Simple Finance – An Evolving product
With all the hype around Simple Finance , many companies are curious about what this product has to offer . They would like to evaluate the pros and cons of moving to Simple Finance and more so from a timing perspective. Is it worth a wait to watch and see until SAP comes up with other products in this suite like Simple Logistics , Simple Front office etc. How to justify the return on investment , what would be the additional challenges , are there any product constraints that will be resolved as part of future builds , so on and so forth.
In a rapidly changing world that is embracing newer Technologies, staying relevant both in terms of System Hardware and System Software has been recognized as the best strategy to approach this problem. Assuming on similar lines that adopting Simple Finance today as the recommended approach, we should consider the following points like – where is my company in the SAP product adoption cycle and how soon do they want to move to Simple Finance ?
The approach differs if the company is on classic G/L and utilizing R/3 capabilities or if the company has made significant investment in migrating to New G/L and more so have adopted HANA. Which Enhancement Pack does the client run their SAP on today ? Such questions must be answered before strategizing the roadmap to Simple Finance.
Everyone agrees to the idea that a Greenfield implementation of Simple Finance is the easiest strategy as we do not carry any historical baggage but to the contrary SAP has done a good job of providing migration tools to minimize efforts and complete the job in a short duration.
Some of the pre-requisites to move to Simple Finance is that SAP system should be upgraded to ECC 6.0 EHP7 . Simple Finance is very similar to New G/L in SAP ERP and leverages on its existing data structures. But it is optimized for SAP HANA i.e. no totals tables, convergence with CO and better reporting . If you are someone moving from classic GL to Simple Finance , following scenario’s would not be supported as of today:
1.Implementation of Document Splitting
2. Migration from SPL to New G/L
3. Generate Balance Sheets at Profit Center level
4. New Implementation of Parallel Accounting & Segment Reporting
5. Implementation of ledger approach for Parallel Accounting
6.Change in Chart of Accounts and conversion of chart of Accounts
7.Inclusion of customer fields
8. Transfer Quantities to New G/L Accounting
As most of the functions listed above were not part of classic G/L , if company wants to implement these they should go through a steady effort of migrating to New G/L and then upgrading to Simple Finance. SAP recommends this approach and also provides tools like the migration cockpit etc. to assist with the conversion.
Some of the main functions that would be impacted by the migration to Simple Finance from Classic G/L are :
1. Foreign Currency Revaluation –
2.Reconciliation between CO and FI is no longer needed
3.No longer a separate COS ledger
4.No consolidation staging ledger would be needed as part of preparations.
One needs to understand that in the evolution of SAP Product life cycle there are differences between classic G/L and New G/L . So do we have differences between New G/L and Simple Finance. There by Simple Finance product adoption strategy should include enough time for testing processes, ensure user authorizations are thoroughly considered. Also the volume of data , Quality of data , implementation team experience and exposure to navigate through the issues should be considered before formulating a detailed timeline. A good way to understand issues that can be encountered would be to do a Proof of Concept. This allows you to get a first hand detailed issue log that is relevant to your data.