First-hand knowledge.

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This sample chapter discusses master data management in all major
steps of a Central Finance project: data loads, master data processes,
master data objects, ongoing transaction replication, and governance.
It also provides an overview of why we need to harmonize data and the
types of data we need to harmonize.

“Finance Data Harmonization: How Does

Central Finance Standardize Data?”
Contents

Index

The Authors

Carsten Hilker, Javaid Awan, David Dixon, Marc Six

Central Finance and SAP S/4HANA
606 Pages, 2nd updated and revised edition 2020, $79.95
ISBN 978-1-4932-1918-6

www.sap-press.com/5006
 Chapter 6
Finance Data Harmonization:
How Does Central Finance
Standardize Data?
6
As data landscapes become increasingly complex, companies face the
challenge of trying to manage the influx of both structured and
unstructured data from multiple applications, files, databases, data
warehouses, and data lakes. They need a solution that simplifies their
landscape while also ensuring the highest levels of security.
– Bernd Leukert, member of the SAP Executive Board

If your goal is to replicate transactional data into Central Finance, you need the sup-
port of good master data management. The practice of creating, synchronizing, and
updating master data across multiple systems is not easy and should not be underes-
timated, especially in the context of a Central Finance deployment.
In this chapter, we’ll link Central Finance with master data management through the
major steps of the project: data loads, master data processes, master data objects,
ongoing transaction replication, and governance. First, however, we’ll look at why we
need to harmonize data and the types of data we need to harmonize.

6.1 Why Harmonize Data?

As discussed in earlier chapters, Central Finance is designed to deliver a single, uni-
versal system for all financial transactions which serves as the foundation for intelli-
gent reporting, enhanced operations, and ultimately, stronger and faster decision
making. This universal source of truth can only be realized, however, if the data and
configuration of all the underlying systems can be effectively managed, harmonized,
and brought together in a common way so as to support the technical requirements
as well as serve the needs of the various consumers of this data.

175
6 Finance Data Harmonization: How Does Central Finance Standardize Data?
Central Finance in SAP S/4HANA, although often thought of as a reporting solution
because of the limited impact it has on the source transaction systems, is still a trans-
actional system in and of itself. This means that when the data from numerous sys-
tems is replicated to the Central Finance system, this data must be appropriately
mapped and harmonized so as to be able to pass the master data and configuration
checks in the SAP transactional posting interfaces and be successfully posted.
To better illustrate this concept, let’s take the notion of the chart of accounts as an
example. In a classic consolidation chart of accounts mapping exercise, many
accounts—let’s say five, for example—could be mapped into a single group account
regardless of some of the more technical settings each source account was assigned
to, such as if two of the five were marked as open item managed, while the other three
were not. The group account in a consolidation system is not concerned with the on-
goings of open-item management and clearing, and so the mapping and merging of
these items is allowed. However, in the Central Finance system, because the system is
a transactional system and allows for follow-on processing such as central payment,
these master data definitions, such as open-item management, are required to be in
sync for all source accounts being mapped to the target Central Finance account.
The open-item management flag on the chart of accounts is just one example of a
field within just one master data element which must be considered and designed for
when implementing Central Finance. This section will explore and explain further
the concepts and requirements for harmonization of both master data and configu-
ration data when implementing Central Finance.
6.1.1 Master Data
In addition to the technical complexities and requirements of the solution, which
require that certain master data elements be mapped and aligned, there are very use-
ful and powerful business reasons to harmonize master data as well. To illustrate this,
let’s take a look at a few sample elements and how their harmonization impacts the
business from a benefits perspective:
쐍 Chart of accounts
쐍 Customers and vendors, now referred to as business partners in the SAP S/4HANA
world
쐍 Profit centers and cost centers
176
6.1 Why Harmonize Data?
Harmonizing the chart of accounts and the financial statement versions allows busi-
nesses to achieve a common language across operating groups, business units, and
systems. This increases visibility to the operations while reducing the amount of
manual effort required to “translate” or consolidate the various accounts into those
needed for reporting. This in turn enables soft and predictive financial closing
through increased real-time visibility to the solution, improves the accuracy and reli-
ability of the reporting due to less manipulation between transactions and reporting,
and serves as the foundation on which to layer on next-generation reporting capabil- 6
ities such as analytics, machine-learning, and automation. More information and
detailed discussion of the harmonization of the chart of accounts from both techni-
cal and functional perspectives is addressed in Section 6.4.1.
Customer and vendor harmonization across the business into the newly required
business partner concept in SAP S/4HANA allows businesses to look at their business
partners holistically, from both a payables and a receivables perspective. This allows
for better decision making in regard to things such as lines of credit and net effects.
Often, there are many redundancies within an organization’s master data as it relates
to customers and vendors as the result of factors such as multiple addresses or differ-
ences in spelling, such as “Main Street” versus “Main St.” versus “Main St”. There are
often discrepancies across source systems, which can now be managed and mapped
to a common definition.
Having the business partner information collected from across an organization into
a single source allows for issues such as over-lending and exposure to be identified
more easily and acted upon. Mapping and harmonizing your data allows you to see,
for example, if a customer you have allowed a $1M dollar line of credit is, in fact,
receiving $1M dollars from each of your source systems independently for a total of
$3M. Business partners as a master data element are discussed in further detail in Sec-
tion 6.4.2.
Profit and cost centers are often reporting dimensions which are designed with the
best intentions, but light governance can see them grow to large volumes and
become difficult to manage. Maintaining the respective hierarchies for these items
across an organization can often become difficult and time-consuming. For others,
the enterprise and organization structure implemented in their SAP ERP system,
sometimes 10–15 years ago, doesn’t accurately reflect their business today.
For many organizations, Central Finance presents an opportunity to right many of
the ills of the past by adopting a new, central profit and cost center model for report-
ing, overhead, and operations which more accurately captures the way that they
177
6 Finance Data Harmonization: How Does Central Finance Standardize Data?
want to view and manage their business. The result is often a reduction in the total
number of these elements and improved dimensionality elsewhere on the code
block to supplement some of the various reporting requirements.
Additionally, with many different source systems, organizations sometimes find
themselves with multiple controlling areas. In the Central Finance system, with the
ability to map historic elements to the new system, companies can achieve a single
controlling area in their SAP S/4HANA system while still being able to operate in a
disparate historic environment both centrally and locally. Profit Centers and Cost
Centers are explored in additional detail in Section 6.4.4 and Section 6.4.5.
We’ve listed only a few elements and a few of the benefits that harmonization brings
to the business users for these elements. Additional elements, hierarchies, and their
benefits and requirements are discussed later in this chapter, but it is clear that both
operations and reporting can benefit from the effort of harmonizing your organiza-
tion’s master data.
6.1.2 Configuration Data
Harmonizing master data alone is not enough to achieve a truly centralized platform
in Central Finance. As with any implementation, complementary to master data is
configuration data—the technical system settings which drive how SAP interacts
with your business processes and data. Harmonizing your configuration settings
between the systems is a challenging endeavor even if you are only utilizing a single
source SAP ERP system, because of the significant number of changes SAP S/4HANA
has compared to SAP ERP. This complexity is amplified by the increased number of
source systems in consideration.
Some of the more critical elements of configuration data which must be harmonized
include finance-related configuration such as currency, document types, decimal
places, and document splitting and controlling-related configuration, including prof-
itability analysis, currency and account category, and tax configuration.
With SAP S/4HANA and the Universal Journal, the number of currencies which can be
maintained has been increased. However, Central Finance has a prerequisite that the
currency settings match between the source and target systems. So how does Central
Finance reconcile the addition of new currencies while mandating that currencies be
the same across environments? The answer is in how the system treats “integrated
currencies” as opposed to “freely defined currencies.”
178
6.1 Why Harmonize Data?
Integrated currencies are those currencies which previously existed in the SAP ERP
environment as table BSEG, or finance document line item currencies. Previously, SAP
ERP allowed up to three currency field definitions:
쐍 Transaction or document currency: currency type 00
쐍 Local or company code currency: currency type 10
쐍 Group currency: currency type 30
6
In SAP S/4HANA, freely defined currencies were introduced, and there are additional
columns in the Universal Journal table to capture these additional translations. The
Central Finance requirement is only that the integrated currencies be in sync
between source systems, and therefore it does support the addition of the new cur-
rencies in the freely defined currency columns.
The foundational reasoning that the source and target system integrated currencies
must be aligned is so that corresponding or subsequent process posting activities will
not fail.
Tax settings are another critical configuration item which must be synchronized
when you’re implementing Central Finance. Central Finance supports the replication
of tax-related information at the time of posting, so it is important that this tax infor-
mation is posted correctly in the Central Finance system. Because the Central Finance
system reposts the documents which it receives from replication, the tax settings
must align between the source and target; otherwise, discrepancies in the tax calcu-
lation result in differing tax values being posted. This, in turn, breaks subsequent
central processing, such as payments, and prohibits the Central Finance system from
being able to be used as the tax reporting system, which is a prerequisite for the cen-
tral payment solution.
Tax-relevant information such as tax country, jurisdiction, and code need to be vali-
dated across the systems to ensure consistency. For more information on the tax
impacts that Central Finance brings, please refer to these references:
쐍 SAP Note 2509047
쐍 SAP Note 2656874
쐍 SAP Central Finance Administrators Guide—Central Tax Reporting
SAP has provided a set of tools that can assist in the early identification and resolu-
tion of configuration inconsistencies. These tools include the Configuration Consis-
tency Check Report, shown in Figure 6.1, and the MCDELTA tool, available as part of
the Central Finance adoption content, which is discussed further in Chapter 9.
179
6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.2 Transactional Data Loads

Big Bang
Error Fixing
Full
Go-Live
Scope

Agile
Add Add Go-Live 6
Base Comp. Balances
Figure 6.1 Central Finance Configuration Consistency Check Report Scope Codes

Figure 6.2 Big Bang versus Agile Approach to Initial Loads in Central Finance Projects
6.2 Transactional Data Loads
The initial load process loads the SAP ERP tables listed in Table 6.1 (in that order).
Transactional data replication from a source system to a Central Finance system is
performed in two major steps: initial load and delta load. In parallel, master data Document Source Table Communica- Filter Error Handling
maintenance must create a golden record. Type tion Channel

Cost objects AUFK SAP Landscape SAP LT Replica- SAP Application

6.2.1 Initial Data Loads and Delta Loads (orders) Transforma- tion Server Interface
tion Replication rules Framework
The initial data load is a critical phase in any Central Finance project. The best way to Server (SAP LT
approach the initial data load is to plan for multiple data loads with a data drop in Replication
between. Server)
The reason is simple: Carrying a full data load for all company codes, including bal- Finance and CFIN_ACCHD Remote func- Central Finance Logs
ances and document replication, could generate hundreds of thousands, if not mil- controlling (FI/ tion call (RFC) Customizing
lions, of error messages in SAP Application Interface Framework. Solving so many CO) postings
errors can be overwhelming, since resolution may require changes to both the con- (balances, docs)
figuration (number ranges, organizational structure, exchange rates, units of mea- CO secondary COBK SAP LT Replica- SAP LT Replica- SAP Application
sures, etc.) and master data (chart of accounts, mappings, cost centers, etc.). postings (docu- tion Server tion Server Interface
Instead of this big bang approach, an agile step-by-step strategy focused on learning ments) rules Framework
is more effective and reliable. As shown in Figure 6.2, with a smaller number of trans- Commitment CFIN_CMT_H SAP LT Replica- SAP LT Replica- SAP Application
actions to replicate, these first steps are faster. The number of error messages is lim- postings tion Server tion Server Interface
ited, and these errors are easier to solve. As complexity increases, for instance, by rules Framework
adding company codes or including balances that were skipped initially, the team
Table 6.1 Link between Document Types, Source Tables, Communication Channels, Filter
could experience a sense of progress while enhancing their learning. However, this
Tools, and Error Handling Tools for SAP Sources
best practice strategy requires a drop and reload of the data between each step.

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6 Finance Data Harmonization: How Does Central Finance Standardize Data?
You need to execute the following configuration steps to perform the initial load
from an SAP ERP system:
1. SAP LT Replication Server: Define a simulation of replication objects for table
AUFK.
2. Central system: Perform smoke testing and/or simulating an initial load of cost
object mappings.
3. Central system/SAP Application Interface Framework: Handle errors from table
AUFK under CO_OBJ_SIM.
4. SAP LT Replication Server: Start the load and replication of table AUFK.
5. Central system/SAP Application Interface Framework: Handle errors from table
AUFK under CO_OBJ.
6. Source system: Configure company codes in view VCFIN_SOURCE_SET.
7. SAP LT Replication Server: Define replication objects for table CFIN_ACCHD.
8. SAP LT Replication Server: Execute the start load and replication of table CFIN_
ACCHD.
9. Central system: Extract/monitor data for the initial load.
10. Central system: Extract/monitor delta load for the initial load.
11. Source system: Select the Initial Load Finished checkbox in view VCFIN_SOURCE_
SET.
12. Central system: Simulate/monitor the mapping.
13. Central system: Execute/monitor the mapping.
14. Central system: Execute/monitor the postings.
15. Central system: Compare initial load postings for FI and CO.
16. SAP LT Replication Server: Activate replication for table CFIN_ACCHD.
17. Central system/SAP Application Interface Framework: Handle errors from table
CFIN_ACCHD under AC_DOC.
18. Central system: Prepare/monitor the initial load of CO postings.
19. SAP LT Replication Server: Define replication objects for table COBK.
20. Central system: Perform smoke testing and/or simulation for CO document rep-
lication.
21. SAP LT Replication Server: Start the load and replication for table COBK.
22. Central system/SAP Application Interface Framework: Handle errors from table
COBK under CO_DOC.
182
6.2 Transactional Data Loads
23. SAP LT Replication Server: Define replication objects for table CFIN_CMT_H.
24. Central system: Simulate/execute the initial load of commitments.
25. Central system/SAP Application Interface Framework: Handle errors from table
CFIN_CMT_H under CMT_DOC.
26. Central system: Reconcile journal entries, balances, and line items for FI and CO.
The initial load can take several hours, depending on the size and performance of
6
your source systems and the central system. After the first initial load, you should
always perform a second initial load (the delta load in step 10) to ensure that all doc-
uments have been selected and transferred.
After the delta load has completed, maintain the view VCFIN_SOURCE_SET in the
source system and select the Initial load finished checkbox. Then, in SAP LT Replica-
tion Server, start the load and replication for table CFIN_ACCHD. From this point on, all
documents created in the source system will be automatically replicated in the cen-
tral system.
You need to execute the following configuration steps to perform the initial load
from non-SAP systems using the SAP Central Finance Transaction Replication appli-
cation by Magnitude:
1. Define the logical system for third parties in SAP LT Replication Server using
Transaction BD54.
2. Enable change data capture in the source ERP system to build the change logs.
3. Start replication in SAP LT Replication Server for third-party source systems.
4. Upload any mapping that is defined in SAP Central Finance Transaction Replica-
tion.
5. Execute <SourceSystem>_%_balances load in SAP Data Services after specifying the
required parameters.
6. Execute <source_system>_Journals_OT load in SAP data services for loading histori-
cal transactions after specifying the required parameters.
7. Execute SAP Central Finance Transaction Replication reconciliation reports to
identify errors between the source and SAP LT Replication Server. Resolve errors in
the source and execute the first six steps to reprocess error records.
8. Resolve SAP Application Interface Framework errors and repost.
You need to execute the following steps to enable the delta load after the initial data
load is complete using SAP Central Finance Transaction Replication:
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6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.3 Master Data Processes

1. Run the <SourceSystem>CDC_Set_Status_On job in SAP Data Services. This job In the context of master data management in SAP, the term “golden record” usually
enables the replication process. applies to master data domains such as customers, vendors, or materials. By exten-
2. Run the <SourceSystem>_Journals_CDC job. This job starts replication of documents sion, this principle can be applied to the configuration domain, such as plants or con-
from source ERP systems into SAP LT Replication Server. Once started, all the trolling areas, and to transaction objects, such as sales orders, purchase orders, or
transactions are replicated in Central Finance in real time. The job runs continu- journal entries.
ously when viewed in the SAP Data Services management console. As shown in Figure 6.3, an ideal environment would use a master data management
3. The job <SourceSystem>CDC_Set_Status_Off can be used executed to stop the repli- solution like SAP Master Data Governance (SAP MDG) or use third-party software to
6
cation if required. integrate master data from multiple SAP and non-SAP sources. At a high-level, the
following steps are undertaken:
The following are the driving tables in each source ERP system to extract FI docu-
ments: 1 Synchronize the systems to match, merge, and purge the records.
2 Create the golden record in the master data management solution.
쐍 Oracle E-Business Suite: table GL_JE_HEADERS
3 Create a corresponding record in the Central Finance system.
쐍 IFS Applications: table GEN_LED_VOUCHER_TAB
4 Match the record from the central system to the golden record.
쐍 JD Edwards EnterpriseOne: table F0911
5 Update the mapping table in the SAP MDG foundation in the central system.
쐍 PeopleSoft: table PS_JRNL_HEADER
쐍 Microsoft Dynamics AX: table GENERALJOURNALENTRY
Synchronize
쐍 Microsoft Dynamics NAV: table <CompanyName>_$G_L Register
ID 1518
쐍 Microsoft Dynamics SL: table Batch SAP
Name Best Customer
Address 55 Wacker Dr
Source
쐍 Microsoft Dynamics GP: table GL20000 (1)
City
Country
Chicago, IL

Source SAP -1
쐍 Epicor iScala: table GL06<CompanyCode><FiscalYear>
ID 1815 ID 2550 ID 2550
쐍 Infor CloudSuite Industrial (SyteLine): table LEDGER_MST Name BestCustomer Name BestCustomer Name BestCustomer
SAP Central
Address 55 Wacker St Address 55 Wacker Dr Address 55 Wacker Dr
Source MDM Finance
쐍 Infor Baan: table TTFGLD106<CompanyCode> (2)
City Chicago, IL City Chicago, IL
(4)
City Chicago, IL
Country USA Country USA Country USA
CFIN -4
쐍 NetSuite: table NS_TRANSACTIONS Source SAP -2 Source Source CFIN -4

ID LD5500 CU5501
Name BestCustomer BestCustomer
Non-SAP Address 55 Wacky Dr 55 Wacky Dr Source Source ID Target ID
SAP -1 1518 2250
6.2.2 Golden Record Creation Source
(3)
City
Country
Chicago, IL
USA
Chicago, IL
USA SAP -2 1815 2550
Category Lead Customer ERP -3 CU5501 2550
Nowadays, data is considered an enterprise asset. Its value is recognized when it sup- Source ERP -3 ERP -3

ports operational and strategic business decisions. However, this value is directly cor-
related to its quality, measured in the accuracy, consistency, existence, integrity, and Figure 6.3 Golden Record Creation in a Central Finance Environment
validity of the data.
The highest value is given to the golden record, the most complete combination of
6.3 Master Data Processes
master data elements and hierarchies in an organization, combining information
from multiple sources. The golden record is an important step in the quest for a sin- Almost every organization has issues with master data, and many spend a great deal
gle source of truth. of time dealing with master data issues. Master data is usually captured and managed

184 185
6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.3 Master Data Processes

in multiple business applications and/or manually. As a result, the data lacks consis- 쐍 Users in the source system creating their own master data without notifying Cen-
tency across the different applications. The chief financial officer is usually the owner tral Finance owners, which could affect reporting and/or operations in the central
of all the financial numbers used in and produced by multiple applications and their system
master data. The consistency of these numbers can be directly affected by the lack of
Controlling this master data process for Central Finance is essential for avoiding fre-
synchronization of master data across multiple applications. Some key issues in mas-
quent, redundant errors and for establishing business control over the initial creation
ter data processes that may directly impact data quality in Central Finance include
and sustainability of your master data. The recommended process encompasses at
the following:
least four steps, as shown in Figure 6.4. 6
쐍 Lack of resources allocated to master data quality
쐍 No business ownership, with data quality being handled by IT and consultants
쐍 Lack of adoption of best practices due to little or disconnected engagement with View Current
Attribute
different parts of the business
쐍 Starting a master data management process without understanding the underly-
ing issues
쐍 Trying to achieve too much too quickly due to a lack of focus on key master data Update
objects Attributes

쐍 Choosing a generalist as a leader who does not fully understand how processes
interact with each other

When managing master data, you choose from three basic options: Define Sequence
of Hierarchy
쐍 Leave the current way of managing the process as-is, even if it is not working
쐍 Establish a manual process that allows you to determine who is doing what and to
enforce manual governance Generate Hierarchy
쐍 Automate the process of governance for the core process involved in managing
the master data

Automation is ideal because leaving the current process as-is could lead to issues in
Central Finance after go-live that might manifest themselves in the following symp-
toms:
쐍 Mapping errors appearing in SAP Application Interface Framework
쐍 Missing master data in Central Finance even though the data had been mapped
correctly
쐍 Incorrect mapping between source and Central Finance master data
쐍 High volume of errors caused by missing data or incorrect mapping during the
initial load, the cutover period, and the real-time replication, after go-live
Figure 6.4 Central Finance Master Data Process Steps

186 187
6 Finance Data Harmonization: How Does Central Finance Standardize Data?
Whether the process is manual or fully automated, the master data process must
have at least these steps to reduce the number of errors after go-live. In the following
sections, we’ll describe each of these steps.
6.3.1 Request for Change
The change request must cover the creation, modification, deletion, and blocking of
master data in accordance with SAP S/4HANA core master data operations. Mass cre-
ate, change, delete, or block operations outside of core systems are optional, since
these operations can be performed in a series. An additional task is that the change
request needs to include whether the master data request requires any creation or
changes to the mapping for Central Finance.
The mapping for Central Finance is a mandatory element in the change request
because the mapping triggers alerts to users and/or executes an automated control
in a tool (e.g., a business rules framework in SAP MDG).
Once the change request is raised, key elements of the master data element must be
added before the changed data can be validated.
The completion of the change request should trigger the validation of master data.
This task must be given to an expert in the business process being facilitated by the
given master data object. For example, the creation of general ledger (G/L) accounts
must be checked by the finance department, who would fully understand the impact
of the various settings. Giving this task to the wrong department leads to poor pro-
cesses and increased errors and is wasted effort.
The validation of the data is the most critical step in a master data process. You need
to perform the following checks:
1. Check whether the change or creation operation requires a change in the mapping.
2. Check that the attributes requested by the change request are relevant for Central
Finance.
3. Check whether any attributes are inconsistent between the source system and the
Central Finance system.
4. Check that the objects requested in the change request are consistent with the
scope of Central Finance.
5. Check that the individual values for the attributes are configuration dependent.
6. Check whether the master data organizational assignments are the same or differ-
ent in the source system and the Central Finance system.
188
6.3 Master Data Processes
7. Check which systems the master data requires to be created, changed, deleted,
blocked, and so on.
This list of checks is not exhaustive but does reflect the lessons we’ve learned from
our customers that either have gone live or are in the project phase. The validation
phase should belong to a data steward, even if only unofficially. When one or more
checks are inconsistent with the process laid out for the relevant master data object,
this change request should be returned to the person who initiated the change 6
request.
In instances where the data steward can determine the values or corrective action for
a change request, a modification should be made to the change request and resent to
the person who initiated the change request to confirm the changes suggested by the
data steward. While this step is not necessary, some organizations could improve
data quality continuously by requiring the initiator of a change request to ensure
that checks won’t fail and to provide continuous feedback, which increases future
accuracy.
6.3.2 Approval of the Request
Assuming the data steward, automated or manual, has carried out the validation
steps with the requisite due diligence, the approval step should be a formality. How-
ever, this step represents the point of no return. The approver should understand the
process, the systems, and the impact of a change while being accountable for the
change request and its impact.
For Central Finance, an approval involves many facets of the master data process that
have a direct impact on the replication process. The approver ideally is the owner of
the object and someone who understands Central Finance design. The approver’s
tasks include the following:
1. Confirm that the data steward has completed or verified all the mandatory fields.
2. Check that optional fields have the correct values for the target system.
3. Check that mapping values exist when mapping for Central Finance exists.
4. Make final changes to values for any attributes.
5. Approve the change request.
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 6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.4 Master Data Objects and Hierarchies

All master data objects are subject to the core process for managing data we’ve
Note described in this section. However, so far, we’ve been focused on the process and
The data steward and the approver can be the same person for the purposes of Cen- should look at master data itself next.
tral Finance, but validation and approval processes should be segregated to ensure
one final check before executing the change request.
6.4 Master Data Objects and Hierarchies
Once the approval is granted, the given master data change operation (i.e., create,
Up to now, we’ve discussed the process for maintaining master data objects using 6
change, delete, block, mass change, etc.) is executed.
tools from SAP and its partners (see Figure 6.6). In this section, we’ll discuss the most
common master data objects relevant to Central Finance.
6.3.3 Execution of the Change Request
In execution, automation helps. Central Finance needs at least three events to occur Manual Create/ Create/ Map in
Execute
to ensure the correct execution of master data changes, as follows: Change in Change in SAP MDG
Process
Source Central Finance Foundation
쐍 Always updating the Central Finance system first in the execution phase
쐍 Updating the mapping engine for Central Finance next IDoc Create/ Trigger
Map in
Execute
Change in SAP MDG
쐍 Carrying out the requested change in the source system if appropriate (i.e., create, Source
Replication
Foundation
Process

change, block, etc.)

The exact method of execution depends on the scope of the project and the tools Magnitude Create/ Rules, Validations, Map in
Execute
Change in and Sync SAP MDG
your organization uses to implement this process. Execution can take the form of a Process
Source Central Finance Foundation
manual process at an offshore center or a completely automated web service that
notifies all parties when a change request has been executed successfully. Figure 6.5 SAP MDG Create/ Rules, Validations,
Execute
shows a high-level overview of the process for executing master data change Change in and Sync Auto Map
Process
Source Central Finance
requests.

Figure 6.6 Central Finance Master Data Tools

Request Validate Approve Execute At the time of this writing, Central Finance can automatically create orders based on
order types maintained in configuration settings. In addition, as of SAP S/4HANA
1709 FPS 01, work breakdown structure (WBS) elements can be replicated into Central
Finance for reporting purposes. For other master data, automatic replication does
Central Finance Mapping Source System
not exist, as other tools already perform this function.
In general, four main tools for ensuring master data synchronization between your
Figure 6.5 Master Data Execution for Central Finance
source systems and Central Finance are available:

Where the process stops short of full execution, you should expect to receive error 쐍 Manual processes
messages in SAP Application Interface Framework for Central Finance. In a manual process, you use a CSV file that uses Central Finance mapping mainte-
nance programs. The actual creation and change of master data between systems

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6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.4 Master Data Objects and Hierarchies

for most master data is manual. This process requires users to confirm the output Within SAP S/4HANA, and thus within Central Finance, three charts of accounts exist:
prior to posting a transaction. If a transaction is posted without the process being group, country, and operational. Each represents a different purpose, recording
followed, the likelihood of an error arising is quite high. mechanism, and reporting capability. By default, implementing Central Finance
쐍 Intermediate documents (IDocs) implies commonality and harmonization among these objects from multiple source
IDocs can be used to send data from a source system to Central Finance, and vice systems.
versa. This method works well during the initial cutover, when harmonization is Often, but not necessarily, the Central Finance instance contains a single operational
not critical for the relevant object. If harmonization is important, you need to cus- chart of accounts. This chart of accounts is used to make all the postings from the
6
tomize the IDoc. IDocs are a purely IT solution and do not help manage master source system into SAP S/4HANA. The configuration of the Central Finance instance
data. depends on this operational chart of accounts, as shown in Figure 6.7, and how this
쐍 Third-party tools chart of accounts is set up directly impacts how Central Finance operates.
A partner solution, such as those offered by Magnitude, can be used for SAP and
non-SAP data for the initial load during the cutover period. This solution can also Source
Group Operational
assist with profiling data and with removing duplicates in legacy data. In addition, COA COA
Magnitude solutions can handle both SAP and non-SAP systems to kickstart the
process of loading data with some data cleansing.
Company Country
쐍 SAP Master Data Governance COA COA
Using SAP MDG allows for initial loads and online replication based on change
requests that comply with the optimal four-step process (request, validate,
approve, and execute). In addition, Central Finance uses SAP MDG to maintain the Central Country
Company
Finance COA
mapping. SAP MDG also allows a full governance process for master data, includ- Code

ing the creation of the golden record, replication, and notifications of changes to
user groups. This tool is built and maintained by the IT department but owned and Operational
Group
used by business users. Consider SAP MDG as just another business application COA COA
that happens to manage master data.
Figure 6.7 Central Finance and Charts of Accounts

6.4.1 Chart of Accounts (General Ledger Account)
The central object in a finance transformation is a chart of accounts, which rep-
resents the basic recording mechanism for accounting entries being fed from source
systems. A chart of accounts is the number one prerequisite for implementing Cen-
tral Finance from a business perspective and drives many design decisions for
finance functions. You don’t have to wait until kicking off a Central Finance imple-
mentation project before creating a chart of accounts. Starting even months ahead
could provide your organization the time to discuss the project and save resources in
the long run. Up to three charts of accounts can exist for a company code, and each
company code must have at least one chart of accounts, per SAP standards.
Let’s consider the context of different charts of accounts in Central Finance. As
shown in Figure 6.7, the group chart of accounts is linked to the operational chart of
accounts in the Central Finance instance. This optional chart of accounts and config-
uration element becomes important for three reasons: First, perhaps your organiza-
tion wants to generate a consolidation feed from Central Finance or use embedded
SAP consolidation software within the Central Finance instance. Second, you also
manage intercompany or intracompany transactions within the Universal Journal
with Central Finance. Third, using the reporting capabilities enabled by Central
Finance using the group chart of accounts could assist with resolving preconsolida-
tion or intercompany issues.

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6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.4 Master Data Objects and Hierarchies

When Central Finance is used as a reporting or operational tool for local generally S/4HANA system where Central Finance is operational. Three options exist for map-
accepted accounting principles (GAAP), then the country chart of accounts becomes ping the G/L account:
relevant but is otherwise optional. If needed, this chart of accounts must be config- 쐍 The G/L account number in the source system is the same as the G/L account num-
ured for each company code being transitioned into the Central Finance instance. ber in Central Finance. In this case, no mapping is needed.
Normally, the chart of accounts would be directly configured within Central Finance 쐍 One or more G/L account numbers in the source system have different numbers
Customizing in an early design step. Thereafter, many customizing settings will be a from one G/L account in Central Finance. In this case, mapping is needed.
product of the operational chart of accounts, such as the retained earnings account,
쐍 A rule does not exist for mapping on a 1:1 or N:1 basis. In this case, rule-based map- 6
the currency valuation, the bank account link to the G/L account, and so on.
ping is needed.
The G/L account is part the chart of accounts. Two main types of G/L accounts are set
up: balance sheet accounts and P&L accounts. You must create G/L accounts for each Source
Group Operational
chart of accounts set up in Central Finance as per the project scope. Each G/L account COA COA
in Central Finance has the same segments as SAP ERP 6.0 in terms of chart of
accounts segment and company code segment. The key difference between SAP ERP
6.0 and a Central Finance instance is that Central Finance does not differentiate Company Country
G/L Account
COA COA
between G/L accounts and cost elements.
Therefore, you must understand how the design of the G/L account will work with
Central Finance given the differences between the two technologies as well as the Central Country
Company
Finance G/L Account
Code COA
existing differences between your various G/L accounts, which may be set up across
the same technologies. For example, a G/L account number may be seven digits in
one system and nine digits in another. Meanwhile, the organization may have Group Operational
decided to create a new G/L account structure based on eight digits going forward. COA COA

Differences can arise in the G/L account structure for the following reasons:
쐍 Length of the G/L account
쐍 Usage of the G/L account
쐍 Settings of the G/L account
쐍 Structure of the G/L account for non-SAP technologies
쐍 Same G/L account usage with different codes
쐍 Links between G/L accounts for country and group charts of accounts inconsistent
at the operational level
This list represents just a few sample reasons why the harmonization of G/L accounts
is a key activity in all implementations of Central Finance. Regardless of the reason,
the G/L account should be harmonized as a matter of best practice.
Like all other master data objects relevant for Central Finance, the G/L account may
need to be mapped, as shown in Figure 6.8, from the source system to the SAP
Figure 6.8 G/L Account Mapping for Central Finance
For each source system G/L account, the designer needs to establish the mapping
options from a business perspective to ensure the correct working of the G/L account
master data process. Note that the process of managing G/L accounts also requires
that users understand how the design of this object has changed with SAP S/4HANA.
In the following section, we’ll cover the most salient changes.
6.4.2 Business Partners
One big change in SAP S/4HANA beyond the G/L account is the adoption of the busi-
ness partner as the main functional object for customers and vendors. Business part-
ners are probably the second most important objects in Central Finance, in terms of
data volumes and impact, because most open items in Central Finance are related to
a business partner. While business partners are mandatory for Central Finance for

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 6 Finance Data Harmonization: How Does Central Finance Standardize Data?
payables and receivables reporting, for operational scenarios, or as a stepping stone
to SAP S/4HANA logistics, customer and vendor objects are still involved in these
processes in SAP S/4HANA and, therefore, in Central Finance.
You should consider how business partners will be initially loaded into Central
Finance, whether using a master data load tool described earlier or another method.
Once the data is loaded into the Central Finance instance, the configuration must be
set up appropriately to ensure that customers and vendors are correctly created from
business partners.
The process of creating customers and vendors requires that you design and build
business partner roles, their attributes, and any process-relevant data such as bank
data, credit details, payment methods, and so on. The scope of the business partner
data is directly driven by the scope of the processes used for reporting or transac-
tional scenarios. Once your data needs have been clearly determined and according
to scope, customer/vendor integration (CVI) can be used to manage the process of
maintaining customers and vendors through the business partner. Figure 6.9 shows
the required movement set up as a process during the cutover and for ongoing main-
tenance. What tool is used to maintain the source system and the Central Finance
instance depends on your requirements.
Of course, manual tools dealing with large data volumes in a large company require
greater effort to ensure that business partner and customer integration is main-
tained in Central Finance. For example, you need to ensure that bank data is correct
across the landscape, a prerequisite for payment factories to make payments, which
may originate from more than one system, to vendors and to engage in multiple
types of procurement categories.
Technically Cleared
Source
Sales Delivery/
Billing Accounting
Order Goods Issue
Central Open Item
Finance
Credit Mgt Accounting Payment Bank Rec.
Collections
Figure 6.9 Central Finance and Business Partners
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6.4 Master Data Objects and Hierarchies
By understanding the management of the business partner process and its attributes
during the project, the go-live will be smoother, and after go-live, maintenance will be
easier. These organizational change management issues can cause symptoms in Cen-
tral Finance’s functional and technical operations.
6.4.3 Material Numbers
Whether you use the material master within Central Finance is optional. Replicated 6
postings from SAP source systems include the material number, which can then be
used for market segment reporting within the Universal Journal within Central
Finance. Another reason for maintaining the material master within Central Finance
is to facilitate the execution of logistical processes that may be centralized, such as
procurement.
When material master numbers differ across multiple source systems, SAP MDG key
mapping can be used to manage their relationships. When deployed fully, SAP MDG
can also be used to manage governance and distribution processes.
If the material master is not required within the scope of the project, a Central
Finance BAdI (Business Add-In) will be required to remove the material master from
the replicated accounting postings, which is a relatively easy task. Assuming the BAdI
is no longer relevant and that the material master is no longer needed, the BAdI can
be deactivated and the code removed as a project activity. The flexibility is provided
by the technical framework behind Central Finance.
6.4.4 Profit Centers
Profit centers are probably required within Central Finance because almost every
connected system (both SAP and non-SAP systems) uses the concept of profit centers
to manage overhead. Also, profit center codes may differ in the Central Finance sys-
tem in order to introduce a single controlling area. SAP MDG key mapping would
therefore be required to identify new values based on the source system, controlling
area, and profit center.
As with financial master data objects, fully deployed, SAP MDG can centrally govern
and distribute profit center records. SAP S/4HANA Finance provides SAP Fiori appli-
cations for the maintenance of profit centers (e.g., the Manage Profit Centers app).
Profit centers within SAP S/4 HANA are linked to a “segment” as per the new G/L
functionality, and document splitting can be performed for both profit centers and
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6 Finance Data Harmonization: How Does Central Finance Standardize Data?
segments. If the source system uses the classic G/L, profit center master records will
not contain this attribute. However, given the framework behind Central Finance,
any classic G/L attributes can be determined using a BAdI based on business rules or
default values, which could be a project activity.
Full P&L account reporting by profit center and profit center hierarchy is available in
the Central Finance instance using replicated and direct postings. Standard SAP Fiori
applications (e.g., the Profit Centers—Plan/Actual app) are provided, together with
queries and core data services (CDS) views. Queries and views can also be consumed
within business intelligence tools such as SAP Analysis for Microsoft Office. You
should also consider planning data since most profit center managers require actual
and plan postings within a single report. Thus, building a centralized planning sys-
tem using SAP S/4HANA optimized with SAP Business Planning and Consolidation
(SAP BPC) may make sense since planning data is not replicated to Central Finance.
Alternatively, SAP Analytics Cloud could also provide users the necessary planning
capabilities.
6.4.5 Cost Centers
Cost centers are probably required within Central Finance process design because
almost every connected system (both SAP and non-SAP systems) uses the concept of
cost centers to manage overhead and operational expenses. Also, cost center codes
may differ in the Central Finance system in order to introduce a single controlling
area. SAP MDG key mapping is therefore required to identify the new values based on
the source system, the controlling area, and the cost center. Like other financial mas-
ter data objects, fully deployed, SAP MDG can centrally govern and distribute cost
center records.
Central Finance provides SAP Fiori applications for maintaining cost centers (e.g., the
Manage Cost Centers app). Cost centers may also be posted to directly within Central
Finance because centralizing certain indirect business processes (e.g., connectivity
with SAP Ariba and Concur) may make sense.
Full profit and loss reporting by cost center and cost center hierarchy is available in
the Central Finance instance using replicated and direct postings. Standard SAP Fiori
applications (e.g., the My Spend app) are provided, together with queries and CDS
views. Queries and views can also be consumed within business intelligence tools
such as SAP Analysis for Microsoft Office. You should also consider planning data
since most cost center managers require actual and plan postings within a single
198
6.4 Master Data Objects and Hierarchies
report. Thus, building a centralized planning system using SAP BPC optimized for
SAP S/4HANA may make sense since planning data is not replicated to Central
Finance. Like profit centers, SAP Analytics Cloud can also hold planning data and pro-
vide reporting capabilities.
6.4.6 Activity Types
Activity types are optional within Central Finance. If the connected SAP system per- 6
forms activity type allocations (directly or indirectly), then these activities can be
passed to Central Finance via SAP LT Replication Server CO document replication.
Alternatively, allocations may be performed directly within Central Finance as a part
of centralized closing activities.
If activity type allocations are being replicated to Central Finance, you may need to
perform an SAP MDG key mapping to convert to a harmonized activity type code.
Often, this mapping is necessary when the Central Finance design includes a single
controlling area and the connected systems use multiple controlling areas. Like other
financial master data objects, fully deployed, SAP MDG can centrally govern and dis-
tribute activity type records.
One dimension often overlooked regarding activity types is that, if direct activity
type allocations are replicated, the activity type rate must exist within Central
Finance. SAP S/4HANA Finance provides SAP Fiori applications maintaining activity
types (e.g., the Manage Activity Type app).
6.4.7 Statistical Key Figures
Statistical key figures (SKFs) are optional within Central Finance. SKFs are generally
used to support allocations within the CO module. For example, SKFs may be used
within an assessment cycle to distribute costs from a central cost center to several
receiver cost centers (e.g., based on floor space or employee headcount).
If central closing allocations are being performed within Central Finance, then SKFs
can be defined. Like other financial master data objects, fully deployed, SAP MDG can
centrally govern and distribute SKF records. Like other CO objects, SAP S/4HANA
Finance provides SAP Fiori applications for maintaining SKFs (e.g., the Manage Statis-
tical Key Figures app).
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6 Finance Data Harmonization: How Does Central Finance Standardize Data?
Flexible Hierarchies
Not strictly master data, flexible hierarchies need special mention as one of the key
innovations from SAP that can be used when deploying Central Finance. Hierarchies
(e.g., profit center and cost center hierarchies) are composed of master data exclu-
sively. Since SAP S/4HANA 1709, you can create hierarchies and base their levels on
cost center and profit center attributes.
End users can create these hierarchies and then use them on all data replicated via
Central Finance in SAP S/4HANA. Using Central Finance with flexible hierarchies can
benefit business users by separating the process of managing hierarchies from the
normal master data processes for cost centers and profit centers. Flexible hierarchies
can use a harmonized model down to the profit center and cost center attributes,
which in turn can be used in reporting based on different levels and the nature of the
hierarchy.
6.5 Ongoing Transaction Replication
Master data and configuration harmonization is a necessity for ongoing transaction
replication just as it is for the initial load process. Naturally, the system requires con-
sistency across the various source systems and the Central Finance systems through-
out the life of the solution, and as mentioned in Section 6.3, this means setting up
systems and processes to govern and ensure this consistency. Chapter 11 introduces
the SAP MDG toolset, which is one such tool that can assist in the governance and
controls relating to the management and creation of key finance master data ele-
ments across various source systems as well as the Central Finance system.
This section discusses features relating to the ongoing replication of transactions
from SAP source systems in Section 6.5.1, as well as the replication of transactions
from non-SAP source systems in Section 6.5.2.
6.5.1 SAP Transaction Replication
As we’ve seen, sourcing from an SAP source system supports a large variety of busi-
ness operations and financial information to be replicated to the Central Finance sys-
tem. Whether it is the financial data sourced from classic FI, the managerial
financial data sourced from classic CO, the profit center accounting information from
Profit Center Accounting (PCA), or document changes, taxes, or clearing information,
200
6.5 Ongoing Transaction Replication
replicating SAP transaction information comes to Central Finance through a number
of interfaces. Each of these interfaces requires its own consideration, rules, mapping,
and customizations. The detailed information about the technical interfaces across
the systems will be explored further in Chapter 9, but for now let’s briefly touch on
them at a high level in order to discuss the configuration and options that SAP pro-
vides to assist in the mapping and management of the data supported with these
interfaces.
6
The standard SAP interfaces are as follows:
쐍 Accounting document replication
The standard replication of financial postings from source to target system. The
technical name for the FI interface which is visible for monitoring within the SAP
Application Interface Framework Interface Monitor is AC_DOC. This interface
name corresponds to the source system staging table CFIN_ACCHD, which is popu-
lated for all relevant FI transactions to be replicated to Central Finance. When a
business transaction is executed in the source system which results in the creation
of a financial document, (historically a BKPF entry) and this financial document is
required in the Central Finance system, the source system creates the necessary
entries in a series of CFIN_ACC## tables, where the ## suffix represents different
information, such as CFIN_ACCHD for header information or CFIN_ACCIT for item
information. In the source system, these various CFIN_ACC## tables are linked
together by a unique identifier, a GUID, which exists across these tables. In this
way, when a trigger and replication are made on the CFIN_ACCHD table, a subsequent
pull from all the CFIN_ACC## tables with that GUID is also done, and these pieces of
“children” information are sent along to Central Finance as a part of the Central
Finance package.
쐍 Controlling document replication
The standard replication of managerial accounting postings from source to target
system. The technical name for the CO interface is CO_DOC, and it corresponds to
the COBK table (CO Headers) in the source system. Whenever a relevant transaction
is posted in the source system which creates a Controlling document which
updates COBK, the CO_DOC interface transfers the relevant information from COBK
and the various information tables, such as COEP (CO Line Items) and so on.
Because Central Finance is utilizing the standard CO tables as staging tables, no
Central Finance-specific GUID is created for CO documents; instead, the reference
document number of the standard CO tables is used to link the header to the vari-
ous line item details.
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6 Finance Data Harmonization: How Does Central Finance Standardize Data?
쐍 Accounting document change replication
The accounting document changes can be replicated to Central Finance via the
AC_DOC_CHG interface. This interface utilizes change triggers in the source sys-
tem to replicate the updated information to Central Finance, where it is reposted
with its own unique GUID. In some cases, documents may be captured in SAP
Application Interface Framework for this interface with errors such as “reference
document not found,” and this is due to the nature of change documents requir-
ing that their original document be in the system prior to changes being created
on that document.
쐍 Commitment replication
Central Finance supports the replication of commitment information from the
source system to the target via the CMT_DOC interface. This interface uses triggers
set in the newly created central finance source persistence table for commitments,
table CFIN_CMT_H. When new or updated commitment information is created in the
source system, table CFIN_CMT_H is updated, and data is replicated to the target sys-
tem.
쐍 Profit Center Accounting replication
Profit Center Accounting documents are supported in the central finance solution.
The PCA_DOC interface can be viewed in SAP Application Interface Framework
and supports the replication of Profit Center document entry, actual assessment
in Profit Center Accounting, and actual distribution in Profit Center Accounting.
The data for PCA postings is retrieved from the source system via table GLPCA, and
PCA configuration is carried out via Transaction FIN_CFIN_PCA_SET in the source
system, where a configuration table similar to that of CFIN_SOURCE_SET is main-
tained for PCA specifically.
In summary, not all documents that are posted in the SAP source system are relevant
for replication to Central Finance. There are cases where the documents in the source
system should indeed not be replicated to the target system, either because of the
scenario you have chosen to deploy or because if they were to be replicated, the
accounting would be inaccurate, such as the case with CO/FI postings, for example. In
SAP ERP, the CO/FI posting used to reconcile FI to CO when an intercompany CO
movement created an FI document; however, in Central Finance, because the CO doc-
ument was already replicated, when the CO document is posted in the target system,
the CO and FI accounting has already been updated. This is because SAP S/4HANA has
merged FI and CO via the Universal Journal If the CO/FI document posted in the
source system was replicated to Central Finance, it would result in a double FI post-
ing.
202
6.5 Ongoing Transaction Replication
To understand all of the latest relevant transactions which are in scope for Central
Finance, you should refer to SAP Note 2184567, the Central Finance FAQ, and the Cen-
tral Finance Administrators Guide for your version.
6.5.2 Non-SAP Transaction Replication
Realizing and achieving the vision of a Universal Journal across an entire enterprise
often requires the caring for and integration of ERP systems which are not SAP. Many 6
times, these source systems are fundamentally different in their approach to master
and transaction data. These differences in data structure and definitions must be
cared for both functionally and technically in order to harmonize and successfully
create and post this information into Central Finance.
Central Finance does provide support and accelerators to integrate the data from
non-SAP systems via the SAP LT Replication Server third-party interface. Utilizing
this interface has several requisites and dependencies, which we’ll highlight in this
section. In Chapter 9, we’ll explore the specific details of the technical structure of
data as it flows into Central Finance from SAP LT Replication Server, but for now it is
sufficient to understand that the SAP S/4HANA architecture is driven by a set of
structures representing the header of the document, the line items of the document,
and so on. These tables are linked together via a GUID in SAP LT Replication Server
and by their reference document number, or their primary key, such as company
code, fiscal year, and document number. Figure 6.10 shows at a high level the various
structures that SAP LT Replication Server can support when receiving data from the
non-SAP systems and how these structures are linked.
Note
Take a look at the clearing information row in Figure 6.10. Clearing information is
now supported for third-party source systems as of SAP S/4HANA 1909. Refer to SAP
Note 2713300 on how to enable the SAP LT Replication Server structures to support
this functionality.
As you can probably already discern, this reliance of SAP LT Replication Server on a
strictly SAP data structure requires a lot of effort to transform the non-SAP source
system data and structures into a form that SAP LT Replication Server can operate
with. The complexity and variations can be quite numerous given the number of the
various different source system software platforms available and the differences in
design each system represents.
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 6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.6 Governance

The drilldown component deployed using SAP Fiori enables visibility into source ERP
SAP Landscape Transformation Server
operational data for sales orders, purchase orders, goods receipts, and G/L journals.
Journal Header - ACCHD Additionally, any new and ongoing postings in source ERP systems are captured by
GUID Source System Fiscal Year Company Document Period Document Etc. SAP Central Finance Transaction Replication and loaded into Central Finance in real
ID Code Number Type
time, as shown in Figure 6.11.
Journal Line Items - ACCIT
GUID Account Currency Tax Code Profit Center Cost Center Etc. SAP Central Finance Transaction Replication replicates the following items:
Journal Tax Items - ACCTX 쐍 G/L account balances 6
GUID Tax Date Tax Rate Tax
Jurisdiction
Currency Tax Base
Amount
Etc.
쐍 Historical transaction load
Code
쐍 AR/AP open items
Clearing Information –
쐍 Ongoing accounting transaction replication
…

…
…
SAP Central
Custom Extensions Finance SAP LT
Central Finance
Source ERPs Transaction Replication
GUID Item Number Custom Custom Custom … Etc. Universal Journal
Replication by Server Interface
Extension 1 Extension 2 Extension 3
Magnitude

Figure 6.10 Third-Party Interface and Staging Tables

Figure 6.11 Data Flow from Source ERPs to Central Finance
SAP Central Finance Transaction Replication accelerates integration of historical and
ongoing financial accounting transactions and master data from non-SAP systems
into Central Finance. The solution consists of prebuilt extraction, mapping, transfor- 6.6 Governance
mation, validation, and drilldown components. Transaction data is interfaced using
Since a Central Finance system merges master data, configuration, and transactions
the SAP standard third-party Interface for Central Finance in SAP S/4HANA. Transac-
from multiple systems, a question often arises: What happens when new data is cre-
tion and master data are extracted from source ERP systems and land in the SAP Cen-
ated, updated, or even archived? This process requires proper governance.
tral Finance Transaction Replication stage area, where data is transformed, validated,
and mapped to SAP table structures. Business rules are applied in SAP Central The steps shown in Figure 6.12 follow the lifecycle of master data governance:
Finance Transaction Replication to account for any differences in coding blocks and extraction, harmonization, rationalization, dissemination, and maintenance.
accounting business processes between source ERPs and SAP S/4HANA. The data is
technically and functionally validated before loading into the third-party interface,
reducing the potential SAP Application Interface Framework errors in Central
Finance. The replication is configurable for real-time or batch integration. SAP Cen-
tral Finance Transaction Replication delivers five levels of reconciliation reports to
Extract Harmonize Rationalize Disseminate Maintain
reconcile data between the source ERP system and Central Finance. The interface
includes detailed customer, vendor, product, and document information from sub- Figure 6.12 Master Data Maintenance Process
ledgers where available. Additional customer-specific attributes can be added using
the extension framework within the solution.

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6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.6 Governance

In the following sections, we’ll first look at some initial considerations for master This list of questions should help you evaluate the need for a dedicated master data
data and master data objects before moving on to an overview of the dynamic cost governance solution.
object creation process. Then, we’ll walk through each process in the master data gov-
ernance lifecycle.
6.6.2 Dynamic Cost Object Creation
The following cost objects are supported in Central Finance:
6.6.1 Master Data and Master Data Objects
쐍 OR: Order
The following domains should be considered in all Central Finance projects: 6
쐍 KS: Cost center
쐍 Operating concern, controlling areas, company codes, plants
쐍 KL: Cost center/activity type
쐍 Profit centers, cost centers, activity types, G/L accounts, and cost elements
쐍 EO: Profitability segment (account-based)
쐍 Customers, vendors, and business partners
쐍 AO: Profitability segment (costing-based)
쐍 Projects and WBS elements
쐍 PR: Project (WBS element)
쐍 Materials and characteristics
Some cost objects, however, are not supported by the Central Finance system, but
During the scoping phase, the following questions have to be answered: BAdIs are available to extend the solution, which is the case for the following:
쐍 Which domains are relevant to the selected scope? For instance, plants and mate-
쐍 VB: Sales order
rials might not be necessary if logistics and product profitability are not consid-
쐍 BP: Business processes
ered.
쐍 NV: Networks
쐍 Which source system(s) contain the right master data? Are all characteristics nec-
essary for the project? For example, material dimensions might not be required, 쐍 HP: Generic cost object
but unit costs might. 쐍 I*: Real-estate object
쐍 What software solutions are already in place that cover part or all of these do- 쐍 OP: Order/line item
mains?
For more information on supported cost objects, refer to SAP Note 2103482.
쐍 Are the master data objects time-dependent? How frequently are they created,
Figure 6.13 shows a list of all BAdIs available for Central Finance. Templates are avail-
updated, or archived?
able to facilitate these extensions.
쐍 Is there a language component for the master data objects (e.g., cost center
description) in multiple languages?
쐍 When a master data object is changed, how quickly does the change need to be rep-
licated to the Central Finance system before a corresponding transaction is repli-
cated?
쐍 What are the security and authorization requirements?
쐍 What are the audit or logging requirements?
쐍 What is the incremental level of effort required for the initial load? For ongoing
maintenance?

Figure 6.13 List of BAdIs Available for Central Finance

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6 Finance Data Harmonization: How Does Central Finance Standardize Data?
In general, you follow these steps:
1. Open Central Finance Customizing (Transaction CFINIMG) under BAdIs: Central
Finance • BAdI: Enhance Standard Processing of CO Secondary Posting.
2. Now, an implementation for BAdI BADI_FINS_CFIN_CO_INTERFACE of enhancement
spot ES_FINS_CFIN_CO_INTERFACE is created. Click Continue.
3. In the popup window, enter an Enhancement Implementation name and a Short
Text.
4. Click Creation of Enhancement.
5. Select a transport package or choose Local Object if in a sandbox system.
6. Enter a name for the BAdI Implementation and the Implementation Class. Click
Continue.
7. This step is important. Choose between Create a new empty class, Copy one of the
example classes, and Inherit from an example class not declared as final. We rec-
ommend either copying the example or inheriting the class attributes from class
CL_FINS_CFIN_CO_INTERFACE_EXAM. In this example, choose Copy sample class.
8. On the overview screen, click Save and then Activate.
In the implemented class, open method IF_BADI_FINS_CFIN_CO_INTERFACE~MAP_REPLACE_
CO_POSTING_DATA. Notice the call to object_handler_bp. In this private method, the
technical object key is interpreted and available in the field prznr. From this field,
developers can map to a dummy business process, perform remote calls, or generate
the necessary master data.
6.6.3 Extraction
Data extraction from SAP and non-SAP systems can be performed in three ways:
쐍 Manually, through data file export
쐍 With standard solutions like SAP MDG, SAP Data Services, or third-party software
쐍 With custom programming
Which solution you choose depends on the level of effort, the frequency of updates,
and the solutions already in place. The solution could also handle the initial load and
the ongoing operations differently.
208
6.6 Governance
Note
Before performing the extraction, always check for deletion flags, because you don’t
need to extract and transfer master data that’s marked for deletion, which is particu-
larly relevant with materials (MARA-LVORM), customers (KNA1-LOEVM), and vendors
(LFA1-LOEVM).
6
6.6.4 Harmonization
Multiple strategies are possible for master data harmonization, for example:
쐍 Spending as little time as possible harmonizing data by only dealing with overlap-
ping number ranges
쐍 Focusing on attributes and characteristics like groups and only harmonizing the
top elements (i.e., top 10% of customers by revenue or top 20% of raw materials by
procurement volume)
쐍 Performing an extensive harmonization process using matching algorithms and
machine learning
When merging data from multiple source systems, especially in the case of customer/
vendor integration (CVI), pay special attention to key IDs when these values are kept
from the source systems. Watch out for the following:
쐍 Different elements representing different IDs
쐍 The same elements with different IDs
쐍 Different elements with the same IDs
쐍 The same elements with the same IDs
The only hard requirement is that if key IDs are kept from the source system, the
third case must be avoided, which is possible with preliminary work.
Organizations usually worry about the second case. What if the same customer or
supplier exists in different source systems but is represented as two different cus-
tomers? The answer is to overlook the IDs and focus on customer attributes, groups,
or hierarchies. If these elements are maintained correctly, reports will show these ele-
ments in the same group, and harmonization can be performed after the fact.
With harmonization, unfortunately, the return does not always match the level of
the effort that the team has put in, and the law of diminishing returns can certainly
apply in this situation.
209
6 Finance Data Harmonization: How Does Central Finance Standardize Data? 6.6 Governance

6.6.5 Rationalization To achieve this responsiveness, a master data management system must be included
in the overall enterprise architecture, which may follow one of four commonly recog-
Over time, or through system integration, chances are that some pieces of master
nized architecture models, as shown in Figure 6.14 and summarized in Table 6.2.
data will be duplicated. For example, a vendor could have different numbers in the
procurement and ERP systems; a customer could be represented twice in customer
relationship management (CRM), ERP, or logistics due to multiple subsidiaries; a raw Consolidation Hub Registry Hub
material could be represented differently in separate source systems, and so on. The
process of reducing the number of duplicates while ensuring better master data qual-
6
ity is called rationalization.
For master data rationalization, we recommend using standard taxonomies such as
UNSPSC, NATO, or eClass to facilitate the rationalization process. These taxonomies
are supported by most master data software.
Once duplicates have been identified, you need to determine which fields should be
kept. This process can be done manually if the volume is reasonable. With larger data-
sets, the best strategy is to prioritize information based on source systems. For Coexistence Hub Centralized Hub

instance, a customer address is probably more reliable coming from the logistics sys-
tem than from the CRM system. Another strategy would be to prioritize the most
recent records.

6.6.6 Dissemination
The dissemination or synchronization of master data is the process of communicat-
ing the updated record back to the source systems. To maintain transactional integ-
rity, the original element IDs should be kept and transferred together with the
Figure 6.14 Architectural Approach to Master Data Management
updated information. As much as possible, the dissemination process should update
all systems at once to avoid discrepancies.
Consolidation Registry Hub Coexistence Centralized
Hub Hub Hub
6.6.7 Maintenance
Consolidation Federation or Federation and Federation, Physical
To reduce effort and provide a more reliable framework, we recommend setting up physical real-time physical consolidation
the same de-duplication rules during the initial load as in the ongoing replication. consolidation change consolidation, and real-time
Master data management should be set up in such a way that exceptions will be propagation and real-time change
raised, and the master data group should be notified. Then, an analyst can evaluate change propagation
master data conflicts and either resolve these issues directly or dispatch issues to the propagation
relevant groups. Synchroniza- Batch or real Real time Batch and real Batch and real
tion type time time time

Table 6.2 Characteristics of Master Data

210 211
6 Finance Data Harmonization: How Does Central Finance Standardize Data?

Consolidation Registry Hub Coexistence Centralized

Hub Hub Hub

Data flow Unidirectional Bidirectional Bidirectional Bidirectional

Quality At the At the source At the source At the

controls repository and at the repository
repository

Table 6.2 Characteristics of Master Data (Cont.)

6.7 Summary
Master data is an important workstream in all Central Finance projects but should be
separated from transactional data or configuration. The initial load process can be
overwhelming, so an agile approach is preferred over a big bang implementation. To
that end, SAP Application Interface Framework can be used during the initial load
and for subsequent delta loads.
A master data management solution deployed in the landscape will help you in the
overall process of extracting, harmonizing, rationalizing, disseminating, and main-
taining the key master data domains. More than the data itself, the processes around
maintaining master data will increase the value of the Central Finance project.
In the next chapter, we’ll take a look at your deployment options for Central Finance.

212
Contents
Preface ..................................................................................................................................................... 19

PART I Getting Started with Central Finance

1 The Basics: What Is Central Finance? 29

1.1 A Centralized Finance System ........................................................................................ 29

1.1.1 Evolution of Central Finance ............................................................................ 30
1.1.2 Central Process Execution Model .................................................................... 32
1.2 Central Finance with SAP S/4HANA ............................................................................ 35
1.2.1 Standard SAP (Non-Custom) Solution ........................................................... 35
1.2.2 Technical Foundation .......................................................................................... 36
1.2.3 Deployment Option ............................................................................................. 37
1.2.4 System Consolidation Path ............................................................................... 38
1.3 Central Finance Components ......................................................................................... 40
1.3.1 Source System ....................................................................................................... 40
1.3.2 Data Replication .................................................................................................... 43
1.3.3 Central System ...................................................................................................... 46
1.3.4 Cloud Integration ................................................................................................. 48
1.4 Central Finance Outcomes .............................................................................................. 49

1.5 Central Finance Boundaries and Restrictions ......................................................... 51

1.6 Common Central Finance Misconceptions ............................................................... 53

1.7 Summary ................................................................................................................................. 55

2 The Mechanics: How Does Central Finance Work? 57

2.1 Functional Foundation ...................................................................................................... 57

2.1.1 Planning, Reporting, and Compliance ........................................................... 58
2.1.2 Finance Operations and Shared Services ...................................................... 59

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2.1.3 Central Close .......................................................................................................... 59 4 Reporting: What Can I Learn About My Data? 97
2.2 Central Finance Capabilities ........................................................................................... 60
2.2.1 Data Logging .......................................................................................................... 61 4.1 Advanced Reporting ........................................................................................................... 97
2.2.2 Data Replication ................................................................................................... 63 4.1.1 Line Item Access .................................................................................................... 98
2.2.3 Business Mapping ................................................................................................ 65 4.1.2 Universal Reporting ............................................................................................. 99
2.2.4 Data Digitization and Inbound Posting ........................................................ 67 4.1.3 Multidimensional Reporting ............................................................................ 101
2.2.5 Error Handling ....................................................................................................... 68 4.1.4 Microsoft Excel Analysis ..................................................................................... 102
2.2.6 Drilldown/Audit Trail .......................................................................................... 70 4.1.5 Root-Cause Analysis and Storytelling ............................................................ 102
2.2.7 Data Reconciliation ............................................................................................. 70 4.1.6 Embedded Reporting ........................................................................................... 103
2.3 Summary ................................................................................................................................. 72 4.1.7 Real-Time KPIs ....................................................................................................... 104
4.1.8 Predictive Reporting ............................................................................................ 105
4.1.9 Problem-Solving Solutions ................................................................................ 106
4.2 Extended Dimensional Reporting ................................................................................ 108
3 The Motivation: Why Central Finance and 4.2.1 Microsegment Profitability ............................................................................... 109
Why Now? 73 4.2.2 Cross-Organizational Functional Reporting ................................................ 110
4.2.3 Business Continuity Reporting ........................................................................ 111
3.1 Central Finance as a Silver Bullet ................................................................................. 73 4.2.4 Artificial Intelligence and Machine Learning-Based Analysis ................ 112
3.2 Innovation Acceleration ................................................................................................... 79 4.3 Entity Reporting ................................................................................................................... 113
3.2.1 Pressure to Innovate ........................................................................................... 80 4.3.1 Local Processes ...................................................................................................... 114
3.2.2 Earlier Innovation ................................................................................................. 81 4.3.2 System of Record .................................................................................................. 114
3.2.3 Faster Cycles, Faster Adoption ......................................................................... 82 4.3.3 Company Code Alignments .............................................................................. 115
3.3 Process Transformation ................................................................................................... 83 4.3.4 Tax Optimization .................................................................................................. 115

3.4 Business Model Evolution ............................................................................................... 85 4.4 Group Reporting ................................................................................................................... 116
3.4.1 Enterprise Optimization .................................................................................... 86 4.4.1 Multientity Reporting ......................................................................................... 116
3.4.2 Business Model Changes ................................................................................... 87 4.4.2 Harmonized/Standardized ................................................................................ 117
3.4.3 Mergers and Acquisitions ................................................................................. 87 4.4.3 Benchmarking ........................................................................................................ 118
3.4.4 Divestitures ............................................................................................................ 88 4.4.4 Consolidated Reporting ...................................................................................... 118
4.4.5 Continuous Close at the Group Level ............................................................ 119
3.5 Technology Transformation ........................................................................................... 88
3.5.1 Rationalization ...................................................................................................... 89 4.5 Summary ................................................................................................................................. 120
3.5.2 Consolidation ........................................................................................................ 90
3.5.3 Cloud Transition ................................................................................................... 91
3.6 SAP S/4HANA Adoption ................................................................................................... 92 5 Finance Processes: What Can Central Finance
3.6.1 Continued Evolution ........................................................................................... 92 Improve? 121
3.6.2 Side Car Adoption ................................................................................................ 93
3.7 Summary ................................................................................................................................. 95 5.1 Digital Debt ............................................................................................................................ 121

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5.2 Planning, Reporting, and Compliance ....................................................................... 128 6.2.1 Initial Data Loads and Delta Loads ................................................................. 180
5.2.1 Reporting ................................................................................................................ 128 6.2.2 Golden Record Creation ..................................................................................... 184
5.2.2 Financial Planning ............................................................................................... 129 6.3 Master Data Processes ...................................................................................................... 185
5.2.3 Controlling ............................................................................................................. 130 6.3.1 Request for Change ............................................................................................. 188
5.2.4 Prediction and Simulations .............................................................................. 134 6.3.2 Approval of the Request ..................................................................................... 189
5.2.5 Tax Reporting and Compliance ....................................................................... 135 6.3.3 Execution of the Change Request ................................................................... 190
5.3 Finance Operations and Shared Services .................................................................. 136 6.4 Master Data Objects and Hierarchies ......................................................................... 191
5.3.1 Credit, Collections, and Disputes .................................................................... 137 6.4.1 Chart of Accounts (General Ledger Account) .............................................. 192
5.3.2 Central Payments ................................................................................................. 141 6.4.2 Business Partners ................................................................................................. 195
5.3.3 Intercompany Movements ............................................................................... 147 6.4.3 Material Numbers ................................................................................................ 197
5.3.4 Bank Account Management ............................................................................. 148 6.4.4 Profit Centers ......................................................................................................... 197
5.3.5 Cash Operations and Liquidity Management ............................................ 151 6.4.5 Cost Centers ........................................................................................................... 198
5.3.6 Treasury ................................................................................................................... 153 6.4.6 Activity Types ......................................................................................................... 199
5.4 Central Closing ..................................................................................................................... 158 6.4.7 Statistical Key Figures ......................................................................................... 199
5.4.1 Business Model ..................................................................................................... 159 6.5 Ongoing Transaction Replication ................................................................................. 200
5.4.2 Daily Activities ...................................................................................................... 164 6.5.1 SAP Transaction Replication ............................................................................. 200
5.4.3 Entity Close ............................................................................................................ 165 6.5.2 Non-SAP Transaction Replication ................................................................... 203
5.4.4 Group Close ............................................................................................................ 168
6.6 Governance ............................................................................................................................ 205
5.4.5 Disclosure ............................................................................................................... 169
6.6.1 Master Data and Master Data Objects ......................................................... 206
5.4.6 Workflow ................................................................................................................ 169
6.6.2 Dynamic Cost Object Creation ......................................................................... 207
5.4.7 Financial Closing Cockpit ................................................................................... 169
6.6.3 Extraction ................................................................................................................ 208
5.4.8 Contract Lifecycle Management (IFRS 16) ................................................... 170
6.6.4 Harmonization ...................................................................................................... 209
5.4.9 Revenue Recognition (IFRS 15) ........................................................................ 171
6.6.5 Rationalization ...................................................................................................... 210
5.4.10 Group Reporting ................................................................................................... 171
6.6.6 Dissemination ....................................................................................................... 210
5.4.11 SAP Financial Closing Cockpit for SAP S/4HANA ....................................... 173
6.6.7 Maintenance .......................................................................................................... 210
5.5 Summary ................................................................................................................................. 174
6.7 Summary ................................................................................................................................. 212

6 Finance Data Harmonization: How Does Central

7 Deployment Options: How Do I Implement
Finance Standardize Data? 175
Central Finance? 213

6.1 Why Harmonize Data? ...................................................................................................... 175

7.1 Getting Started ..................................................................................................................... 214
6.1.1 Master Data ........................................................................................................... 176
6.1.2 Configuration Data ............................................................................................. 178 7.2 On-Premise ............................................................................................................................. 216
7.2.1 Required Deployments ....................................................................................... 217
6.2 Transactional Data Loads ................................................................................................ 180
7.2.2 Optional Deployments ....................................................................................... 218

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7.3 Cloud ......................................................................................................................................... 225 8.5.5 SAP Business Client .............................................................................................. 266
7.3.1 Private Cloud ......................................................................................................... 227 8.6 Summary ................................................................................................................................. 267
7.3.2 Public Cloud ........................................................................................................... 229
7.3.3 Managed Cloud .................................................................................................... 231
7.3.4 Project Cloud ......................................................................................................... 234
7.3.5 Cloud Integration ................................................................................................. 235 9 Implementing Central Finance 269

7.4 Two-Tier Strategy ............................................................................................................... 237

9.1 Rollout ...................................................................................................................................... 269
7.5 Summary ................................................................................................................................. 238
9.1.1 Iterative Rollout versus Big Bang .................................................................... 269
9.1.2 Milestone-Based Rollout .................................................................................... 271
9.1.3 Process Selection .................................................................................................. 272
PART II Deploying Central Finance 9.2 Roadmap ................................................................................................................................. 273
9.2.1 First Wave ............................................................................................................... 273
8 System Architecture 243 9.2.2 Subsequent Waves .............................................................................................. 274
9.2.3 End State ................................................................................................................. 274
8.1 Technical Architecture ...................................................................................................... 243 9.3 System Setup ......................................................................................................................... 274
8.1.1 Technical Foundation ......................................................................................... 245 9.3.1 Landscape ................................................................................................................ 275
8.1.2 Source System ....................................................................................................... 245 9.3.2 Central Finance Instance .................................................................................... 277
8.1.3 Data Replication ................................................................................................... 246 9.3.3 SAP Landscape Transformation Replication Server .................................. 292
8.1.4 Central System ...................................................................................................... 247 9.3.4 SAP Source Systems ............................................................................................. 295
8.1.5 Extensions .............................................................................................................. 248 9.3.5 Non-SAP Source Systems ................................................................................... 296
8.2 Central Finance Landscape ............................................................................................. 249 9.3.6 SAP Master Data Governance .......................................................................... 297

8.3 SAP Landscape Transformation Replication Server ............................................. 254 9.4 Data Integration Framework .......................................................................................... 298
8.3.1 Deployment Options .......................................................................................... 256 9.4.1 Master Data ............................................................................................................ 298
8.3.2 Data Migration Server ........................................................................................ 257 9.4.2 Transactional Data ............................................................................................... 308
9.4.3 SAP Source Data .................................................................................................... 312
8.4 SAP Application Interface Framework ....................................................................... 257
9.4.4 Non-SAP Source Data .......................................................................................... 316
8.4.1 SAP Application Interface Framework Message Processing .................. 259
9.4.5 Third-Party Interface ........................................................................................... 317
8.4.2 BC Sets for SAP Application Interface Framework .................................... 260
8.4.3 Configuring SAP Application Interface Framework .................................. 261 9.5 Replication Setup ................................................................................................................. 319
8.4.4 Monitoring SAP Application Interface Framework for 9.5.1 SAP Source Systems ............................................................................................. 319
Central Finance ..................................................................................................... 261 9.5.2 Non-SAP Source Systems ................................................................................... 321
9.5.3 Pre-Implementation Assessment ................................................................... 322
8.5 Frontend Tools and Central Finance ........................................................................... 261
9.5.4 Test Data Load ....................................................................................................... 323
8.5.1 SAP GUI .................................................................................................................... 262
9.5.5 Initial Data Load .................................................................................................... 328
8.5.2 SAP Fiori ................................................................................................................... 262
9.5.6 Ongoing Replication ............................................................................................ 329
8.5.3 SAP Analysis for Microsoft Office ................................................................... 264
9.5.7 Accounting View of Logistics ............................................................................ 329
8.5.4 SAP Analytics Cloud ............................................................................................. 265

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9.6 Business Mapping ............................................................................................................... 332 10.4 Explore Phase ........................................................................................................................ 385
9.6.1 Master Data Objects ........................................................................................... 332 10.4.1 Key Decisions ......................................................................................................... 385
9.6.2 Strategies ................................................................................................................ 333 10.4.2 Fit/Gap Analysis and Blueprinting .................................................................. 386
9.7 Consistency Check Reports ............................................................................................. 336 10.5 Realization Phase ................................................................................................................ 387
9.7.1 FI Configuration Check ....................................................................................... 338 10.5.1 Monitoring Progress ............................................................................................ 387
9.7.2 Central Payment Configuration Check ......................................................... 338 10.5.2 Issue Management .............................................................................................. 388
9.7.3 Tax Configuration Check ................................................................................... 339 10.5.3 Development Coordination .............................................................................. 388
9.7.4 CO Configuration Check .................................................................................... 339 10.5.4 Testing ...................................................................................................................... 389
9.8 Initial Data Load .................................................................................................................. 340 10.6 Deploy Phase ......................................................................................................................... 390
9.8.1 Prerequisites .......................................................................................................... 341 10.6.1 Cutover ..................................................................................................................... 390
9.8.2 Configuration in the Source System .............................................................. 342 10.6.2 Centers of Excellence .......................................................................................... 391
9.8.3 Initial Load of CO Postings ................................................................................ 345 10.6.3 System Onboarding ............................................................................................. 392
9.8.4 Initial Load for Financial Accounting ............................................................. 348 10.6.4 Process Onboarding ............................................................................................. 395
9.8.5 Final Steps .............................................................................................................. 363 10.7 Run Phase ................................................................................................................................ 396
9.9 Summary ................................................................................................................................. 365 10.7.1 Ongoing Replication ............................................................................................ 396
10.7.2 Master Data ............................................................................................................ 400
10.8 Mergers, Acquisitions, and Divestitures ................................................................... 402
10 Implementation Project and Operations 367 10.9 Summary ................................................................................................................................. 404

10.1 Establishing a Governance Framework ..................................................................... 368

10.1.1 What Makes Central Finance Different? ...................................................... 369
11 Master Data Management 405
10.1.2 Change Management ......................................................................................... 371
10.1.3 Roles and Responsibilities ................................................................................. 374
10.1.4 Resourcing Considerations ............................................................................... 377
11.1 Master Data Integration Technology Options ........................................................ 406
11.1.1 Central Finance-Supported Master Data ..................................................... 407
10.2 Project Methodology ......................................................................................................... 378
11.1.2 ALE Master Data Distribution ........................................................................... 415
10.2.1 Agile versus Waterfall ........................................................................................ 379 11.1.3 SAP Data Services ................................................................................................. 422
10.2.2 Waves, Workstreams, and Milestones ......................................................... 380 11.1.4 SAP S/4HANA Migration Cockpit .................................................................... 435
10.2.3 SAP Activate ........................................................................................................... 381 11.1.5 Third-Party Solutions ........................................................................................... 442
10.3 Discover and Prepare Phases ......................................................................................... 383 11.1.6 Custom Programs ................................................................................................. 448
10.3.1 Road Mapping ....................................................................................................... 383 11.2 SAP Master Data Governance ........................................................................................ 451
10.3.2 Readiness Planning ............................................................................................. 384 11.2.1 Consolidation versus Central Governance ................................................... 452
10.3.3 Demo and Trial System Options ..................................................................... 384 11.2.2 Landscape and Architecture ............................................................................. 453
10.3.4 Education and Training Options ..................................................................... 385 11.2.3 Data Models ........................................................................................................... 469
11.3 Summary ................................................................................................................................. 474

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PART III Next Steps with Central Finance 13.4 Central Finance and the SAP S/4HANA Movement Program .......................... 515
13.5 Summary ................................................................................................................................. 517
12 Mergers and Integrations 479

12.1 Integration Catalyst ........................................................................................................... 479

14 Finance Transformation 519
12.1.1 Merger and Integration Platform ................................................................... 480
12.1.2 Merger and Integration Playbook ................................................................... 481
14.1 Strategy Management ...................................................................................................... 520
12.2 Mergers and Acquisitions ................................................................................................ 482
14.2 Value Management ............................................................................................................ 526
12.2.1 Central Finance as an M&A Platform ............................................................ 483
12.2.2 Building Blocks ...................................................................................................... 484 14.3 Risk Management ............................................................................................................... 529
12.2.3 Capabilities ............................................................................................................ 488 14.3.1 Technical Risk Factors ......................................................................................... 530
14.3.2 Business Change and Organizational Risk Factors .................................... 533
12.3 Postmerger Integration .................................................................................................... 491
14.3.3 Financial Risk Factors .......................................................................................... 535
12.3.1 Process Execution Considerations .................................................................. 492
12.3.2 Platform Considerations .................................................................................... 493 14.4 Business Process Management ..................................................................................... 537
12.3.3 System Continuity ............................................................................................... 494 14.5 Organizational Change Management ........................................................................ 540
12.3.4 Interim versus End State ................................................................................... 494
14.6 Summary ................................................................................................................................. 550
12.4 Summary ................................................................................................................................. 496

15 Platform Transformation 551

13 Central Finance as a Stepping Stone to
SAP S/4HANA 497 15.1 Platform Transformation Strategy .............................................................................. 552
15.2 System and Application Consolidation ...................................................................... 555
13.1 Charting Your Journey ...................................................................................................... 498 15.2.1 Corporate SAP HANA Reporting Platform .................................................... 556
13.1.1 First Step: Central Finance ................................................................................ 499 15.2.2 Corporate Finance Service Platform ............................................................... 557
13.1.2 End State ................................................................................................................. 502 15.2.3 Stepping Stone to Consolidated SAP S/4HANA Platform ....................... 559
13.2 Choosing Your Route ......................................................................................................... 503 15.2.4 Corporate Mergers, Acquisitions, and Divestitures Platform ................ 560
13.2.1 Brownfield versus Greenfield .......................................................................... 504 15.2.5 Orchestration of Source Systems of Record with Central Finance ...... 560
13.2.2 SAP S/4HANA Cloud Code Line ........................................................................ 505 15.3 Digitization ............................................................................................................................. 563
13.3 Planning the Process .......................................................................................................... 506 15.4 Readiness for Services Consumption in the Cloud ............................................... 565
13.3.1 Transition Planning ............................................................................................. 507
15.5 Summary ................................................................................................................................. 568
13.3.2 Adoption Patterns ................................................................................................ 510
13.3.3 Moving a Single ERP System ............................................................................ 512
13.3.4 Moving Multiple ERP Systems ......................................................................... 513

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16 Central Finance Business Case Development 571

16.1 Identifying Stakeholders ................................................................................................. 572

16.1.1 Finance Organization and the Impact on Resources ............................... 572
16.1.2 IT Organization ..................................................................................................... 573
16.2 Evaluating the Status Quo .............................................................................................. 574
16.2.1 Current Landscape ............................................................................................... 575
16.2.2 Anticipated Challenges ...................................................................................... 576
16.3 Determining Key Value Drivers .................................................................................... 577
16.3.1 Flexibility ................................................................................................................. 578
16.3.2 Efficiency ................................................................................................................. 578
16.3.3 Service Level ........................................................................................................... 579
16.3.4 Cost Reduction ...................................................................................................... 579
16.3.5 Working Capital Improvement ........................................................................ 579
16.3.6 Profit and Margin Management ..................................................................... 579
16.3.7 Simplification ........................................................................................................ 580
16.3.8 Business Continuity ............................................................................................ 581
16.3.9 Risk Mitigation ...................................................................................................... 581
16.4 Assessing the Cost .............................................................................................................. 583
16.4.1 Initial Implementation ....................................................................................... 583
16.4.2 Maintenance ......................................................................................................... 585
16.4.3 End State ................................................................................................................. 585
16.5 Return on Investment ....................................................................................................... 586
16.6 Summary ................................................................................................................................. 588

The Authors ........................................................................................................................................... 589

Index ........................................................................................................................................................ 593

18
Index
0G data model ........................................................ 470
A Background job ..................................................... 291
Account category .................................................. 340
Account group ....................................................... 458
Account-based CO-PA ......................................... 133
Accounting ................................................................. 61
Accounting document ........................................ 145
Accounting document replication ................ 201
Accounting view of logistics (AVL) ...... 329, 330
activate ................................................................ 330
Accounts payable .................................................. 142
with central payments ................................... 143
without central payments ............................ 142
Accounts Payable app ......................................... 564
Accruals management ........................................ 559
Active data ............................................................... 466
Activity rates ........................................................... 412
tables ..................................................................... 415
Activity types ......................................................... 199
Actuals entry .......................................................... 538
Advanced datastore object (ADSO) ................ 450
Advanced reporting ................................................ 49
Advertising and promotion (A&P) ................ 133
Amazon Web Services ......................................... 214
Analytics ................................................................... 523
Analytics gap .......................................................... 576
Application Function Library (AFL) ............... 565
Application Link Enabling (ALE) ........... 219, 417
master data distribution ............................... 415
Application programming interface
(API) ............................................................. 248, 565
Application strategy ............................................ 536
ASC X12 ..................................................................... 415
Attribute ................................................................... 111
Audit trail .................................................................... 70
Auditing ....................................................................... 61
Authorization ......................................................... 545
Automation ................................................................ 84
B
Background work process ................................. 291
Backposting ..................................................... 61, 568
Balances .................................................................... 363
Bank Account Management .................... 148, 150
master data ........................................................ 149
BC set ............................................. 303, 304, 309, 396
create .................................................................... 303
Benchmarking ................................................ 86, 118
Big bang .................................................................... 269
Big data ..................................................................... 523
Billing document ..................................................... 62
BlackLine .................................................................. 156
Blueprinting ........................................................... 386
BP data model ........................................................ 472
BRFplus ..................................................................... 464
Brownfield implementation ................... 498, 510
Business Add-In (BAdI) ................................ 66, 207
Business case .......................................................... 535
Business continuity ............................................. 581
Business function ................................................. 279
Business mapping .................................. 60, 65, 447
actions ..................................................................... 66
layer ...................................................................... 115
Business model
changes ................................................................... 87
debt ........................................................................ 122
evolution ................................................................ 85
Business object types .......................................... 310
Business partner ....................... 177, 195, 457, 471
jobs ........................................................................ 430
master data ........................................................ 450
number ................................................................. 462
Business process
changes ................................................................ 534
management ..................................................... 537
master list ........................................................... 387
owner .................................................................... 544
Business reconciliation ...................................... 341
Business representative ..................................... 392
593
Index
Business system communication Central Finance (Cont.)
channels .............................................................. 311 data ........................................................................ 561
Business systems .................................................. 310 data collection ..................................................... 62
Business unit controller .................................... 546 data contraints .................................................... 52
Business value network ..................................... 527 demo and trial system options ................... 384
dependencies ...................................................... 369
C deployment options .......................................... 37
dual track landscape ....................................... 251
Capital expenditure (CapEx) ..................... 91, 131 efficiency .............................................................. 578
Cash flows ................................................................ 153 embedded SAP BW ........................................... 223
Cash Management ............................................... 152 end state ........................................... 496, 502, 585
Cash operations .......................................... 151–153 enterprise consolidation ................................ 577
Center of excellence ............................................ 391 evolution ................................................................ 30
key resources ..................................................... 391 extensions ........................................................... 248
Central closing ................................................ 59, 158 finance organization ...................................... 572
business model ........................................ 159, 160 financial metrics ............................................... 587
categories ............................................................ 164 first step ................................................................ 499
cycle ....................................................................... 174 flexibility .............................................................. 578
daily activities ................................................... 164 frontend tools .................................................... 261
entity closing ............................................ 162, 165 functional foundation ...................................... 57
group closing ..................................................... 162 impact ................................................................... 233
group reporting ................................................ 172 in the cloud ........................................................... 91
hybrid model ..................................................... 162 initial implementation ................................... 583
ownership ........................................................... 160 innovation acceleration .................................. 79
Central collections ............................................... 139 innovation pressure .......................................... 80
Central Finance innovations ........................................................... 81
analytics .............................................................. 575 instance ................................................................ 277
approach ............................................................. 501 integration plan ................................................ 481
architecture ............................................... 245, 276 integration platform ....................................... 480
benefits ...................................... 93, 529, 572, 575 investment .......................................................... 500
benefits timeline ................................................. 82 IT organization .................................................. 573
brownfield versus greenfield ....................... 504 key innovations ................................................... 76
building blocks ........................................... 40, 484 key landscape elements ................................. 249
business cases ................................................... 571 landscape ......................................... 249, 251, 275
business value ................................................... 561 landscape evaluation ..................................... 574
capabilities ..................................................... 60, 77 local processes ..................................................... 32
central processes ................................................. 33 M&A capabilities .................................... 483, 488
centralization ........................................... 492, 504 M&A platform ................................................... 483
challenges ........................................................... 576 maintenance ...................................................... 585
choosing your route ....................................... 503 master data ........................................................ 187
code line ..................................................... 215, 505 mixed landscape ............................................... 252
complexity .......................................................... 530 motivation ............................................................ 73
configuration .................................................... 298 multi-ERP source system ............................... 517
consolidation .................................................... 556 multiple instances ............................................ 503
cost assessment ................................................ 583 myths ....................................................................... 53
cross-system reporting ..................................... 78 non-SAP source landscape ............................ 253
594
Central Finance (Cont.)
onboarding platform ..................................... 501
on-premise landscape .................................... 216
operationalize ................................................... 123
optional deployments .................................... 218
options matrix .................................................. 498
orchestration ..................................................... 163
orchestration layer .......................................... 486
predefine jobs .................................................... 423
prerequisites .......................................................... 51
process candidates ............................................. 58
process execution ............................................... 32
process groups ..................................................... 58
product versus solution ................................. 243
project ................................................................... 369
project waves ..................................................... 393
QA system ........................................................... 389
replication .............................................................. 52
reporting .............................................................. 390
required deployments .................................... 217
restrictions ............................................................. 51
results ...................................................................... 49
risks ........................................................................ 530
ROI ......................................................................... 586
sandbox ............................................................... 249
SAP S/4HANA core .............................................. 31
SAP S/4HANA Movement ............................. 516
SAP-only sources .............................................. 252
scenarios .............................................................. 502
scope ..................................................................... 393
side car ................................................................. 537
sidecar ..................................................................... 93
silver bullet ............................................................ 73
simplification .................................................... 580
single instance ................................................... 503
single source of truth ............................ 534, 560
solution ................................................................ 244
source systems .............................................. 45, 54
stakeholders ............................................. 541, 572
standard deployment ........................................ 36
standard SAP solution ...................................... 35
stepping stone ................................ 402, 497, 507
sustainability ..................................................... 536
synchronization requirements ................... 371
system configuration ..................................... 331
system consolidation ........................................ 38
Index
Central Finance (Cont.)
system onboarding ......................................... 392
targeted processes ........................................... 577
technical architecture .................................... 243
technical components ...................................... 47
technical foundation ............................... 36, 245
technical novelty .............................................. 530
technology .......................................................... 587
technology stack .............................................. 487
terminology ....................................................... 214
versus traditional ERP ................................... 584
without SAP BW ................................................ 223
worker skills ....................................................... 573
Central governance ............................................. 453
Central payment configuration check ......... 338
Central payments .................... 141, 143, 145, 146,
285, 557
Central process execution ......................... 49, 480
Central system .......................................................... 46
Centralization ........................................................... 84
Centralized finance ................................................. 29
Change database capture .................................. 344
Change management ....................... 238, 371, 395
Change pointers .................................................... 418
Change request ............................................. 456, 457
Change Request Analysis for Business
Partner app ......................................................... 465
Chart of accounts ............................... 177, 192, 193
Chief financial officer (CFO) .................... 519, 541
Chief information officer (CIO) .............. 525, 542
Classifications ........................................................ 485
Clearing document .............................................. 399
Closing as a service (CaaS) ................................. 161
Cloud connector .......................................... 106, 235
Cloud credits .......................................................... 567
Cloud hosting ......................................................... 214
Cloud integration .......................................... 48, 235
Cloud ready ................................................................ 48
Cloud transition ....................................................... 91
Cloud-based applications .................................. 554
Code list .................................................................... 316
Coding block ........................................................... 485
Collaborative Human Interface Part
(CHIP) .................................................................... 455
Collection factories .............................................. 155
Commitment replication .................................. 202
595
Index
Company code ........................... 270, 348, 394, 500
alignments ......................................................... 115
fields ...................................................................... 342
Compliance .......................................... 127, 128, 135
Conditionals ........................................................... 426
Configuration check report .............................. 337
Configuration Consistency Check Report ... 179
Configuration data ............................................... 178
Consistency checks ..................................... 336, 341
Consolidation ....................... 89, 90, 452, 493, 537
on-demand ......................................................... 119
Consumer proxy ................................................... 138
Consumption-based services .......................... 567
Continuous close .................................................. 119
Contract Lifecycle Management .................... 170
Control record ....................................................... 416
Controlling .............................................................. 130
Controlling areas .................................................. 178
Controlling configuration check .................... 339
Controlling document replication ................ 201
Controlling postings ........................................... 340
CO-PA segment ..................................................... 333
Core data services (CDS) ........................... 112, 557
Corporate controller ........................................... 542
Cost center ..................................................... 177, 198
Cost object ............................................................... 340
Cost object replication framework ................... 64
Cost object-dependent object ............................ 66
Cost objects ............................................................. 409
creation ................................................................ 207
interface .............................................................. 410
Cost reduction ....................................................... 579
Cost reduction tracker ........................................ 489
Credit integration ................................................. 146
Credit management ................................... 137, 138
Cross-origin resource sharing (CORS) .......... 266
Currency .......................................................... 179, 338
Current landscape ................................................ 575
Custom function .................................................. 429
Customer and vendor numbers ..................... 307
Customer master record .......................... 416, 458
Customer stories .................................................. 582
Customer/vendor integration (CVI) .... 209, 473
Customer-defined field ......................................... 67
Cutover ..................................................................... 390
CVS Healthcare ...................................................... 480
596
D Digital twin ................................................................. 30
Data access ............................................................... 534
Data bus .................................................................... 246
Data cleanup ........................................................... 363
Data consistency ................................................... 391
Data digitization ............................................... 61, 67
Data duplication .................................................... 119
Data exploration ..................................................... 98
Data extraction ............................................ 208, 351
Data harmonization ................................... 175, 561
theory .................................................................... 175
Data inclusion ........................................................ 483
Data integration framework ............................. 298
Data lake ................................................................... 129
Data load ............................................................ 63, 425
initial ....................................................................... 69
strategy ................................................................ 318
test .......................................................................... 323
Data logging ....................................................... 60–62
Data migration job ............................................... 434
Data Migration Server ... 216, 257, 284, 292, 295
Data provisioning ................................................. 247
Data quality ............................................................. 576
Data reconciliation ........................................ 70, 399
Data record .............................................................. 416
Data replication ....................................... 43, 63, 246
scenarios ................................................................ 64
setup ...................................................................... 319
Data replication framework .................... 421, 468
Data staging ............................................................. 425
Data steward ................................................. 189, 190
Data transparency ................................................ 521
Data validation ............................................. 188, 307
Datastores ...................................................... 220, 430
Delta load ................................................................. 183
Dependent systems .............................................. 273
Deployment ............................................................ 213
cloud ...................................................................... 225
Destination .............................................................. 293
Development environment .............................. 249
Dialog work process ............................................. 291
Digital debt .............................................................. 121
pain points .......................................................... 123
Digital economy ............................................... 31, 81
Digital transformation .............................. 520, 552
Digitization ............................................................. 563
Dimension ..................................................... 102, 110
Direct data transfer .............................................. 440
Disclosure ................................................................ 169
Display Inbox app ................................................. 139
Display My Account Master Data app .......... 158
Display My Account Statement app ............. 158
Disputes .................................................................... 140
Dissemination ........................................................ 210
Distribution model .............................................. 411
Divestitures ..................................... 42, 88, 256, 402
Document relationship browser .................... 285
Document splitting .................................... 338, 390
Drilldown .................................................................... 70
E Flexible hierarchies ............................................. 471
eBAM .......................................................................... 150
Embedded analytics ............................................ 581
Emergency corrections mode ............................ 69
Employee roles ...................................................... 572
Empty load ................................................................. 63
Enabling layer ........................................................... 36
End user .................................................................... 540
Enterprise optimization ........................................ 86
Enterprise performance management
(EPM) ..................................................................... 128
Enterprise search .................................................. 563
Entity closing .......................................................... 165
Entity reporting ........................................................ 49
Entity types ............................................................. 471
Error correction ........................................................ 46
Error correction and suspense accounting ... 68
Error handling .......................................... 61, 68, 324
Error message ......................................................... 325
Error monitoring .................................................. 353
Executive commitment ..................................... 547
Extract, transform, and load (ETL) ....... 219, 423
F
Facet ...........................................................................
File transfer .............................................................
Finance configuration check ............................
Finance operations ..............................................
Index
Finance operations and shared services ........ 59
Finance processes ................................................. 121
Finance representative ....................................... 391
Finance scope ......................................................... 272
Finance services .................................................... 557
Finance transformation ..................... 50, 493, 519
Finance user ............................................................ 543
Financial accounting data ................................. 284
Financial information model .......................... 301
Financial planning ............................................... 129
Financial postings ................................................ 340
Financial transactions ........................................... 79
Find Business Partner app ................................ 139
Fit/gap analysis ..................................................... 386
Flat files ..................................................................... 427
Flex option .............................................................. 466
Flexible Real Estate Management (RE-FX) ... 170
Functional debt ..................................................... 121
G
G/L account .................................................... 194, 338
GAAP .......................................................................... 166
General Motors ..................................................... 481
Global accounting hierarchies ........................ 471
Global business process owners (GPOs) ...... 375
Global data types .................................................. 316
Golden record ............................................... 184, 452
Goods and invoice receipt reconciliation ... 559
Goods receipts ....................................................... 539
Governance ............................................................. 489
Governance framework ..................................... 368
GR/IR account ........................................................ 143
Greenfield implementation ................... 497, 505,
510, 517
Group closing ......................................................... 168
Group reporting ....................................................... 49
Guided configuration ......................................... 382
GuiXT ......................................................................... 262
H
101
437 Harmonization ............................................... 77, 209
338 Harmonized data .................................................. 522
136 Header staging table ........................................... 321
597
Index
Hershey’s ........................................................ 482, 582
Hierarchies .............................................................. 131
flexible .................................................................. 200
History load ............................................................ 364
I source system configuration ....................... 342
IDoc ................................................ 192, 258, 415, 420
data exchange .................................................. 418
segment ............................................................... 433
IFRS ............................................................................. 166
IFRS 15 ....................................................................... 171
IFRS 16 ....................................................................... 170
Implementation ................................................... 269
customer role .................................................... 375
end state .............................................................. 274
first wave ............................................................. 273
functional resources ....................................... 376
lean versus robust ........................................... 369
monitoring progress ....................................... 387
process selection .............................................. 272
project .................................................................. 367
project costs ....................................................... 535
project methodology ...................................... 378
resourcing considerations ............................ 377
roles and responsibilities .............................. 374
rollout strategy ................................................. 371
subsequent waves ............................................ 274
system setup ...................................................... 274
technical resources ......................................... 375
testing .................................................................. 389
Inbound posting ............................................... 61, 67
Individual entity closing ................................... 161
Infrastructure as a service (IaaS) ................... 214,
227, 230
Initial load ................................... 180, 322, 328, 340
big bang v. agile ............................................... 181
CO postings ........................................................ 345
compare postings ............................................ 354
complete .............................................................. 361
configuration steps ................................ 182, 183
define groups ..................................................... 349
delete data .......................................................... 361
document type .................................................. 181
execution ............................................................ 351
extract data ....................................................... 350
598
Initial load (Cont.) Liquidity management ....................................... 151
financial accounting ....................................... 348 Lockheed Martin ................................................... 494
monitor ................................................................ 352 Logical system .............................................. 286, 288
objects ................................................................... 346 check assignment ............................................. 289
prerequisites ............................................. 341, 345 Logistics .................................................................... 136
Logistics scope ....................................................... 272
Integration ............................................................... 524 Lookup tables ......................................................... 432
Intelligent core ............................................. 551, 554 mapping .............................................................. 432
Intercompany cockpit ......................................... 147 Lufthansa ................................................................. 492
Intercompany movements ............................... 147
Intercompany reconciliation ........................... 558 M configuration considerations ..................... 401
Interface Monitor .............. 69, 309, 323, 346, 347
advanced features ............................................ 326 Machine learning ........................................... 84, 105
error handling .................................................... 324 Magnitude SourceConnect
Internal cloud ......................................................... 227 Harmonization ................... 220, 423, 435, 442,
Internal order ......................................................... 333 444, 445
Internet of Things (IoT) ....................................... 552 prebuilt integrations ....................................... 442
Issue management ............................................... 388 Maintenance order .............................................. 333
IT architects ............................................................. 545 Manage Credit Reports app .............................. 139
IT representative ................................................... 392 Manage Credit Reports for Business
Iterative rollout ...................................................... 269 Partner app ......................................................... 138
Manage Investigation app ................................ 139
J Manage Profit Centers app ............................... 197
Managed cloud ............................................ 227, 231
jQuery ........................................................................ 264 Management accounting .................................. 166
Management reporting ...................................... 561
K Manual data ingestion ........................................ 483
Many-to-one mapping ....................................... 334
Key design decisions ............................................ 372 Mapping ........... 44, 188, 284, 297, 311, 312, 316,
document ............................................................ 373 332, 528, 577
Key performance indicator (KPI) ................... 104, additional transactions ................................. 314
528, 581 CO-PA .................................................................... 336
cost objects ......................................................... 347
L entity ..................................................................... 311
errors ..................................................................... 353
Landscape Transformation Migration external codes to internal ............................. 317
Cockpit .................................................................. 305 list ........................................................................... 314
Legacy data environment .................................. 424 mass maintenance .......................................... 313
Legacy System Migration Workbench master data objects ........................................ 332
(LSMW) ........................................................ 435, 436 rules for cost objects ....................................... 335
Liability management ......................................... 539 search key ............................................................ 315
Lift and shift tools ................................................. 510 simulation ........................................................... 353
Line item .................................................. 45, 364, 399 strategies ............................................................. 333
Line item access ....................................................... 98 tables ..................................................................... 334
Line Item Browser app .......................................... 98 third-party interface ....................................... 317
Liquidity forecast .................................................. 152 value ...................................................................... 317
Index
Mass processing .................................................... 452
Mass transfer ................................................. 294, 321
Master data ........ 65, 69, 125, 176, 206, 298, 308,
310, 394, 400, 531, 544
attributes ............................................................... 68
Central Finance-supported .......................... 407
central v. local ................................................... 408
change request .................................................. 188
change request execution ............................ 190
characteristics ................................................... 211
consolidation .................................................... 445
custom integration ......................................... 448
deduplication .................................................... 445
destributable/reducible ................................. 419
distributing programs ................................... 420
flat file .................................................................. 447
governance ................................................ 205, 402
initial extraction .............................................. 444
initial load .......................................................... 446
integration decision tree ............................... 407
integration technology ................................. 406
maintenance ............................................. 210, 401
missing ................................................................. 398
normalization ................................................... 446
objects .................................................................. 191
processes ............................................................. 185
profiling ............................................................... 443
representative ................................................... 392
request approval .............................................. 189
staging/validation .......................................... 466
synchronization ............................................... 191
upload .................................................................. 305
Master data management ..... 127, 186, 211, 405
SAP Fiori apps .................................................... 407
Master Data Process Overview for
Business Partner app ...................................... 464
Master record ......................................................... 305
Match Payments with Invoices app .............. 157
Material cost estimate ........................................ 413
Material cost estimates
tables .................................................................... 415
Material master ..................................................... 474
Material number ................................................... 197
MCDELTA ........................................................ 179, 371
Memory size ........................................................... 397
599
Index
Mergers and acquisitions ... 42, 78, 87, 402, 479,
482, 503
common information model ...................... 484
data structures ................................................. 485
Day 1 ............................................................. 487, 495
end-to-end lifecycle ......................................... 488
handoffs .............................................................. 482
interim state ...................................................... 495
process orchestration ..................................... 486
Message type .......................................................... 324
Microsegment profitability .............................. 109
Migrate Your Data app ....................................... 440
Migration ................................................................. 305
Migration cockpit ................................................. 305
Migration object .......................................... 437, 439
Migration Services app ....................................... 435
Milestone-based rollout .................................... 271
Milestones ............................................................... 381
MM data model ..................................................... 474
Multimapping ........................................................ 338
Multiple components in one database
(MCOD) ................................................................ 223
Multitenant database containers (MDCs) .... 222
My Change Requests app .................................. 461
N platform considerations ................................ 493
N:1 data provisioning ......................................... 247
O Predictive accounting ......................................... 559
Onboarding checklist .......................................... 394
One Exposure from Operations hub ............ 152
Ongoing replication ............................................ 447
Online replication ................................................ 329
Open item ............................................. 143, 146, 363
Open-item management ................................... 176
OpenSAP platform ............................................... 385
Operational data provider (ODP) ................... 448
Operational expenses (OpEx) ................... 91, 130
Operations ............................................................... 367
Opportunity costs ................................................ 586
Order type mapping ............................................ 334
Organizational change management
(OCM) ................................................. 540, 546, 550
Organizational readiness .................................. 533
600
Organizational readiness assessment .......... 546
Organizational structure .................................... 126
P Product definition ................................................ 244
Partial load ............................................................... 397
Partner profile ........................................................ 421
Pay My Bills app ..................................................... 157
Payables .................................................................... 144
Payment Advice Extraction app ..................... 564
Payment factories ................................................. 154
Payments on behalf of others (POBO) .......... 155
Period-end close .................................................... 398
Persona-based change model .......................... 549
Personas .................................................................... 128
Personnel retention ............................................. 491
Planning .................................................................... 128
Planning, reporting, and compliance ............. 58
Platform .................................................................... 552
Platform as a service (PaaS) ........... 214, 228, 230
Platform transformation ................................... 551
strategy ................................................................ 552
Ports ........................................................................... 226
Postmerger integration .................. 479, 487, 491
iterim versus end state ................................... 494
process execution ............................................. 492
Preconsolidation ................................................... 167
Prediction ................................................................. 134
Predictive analytics .............................................. 523
Predictive models ................................................. 105
Preproduction tier ................................................ 250
Private cloud ................................................. 214, 227
Process analytics for master data ................... 464
Process automation ............................................. 520
Process boundaries ................................................ 52
Process execution ................................................... 86
Process harmonization ....................................... 574
Process onboarding .............................................. 395
Process orchestration ................................ 124, 125
pattern .................................................................. 127
project ................................................................... 125
Process order .......................................................... 333
Process Receivables app ..................................... 104
Process transformation ........................................ 83
Procurement ........................................................... 144
Procure-to-pay process ...................................... 538
Product cost collector ......................................... 333
Product Profitability app ................................... 104
Production environment .................................. 250
Production order .................................................. 332
Profit and loss (P&L) .................................. 106, 132
Profit and margin management ..................... 579
Profit center .................................. 67, 177, 197, 340
Profit Center Accounting ................................... 522
replication ........................................................... 202
Profit center accounting .................................... 132
Profitability Analysis (CO-PA) ....... 109, 133, 331
Program management ....................................... 533
Project cloud ........................................................... 234
Project lead .............................................................. 391
Project management office .............................. 374
Project methodology .......................................... 378
agile versus waterfall ..................................... 379
hybrid .................................................................... 380
Public cloud ................................................... 214, 229
Q embedded ........................................................... 103
Quality management order .............................. 333
Query Browser ....................................................... 355
Query transforms ................................................. 428
R local processes .................................................. 114
RAID log .......................................................... 387, 388
Rapid data migration to SAP S/4HANA
(on-premise) ...................................................... 424
challenges ........................................................... 434
Rationalization ........................................ 84, 89, 210
Raw data ...................................................................... 68
Readiness planning .............................................. 384
Real-time replication .................................... 44, 528
Receivables .............................................................. 155
with central payments ................................... 146
without central payments ............................ 145
Reconciliation ........................................................... 61
attributes ............................................................. 359
reports ..................................................................... 70
Index
Remote Function Call (RFC) ........... 226, 256, 284
assign destinations ......................................... 287
define destinations .......................................... 293
destination naming ........................................ 285
Replication .............................................. 60, 396, 532
content ................................................................. 292
error correction ................................................ 398
object ................................................. 319, 321, 322
ongoing ................................................................ 329
reconciliation .................................................... 399
transactions ....................................................... 396
Replication by Replication Model app ......... 468
Replication cockpit .............................................. 397
Reporting ....... 44, 49, 85, 97, 128, 273, 284, 355,
508, 548
additional fields ............................................... 108
advanced ................................................................ 97
business continuity ......................................... 111
consolidated ...................................................... 118
cross-organizational functions .................. 110
data lakes ............................................................ 129
detail ..................................................................... 356
dimensional ....................................................... 108
entity ..................................................................... 113
general ledger data ......................................... 132
group .................................................................... 116
harmonized ........................................................ 117
line items ................................................................ 98
microsegment profitability ......................... 109
Microsoft Excel ................................................. 102
multidimensional ............................................ 101
multientity .......................................................... 116
predictive ............................................................ 105
universal ................................................................. 99
Request Investigation app ................................ 139
Resource commitment ...................................... 533
Reuse option ........................................................... 466
Revenue recognition ........................................... 171
Reverse invoke proxy ......................................... 235
Risk management ............................. 148, 158, 529
change management ..................................... 533
financial risk ...................................................... 535
technical risks .................................................... 530
Risk mitigation ...................................................... 581
601
Index
Road mapping ........................................................ 383
Roadmap .................................................................. 273
Robotic process automation (RPA) ................. 33,
84, 564
Role ................................................ 281, 282, 284, 295
new ........................................................................ 283
Rollout ...................................................................... 269
Root cause analysis .............................................. 102
Runtime configuration group ................ 290, 291
S SAP Business Warehouse (SAP BW) ....... 62, 213,
SAP Account Reconciliation and
Automation by BlackLine ............................. 559
SAP Activate ................................ 216, 218, 295, 381
deploy phase ...................................................... 390
development coordination .......................... 388
discover and prepare phases ....................... 383
explore phase .................................................... 385
key decisions ...................................................... 385
methodology ............................................ 234, 382
realization phase ............................................. 387
run phase ............................................................ 396
standard solutions .......................................... 386
tasks ...................................................................... 382
SAP Analysis for Microsoft Office ................. 102,
264, 357
attributes ............................................................ 359
benefits ................................................................ 264
data source ......................................................... 358
SAP Analytics Cloud ..... 103, 130, 225, 231, 236,
265, 483, 527, 548
SAP Apparel and Footwear ............................... 440
SAP Application Interface Framework .... 37, 46,
68, 180, 257, 291, 308, 409, 556
activation ............................................................ 309
architecture ........................................................ 258
BC sets .................................................................. 260
configuration .................................................... 261
cost objects ......................................................... 409
interface .............................................................. 410
users ...................................................................... 309
SAP application management services ....... 231
SAP Ariba .......................................................... 91, 481
SAP Best Practice Explorer ................................ 423
602
SAP Best Practices ......... 219, 235, 295, 381, 423,
428, 436, 561
datastores ............................................................ 430
SAP Business Client .......................... 266, 453, 454
SAP Business Integrity Screening ................... 564
SAP Business Planning and Consolidation
(SAP BPC) ........ 77, 90, 118, 213, 224, 271, 557
deployment options ........................................ 224
SAP Business Planning and Consolidation
for SAP S/4HANA .............................................. 129
222, 224, 450, 556
SAP Business Workflow ............................ 461, 463
SAP BusinessObjects Enterprise ............ 425, 431
SAP BW/4HANA ..................................................... 224
SAP C/4HANA ........................................................... 91
SAP Cash Application ............. 156, 236, 558, 564
SAP Central Finance Transaction
Replication .... 46, 54, 183, 204, 220, 297, 317,
329, 343, 354
accelerator ............................................................ 70
SAP Cloud for Customer ..................................... 566
SAP Cloud Platform .................. 94, 230, 236, 553,
565, 567
SAP Cloud Platform Connectivity .................. 235
cloud connector .............................................. 566
SAP Cloud Platform Portal ................................ 566
SAP Cloud Platform, private edition ............. 228
SAP Concur ............................................. 91, 481, 566
SAP Credit Management .......................... 138, 146
SAP Data Integrator .............................................. 423
SAP Data Quality Management ....................... 423
SAP Data Services .......... 219, 220, 248, 254, 305,
421–423, 434
benefits ................................................................. 422
custom functions/script ................................ 429
designer ................................................................ 427
predefined content ........................................... 219
project area ......................................................... 425
SAP Digital Boardroom .......... 103, 483, 487, 568
SAP Disclosure Management ........................... 169
SAP ERP 6.0 .................................................... 497, 554
SAP Extended Warehouse Management
(SAP EWM) ........................................................... 440
SAP Fieldglass ......................................................... 566
SAP Financial Closing cockpit ............... 154, 169,
173, 558
SAP Financial Shared Services
Framework .......................................................... 558
SAP Financial Statement Insights ................. 106,
236, 568
SAP Fiori ... 94, 262, 263, 355, 459, 500, 580, 581
SAP Fiori launchpad ............................................. 104
SAP General Ledger .............................................. 132
SAP GUI ..................................................................... 262
SAP HANA ..... 37, 47, 76, 222, 480, 500, 553, 554
reporting .............................................................. 556
SAP HANA Enterprise Cloud ........ 214, 215, 227,
230, 231, 233, 254
SAP HANA enterprise search ........................... 454
SAP Information Steward .................................. 454
SAP In-House Cash ............................................... 271
SAP Intelligent Robotic Process
Automation ........................................................ 559
SAP Invoice Management by OpenText ..... 141,
142, 557
SAP Learning Hub ................................................. 385
SAP Leonardo Machine Learning ................... 554
SAP Leonardo Machine Learning
Foundation ......................................................... 157
SAP LT Replication Server ......... 37, 64, 181, 182,
203, 213, 217, 218, 226, 232, 246, 254, 255, 261,
274, 285, 292, 294, 296, 318, 319, 323, 330, 340,
345, 396, 397, 401, 448, 556
AVL settings ....................................................... 332
benefits ................................................................. 246
configuration ..................................................... 293
deployment options ........................................ 256
initial load ........................................................... 284
many-to-many deployment ........................ 256
many-to-one deployment ............................. 256
one-to-many deployment ............................. 257
SAP Master Data Governance
(SAP MDG) ..... 37, 65, 185, 192, 213, 221, 274,
297, 369, 396, 451, 532, 556, 557
architecture ........................................................ 453
business partners ............................................. 471
change requests ................................................ 460
consolidation v. central governance ........ 452
data models ........................................................ 469
Financials .................................................. 467, 470
Index
SAP Master Data Governance (SAP MDG) (Cont.)
materials ............................................................. 473
roles ....................................................................... 455
SAP Master Data Quality ................................... 452
SAP MaxAttention ...................................... 377, 582
SAP Model Company ................................. 235, 299
SAP Predictive Analytics .................................... 500
SAP RealSpend .............................................. 106, 236
SAP S/4HANA .............. 37, 47, 229, 245, 260, 277,
500, 527
adoption ................................................................. 92
adoption patterns ............................................ 510
classic migration .............................................. 512
continued evolution .......................................... 92
core system ......................................................... 247
editions ................................................................ 295
end state .............................................................. 506
faster adoption .................................................... 82
full adoption ...................................................... 512
implementation approach ........................... 509
logistics ................................................................ 508
migration ............................................................ 498
paths ..................................................................... 217
planning .............................................................. 506
releases ................................................................. 247
SAP-to-SAP moves ........................................... 509
stepping stone ................................ 559, 577, 585
transition planning ......................................... 507
with Central Finance ...................................... 511
SAP S/4HANA Cloud ........ 78, 157, 215, 231, 236,
238, 266, 278, 295, 516
benefits ................................................................. 237
code line ............................................................... 505
SAP S/4HANA Cloud for credit
integration ................................................ 138, 236
SAP S/4HANA Cloud for customer
payments ......................................... 157, 158, 236
SAP S/4HANA Cloud, single tenant
edition ......................................................... 215, 238
SAP S/4HANA Finance .................................... 48, 76
embedded applications .................................... 76
SAP S/4HANA Finance for
group reporting ....................................... 171, 225
task list ................................................................. 172
603
Index
SAP S/4HANA for advanced
compliance reporting ........................... 135, 558
closing report .................................................... 136
SAP S/4HANA for central finance
foundation ......................................................... 582
SAP S/4HANA migration cockpit .................. 425,
435, 436
limitations .......................................................... 441
SAP S/4HANA migration object modeler ... 441
SAP S/4HANA Movement ................................. 515
transition options ............................................ 515
SAP Screen Personas ........................................... 262
SAP Shared Services Framework .................... 483
SAP Solution Manager ............................... 218, 277
SAP SuccessFactors .............................................. 566
SAP Value Assurance ........................................... 377
Scalable process execution .................................. 77
Scope ......................................................................... 527
Scoping ..................................................................... 206
Secure socket layer (SSL) certificates ............ 265
Security .............................................................. 99, 394
Security Assertion Markup Language
(SAML) .................................................................. 265
Segment-level reporting ....................................... 49
Segments ................................................................. 416
SEPA mandates ...................................................... 412
Service levels .......................................................... 579
Shared service center .......................................... 543
Shared services ...................................................... 136
Shares services model ........................................... 34
Simulation ............................................... 86, 307, 523
Simulation replication objects ........................ 320
Simulations ............................................................. 134
Single instance ...................................................... 514
Single-instance ERP ................................................ 41
SMD tool ......................................................... 418, 419
Software as a service (SaaS) ........... 214, 228, 231
solutions .............................................................. 236
Solution definition .............................................. 243
Source data
non-SAP ............................................................... 316
SAP ......................................................................... 312
Source system ... 40, 126, 245, 270, 282, 318, 394
non-SAP ............................................... 78, 296, 321
SAP ............................................... 78, 295, 301, 319
Source type ............................................................. 270
604
SourceConnect accelerator ................................. 70
Sponsor buy-in ....................................................... 547
Staging table ............................................................ 296
Staging tables ................................................ 438, 466
Stakeholder groups .............................................. 548
Standardization ....................................................... 83
Stanley Black & Decker ....................................... 482
Statistical key figures (SKFs) ............................. 199
Status record ........................................................... 416
Statutory accounting ........................................... 166
Storytelling .............................................................. 102
Strategic business units (SBUs) ....................... 256
Strategy management ......................................... 520
dependent strategies ....................................... 526
Subsidiary instances .............................................. 78
Supervise Collections Worklist app ............... 104
System and application consolidation ......... 555
System architecture ............................................. 243
System continuity ................................................ 494
System implementer ........................................... 376
System landscape .................................................... 74
multi-ERP ............................................................... 41
System Landscape Directory ................. 218, 219,
226, 310
System of record ....................... 114, 395, 539, 560
System setup ........................................................... 274
activating business functions ..................... 279
activating Web Dynpro .................................. 279
security ................................................................. 281
sequence ............................................................... 276
T FINS_CFIN_AIF_SETUP .................................. 309
Table ACDOCP ........................................................ 129
Table export ............................................................ 303
Table logging ........................................................... 397
Task footprint ......................................................... 562
Tax configuration check ..................................... 339
Tax optimization ................................................... 115
Tax reporting .......................................................... 135
Taxes .......................................................................... 179
TCP/IP ........................................................................ 226
Technical debt ........................................................ 122
Technical readiness .............................................. 566
Technology transformation ............................... 88
Template ............................................... 269, 306, 334
Template table ....................................................... 429
Test environment ................................................. 425
Test run ..................................................................... 362
Three-way matching ............................................ 141
Time periods ........................................................... 344
Time-to-value ......................................................... 584
Total cost of ownership (TCO) ......................... 492
Traditional data warehouse .............................. 117
Transaction
/AIF/CUST_FUNC ............................................. 326
/AIF/CUST_HINTS ............................................ 326
/AIF/IFMON ..................................... 309, 323, 346
/AIF/PERS_CGR ................................................. 290
/AIF/RECIPIENTS .................................... 310, 398
AIF/ERR ................................................................ 261
BD21 ....................................................................... 420
BD54 ............................................................ 183, 344
BD64 ...................................................................... 410
BDBG ..................................................................... 422
BP ............................................................................ 436
CFINIM .................................................................. 291
CFINIMG .............. 208, 279, 286–289, 310, 311
CK13N .................................................................... 413
DBCO ..................................................................... 440
F-28 ........................................................................ 157
FAGLF03 ............................................................... 341
FAGLGVTR ........................................................... 341
FB03 ....................................................................... 284
FEB_AUTO_REPRO .......................................... 157
FF_5 ........................................................................ 157
FI12 ......................................................................... 150
FINS_CFIN_DFV_FI_DOC .............................. 399
FINS_CFIN_DFV_FI_NUM ............................ 399
FINS_CFIN_DOC_DELETE ............................. 362
FINS_CFIN_MAP_MANAGE ...... 313, 343, 435
FSEPA_M4 ........................................................... 412
GCAC ..................................................................... 341
KP26 ....................................................................... 413
KPSI ........................................................................ 413
KSB5 ....................................................................... 284
LSMW .................................................................... 435
LTMC .................................................. 305, 435, 437
LTMOM ................................................................ 441
LTRC .................................................... 293, 322, 397
Index
Transaction (Cont.)
MDG_ANALYSE_IDM ..................................... 314
MDG_DISPLAY_MODEL ................................ 469
MDG_KM_MAINTAIN .................................... 312
MDGIMG ............................................................. 467
MM03 ................................................................... 326
OY19 ...................................................................... 302
PFCG ............................................................. 281, 282
RCAL ...................................................................... 411
S_ALR_87013611 ................................................ 342
SARA ...................................................................... 260
SCC1 ....................................................................... 249
SCMP ..................................................................... 302
SCPR20 .............................................. 260, 304, 309
SCPR3 ........................................................... 303, 304
SCU0 ..................................................................... 302
SE16 ..................................................... 294, 363, 399
SFW5 ............................................................. 279, 330
SICF ........................................................................ 280
SM21 ...................................................................... 233
SM30 ............................................................ 329, 342
SM37 ............................................................. 350, 351
SM50 ............................................................ 232, 291
SM51 ............................................................. 232, 291
SM59 ............................................................. 285, 468
SMGW ................................................................... 232
SOAMANAGER .................................................. 468
SPRO .......................................... 279, 299, 301, 330
SRTIDOC .............................................................. 422
ST03 ....................................................................... 232
ST22 ....................................................................... 233
SU01 ...................................................................... 284
Transaction replication ............................. 200, 203
Transaction settings ............................................ 126
Transactional data ....................................... 308, 394
Transactional data replication ........................ 180
Transactional posting ............................................ 45
Transactional system .......................................... 559
Transfer rules ......................................................... 413
Transport list .......................................................... 387
Treasury ........................................................... 153, 154
Trial Balance app ...................................................... 99
Trigger functions .................................................. 467
Two-tier strategy .......................................... 237, 403
605
Index
U Virtualization .......................................................... 553
UN/EDIFACT ........................................................... 415
Unicode .................................................................... 246
Unified Key Mapping Service
(UKMS) ........................................................ 219, 222
Universal Journal ........... 102, 178, 474, 483, 485,
522, 574, 575, 580
Unstructured data ................................................ 563
User ............................................................................ 273
User experience (UX) ................................. 262, 581
User interface (UI) ......................................... 47, 528
Utility computing ................................................ 214
V Workstreams ........................................................... 380
Value drivers ................................................. 577, 586
Value management ............................................. 526
Value proposition ....................................... 529, 546
606
VMware ..................................................................... 552
Vrtual machines .................................................... 553
W
Waves ............................................................... 273, 380
WBS elements ............................................... 191, 410
Web Dynpro ............................... 262, 266, 279, 467
Work center ............................................................. 454
Workflow .................................................................. 169
Workflow log ........................................................... 462
Workflow templates ................................... 149, 461
Working capital ...................................................... 579
X
XML ............................................................................. 259
 First-hand knowledge.

Carsten Hilker is a global solution owner for Central Finance. He

is the host of the annual SAP Financial Excellence Forum, an event
for SAP customers to network and interact with domain experts
and thought leaders in finance and management accounting.

Javaid Awan is a global solution owner for Central Finance and a

qualified accountant with more than 25 years of hands-on experi-
ence in software applications.

David Dixon is a partner at TruQua Enterprises and a featured

speaker worldwide at SAPinsider conferences.

Marc Six is a principal consultant and the SAP S/4HANA and

Central Finance practice lead at TruQua Enterprises.

Carsten Hilker, Javaid Awan, David Dixon, Marc Six

Central Finance and SAP S/4HANA
606 Pages, 2nd updated and revised edition 2020, $79.95 We hope you have enjoyed this reading sample. You may recommend
ISBN 978-1-4932-1918-6 or pass it on to others, but only in its entirety, including all pages. This
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