These days, one of the top challenges of corporate finance is to provide a simple and complete view of corporate financial information. Typically, this involves pulling information from multiple systems and finding some way to integrate it – typically intensive, manual, error-prone work that often falls short of the objective of the ‘simple, complete’ objective. Fortunately, SAP has introduced SAP S/4HANA Central Finance to solve this problem! The core value proposition of SAP Central Finance is that it can pull together data from multiple financial systems and present it in a single, unified system for maximum visibility and control – a worthy and most valuable objective, to be sure!
In considering an implementation of SAP Central Finance, it is worth looking at all the data sources that may be needed and determining the integration tasks required for each. In other words, how the data will be extracted, harmonized and synchronized between systems.
It should be noted that where SAP ECC is the source system, many of these integration requirements are met by pre-built SAP integrations. However, there are no such pre-built integrations for 3rd party ERPs. For most Central Finance implementations, there will be more than one non-SAP source system, so consideration of the following requirements is essential.
Let’s look at the main integration tasks:
- Source Data Extraction – Each source system holds financial transaction data in its own proprietary formats and its spread across multiple tables and views each with its own processes, definitions and operating nuances. This information must be extracted from the source so it can be made available to Central Finance. Clearly, writing these scripts requires significant knowledge of the source system and it should be noted that there is no single ‘transaction’ to be integrated, but depending on the source, there can be up to 25 financial transaction types that must be understood and supported! Naturally, this can drive a considerable amount of effort and complexity.
- Upload to SAP – Data from the respective source systems must be validated and transformed into an SAP-specified format for loading into staging tables and then into Central Finance. This requires intimate knowledge of the SAP load formats.
- Master Data Harmonization – Often overlooked are the many data disparities within and between source systems. Customer and supplier names, as well as product names, are misspelled, abbreviated and contorted in innumerable different ways. If left in this state and loaded into Central Finance, the reports will be dubious at best and dangerous at worst, so they must be reconciled (harmonized) to a single version of the truth. Some companies do have unique customers and products that are clearly identified by unique IDs, but these rarely cover all master data entities across all systems, so some harmonization is still generally needed. Longer term, the source systems should really be reconciled through a Master Data Management (MDM) program, but can you wait that long to implement Central Finance? In the short term, it is much faster to take the ‘master’ data from all the source systems and create a cross-reference table that can be loaded into Central Finance to link the customers, suppliers, product and other information that should be linked. As a bonus, this cross-reference information can later be used to kick-start a future MDM project that can properly reconcile the source systems at a more fundamental level.
- Transaction-Level Drill Down – Of necessity, Central Finance only holds financial transaction information at a summary level. When a Central Finance user needs to drill down on an item to investigate it, they can try to find it in the original source system (if they even have access), or the original source details can be kept in a small data warehouse for click-through access direct from Central Finance. Of course, this requires creation and maintenance of a data warehouse, but with good planning, that can be a simple addition to the integration work that is already being undertaken.
- Write-back to Source – The Holy Grail of financial systems is that any changes made in Central Finance (payments, adjustments, etc.) should be reflected in the various source systems. A ‘write-back’ capability enables payments authorized in Central Finance to be cleared in the source ERPs so all systems are kept in sync. This process requires complex calls to available APIs while satisfying the business rules in the various source systems.
So those are the most common data integration tasks. Not every item may be needed on day 1, but over time, most will become requirements if Central Finance is to be used to its best effect.
It should be clear from the above, that integrating data into SAP Central Finance from 3rd party systems is not a trivial undertaking. Fortunately, Magnitude SourceConnect has been built to simplify exactly these tasks and enable faster, and more reliable implementation of SAP Central Finance.
Find out more about Magnitude SourceConnect: