For many existing SAP customers, deciding whether to implement SAP HANA Central Finance could be the most important technology investment decision. But, how one should decide which is the best suitable option available.? Lets' explore and understand the best migration practices which are recommend by SAP.
Why SAP Central Finance ?
As we get close to year 2027, most of the businesses are migrating towards the SAP S/4 HANA, as existing SAP user's wants to take an advantage of new features which comes with SAP S/4 HANA Finance. For customers, who seek to evade long and expensive migration projects or any customers that they need to maintain their legacy system's ., for them, the best available option is to go with SAP Central Finance.
By implementing SAP Central Finance, organization can continue their existing ERP environment, without dispensing the current ERP system landscapes., CFin is a seamless deployment model that allows customers to move to SAP S/4HANA Finance by bringing together the required Finance information from different multiple systems, whether they are in SAP or non-SAP.
Central Finance is a more easily deployed central system for finance, enabling consolidated transaction execution, business planning, group consolidation, and reporting and analytics, all out of a single system.
Central Finance Key benefits : -
- A central finance posting looks the same as an SAP ECC financial posting but it can drill down back to the source system via SLT to the document number of the source document and logical system.
- HANA Central Finance consists of one document for real-time processing and analytics and combines FI & CO together.
- Central Finance is a way to implement S/4HANA Finance without changing the existing source SAP ERP or Non SAP systems.
- In HANA Central Finance, the accounting interfaces are directly replicated to the Universal Journal which minimize the need for AP/AR/AA reconciliation during Month end process, integration, batch processing and data replication real time.
Migration strategy
1.SAP S/4HANA Migration Strategy – Greenfield.
- Choosing a new Implementation (Greenfield) typically wants to eliminate the Z-programs, shed the unproductive practices, and drive more standardization around the best practices. Organizations that implemented SAP when they had simpler business models, different participants, and a less demanding customer base find this approach allows for re-modelling the business process to support the productivity and growth. It also lets them start a new and keep their ERP system intact.
2. SAP S/4HANA Adoption – Brownfield.
- With all the limitations of the Greenfield approach, there is another approach to migrate, (brownfield implementation). The SAP’s recommendation for existing customers, who are operating on SAP old systems and want to migrate to SAP HANA, but keep their process in the current system. With the system conversion, the SAP Customer's can move the whole system and the business process to a new platform of SAP S/4 HANA.
- This approach can offer a better solution if the customer doesn’t want to changes the business process. It essentially allows to run the business with less interruption, since it’s more of a technical system conversion.
3. SAP S/4HANA Adoption – Central Finance (Landscape Transformation )
- For many existing SAP customers, a new greenfield implementation or system conversion can be combined with a third implementation option, leveraging the SAP HANA Central Finance
- SAP HANA Central Finance allows companies to deploy a single environment instance of SAP S/4 HANA Finance and then integrate their financial operational process back through that one environment. A company’s current SAP or non-SAP financial systems don’t need to be transformed and can remain in their existing landscapes. By this option the current or old system landscapes will be preserved. This option is viable for those business organization which runs in the multiple ERP’s systems.
Choosing the correct approach requires an organization to performs a widespread study and assessment of technical & functional aspects, the existing ERP landscapes, SAP – Non SAP, business process, and management adaptability are a few things that need to be taken into consideration. More significantly, the organization need to focus on the own IT roadmap for right digital transformation., which can be scalable in the future.
Useful reference link on SAP S/4 HANA Central Finance
SAP S/4HANA 1809 Highlights
SAP S/4HANA 1909: The Intelligent Enterprise Foundation
Intelligent ERP: SAP S/4HANA 1909 Release
SAP S/4HANA 1909 System Conversion Steps & Details – How to be prepared
Conclusion & Outlook :
SAP Central Finance has provided an exciting way to migrate towards SAP HANA at a lower risk and in most cost effective approach, to deploy some of the advanced & best process of SAP HANA.
While a full-scale SAP S/4HANA migration will provides a lot of new functionality for the businesses, they also undergo lot of work to set up. But, Companies looking for the financial benefits of SAP S/4HANA while maintaining an existing ERP landscapes, will find Central Finance is a more profitable option.As you’ve read above, there are multiple benefits to upgrading from SAP ERP to Central Finance, but ultimately the option lies with the business to consider full-scale SAP S/4 HANA upgrade or Central Finance replication for reporting and consolidation.
A lot more is there to share on SAP S/4 HANA, Central Finance and will keep on sharing.
