SAP Central Finance – the other S/4HANA scenario

Currently SAP identifies three major options for customers to make the transition to SAP S/4HANA: a new implementation, system conversion or landscape transformation.

1) In a new (greenfield) implementation an existing SAP or Non-SAP system is replaced by S/4HANA.

A new implementation

2) During a (brownfield) system conversion an existing SAP system is (mainly technically) converted into S/4HANA.

System conversion where an existing SAP system is (mainly technically) converted into S/4HANA.

3) A lot of information can be found describing the first two options, but less is known about the third alternative. In a landscape transformation, companies are moving to S/4HANA while making changes to their system landscape (e.g. system consolidations, carve outs, or a central finance implementation).

Landscape transformationIn a central finance implementation existing SAP and / or Non-SAP systems remain as is. However, any postings resulting in changes in the financial source databases are replicated real-time to a SAP S/4HANA system.

This scenario is therefore really interesting for companies having a heterogeneous system landscape that want to use the capabilities of SAP S/4HANA without disturbing running business processes in their existing systems.


SAP S/4HANA Central Finance Architecture

The following components are required in an SAP S/4HANA Central Finance architecture:

  • SAP and / or non-SAP source systems and databases containing financial data.
  • SAP Landscape Transformation Replication Server to real-time replicate the information from the financial databases of the source systems to the central S/4HANA system.
  • SAP S/4HANA system to receive, map, process (including error handling) and transfer the financial data from the source systems into S/4HANA universal journal postings (table ACDOCA).
  • SAP Master Data Governance as an optional component to harmonize master data in the transformation landscape.

SAP S/4HANA Central Finance architecture

Considering SAP S/4HANA Central Finance

SAP S/4HANA Central Finance is a transition scenario mostly considered by companies that have:

  • complex and heterogeneous system landscapes with multiple SAP and/or Non-SAP systems,
  • with non-harmonized business processes and master data,
  • including a high amount of intercompany traffic,
  • having or considering financial shared services,
  • facing a disproportionate effort in monthly financial reconciliation, consolidation and reporting.

SAP S/4HANA Central Finance is available as of release 1503. Although the original version had its restrictions, the solution has certainly evolved as such since then. Additional improvements are now expected in the area of shared services in accounts payables/ receivables and the capabilities for central reversal and correction in the upcoming SAP S/4HANA 1709 release.

In case your company meets the characteristics mentioned above and you are considering to make the transition to SAP S/4HANA, the Central Finance scenario would certainly be something to take into account.

Interested? Please contact us!

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