SAP Central Finance & organizational Data Strategy
In this blog I will explain what the Data Strategy is all about (my personal views) and how it should be linked up to the transformation projects focused on SAP S/4HANA Central Finance, of course each organization may run their own strategy and projects but goo to have a view from experience and use case perspective.
I will not explain what Central Finance is, so it is important that you read the below blogs if you really like to get value out of reading current blog.
- Introduction to Central Finance – CLICK HERE
- How Central Finance is different from ERP projects – CLICK HERE
Now let us try to summarize Data and Data Strategy.
What is Data? All what we do today and what we read, surf, explore, analyse is data. Any Facebook post is data and any tweet is data at the same time any transaction is business is also data. It may be stored on premise or on cloud (separate reading) but it needs to be stored.
Organizations have huge data in forms of records, images, documents and videos that are stored in different systems and servers and are keep on adding up at ever-increasing speed. In this age, most of the organizations are running a transformation or ways of working to clean the past, to stay clean in future, and to unify the data so that value can be generated out of that data. This needs a sustainable, flexible and measurable strategy, which is the key focus for the CTOs, CDOs (Chief Data Officer in many organization), Digital Transformation directors etc.
Based on my opinion – Data Strategy is a journey to get competitive advantage by utilizing the data available within & outside the organization and simplifying the future by adopting the digital path. It also helps customers, employees and partners in demystifying the value to the organization
This I will cover in detail in separate blog focused on Data based transformation. If we see today in the organizations who are planning their digital journey, they have challenges namely:
- Several ERP Systems
- Master Data Systems
- Data Harmonization
- Single source of truth for master data
- Make Clean
- Stay Clean
- Change Management efforts
For now, we will only focus on Master Data and Transactions data as we are focused on SAP Central Finance Deployment. We always have a confusion among:
- How should my Central Finance journey start?
- How should my data organization look like?
- Is Data a challenge or I should focus on technical aspects?
From Central Finance Standpoint, Data Strategy is very important. Central Finance is all about movement of data harmonize it and use it for transactions, reporting, simplification, getting value out of that data. I will simplify this blog by organizing it in TWO phases:
Data Management: – In data management, we can scope below:
- Data Cleansing – It is rather linked to data harmonization as well. For Example there are two similar payment terms in system Z001 – 30 days net and Z099 – 30 days net. Why? It’s just due to some historic reason or may be mistake but it is good to clean the system with all such junk data as the objects will need mapping when you implement Central Finance. Data should be harmonized and one design should be implemented which can be taken to the whole organization and should give value out of it in terms of usage and reporting.
- Data Clearing – Organization often have lot of open items in the system, which are effectively cleared from business perspective but not cleared from system perspective. Example – Invoice of $100 and Payment of $100 is booked but that invoice is not cleared against that payment. If we do not clear it, we have the liability to load both these lines from source system to SAP Central Finance system but if we do good job in clearing all such open items we can really reduce the load and errors and which can be turned to time & money. I have seen organizations have millions of mile items open without any reason
- Data Migration – Before we do the load (initial load – CLICK HERE) of transaction data we have to create or migrate the master data in SAP S/4HANA system. It can be automated, manual or blend but data has to be loaded and mappings needs to be maintained in Central Finance system so that the transaction data is ready to be posted.
- Data Replication – This is the ongoing process as the new master data is created it needs also to be created in Central Finance system but we will discuss it more in data governance section.
Data Governance: – In data governance, we have to first classify or decide what kind of governance is organization is prepared for
Let’s compare the both aspects with regards to the points mentioned in Data Governance
It is purely an organizational decision to opt for the governance model however it is recommended to use Centralized one. Organization may have their own challenges but most of them can be managed with centralized. Lets see the answer to the challenges which we discussed in first part of blog, how can those be addressed:
ALERT – Traditional mind set of data migration or migrations within the organization must not influence this approach or decision. Decision should always be forward looking in terms of future, usage of data, value out of data, and simplification of data processes. This is not traditional ERP implementation where data migration as an easy approach can be carried for long term.
All these aspects needs to be considered before any SAP Central Finance implementation. As I mentioned in my other blog, Central Finance is a very different ballgame in terms of projects and transformation journey and it has to be treated in a similar way. Central Finance implementation starts with Data, moves with data and ends with processes which is blended with data so data strategy is of utmost importance and should not be underestimated.
Note – All ideas & recommendations are based on personal experience of author.