(Note: This blog post focuses on Best Practices for SAP S/4HANA Cloud and not SAP S/4HANA on premise)
The words ‘Best Practices’ and SAP are almost synonymous – if you’re discussing SAP you’re pretty much guaranteed to talk about Best Practices as well. Given this, you might be initially shy (as I was) to ask for a clear explanation of what is meant by a Best Practice. Maybe you might give it a try right now and give the answer out loud to the question: What is a Best Practice? This blog post tries to answer that question.
After asking more than a few times – I got an answer that finally clicked for me:
When SAP mentions a ‘Best Practice’ it’s talking about the best way to execute a process in the SAP system.
That’s it. You can stop reading now if that clarifies it for you, or you can keep going for examples on what a Best Practice is not, and the difference between Best Practices and Best Practice Content.
So for example, we have a ‘best practice’ in the Order to Cash area for when a customer is using SAP S/4HANA Cloud to sell an inventory managed item. So the best practice for Sale of Stock is the ‘best’ way to carry out this process in SAP S/4HANA Cloud so that the process:
- Meets legal requirements
- Can be reviewed/controlled (e.g. monitored start to finish)
- Makes the correct financial account postings (if relevant),
- Can be reported on (by standard SAP reports – also sometimes industry/government compliance reporting standards)
- Integrates properly to other system applications (e.g. the Invoice generation logic and layout)
- Successfully works with other dependent business processes (e.g. financial reporting, Material Requirements Planning in production etc.)
The ‘best practice’ for a business process is one that meets the above objectives.
The SAP Best Practice does not try to tell you whether in the physical world, the best way to sell stock (inventory managed) items is in a single store, a chain of stores, at a lemonade stand, or via digital web portal fulfilled by Amazon etc. That’s the business side of things that the customer is the expert on. (Note though that your consultant should have an opinion though on how you map the physical world entities and processes to the system entities/processes).
So – knowing that there’s an acknowledged best way to carry out this process in your SAP S/4HANA Cloud system – how do you find out what that is? Well that’s where you begin using the Best Practices Content. The Best Practice content provides baseline examples of how the key objectives highlighted earlier can be met in a typical business based on SAP’s (extensive) experience of customers using our software to fulfil their business needs. Of course individual, industry and local nuances need to be considered as a part of your implementation, but we provide a wealth of documentation and tools based on that baseline best practice to accelerate your implementation – and for SAP S/4HANA Cloud this can all be found in the SAP Best Practices Explorer.
The Best Practices Explorer identifies processes with a concept called ‘Scope Items’. The scope item normally represents a full business process e.g. BD9 – Sell From Stock – Selling inventory managed items to an external customer, J45 – Procurement of Direct Materials – Where you might be purchasing those items that you’ll be selling on from some other suppliers, and J59 – Accounts Receivable – Where you can post into the system incoming payments from customers for the items that you sold earlier with BD9.
So for each scope item, various types of Best Practice Content is available. For example, within the BD9 – Sale of Stock scope item, you have:
- Test Script – A full example of how you execute this process in your SAP S/4HANA Cloud system. It uses master data (customers, materials etc) that is set up and provided to you in your Starter System or Trial System. It includes information on what needs to have been done before you can execute this process (You may need to procure stock, provide your system user with appropriate security access for example), what processes follow this one etc. This information is detailed enough that you can actually follow along in the system and see an example of the best way to execute this process in your SAP system. The Test Script is Best Practice content that will outline steps that conform to the SAP Best Practice – and deliver you the benefits discussed earlier.
- Process Flow – This is a flowchart / overview that provides higher level information on the Test Script discussed before. It enables you to see at a glance the major steps that are executed by which business role in order for the process to be completed. Note that the difference between the ‘Process Flow’ and the ‘Process flow (BPMN2)’ links is that you can download the BPMN2 file to edit it as required for your specific business scenario e.g. removing optional steps that you have opted not to use. Also note that the process flow (and Test Script) often includes optional steps and follow on-subsequent processes: Only use these if applicable for your business. Including these where appropriate, and excluding them where inapplicable, keeps you aligned to the Best Practice.
- Task Tutorials – This is one of my favourite bits of Best Practices Content. This is a recording of someone carrying out various steps that were detailed in the Test Script so that if you just need a quick review of what this flow looks like in the system – you can open this content and get a walkthrough of the full process within a couple of minutes. It’s also great for practice as you can interact with the recording to select the appropriate fields etc. and actually get the feel for the steps included in the Best Practice. Task Tutorials are not available for all scope items but more are being added quarterly.
- Set Up Instructions – For some scope items there’s a separate document leading you through relevant additional set up steps such as communication arrangements etc. that must be completed for you to be able to execute the Test Script.
As further backing to the claim that Best Practices help you fulfil legal requirements, you can take a quick look at the difference in the end of the business process flow for the Sale from Stock Process Flow in the US and Spain.
In Spain, there is an additional step for ‘EDocument Cockpit’ to fulfil the legal requirement of transmitting the electronic billing document to the government for approval. Differences in processes like this are taken into account in the Best Practice Content, and is the reason why it is different for various localizations. (Disclaimer: SAP does not provide legal advice. The localization team for each country works to ensure the SAP solution enables the customer to be legally compliant, but this compliance remains customer responsibility).
So, there are Best Practices for scope items of business processes. There are also scope items for Master Data. Similar to the test scripts for business processes, these illustrate the steps and applications involved in creating each type of master data. Again, these scripts are best practice content, but the steps they show the recommended way to carry out those actions (e.g. creating a Trading Good material, or creating a customer) in the SAP system.
Best Practice Approach
To take an example of Business Partners – an SAP customer may have a single Business Partner (legal entity) that buys goods or services from them (and so is a Customer) and also sells goods to them (and so is a Vendor). This Business Partner trades with their USA operation, and with their German operation – sometimes with different contract elements such as payment terms etc. Generally the Best Practice approach to setting up this business partner is to use a single Business Partner in your system – with one system Business Partner ID – and then you can differentiate the varying partner information by using different ‘Sales Areas’ that are attached to that partner. There may be very particular circumstances that require multiple business partners with different IDs to be created in your SAP system, but the vast majority of the time – doing so would constitute ‘breaking’ a best practice. This sort of best practice information is not a part of SAP Activate, and will typically come from education courses such as SAP Certification for the relevant line of business, blog articles, white papers and the like.
Of course there are other subtleties to what constitutes a ‘Best Practice’. However for S/4HANA Cloud, if you 1) Follow the guidance from the Best Practices Content (e.g. Test Scripts, Process Flow) and 2) Combine this with an understanding of the best practice approach which comes from the experience, training and certification of your Key Users or Consultants – then you should be on the right track.