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What new functionality should SAP look to implement for FSCM?

by Mark Chalfen

July 2, 2010

This is the last of my 4 blogs which focus on FSCM. The best way to end the series is to look forward and within this blog I intend to focus on where SAP could look to improve FSCM in future enhancement packages or releases of ERP.

Before I delve straight into my ideas it is clear to see that the FSCM suite has evolved over the last 5 or so years. The version delivered in ERP 6 enabled better integration between modules, and in the last 4 Enhancement Packages, all of them have had new functionality relating to FSCM.

Without going into too much detail about how the product has evolved the key concept that I can see amongst the majority of the enhancements is INTEGRATION.

The integration can be broken down into two different areas:

 

  1. Integration into the way the various FSCM modules work together
  2. Integration with other SAP modules and other stand alone systems.

 

 

Examples of current integration in FSCM:

 

Within Collections Management – you can include in your collection strategy credit management information that will influence it, as well as Dispute Management. This enables your worklists in Collections Management to be influenced by the customer’s dispute behaviour and treating the two processes as one. The further benefit is the ability to see if there is a credit issue with an individual customer, and not wait for invoices to full due. The three core FSCM processes of credit management, dispute management and collections management blending and i nter-acting together providing benefit to the implementer.

Within Dispute Management – disputes can be raised to create claims to integrate back to the TPM module in CRM. Disputes can be raised during Finance clearing of payments, or via Collection Management when a collection management engages with the customer.

 

Example of potential new integration in FSCM:

 

Within Dispute Management there is the ability for a lot of automation. Automation of the creation of disputes when an invoice is part paid or not paid. There is however a gap the standard SAP process is for customer invoices to come from Billing in SD. In Dispute Management the finance document is disputes and there is no direct link to the billing document. Within SD customer invoices come from sales orders, which in turn can come from a contract. To fully resolve a dispute you need to go back to the source of the issue and not just tackle the finance issues as they will keep coming back.

If a contract is entered in SAP incorrectly, it will in turn have the wrong price on the sales order and also the billing document which will feed into Finance. It could be a few weeks until the customer raises the initial dispute. They will dispute the invoices they are in receipt of however there could be some sales orders that have not been billed, or the customer has not received yet.

My suggestion is that in dispute management you could go to the original contract (from the invoice in the dispute)– change it and use the standard document flow to see which sales orders and billing documents are wrong and then add them to the dispute. This will stop the customer raising a further dispute. Further to this within Dispute Management you could have the ability to raise a SD credit note that is linked to the Dispute and then update the status of the Dispute.

 

< p>Currently Collections Management can take data from Credit Management to rank the customers on their worklists.  However the credit score currently cannot as standard utilise some of the factors from Collections Management. To manage the credit risk of a customer, monitoring issues around collections and disputes is beneficial. They are all tied and linked together. If a customer is raising disputes and failing promise to pay’s the credit score should increase. If SAP were to look at integrating this into credit management it would close of some of the areas that are not currently fully integrated.

 

Summary

 

In summary there is still plenty of scope that could be enhanced within the full FSCM suite of products. A new enhancement package is due out this Summer and I am sure there will be some more functionality being added to FSCM.  It is clear that SAP has focused a great deal of attention to improve and grow the product and I hope they continue to do this, not only for product development but most importantly for the benefit of the customers that are using FSCM.

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