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Q&A

 

Going under the hood of Central Finance

A live Q&A with Central Finance Bootcamp speakers

August 28, 2018

Panelists: David Dixon and Julien Delvat, TruQua 
Date: Tuesday, August 28
Sponsor: Central Finance Bootcamp 

Read this Q&A chat transcript to gain a deeper understanding of capabilities and architectural components of Central Finance and how it can change your day-to-day finance processes.  Whether you are considering, are deploying, or have implemented Central Finance, David Dixon and Julien Delvat provided users a one-stop-shop to get your most pressing questions answered.

Bridget Kotelly: Hello, and welcome to today’s live Q&A. We’re looking forward to a lively discussion. Thanks to everyone who has submitted their questions in advance.

We’re joined for today’s event by David Dixon and Julien Delvat from TruQua Enterprises. David is a frequent speaker at SAPinsider events and will be presenting at the upcoming Central Finance Bootcamp taking place November 7-8 in Chicago, and November 27-28 in Orlando. To learn more, click here.

David, Julien, thanks so much for taking the time out of your busy schedules to be here. I’ll turn things over to you to start taking questions.    

David Dixon: Thanks, Bridget, for the introduction. We look forward to answering everyone's questions.

Julien Delvat (TruQua): Thanks for the opportunity, Bridget. We're always excited to talk about Central Finance.

Bridget Kotelly: I know you have been working with Central Finance for a long time. Can you give us some sense of how you’ve seen it evolve?  

David Dixon: It's evolved rapidly. One measure of that is how big the SAP development team around this solution has grown. We were involved at the ground level, and in our last visit this summer to SAP headquarters in Walldorf, we were impressed by just how large and organized development around this solution has become. When we started with it, the solution was known as Central Journal and it was more of a services-based offering than a product. But now there are all types of use cases and scenarios it supports. I'm sure we will all see that in the Q&A.

Bridget Kotelly: Thanks, now I'll let you answer the questions submitted by the Q&A attendees.

Comment From Erno Nykänen: What are the key open functionalities that customers are looking for, but have not yet been implemented? What are the highlights of the 1809 release for Central Finance?

Julien Delvat (TruQua): Hi, Erno. 

Based on discussions with potential customers and SAP solution management and development teams, the key features still missing are:

  • Integration of Asset Accounting
  • Central tax reporting in some countries
  • Central project work breakdown structure (WBS) reporting

David Dixon: There are still a lot of open possibilities for Central Finance, especially as it relates to integration scenarios (especially in the area of logistics data). For example, for central tax and Advanced Compliance Reporting (ACR), there is a need for information on sales orders and invoices. While I leave it to SAP to publicly share what will be in version 1809, we can start to expect to see in the product the ability to replicate logistical information (such as sales order and customer invoices) into Central Finance-specific tables (i.e., accounting views of logistical information) dedicated for specific scenarios such as tax.

Comment From Prabhakar: With a single ERP instance with many legacy systems interfacing for data exchange, how can Central Finance bring value to this system?

David Dixon: I’ve encountered two customer use cases where they had an ERP system (one SAP and one non-SAP) that had many custom and finance-centric interfaces. With the use of Central Finance they get the benefit of SAP S/4HANA with standard and supported interfaces (including ones for third-party data sources) to leverage as part of Central Finance as opposed to rewriting those interfaces from scratch.

Comment From Erno Nykänen: What are the most surprising issues or characteristics of the Central Finance system that have come up during implementation or development of the solution?

Julien Delvat (TruQua): That's an interesting question. My first reaction here is master data, especially when merging multiple source systems. The rest of team in the room says complexity of orchestrating processes (master data, planning, consolidation, cash, treasury, closing cockpit) and technologies such as SAP Landscape Transformation Replication Server and SAP Application Interface Framework.

David Dixon: Think of a Central Finance project as a composite application implementation where, for example, your main use case may be group reporting of financially consolidated data, but with the ability to drill to source system line-item details. If that is the case you would be implementing two products: Central Finance with Group Reporting. This then has a master data impact (introduction of Customer Service groups, units, financial statement items, and so on). But also from a technology perspective, you have to work out the data synchronization issues (e.g., configuration, master data, and transaction data) across source systems, SAP Landscape Transformation Replication Server, and Central Finance.

Comment From Min: Is there any benefit in implementing Central Finance if there is a strategic plan to move to SAP S/4HANA from SAP ERP Central Component (SAP ECC) within the next 12 months?

David Dixon: Yes, if you still will have a need to interface with financial systems that will remain outside of the SAP S/4HANA system. Also Central Finance functionality can help with data migration of financial history, especially with open items. We recommend a cost-benefit analysis to assess if these combined benefit scenarios are worth the additional cost of Central Finance.

Comment From Juan CarlosIs integration between a system with the classic general ledger (G/L) and another with the SAP General Ledger possible?

Julien Delvat (TruQua): Yes, definitely. Keep in mind that there are key design considerations if your source system is on the classic G/L. For more information, click here.

David Dixon: Yes, we have a customer that is doing that now.

Comment From Attendee 1: Is Central Finance the same as SAP S/4HANA Finance?

Julien Delvat (TruQua): Not really. SAP S/4HANA Finance was the name of the first SAP S/4HANA release (1511).Central Finance is a deployment option, a small add-on to any standard SAP S/4HANA system.You may find this video from SAP to be useful.

Comment From Marie: There seem to be a lot of prerequisites that should be done before rolling out Central Finance, such as master data cleansing, data mapping, standardization of master data, change management, and master data governance. Do you suggest doing the prep work before kicking of the implementation?

Julien Delvat (TruQua): There actually used to be a lot more technical prerequisites in the past. Our experience on customer projects has been that project teams learn a lot more by starting a proof of concept where they can start small (one source system, one company code, one period, etc.) and gradually expand from there. You can treat this either as phase 0 or as the first phase of the implementation.

Comment From Sarah: We recently deployed SAP S/4HANA and are exploring options to use Central Finance. What are some of the areas where Central Finance has been seen as an easier spot for adoption and use? We have some project fatigue within the organization, so we don't want to embark on a major project for a few months, but have several areas where we see good use cases for Central Finance.

Julien Delvat (TruQua): That's an interesting question. I can relate to the project fatigue from the business or IT teams.In that case, I would try to focus on small bites with highly visible value. It doesn't have to be big.

If you have already deployed SAP S/4HANA, what other source systems are you considering integrating?

David Dixon: The earliest adoption scenarios were around centralized reporting and analysis. Another easier spot is financial planning and analysis (FP&A) or financial consolidation along with that. That could be where you start.

Comment From Ravi: What are the significant Controlling changes in Central Finance? Are there any improvements in period-end closing?

Julien Delvat (TruQua): Hi, Ravi.

You can leverage Central Finance to simplify the overhead accounting and closing processes.
Assuming that you close local entities in the source system, you can perform intercompany clearing and overhead allocations in the central system. Our customers find that easier since it's done in real time and at the transaction level.

Comment From Marianne: We have an old ledger, with SAP HANA and SAP Business Suite on premise and are considering SAP S/4HANA Finance on premise. We have a split ledger (ZZSPLITA and ZZSPLITT) and a lot of custom code written against these tables. My understanding is that all custom programs against the split ledger (ZZSPLITA and ZZSPLITT) that are read only will be okay. Anything that is not will have to be looked at and redone or eliminated. Is that true?

David Dixon: Central Finance does not replicate special ledger data as the associated tables are redundant with Financial and Controlling (FI/CO) line items being replicated to the Universal Journal in SAP S/4HANA. In other words table ACDOCA (Universal Journal) should replace both ZZSPLITA actual line items and the ZZSPLITT totals table. These would warrant redesign and reimplementation in Central Finance.

However, if you are doing a brownfield migration to SAP S/4HANA, then the special ledger can remain in place, but there is still a risk that custom code will break because of changed data structures in SAP S/4HANA even if you remediated your code for SAP HANA as part of the SAP Business Suite on SAP HANA migration. I would review the SAP S/4HANA Simplification Guide to assess the impact of the data model changes to your code — be it a field movement user exit or an entirely custom and executable program.

Comment From Ferreira: We are facing some situations that some customers have different SAP ECC instances, including industry-specific solutions (e.g., Retail), and they want to integrate all heterogeneous instances in only one view in SAP Central Finance. Which financial information will be in Central Finance? What information will not be? Is the user able to perform any transaction from Central Finance to the other instances? Can other information (logistic, sales, etc.) be viewed in Central Finance? What are the standard reports from Central Finance?

Julien Delvat (TruQua): Which financial information will be in Central Finance?
Everything related to FI/CO  is in Central Finance (with exceptions such as costing-based Profitability Analysis [CO-PA] not being supported).

Is the user able to perform any transaction from Central Finance to the other instances?
Not really.

Can other information (logistic, sales, etc.) be viewed in Central Finance?
Not really.

What are the standard reports from Central Finance?
All SAP S/4HANA standard reports are supported. In addition, there are some reconciliation reports specific to Central Finance. For more details click here.

David Dixon: While Central Finance doesn't yet support a lot of logistics data integration scenarios, we have seen customers explore bringing in that data via SAP Landscape Transformation Replication Server into the SAP HANA database underlying Central Finance and then doing integration via SAP Business Planning and Consolidation (SAP BPC) for SAP S/4HANA. This gets more into SAP HANA and SAP BPC capabilities for integrated reporting and analysis.

Comment From Attendee 1: I can imagine that the amount of financial data to be transferred to Central Finance can be profound. I assume the process of transferring data consists of an initial load and then the subsequent updates. Is this correct? Are there issues with transferring large volumes of data? I guess I mean the performance of the system during the initial load and the subsequent line-item updates via SAP Application Interface Framework.

Julien Delvat (TruQua): That topic is frequently overlooked, thanks for asking.

First, you're right, there are two phases: initial load and online replication. For information on the full sequence, click here.

During online replication, only a small number of documents are replicated in real time. The performance bottleneck happens during the initial load. You need to be cautious about memory size on the SAP Landscape Transformation Replication Server. You should also optimize the Central Finance system (and potentially the source system) for background processes. We recommend a proper sizing exercise for both the Central Finance and the SAP Landscape Transformation Replication Server systems.

Comment From Marie: What pitfalls should we watch out for when shifting Accounts Payable (AP)  and Accounts Receivable (AR) from regional instances into the global Central Finance instance?

Julien Delvat (TruQua): That is a good question.

One sticky point is the need to redefine the Central Finance system as the system of record. Keep in mind that there is no retraction of transactions from the Central Finance instance back into the regional instances.

Comment From Juan Carlos: Is integration always at the level of FI documents, or are there scenarios in which the logistic document (for example, invoice VBRK) is posted in the source system without an FI document. Then the FI posting would take place only in the Central Finance system.

David Dixon: Central Finance supports integration outside of FI documents, such as commitments, CO line items, and Profit Center Accounting (EC-PCA) actuals. In the case of customer invoices, I made a comment in an earlier post about the roadmap that we can envision for this data being replicated, but for specific Central Finance scenarios such as tax. In that specific scenario the source VBRK won't replicate into the VBRK of the Central Finance system to avoid future conflicts (i.e., using Central Finance as a stepping stone to SAP S/4HANA), but will be go into a Central Finance-specific table (I add the caveat that 1809 is not released yet, and we will have to see what is there when it actually comes out, so treat this information as an outward-looking assumption).

Comment From Steve: We are in the early stages of an SAP S/4HANA implementation that is fully integrated for one business plus finance only for several nonintegrated businesses, all on a single platform. We'll have well over 100 interfaces to SAP S/4HANA from legacy non-SAP systems. Can Central Finance handle it?

Julien Delvat (TruQua): Probably yes, but we would have to get into the details of the integration points. Central Finance could handle most of the financial integration, but not the logistics ones. 

One setup that our customers like with Central Finance is to use it as a source for outbound integration to other systems for reporting (SAP Lumira, SAP Analytics Cloud) or planning (SAP BPC or a third-party planning solution.)

Comment From Ferreira: Is there any version of Central Finance on the cloud?

Julien Delvat (TruQua): SAP S/4HANA Cloud cannot be used as the central instance in a Central Finance deployment. However, consider these two points:

  1. SAP S/4HANA Cloud can be used as a source instance. SAP calls it two-tier ERP (scope item 1W4). For more information, click here.
  2. You can deploy SAP S/4HANA on any of the clouds such as Amazon, Google Cloud Platform, Azure, or VirtuStream. TruQua even has a template deployment that can be used to accelerate such projects. We call it TruQloud.

Comment From Ferreira: Is it possible to integrate Central Finance with the SAP Digital Boardroom to create some financial simulations and customized reports?

Julien Delvat (TruQua): Absolutely. We've done this with SAP Analytics Cloud for reporting and planning or forecasting purposes. The same can be done with the SAP Digital Boardroom.

Comment From Marcus: As it relates to data mapping, what is the most effective way to go about setting up different structures in the Central Finance system compared with other source ERP systems?

David Dixon: Central Finance is an SAP S/4HANA system, so you need a unified configuration and master data structure. This means studying all the source systems (within a practical scope) and identifying design conflicts and resolving them via mapping (and if necessary, data cleansing). A methodology can be employed where you study the configuration and master data relevant to the history you plan on replicating to Central Finance and perform table comparisons for conflicts (if those tables are provided by SAP) or something similar at a conceptual level for non-SAP sources. For SAP system sources, SAP has a service offering with an MC DELTA tool to facilitate branded as SAP Model Company, or you can employ the methodology manually. Mappings themselves are either implemented via MDG Foundation (which wraps around Unified Key Mapping Service [UKMS] functionality) or via Central Finance Business Add-In (BAdI) implementations.

Comment From Prabhakar: With finance only centralized, how are Material Management (MM) and Sales and Distribution (SD) going to play out in a Central Finance system?

Julien Delvat (TruQua): The consultants’ default answer is it depends.

You can place the implementation cursor wherever you want: from 0 (MM and SD are not represented at all) to 10 (the material master is in place and Central Finance is used for quotation, sales, invoicing, and so on). If you place the cursor on 11 with bills of materials, routings, and manufacturing, you're not considering a Central Finance project anymore, but a full SAP S/4HANA implementation.

Comment From Prabhakar: Currently we have a single SAP ECC system, but many legacy systems are talking to it. Would going to Central Finance add value in our present scenario (our legacy systems send logistic details to and from the SAP ECC system)?

Julien Delvat (TruQua): For legacy systems, you can also look into a third-party solution. I think we would need to take this discussion offline to get into the details.

Comment From Ferreira: Do my FI/CO consultants need any further expertise to implement Central Finance?

Julien Delvat (TruQua): I believe that it would be very complicated for FI/CO consultants on their own, especially if they're not even SAP S/4HANA consultants. Most of our customers have been overwhelmed in their first steps with Central Finance, and I would highly recommend using an experienced consultant.

Of course, you're asking a consultant, so I might be biased.

Comment From Ravi: How does Central Finance handle the SAP Project System, SAP Portfolio and Project Management (SAP PPM), and SAP Commercial Project Management modules? Are there any improvements in Professional Services and Customer Projects? Are they built-in solutions in Central Finance?

Julien Delvat (TruQua): There's going to be a lot of new features related to Projects and WBS in Central Finance with the 1809 version. I would recommend that you wait a bit.

Comment From Guest: What planning solution would you suggest as a pairing with Central Finance, in particular for business units and functions to plan their profit and loss (P&L) statements?

David Dixon: The two options we typically evaluate with our Central Finance customers are SAP BPC for SAP S/4HANA and SAP Analytics Cloud planning, or even some combination of the two. In one case study example, the customer is evaluating SAP BPC for SAP S/4HANA for centrally governed planning scenarios, but enabling more autonomy and self-service to specific business units and functions via SAP Analytics Cloud planning for specific and limited scenarios where there aren't a lot of corporate standards.

Comment From Ferreira: What is the knowledge needed for a Central Finance project?

David Dixon: As I mentioned in an earlier post, think of Central Finance projects as an implementation of composite products. On the functional side, there are several different roadmap strategies and domains a Central Finance project can cover. From an application perspective a Central Finance project may (or may not) require SAP Master Data Governance, SAP BPC for SAP S/4HANA, Group Reporting, Cash Management, and the closing cockpit in addition to SAP S/4HANA Finance.

On the technical side there is integration with SAP Application Interface Framework and SAP Landscape Transformation Replication Server. And then there is the possible use of Core Data Services (CDS) views, SAP HANA models, and SAP Business Warehouse (SAP BW) to enable reporting and analysis.

Comment From Attendee 1: Can master data in Central Finance be used to update another application?

Julien Delvat (TruQua): You could, but it's not the best application for that. We would highly recommend you consider a proper master data management application such as SAP Master Data Governance.

Comment From Prabhakar: If reports will be out of the Central Finance system, do all financial statement versions (FSVs) need to be redone, or is there a migration process to move existing FSVs?

Julien Delvat (TruQua): What do you call FSVs?

Comment From Ravi: Can we also transfer images PDF/JPG from legacy systems to Central Finance along with vendor and customer finance data in Central Finance?

David Dixon: Central Finance doesn't explicitly address vendor and customer master data replication. You have a variety of different options to handle master data replication, including but not limited to SAP Data Services (including the Magnitude Software pre-delivered content for Central Finance), Application Link Enabling (ALE) master data replication, SAP MDG, or SAP Landscape Transformation Replication Server-based customer interfaces. Transferring images would need to be designed within the context of the master data replication solution you choose.

Comment From Attendee 1: Julien, David, and Bridget, thanks for answering our questions and for making the session possible

Bridget Kotelly: You're welcome.

Thanks again, David and Julien. David, I look forward to seeing you at the Central Finance Bootcamp.

Julien Delvat (TruQua)

That was fun. I wish we had more time to get into some of the details.

If you still have questions, you can reach out directly to us. 

My contact is Julien Delvat – TruQua: julien.delvat@truqua.com

And, of course, you can also get the SAP Press book on Central Finance. For information, click here.

David Dixon

And my contact information is david.dixon@truqua.com.

Bridget Kotelly

To learn more about Central Finance, join us at the Central Finance Bootcamp – either in Chicago, November 7-8, or Orlando November 27-28. Find out more and register here.

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