Explaining the Central Finance Implementation Strategy

Objectives

After completing this lesson, you will be able to:

  • Memorize project implementation phases in relation to Central Finance Activate roadmap 
  • Define the strategy and vision for Central Finance implementation roadmap

Linking activate phases to project road map

The SAP Activate methodology is SAP’s recommended approach for implementing and upgrading all SAP solutions. It provides a framework, tools, and best practices to simplify the implementation process and ensure successful deployments. For Central Finance, SAP Activate methodology offers a structured approach catering to the specific requirements of implementing SAP Central Finance.

Project lifecycle with SAP Activate methodology

The image depicts a typical project lifecycle with SAP Activate methodology, represented as a linear flow diagram. The lifecycle starts with the Prepare phase, which involves conducting an Experience Trial System. Next is the Explore phase, where prototype-based Fit-to-Standard workshops are held. The Realize phase follows, focusing on configuring and testing the system, as well as migrating, integrating, extending and testing it further. The Deploy phase comes next, involving onboarding users and deploying the system. Finally, the Run phase consists of operating, monitoring and supporting the deployed system. This diagram provides a high-level overview of the key stages and activities involved in executing a project from start to finish.

The SAP Activate methodology divides the implementation project of SAP solutions into 6 different phases and each phase has specific deliverables and activities. In this context, the SAP road map viewer is a one stop shop that contains end to end visibility of the information needed prior to starting your Central Finance Project implementation, step by step guidance on project tasks, project plan templates, guides to setup the systems, lessons from recent Projects, most important notes, Product roadmap details and various Accelerators & SAP service offerings provided by SAP Services and Support.

SAP S/4HANA Central Finance Road Map using Activate Methodology:

The image outlines a process flow for discovering the value of S/4HANA and S/4HANA for central finance. The process begins with the Discover phase, then proceeds through Prepare, Explore, Realize, Deploy, and Run phases. Each phase includes specific activities. In the Prepare phase, use case definition, prioritization and team enablement occur. The Explore phase involves solution scope definition, workshops and strategy. Realization entails configuration, test preparation & execution, and integration validation. Deployment focuses on the production cutover. Finally, the Run phase consists of operating the solution and continuously improving and innovating on it. This structured approach aims to methodically uncover and deliver the value of these SAP solutions.

Each phase has specific objectives and deliverables or activities as can be seen in the above diagram.

  1. Discover

    Understanding the benefits of SAP S/4HANA and SAP S/4HANA for central finance is the main goal of the Discover phase. The recommendations made during the validation and scoping workshop are used as an input to the next stage, which involves defining the Central Finance strategy, vision, IT and business objectives, and use cases.

  2. Prepare

    In the Prepare phase, use cases are defined and prioritized in addition to the general strategy and vision for Central Finance being formed. Furthermore, this is the perfect moment to start providing the project team with the tools they need to make sure the Explore phase workshops are as effective as possible.

  3. Explore

    There are three main components to the Explore phase: strategy, workshops, and scope specification. Data profiling for SAP and non-SAP systems is necessary for scope definition in order to determine the master data objects that fall inside the scope. The workshops address a broad range of subjects, including user experience, SAP Landscape Transformation Replication Server configuration, master data, and enterprise structure. Ultimately, the Prepare phase plan is honed and expanded into subjects like Master Data and Test strategy.

  4. Realize

    In the realize phase, configuration is done with various testing cycles (unit, integration, and user acceptance). Troubleshooting guides should be initiated at this stage and carried forward into the deploy and run stages.

  5. Deploy & Run

    Finally, production cutover occurs in the Deploy phase followed by steady state operations in the Run phase.

This road map will be updated with each release of SAP S/4HANA for central finance along with the continual creation of accelerators.

Detail out implementation road map by central reporting, central processes, Group Reporting, etc.

Implementing Central Finance with a Linear Transformation Road Map offers a strategic, phased approach that ensures informed decision-making throughout your organization's finance transformation. This method provides a clear, step-by-step progression, focusing on harmonizing your financial systems efficiently and effectively.

As illustrated in the below diagram, each phase contributes to building a comprehensive and cohesive financial framework.

The image presents a multi-year roadmap for implementing central finance and reporting capabilities. Year 1 focuses on establishing the finance foundation and central reporting through initiatives like data harmonization, designing FI/CO principles, preparing source systems, and building out reporting, accounting, and analytics functionalities. Year 2 builds upon this foundation by rolling out additional systems, performing mergers & acquisitions (M&A), implementing group reporting & ICMR, advanced financial closing, and preparing for centralized processes. Year 3 shifts to centralizing key processes such as payments, cash application, shared services, receivables management, asset accounting, and establishing process interfaces. Year 4 and beyond involve further enhancements like central lease accounting (IFRS16/IFRS16), logistic processes, and the gradual decommissioning of company codes as the organization continues its finance transformation journey.

Note

The timeline provided above serves as a sample and is intended to offer a general overview of the project phases. It's important to note that the actual duration of each phase may vary depending on the number of systems involved, the complexity of the functionalities being implemented, and other project-specific factors.

Each phase is characterized by specific objectives and actions intended to progressively enhance the accuracy, consistency, and efficiency of financial reporting and operations, e.g.,

Phase 0 Preparation:

The journey begins by setting a strong foundation with:

  • A Master Data Strategy and Data Harmonization Concept to unify financial terminologies and configurations.
  • The design of High-Level FI/CO Principles, addressing essential financial operations including document splitting and CO-PA transformation.
  • Source System preparation and patching, alongside defining a Target Landscape that aligns with future financial objectives.

Phase 1 Finance Foundation and Central Reporting:

Building on the initial setup, this phase concentrates on:

  • Establishing Master Data (SAP Master Data Governance, Financials) to ensure accuracy and consistency.
  • Integrating initial set of systems, SAP and/or non-SAP, into the Central Finance landscape.
  • Setting up Financial Reporting frameworks and utilizing SAP Analytics Cloud for depth in financial analysis and insights.
  • Implementing foundational systems such as Bank Account Management Lite, along with frameworks for Management Reporting and Margin Analysis (CO-PA).

Phase 2 Central Reporting:

This phase expands reporting capabilities with:

  • Integration of additional Company Codes and remaining Source Systems ensuring a comprehensive financial overview.
  • Enhanced Group Reporting and Intercompany Matching & Reconciliation (ICMR) for effective financial consolidation.
  • Incorporating strategies for Mergers and Acquisitions (M&A) and preparing for centralized financial processes.

Phase 3 Central Processes:

The road map culminates in centralizing key financial processes to streamline operations:

  • Central Payments.
  • Establishing a Shared Services Framework to achieve efficiency across financial operations.

Advantages of the Linear Approach:

Structured Progression: Allows for a step-by-step advancement through critical milestones, facilitating a smoother transformation journey.

Strategic Clarity: Each phase is designed to build upon the previous, ensuring that the transformation closely aligns with strategic goals.

Operational Improvements: Centralizing key financial processes in later stages leads to enhanced operational efficiency and financial control.

Product Roadmap

The SAP Road Map Explorer is an interactive tool that supports a customer's journey to SAP's future product portfolio and the Intelligent Enterprise. The product roadmap for SAP S/4HANA for Central Finance involves ongoing enhancements and future updates to align with SAP's broader strategy for its Intelligent Enterprise suite of solutions.

The roadmap explorer showcases recent and future innovations (or product features). Customers can also have a more holistic view of each innovation, making it easier to come to informed decisions. Planned Innovations have an overview and benefits section, while delivered innovations have additional information such as specific features and a technical view section. Stakeholders from Business to IT teams can all be part of the conversation.

Screenshot of the interface for the Road Map Explorer.

Learn more about the Roadmap Explorer here: Central Finance Roadmap Explorer

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