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An SAPinsider Online Chat with Paul Ovigele

by Paul Ovigele and Ken Murphy, Editorial Director

October 7, 2013

KM: Hi this is Ken Murphy with SAPinsider, and I’m pleased to be joined by SAPexperts advisor Paul Ovigele. Paul has been a popular speaker at the SAPinsider Financials conferences, and he’s a favorite financials blogger on our site. Paul is also the author of SAP Press book “100 Things You Should Know About Financial Accounting with SAP.” Welcome to the podcast, Paul.

PO: Thank you, Ken. Thanks for having me.

KM: In our last Q&A with you, the topic was Financials functionality in enhancement pack 5.0 (EhP 5.0). Now, with enhancement pack 6.0 (EhP 6.0), I’m curious where, Paul, are the financials teams with the latest update? Are there any favorite features that you’d like to highlight?

PO: Some of the new functions with enhancement pack 6.0 are the closing cockpit enhancements. So in the closing cockpit, you can now add customer fields to a task by using BADIs, business add-ins, which is like a user exit. These additional fields have a push button which appears on the cockpit, and when you choose that push button it displays all the fields that you’ve now defined, and you can use it to create your tasks specifically in the cockpit.

Other enhancements are you can now add documents to a task like Word, PowerPoint, and Excel. You can also copy new tasks to all the organization units that exist in a template. So those are three pretty good enhancements with the package 6.0 which have been added to the closing cockpit. Another feature that I like – and I’ve been asked questions about this – is the segment reorganization in enhancement pack 6.0 for things like sales and manufacturing orders, and just to be clear when I say segment I don’t mean a profitability segment which is normally confused with a segment. A segment is basically a business unit of your organization, which you normally set up as one of the fields in the profit center. And you can either have it derived from a profit center, or you can use your own logic to derive the segment like a BADi, or a substitution rule. Now, this segment reorganization enhancement means that if you restructure your business units. So, for example if you split business units from one to two, or one to three, or if you change them or you merge them, you can run the segment reorganization and you can update all the master data, and all the documents that are affected by the change segment.

KM: So how has segment reorganization and the changes to the closing cockpit been received by SAP finance teams?

PO: Pretty well, actually. With the closing cockpit; that has been well-received. More and more businesses that I deal with or hear about are migrating their closing activities to the cockpit, and actually benefiting from the existing functionalities and the new ones with enhancement pack 6.0. Particularly the one where you can attach things to it. As for segment reorganization, I think the pick-up is a little slower, because one is pretty new and businesses are actually just getting used to the profit center reorganization which came out with enhancement pack 5.0. And I think the more businesses migrate to new GL, and start using that segment I think segment reorganization will also be a very valuable tool for facilitating organizational restructuring.

KM: The new GL, that’s now no longer new – it’s pretty mature – are there changes now, or updates, that you’re looking forward to in financial accounting? What are the key stumbling blocks that still come up when advising clients on better managing their financial processes?

PO: The changes I’m hoping for based on the feedback from some of my clients, is first of all the ability to display some actual statements for the year previous to the migration. For example, if you migrated to new GL in 2013, you can’t actually look at standard financial statement reports of 2012. This is something that SAP has warned about and they have actually suggested that you download your previous year’s financial statement and have it signed off because you won’t easily be able to access it on the system. But I am hoping that with future enhancements businesses will actually be able to go back and display these prior year financial statements. Obviously for comparative reasons I think they’re moving in that direction because I notice there’s already a couple of notes out there where you can get specific balances for the prior year. You just can’t get a whole financial statement for the prior year yet. So that’s one thing.

Another one is with new GL there’s a restriction because you’re migration data in new GL has to be around on a fiscal year-end, or basically at the beginning of a new fiscal year. So for companies that I know that are considering new GL, the fact that they have to work their project around the fiscal year is sometimes restricted, because obviously they might have other projects and they don’t have the flexibility to plan accordingly. So hopefully that’s another restriction that will be removed in future releases.

And then finally the activation of new GL currently is at a client level. So if you have 100 companies closed in your system, and you activate new GL, automatically all those company codes are activated for new GL. Again this is pretty restrictive. I’ve actually had it witnessed first-hand with a multi-national client that has all their companies all over the world in the same client, and some of them want new GL now, and others want it later. But any company that is going to activate new GL right now, all the other companies have to activate it. So that’s pretty restrictive. The little flexibility that companies have is that when you’re doing the migration, you can pick and choose which companies you want to migrate data into new GL for, but the problem with that is that if you have a company that didn’t go through the migration and they have new GL activated, they’ll have a conflict with their data because in their system they’ll now have some data migrated which was before the new GL was activated, and some that is not migrated. So that mismatch actually wouldn’t work for most businesses. I’m hoping this is one of those changes that will happen at some point in the future.

KM: Paul, looking ahead, where do you see financials teams as they evaluate mobile or cloud options, or maybe even integration with SAP HANA?

PO: Well, let me start with mobile technology. I see financials teams benefiting from mobile technology because it allows them, particularly the executives, CFO’s, and people at that level to easily access financial reports on their mobile devices when they’re in the mood. Also it allows employees to enter their travel expenses in real time without having to wait until they get back to their computers or offices. And therefore the finance department has more timely data that they can process. They don’t have to wait around for people to hand in employee expense sheets or things like that. So that I definitely see as a benefit.

As for cloud technology, from my point of view and when I talk to clients about some of these new initiatives, I don’t know that finance users will really be aware of the benefits of cloud technology. And that’s because a finance user doesn’t really get involved where the server or application is hosted. All they want is they want to be able to get relevant and accurate data in a timely manner. It doesn’t really matter if the data’s hosted next door, or if it’s hosted in a faraway country. So that said, if an organization as a whole benefits from cloud technology whether it’s with cost savings, or less reliance on hardware or quicker deployment of information, those benefits will also accrue to the finance team.

As for HANA, I don’t have any clients yet that have adopted HANA. They know what it does, at least from some of the information that’s out there, then they know the speed benefits when it comes to data processing and reporting, but from an accounting and finance point of view, it hasn’t really translated into a tangible benefit. Now if you’re a large organization where it takes days to run some reports or run programs, obviously the benefits are pretty clear. But for your average finance department, the time delays that they have in producing reports is more dependent on them making sure that the numbers are reconciled, and the numbers are explainable before reporting them, than how fast the reports run. So at the moment I think there’s still a little bit of hesitation to adopt HANA, at least for clients that I deal with. But I think once technology gets more stabilized and obviously a little cheaper, and once it’s proven to improve the financial processes, I think you’ll see the adoption rate increase significantly.

KM: And when talking to customers, it seems a common them that CO-PA is still under-utilized. Do you see this, and if so why do you think that is? And also can you provide a couple of tips for setting for better utilization of CO-PA?

PO: Well, the first question of why I think it’s under-utilized, in my experience a lot has to do with reliability of the numbers in CO-PA. CO-PA is an excellent tool, one of the best finance or controlling reporting tools in the system, but it’s not easy to reconcile CO-PA back to the general ledger – there’s no one push-button that tells you if the numbers that you’re reporting can be validated in general ledger. I know of a number of finance teams actually either back-up and say, “I don’t think this is reliable enough,” or they have qualifiers when they produce these reports in CO-PA. So I think that part of getting comfortable with the report is a huge reason why it’s under-utilized. I think to better utilize it, one of the first things I’d recommend is have a process to reconcile it to the general ledger. CO-PA is a great tool because not only are you able to see your contribution margins on fixed and variable, you’re also able to slice and dice your reports according to different dimensions and characteristics in your organization. So I would definitely recommend better reconciliation process with the general ledger. Once you have that, you get that comfort level and then you can produce and send these reports out to management.

Another thing I think is under-utilized in CO-PA is the planning functionality. I think a lot of businesses are still planning in Excel, and CO-PA is a great tool, it has a lot of integrated features even with things like APO and SNP and it’s a pretty good tool for simulating your budget and your financial result. I think now, and in fact just going back to the HANA topic, now that HANA’s now integrated somewhat with CO-PA, if you get the HANA option, the speed part of CO-PA is going to be seriously ramped up and you wouldn’t have the data issue that you have if you didn’t use the normal standard CO-PA in the ERP system.

KM: Some good advice and insights, Paul. Again, this is Ken Murphy with SAPinsider, and I’ve been speaking with SAPexperts advisor Paul Ovigele. Paul, we’ll look for you at the next SAPinsider financials event and thank you for joining us today.

PO: Thanks for having me Ken.

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