of new entities through M&A and opening up new countries to operate, this issue becomes very critical for the CFO as non–compliance could mean disruption of business and legal
penalties etc. S/4 HANA’s Tax reporting & compliance functionality can be easily turned on in CF and
the legacy processes and reports can be turned off.
Closing of accounting Books is always a difficult task involving lots of manual reconciliations and
Re–postings and takes up lots of time and effort in every reporting period. Also the number of staff
involved in this process is limited and is mostly a finance department function.
Hence, the next step in our CF journey is to move Financial closure of the BUs in the CF system rather than legacy system. The financial closure cockpit and various other great tools available in the S/4 HANA
infrastructure will improve the accuracy and speed of the process. One can also do many closing
activities such as intercompany postings and reconciliations on a daily basis and not wait for the
period end.
The success stories in terms of better planning, single source of truth reporting,
better tax and regulatory compliance and last but not the least ease & speed of closing, will create
lots of optimism and fast track the acceptance and collaboration for future steps in the journey.
One of the major operational efficiency lever is Centralized shared service across many Business
entities. This not only reduces cost of tools & technologies and resources, but also helps in
standardization and use of best practices and boosts customer satisfaction. Best candidates
are Central Accounts Payable i.e central payments and Account Receivables i.e. credit collection
and dispute management.
Usually Accounts Payable or Central payments is a good process to migrate to shared service as a
starting point before migrating Customer Credit collection & disputes. BUs are little sensitive about
their customers and think a central handling will upset their long built customer relationships.
This will require some additional non–financial data such as Banks, payment type etc. to be mapped
between Legacy ERP systems and S/4 HANA Central Finance system. The MM, SD, PP, QM transaction will happen as–is–where–is in the legacy ERP system but will stop before the line item is open for
payment or collection.
This will be a technically closed transaction in the Legacy system and will become an
open line item to be processed for payment in the CF system. The automatic payroll run will happen
in CF system and payments will be made as per the rules mentioned in the configuration.
Any vendor queries and status updates need to be done at the CF system as legacy ERP will not have
this data. By transferring some of BU AP Payment process employees to the Central payment team,
BUs can keep the continuity and manage the transition to the Central processing.
Similar efforts are needed for credit collections and disputes management. Each customer’s
sensitivities, language requirements etc. can be configured and hence will be managed by CF
system.
Various other steps such as Bank & Cash management, Group reporting, IFRS like compliance
could be added on top of this to make CF more enriched. The beauty of the CF architecture is that enterprises can implement all of these steps for only selected legacy ERP systems and need not wait for all the legacy systems to be migrated.
For e.g. out of five BUs only three are migrated and the three BUs can benefit from shared services. The fact that the other two are still in the legacy ERP does not matter for this architecture.
Here’s highlighting and summarizing the steps of moving into Central Finance Solution for enterprises:
- Ø Implement Standard S4/HANA infrastructure.
- Ø Finalize MDM and standard configurations and configure CF system.
- Ø Identify ERP systems and do data mapping, initial load and real time data transfer.
- Ø Financial reporting in CF.
- Ø Financial Planning, simulations in CF.
- Ø Closing in CF.
- Ø Shared Services in CF.
The next level of steps is use of cool digital products from SAP such as Success Factors for HR, Ariba for
Central purchasing, SAP Cloud Analytics for IOT, AI/ML which will not be discussed in detail in this white paper.
Chapter 4 : The technologies involved in implementing Central Finance solution
The basic technical components are similar to standard S/4 HANA implementation consisting of HANA database, S/4 Core ERP Finance and Risk Modules and SAP Master Data Governance (SAP MDG) and the S/4 HANA Central Finance module.
The additional key piece of technology we need is the SAP Landscape Transformation replication server. This technology is the glue between the legacy ERP systems and S/4 HANA Central Finance. This pulls in financial transactions from the source system, uses the data mapping and transforms the data and sends it to the CF systems for “re–posting”. Even for non–SAP systems this technology is required.
However, you need additional SAP data Services. SAP Application Interface Framework, part of the S/4 HANA architecture is used for day–to–day management of errors identified real time during the data replication. This provides a single error database and dashboard which can be used both by business and IT and resolve the errors and re–process the transactions.
Central Finance and basic SAP LT replication server architecture
In addition, the front end tools such as SAP GUI which is the graphical user interface client in SAP’s three tier architecture of database, application server and client to SAP FIORI which is a new user experience (UX) for SAP software and applications. It provides a set of applications that are used in regular business functions like work approvals, financial apps, calculation apps and various self–service apps.
System Deployment
Central Finance is a cloud compatible code in S/4 HANA release and hence can get best use from Cloud deployment. However, all the options such as on Premise, Private cloud or public cloud versions are available and users can select the right options for their use.
It is also recommended to use very similar deployment architecture such as Sandbox, Development, QA and Production. In each area, Legacy ERP systems, SAP replication server and Central Finance will be available.
Central Finance with Only SAP Sources
Chapter 5: Conclusion
Most large enterprises have legacy baggage of many older ERP systems with lack of Master data
governance and it is very difficult for the Group or corporate office to benchmark, review and push for performance improvements. There is no single source of truth and each business unit, many of them acquired via M&A, run their systems independently with their own inefficiencies and resist any change.
The ideal solution to the problem is large migration of all these systems in to a single ERP system which could be S/4 HANA. However, the sheer change management across Business Units and cost & time for this migration is high and hence seldom undertaken by enterprises forcing them to work on “Band–Aid” solutions.
The S/4 HANA Central Finance is a very good solution that enables a step by step approach to manage this big problem. In small steps, without making changes to many functions/people in the business units, it is possible to get to a single source of truth and get key financial reports from the single source and really understand the business dynamics to improve performance.
After demonstrating success in the initial steps, one can keep increasing the scope of CF to include many other key functions such as central closing and even shared payment or credit collection systems.
This is a very novel and bold concept from SAP and I am sure this will succeed in helping the enterprises.
Okumaya devam et...