It’s been widely acknowledged that the core Accounts Receivables module part of SAP ERP is not best of breed. I remember fondly a SAP trainer informing me that in line with the German way, customers always paid on time. Trains, for example, are always on time in Germany, life is generally efficient and therefore the Credit Customers payment cycle is one without fault! Credit Collection Managers expect a diary function to record notes and actions, document customer disputes and track the productivity of their team. Sadly, some of the core business requirements have been missing in core SAP Accounts Receivable.
When addressing this shortcoming, SAP clients were presented two options:
1) Go out into the market and purchase a 3rd party solution to facilitate the process
2) Develop a solution inside SAP
Both are costly, both increase IT support and both have implications when SAP needs to be upgraded. With 3rd party systems there will be additional licence costs and system training requirements. The advantage of a bespoke solution in SAP is that it is usually designed to meet specific business requirements and solutions however, as some of the basic functionality is missing as standard, the volume of bespoking will be very high.
SAP FSCM was released to the market when ERP6 was released back in 2006. The product addressed most of the fundamental issues within the core Accounts Receivables module. For new clients moving into the SAP space, purchasing SAP FSCM would remove the need to bespoke a solution or purchase 3rd party solutions. However, for existing customers to benefit from the solution they would need to upgrade to ERP6. Whilst ERP6 is now the most popular version of SAP ERP, most clients implemented it as part of a technical upgrade not realising the breadth of functionality available.
Mature SAP ERP clients who addressed the shortfall in the standard Accounts Receivable now face a conundrum when they move to ERP6. Should they stick to their existing processes or should they move to SAP FSCM? To put it another way, what has SAP done to help force this decision in their favour and what more could they do?
OK this should be the main selling point. Within the recent Enhancement Packages, SAP has slowly improved the functionality within the SAP FSCM modules. The basic requirements of a Credit Collection team have all been met and now some of the ‘nice to have’ functionality has been released via the latest Enhancement Packages.
This is what SAP does best. SAP FSCM integrates with SAP Accounts Receivable. Collections Management within SAP FSCM takes a feed from SAP Accounts Receivable, and the Dispute Management module is real time to both Collections Management and SAP Accounts Receivable. Both of these points will ensure that SAP FSCM provides benefits against 3rd party systems. Real time single system processing is much better than dual system interfaced data.
The core data being used in SAP FSCM comes directly from SAP Accounts Receivable or Sales and Distribution data (or SAP CRM). This provides a single version of the truth and removes the need to map data. Further to this when looking at SAP FSCM Credit Management, it can use internal SAP data and external data (from 3rd party credit houses) to provide more accurate credit information. This provides the best of both worlds providing you the ability to enhance how this is used.
It is clear from the current take up of SAP FSCM that some of these message points have not been cascaded down to the decision makes within existing clients. Further to this SAP should not rest on their laurels. Strong and consistent messaging needs to be played to SAP’s ERP client base. The use of the business function prediction tool is a good example. However central to their approach should be to enhance the SAP FSC M product suite further.
My message to SAP
My message to SAP is clear; to attract customers who are using 3rd party systems or bespoke systems within SAP you need to up your game. You need to focus on trying to attract these customers, as by purchasing 3rd party systems these customers have sent a message that the core SAP Accounts Receivable processes did not meet their business requirements. These customers are also saying that they have business issues within this core process and are willing to invest time and money to provide a robust and business changing process. The way to approach this is to provide new functionality that meets clients’ actual requirements, and ideally functionality that is not available within 3rd party solutions. Further to this, within the new functionality focus on areas of integration that cannot be easily achieved by 3rd party systems. If you can capture as many steps in the Accounts Receivable process into SAP FSCM the business requirement to run this in two systems is then seen as a risk and clients will start to question their system solution for this core business process.