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How to tackle Business Processes

Business processes are the core of the SAP system. It doesn’t really matter if we are talking about SAP S/4HANA, SAP ERP or SAP R/3. The rule is still applicable. Real business scenarios are being reproduced in the system and give value to the client each day, that’s the fact. That’s why understanding business processes is such a big deal. It’s especially important from the beginner perspective when you are on the learning journey and you are new to SAP world. From what I can see it’s possible to distinguish two distinctive approaches here:

1) The TCode approach – main question asked: what is the transaction code for that?

2) The Process approach – main question asked: how does this process flow?

Now you may say: ‘OK, so the first approach is bad and the second is good, right?’.
Plot twist: no, it depends on the situation and your role in the project.

What do I mean by that? Well, if you are a fresher, you should stick to the second approach and learn as many business processes as possible to develop a solid foundation. If you on the other hand, have commercial experience as a SAP consultant and you already have solid knowledge base you can sometimes expand your knowledge just by adding new TCode (functionality) to the business process that you already know. 

With all this in mind, the question arises as to how to learn business processes.

Personally, I like to use the 4I approach. It consists of four phases:

1) Identification

2) In general

3) In detail

4) Implementation

Now let’s go through the above points together.

 

1. Identification

First, we need to identify which business processes we should learn. Often it will be determined by the project and the client that you are currently working for. For example, if your client has a production activity, probably the Plan to Produce process will be crucial. If the client mainly sells, probably the Order to Cash process will be crucial, etc.  Your client may also have heavily customized processes that will use custom (Z) tools/enhancements, but that’s a different story. To be honest a lot depends on the specificity of a given business. Some times during the project you will learn business processes by working with them, that’s one of the best options. Unfortunately it’s not always possible.

In general, if you are just learning and want to build your knowledge base this SAP Learning Journey will be a good starting point. It will point you to the most common and essential processes.

Based on that we now have three main Business Processes to focus our attention on:

  • Purchase to Pay (also commonly referred to as Procure to Pay)
  • Plan to Produce
  • Order to Cash

 

2. In general

OK, now we have our three main business processes to begin with, so we should dive in in the SAP, right? No, not yet. The main problem here is that most people tend to focus too much on the Transaction Codes and SAP-side of things than the general business core of the process. How to overcome this? Start with learning about the desired process in general with no relation to SAP system. The main question that you should be asking yourself at this point is:

  • How does this process work in real life?

The best way of thinking about this is to try to remove the process from the SAP environment and analyze it from the level of neutral ground. Personally, I find YouTube helpful in this matter. Let’s take the Procure to Pay process an example for this whole blog. To get the overview you can start with watching this video. If you are more of the reader than a watcher you can check blog.procurify.com for P2P related articles.

OK, are you now Procure to Pay Specialist? Well, no, but you have broad, general understanding of the particular business process. Your knowledge is not SAP-specific, it’s business specific. It’s really useful because with this knowledge you will later be able to better adjust the system to client’s needs. Let’s apply this knowledge, shall we?

 

3. In detail

Now that we have the general understanding of the process we can finally start to learn it in detail in the SAP context. The recommended way is to use the official learning material from SAP Learning Hub. Let’s stick to the Procure to Pay as an example.

Let’s go back to the SAP Learning Journey from the point 1. Introduction.

 

We can see that the Procure to Pay process is associated with TERP40 course. Additionally there are also separate SAP courses dedicated strictly to the integration of the business processes, they are called:

  • TERP10 – SAP ERP Integration of Business Processes (link)
  • TS410 – Integrated Business Processes in SAP S/4HANA (link)

If you don’t have access to SAP Learning Hub you can search The Web for materials. There are many solid sites with comprehensive SAP related content. In terms of processes I can recommend ERProof.com, they have great article on the the Procure to Pay process.

Another important thing at this point is to look at the business process from the SAP Modules perspective. Main questions that you should ask here:

1) What is the main SAP module involved in the process?

2) What additional SAP modules are involved in the process?

3) Where are the integration points?

Let’s together analyze the P2P process in regards to these three questions:

  1. The core of the process is procurement, which in other words means ‘buying stuff’. Buying process is connected to change in stocks so in general to the Material Management. Therefore, the main module here will be the MM module.
  2. We surely must pay for the things that we bought so Financial Accounting (FI module, Accounts Payable to be more exact) will be involved somehow.
  3. The key is to try to visualize the process flow to pinpoint the integration points. In such a situation, diagrams are helpful.

Using the diagram above we can see that the we have two main integration points:

  • Goods Receipt (GR) – we got the goods from the vendor
  • Invoice Receipt (IR) – we got the invoice from the vendor

For these points, both the FI and MM documents will be generated by the SAP system.

 

4. Implementation

When we have mastered the above knowledge the best way to practice is to try to reproduce the business processes in SAP system. Practice makes perfect after all.

From the TCode perspective Procure to Pay in general flows like this:

  1. Purchase Requisition – ME51N
  2. Purchase Order – ME21N
  3. Goods Receipt – MIGO
  4. Invoice Receipt – MIRO
  5. Vendor’s open items confirmation – FBL1N
  6. Automatic payment for Vendor / Manual payment for Vendor – F110 / F-53

The key is to be aware of what business functions are hidden under each of these transaction codes. Business knowledge comes first, solution specific knowledge is the second most important. That’s the main leverage for functional consultant. Even in the case of IT consulting, the role of business is unbelievably important and there are no indications that this will change in the near future.

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  • Pawel Pawlak congratulations on producing another great piece of writing 🙂 I’m sure it’ll be quite helpful to many. For a fresher, learning the business processes is important, and for experienced professionals, learning the new technology is required to stay relevant. You’ve explained it greatly on how one could tackle any of the directions they are interested in; learning the processes or associated IT solutions.

    If I have to recommend, I always suggest Consultants to understand the business challenges first, before designing and delivering a solution. I shared my thoughts on Design Thinking at the link provided below:

    Design Thinking Workshop, Qualification, and Practice