Accelerate your finance transformation on AWS with Magnitude SourceConnect
This post was co-authored by Ulf Liljensten, Partner Development Specialist at AWS and Carsten Hilker, Product Manager, SAP S/4HANA Central Finance at SAP SE
Introduction: Finance Transformation Challenges
For many enterprises, sophisticated SAP estates combined with highly complex system landscapes of non-SAP systems is a reality. These SAP systems support diverse and complex business processes and may contain custom code developed under many years in order to support differentiated business processes. When considering the journey to SAP S/4HANA, finance departments face a formidable challenge: On the one hand, S/4HANA promises transformative benefits: a universal journal with a single source of financial truth, in-memory technology with instant access to transactional and analytical data, and the agility that comes with the new streamlined financial processes. On the other hand, moving ERP instances systems to an S/4HANA environment can be a daunting proposition for the broader organization. Business continuity must be ensured. Costs for the migrations must be contained. On top of all this, the complexities associated with any large-scale ERP migration must be managed.
To address this situation, companies are evaluating the pros and cons of different S/4HANA strategies. A new implementation of S/4HANA lets customers start fresh and gives an opportunity to keep the ERP in a clean state without customizations that are costly to maintain. New innovations in S/4HANA can be freshly adopted. However, with this approach the existing, proven IT capabilities are retired – all of them, and at the same time. Any specialized functionality in these systems must either be replaced with new S/4HANA functionality or – if this is not possible – re-developed in the new system. Another, less disruptive, approach is the S/4HANA system conversion. With this approach, the existing system is kept and upgraded to SAP S/4HANA. This eliminates the need to start completely from scratch with a new ERP system. However, for companies with highly complex SAP environments this approach also presents a challenge: a significant part of the functionality in S/4HANA is inherently different from that in the classical SAP ECC, and some legacy SAP ECC extensions that the company may be using may not work with SAP S/4HANA.
To give customers an option with the lowest possible disruption, SAP has developed a third option that allows a gradual transformation path starting with Finance: SAP S/4HANA Central Finance.
Enabling finance transformation with SAP S/4HANA Central Finance
With S/4HANA Central Finance, all financial operations are centralized into a single system based on S/4HANA. Customers can replicate financial documents from more than one SAP or non-SAP ERPs into a consolidated general ledger, giving them the benefits of the new best practices and analytics developed in SAP S/4HANA without disruptive changes to the existing ERPs. In the SAP Central Finance system, a customer can leverage the financial capabilities of SAP S/4 HANA such as contextual information at your fingertips, one centralized, organization-wide financial view and real-time reporting capabilities, all without the disruption that comes from the retirement of existing systems.
Harmonize source ERP systems with Magnitude SourceConnect
While the Central Finance approach is desirable for many customers, adopting it effectively requires data integration from various ERPs. Integrating SAP data is relatively straightforward: SLT allows customers to connect directly to SAP ECC and replicate the data into Central Finance. With non-SAP source systems, the story is different. These systems vary in their data formats, metadata definitions and in the technology used to store data. As a result of these difficulties, the integration of non-SAP source systems into a consolidated general ledger is frequently put off into a distant second phase in the SAP Central Finance implementation, effectively kicking the can down the road and reducing the value of a central, single, source of financial truth.
To remedy this, AWS partner Magnitude teamed up with SAP to develop a solution based on predefined, software-based extractors to integrate non-SAP systems with SAP Central Finance. These extractors support 14 different non-SAP source systems out of the box and are constantly maintained to always be kept up to date with source systems changes. They support full data replication as well as capturing updates to write back relevant financial data to the source ERPs, and are tailored for SAP S/4HANA Central Finance. With this solution, customers do not need to engage in time-consuming, error prone development of custom extractors. As a result, non-SAP source systems can be integrated from the very beginning of the SAP Central Finance deployment and their full value can be harvested from day one.
SourceConnect brings several benefits:
· Data Harmonization – Before any source system can be integrated with SAP Central Finance, both sides must speak the same language. SourceConnect automatically maps the master data of the non-SAP system with Central Finance, the loading of relevant master data from SAP and non-SAP system.
· Transaction replication – brings non-SAP financial postings into the universal journal at a detail level and in real time. Each source connector supported up to 23 transaction types, depending on the source system. It is also possible to import source data via flat files, or to customize predefined extractors if there is a need. Depending on the level of complexity, this customization typically takes about 4-6 weeks.
· Drill down – Finance users often need to see the operational details behind the S/4HANA Universal Journal, even when these originate from a non-SAP system. Drill down presents these transactions in a standard Fiori interface, removing the need for training of end-users in multiple systems.
· Syncback- when financial transactions, such as clearing of invoices, are executed in SAP Central Finance this needs to be reflected in the source system. Syncback will automatically keep customer and vendor balances in sync between the non-SAP source systems and Central Finance.
· Reconciliation – with this feature, you can track, audit and compare postings between source ERP systems and Central Finance. Any discrepancies can be analyzed and reported on in a familiar Fiori interface.
The result is lower integration cost, lower overall project cost – and vendor provided maintenance and support beyond the implementation.
Accelerating SAP S/4HANA deployment with AWS Launch Wizard
As customers go through the implementation stages of SAP S/4HANA Central Finance, fast and easy deployment of S/4HANA systems are important to maintain project momentum. Customers need quickly size, configure and deploy production ready SAP environments that follow AWS cloud application best practices. Here, AWS Launch Wizard for SAP can help. Depending on the application performance requirements, AWS Launch Wizard identifies the appropriate AWS resources to deploy and run your SAP application and provides an estimated cost of deployment. When the settings are finalized, Launch Wizard will provision and configure the selected resources, including installation of the S/4HANA software, high availability configuration, and more. From this point, the SAP environment can be managed from the standard AWS console.
The full picture – SAP S/4HANA Central Finance and SourceConnect running on AWS.
AWS, SAP and Magnitude have partnered to make financial transformation as non-disruptive, risk-free and with as fast time to value as possible for our customers. Our customers are benefitting from this partnership in the form of faster, cheaper and better journey to SAP S/4HANA. To build your environment based on the best practices we see from our extensive customer base, reach out to us and start the conversation! The S/4HANA journey may be a major challenge facing your business – but AWS, Magnitude and SAP are here to help and make Central Finance a fast, safe and rewarding transformation.
To learn more about how Magnitude can help accelerate your S/4HANA Central Finance transformation, visit Magnitude’s Source Connect page or talk to a member of your AWS, SAP or Magnitude account team.