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Finance FirstYour first step to S/4HANAFebruary 2020


S/4HANA ADOPTION TIME TO VALUEALTERNATIVES & APPROACHES

Bu

sin

ess D

isru

pti

on

& C

ost

Transformation Capability

Stay on ECC

version

(or earlier ver)

Sys Conversion

from

ECC to S/4

(Brownfield)

New S/4

implementation

(Greenfield)

Phased-approach

Finance First

Hig

her

Low

er

HigherLower


READINESS STEPS TOWARDS S/4HANA ADOPTION

Adapt to new and improved

processes, transformational

UI / FIORI User Interface

ADAPT

Opportunity to move to

standard SAP processes as

much as possible

(Clean ERP approach)

IMPROVE

Clean-up master data, transactional

data and oldprocesses in

Legacy ERP system

CLEAN-UP

Opportunity to consolidate

multiple legacy ERP systems / heterogeneous operations for

unified financial reporting structure

CONSOLIDATE

Step Step Step Step


Finance First approach is frequently used as a first step to create a low-risk mechanism for broader ERP deployments by allowing business units to transact in legacy systems uninterrupted and in parallel during the large-scale implementation

STEPPING STONE

Finance First is leveraged as the least invasive approach to bring data together in a common information model across multiple ERPs (SAP or non-SAP) / heterogeneous operations, which enables the business to plan and have visibility to transaction data otherwise masked in aggregated summary data tables

ERP AND DATA BRIDGE

Finance First enables centralized service delivery models to report, model, and analyze data within a single system and across a common information model further driving value from the shared service center

CENTRALIZED SERVICES

Finance First acts as an integration hub to accelerate an integration or separation of acquisitions and divestitures by allowing companies to continue to transact in legacy systems and simply required master data mapping

M&A ACCELERATION

FINANCE TRANFORMATION ENABLEMENTFINANCE FIRST AS AN ORGANIZATIONAL TANSFORMATIONAL BRIDGE


THE VALUE FOR FINANCE FIRST APPROACHIMPLEMENTING FINANCE FIRST BRINGS TOGETHER BENEFITS OF A CENTRAL PLATFORM, NEW CAPABILITIES OF SAP S/4HANA AND SELECTIVE OPPORTUNITIES FOR FINANCE TRANSFORMATION

1

2

3

CENTRALIZED PLATFORM

Enterprise-wide reporting

Harmonized data

Cross-company cash application

Enterprise allocations

SAP S/4HANA

Real-time analytics for better decision support

Single source of the truth with Universal Journal

Improved user experience for greater productivity

SELECTIVE ORGANIZATION TRANSFORMATION

Select process improvements

Rationalization of S/4HANA adoption scope and velocity


FINANCE FIRST WHAT? WHEN? HOW?

FINANCE

FIRST

What is it?

A deployment option for S/4HANA adoption

Separate product with dedicated license

What it does?

Replication of Financial transactions from source systems

Provides common reporting structure

When it is suitable?

Heterogeneous system landscapes

Consolidated reporting requirements

How it works?

It connects with source systems via SLT/ETL Tool

With Mapping source data transformed to harmonized data structure

Requires separate product with dedicated license (Central Finance)

Replication of financial transactions from source systems

Provides a common financial reporting structure and analytics

Phased-move to S/4HANA approach (sidecar non-disruptive)

Consolidated / homogeneous financial reporting requirements

It connects with source systems via SLT/ETL tools

Mapping source data transformed to harmonized data structures


FINANCE FIRSTA STEPPING STONE TO S/4HANA

BACKGROUND Finance First as stepping stone to S/4 is a valuable

alternative to a straight-forward system upgrade or new greenfield migration/implementation

Most applicable to SAP customers with: A very large system A mission-critical system Heavy customization / enhancements (brown-

field) system System configuration based on old business model

(opportunity to renew business model)

KEY MOTIVATION Get experience, insight into S/4 before migration Reduce ‘uncertainty’ by learning about inner workings of

S/4 with a controlled adoption Optimize migration (set up, data rationalization)

beforehand Move selected migration steps up, make final piece

smaller (risk mitigation)

BUSINESS CASE A decision for or against Finance First as stepping stone is

all about how much the risk reduction, increased comfort and a simpler roll-out, over time, is worth to a client

Various reasons drive such a decision and are really industry, customer and company culture specific

BENEFIT Establish and leverage general foundation (HANA,

reporting), cross-functional (Fiori), core finance-related (business networks, HCP) innovations to the advantage of the organization – right away, in a controlled manner, spot-based

COST The implementation cost for both, the initial roll-out of

Finance First as well as the subsequent roll-out to a complete S/4HANA system (finance + logistics) later on is additive; large portions of Finance First can be applied or re-used however


FINANCE FIRST CAPABILITIES OVERVIEWFINANCE FIRST RUNS ON S/4HANA PLATFORM AND CAN RECEIVE REAL-TIME FINANCIAL TRANSACTIONS FROM MULTIPLES SOURCES FOR CENTRAL FINANCIAL REPORTING OR CENTRAL FINANCIAL PROCESSING

Real-time self service

reporting & analysis

Significantly enhanced

user experience

Enterprise-wide single

source of truth with

detailed posting info

Enterprise and business simulation

and scenario planning

Enhanced enterprise

analytics

Integrated business

planning for finance

Central business

partner management

Central cash

management

FINANCE FIRST KEY BUSINESS ENABLEMENTS

Real-time dashboards

with standardized

metrics

Automated central

controls & monitoring

FINANCIAL SHARED SERVICES

Finance First powered by SAP Central Finance

Source SAP ERP

Source non-SAP

ERP

Hetero-genreous

Companies

Accounting

FP&A CONTROLLERSHIP

Reporting & Analytics

Accounts Payable

Planning & Consolidations

Receivables Management

Cash Management

Asset Accounting

Profitability Accounting

Intercompany Reconciliation


FINANCE FIRST USE CASES

COMPANIES WITH MULTIPLE ERP PLATFORMS / HETEROGENEOUS OPERATIONS IN A SINGLE ERP

COMPANIES WITH FREQUENT M&A / DIVERSTITURES

COMPANIES ON THE JOURNEY TO A NEW S/4HANA PLATFORM

Data harmonization, real-time financial reporting

One enterprise-wide platform for finance transactional processing

Rapid financial integration of acquired or carved-out companies

Low risk, controlled entry into SAP S/4HANA with finance as the first phase of roadmap to implement all company’s functions later on (side care non-disruptive adoption)

CAPABILITY CAPABILITY CAPABILITY


FINANCE FIRST DEPLOYMENTTHE JOURNEY FROM FINANCE FIRST TO ALL FUNCTIONALITY ON S/4HANA

Finance First can complement a long-term ERP roadmap to consolidate into one or fewer instances:

Achieves rapid value with Finance, with minimal disruption to operations (which can continue in legacy ERP) Provides flexibility to bring additional business functions / processes into the central platform over time Over long term, remaining ERP functions can be deployed onto the central platform to retire legacy ERP systems Reduces change management impact and technology risk over full ERP deployment

FINANCE FIRST

ERP1

CoA & Financial Reporting

ERP2

HOp* ….

Financial Processing

ALL FINANCE

Finance

Procurement

Supply Chain

SUPPLY CHAIN

Finance

Procurement

Supply Chain

All other functionalities

OTHER FUNCTIONALITIES

ERP1

S/4 HANA S/4 HANA S/4 HANA S/4 HANA

0201 03 04

ERP1

HOp*ERP1

ERP1

ERP2

HOp* ….ERP1

HOp* ….ERP1

*HOp = Heterogeneous Operations


FINANCE FIRST VALUE PILLARS

ADVANCED REPORTING AT

SEGMENT, ENTITY AND GROUP LEVEL

Business model-agnostic roll-up reporting

and growth (re-org / M&A) extrapolations

Embedded planning and real-time

consolidation in S/4HANA system

User front-end agnostic / self-service

real-time reporting

SCALABLE EXECUTION OF LOCAL AND

CENTRAL FINANCIAL PROCESSES

Alternative / complement to process

execution in source ERP systems

Process centralization (cross-organization,

shared service); economies of scale

Cycle-time reducing Fiori-based and

HANA-optimized process execution

TRANSFORMATION PLATFORM

FOR THE DIGITAL BUSINESS

Advanced digital finance data architecture

(universal journal)

Same (single) platform / single source of

truth for transactions and analytics

Digital core cloud connectors (workforce,

network, customer, IoT), HCP ready


TOP BENEFITS OF FINANCE FIRST

1 TRANSPARENCY

Increased transparency with a single, central source of truth of

harmonized financial data for local, entity and group reporting

5 FLEXIBILIYQuickly adapt to changing business environments and implement

your own growth activities & business model changes

2 EFFICIENCY

Improved process efficiency by integration, standardization, and

automation of business processes

6 SERVICE LEVEL

Improved service level provided to stakeholders; service quality,

accuracy, speed and timeliness, optimally in self-service scenarios

3 COST REDUCTION

Reduced maintenance of multiple systems, applications and

interfaces, centralization and economies of scale (shared

services) to process execution

7 WORKING CAPITAL IMPROVEMENT

Simplified cash, collections and receivables management, and

improved working capital

4 SIMPLIFICATION

Simple one rationalized and consolidated solution for transaction

recording, reporting, planning and consolidation

8 BUSINESS CONTINUITYConnected SAP and non-SAP ERP landscape without disruption to

S/4HANA to run as a digital business, capture market and

transformation potential via cloud and other innovations


FINANCE FIRST IMPLEMENTATION APPROACHTYPICAL PROJECT PHASES

Complete Pre-Assembly

Org Structure

Finance First Build

Conversion &

Integration testing

Production Readiness

Cutover

Support after Go-

Live

Manage Operations

Control Center

Perform Application

Lifecycle Management

Perform Value

ManagementEstablish Design

Workshop schedule

Gather existing Design

Documents

Secure Dev Environment

Operate & Provide Ongoing Support

• Common Information Model• Universal Journal• Parallel Ledgers• Document Splitting• Tax Integration• Master Data Conversion• Error Handling and AIF• Reconciliation Strategy• Statutory Reporting

S/4HANA Configuration

• Configure New GL with Parallel Ledgers, Document Splitting

• Configure financial processes• MDG Configuration

Master Data

Chart of Accounts

User

Acceptance testing

Secure Sandbox/Demo

Environment

Design Workshops and

Signoff

Develop FDS and TDS for all FRICEW objects

Software and Hardware InstallPrepare for

Cutover Dry Run

Prepare for Final Cutover

Cutover

Prod ReadyQA &TRN readyDev readyProject (Sandbox) System ready

Build Finance

First

Blueprint Signoff

Build Activities

Master Data Conversion

• Financial Master Data• Customers & Vendors• MDG provisioning to S/4

RICEFW Developments

• Enhancements• Reporting• FIORI development

Error Handing and Reconciliation

• Application Integration Framework (AIF)

• Reconciliation Reports

Integration Conversion

Dry Run

Training Content

Development

Prepare for Final

Cutover

UAT Conversion

Dry Rum

Leaders

hip

, Busin

ess,

Pro

ject

Org

and I

nfr

a A

lignm

ent

Blueprint Realize (Build and Test) Final PrepPrepare Hypercare


FINANCE FIRST: KEY TAKEAWAYS

S/4 adoption in a phased-approachFinance First support S/4HANA adoption in a phased-approach when companies cannot or do not want to adopt S/4HANA on a big-bang style.

0201 Centralized platform with selective finance

transformationThe value of Finance First includes the value opportunities of a centralized platform, SAP S/4HANA capabilities, and selective finance transformation

05

0306

07

Stepping stone towards full S/4 adoptionFinance First supports companies with multiple financial platforms or heterogeneous financial companies or environments as well as companies with frequent acquisitions that can serve as a stepping stone towards full S/4HANA adoption

Deployed iteratively Finance First can be deployed iteratively for continuous delivery of value, starting with central reporting capabilities

Central reporting, planning & orchestrationFinance First can be deployed for central reporting & planning, central process orchestration, or central transactional processing for Finance (All Finance)

Centralization of other non-Finance applications Centralization of other non-Finance applications can increase the integration and value of Finance First and simplify the IT footprint

Current-state challenges and value opportunitiesGathering current-state challenges from stakeholders helps to inform where value opportunities may exist and increases buy-in on the business case04


QUESTIONS?CONTACT US!

Pablo Pereyra PortugalSocio Enterprise Technology & Performance

[email protected]

mailto:[email protected]

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SAP Offering organizational structure is focused on growth...Most applicable to SAP customers with:...

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