Master Data Management and Successful Central Finance Migrations

October 30, 2020

In a previous article, I provided a high level overview of SAP Central Finance, which came with the headlines:

  • Central Finance offers a stepping-stone for adopting SAP S/4HANA

  • Doing this does enables users to work from a common reporting structure and one consistent set of master data

  • As a result, finance can put real-time data to work in their day-to-day activities

For this article, I now turn the spotlight onto the key data considerations you need to keep in mind when deploying the technology.

 

Centralizing a Global View of Financial Information and Insights

At its heart, Central Finance helps overcome the challenge of fragmented accounting systems. A ‘splintering’ that regularly happens due to organic growth, acquisitions, or system upgrades etc. Plus there’s the growing appreciation from finance leaders of the need to deliver a centralised view of accounting information and reports to avoid/minimise:

  • Tiresome and stressful period-end closes

  • No real confidence or trust in the accuracy of information

  • Reporting and decision-making based on incomplete data

  • Resource intensive activities such as multi-currency conversions etc.

Such benefits help illustrate the big picture ‘why’ behind Central Finance. Ultimately it all comes down to the creation of a global, common reporting structure by mapping accounting entities in upstream systems to one set of master data (e.g. general ledger account, profit centre, or cost centre).

 

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This centralisation also provides an improved platform for running real-time planning data that supports proactive and predictive financial reporting capabilities. The question of course is how?

 

Master Data Management (MDM) and SAP Central Finance: A Heavenly Match

It’s here we have both good and not so good news:

 

The good news: Central Finance provides a non-disruptive solution that acts as a hub into which new entities can be integrated without imposing fundamental changes to the main accounting system

 

The not so good news: the solution also has the potential to introduce significant technical complexities (plus time and cost) when you attempt to properly integrate source ERP data.

 

A proven Master Data Management (MDM) capability is obviously going to have a big impact here, as it helps remove duplicates and drive data quality. MDM that can also be split into two distinct sections:

  • Data mapping 

  • Data harmonisation

    • Business partner harmonisation (bringing together vendor and customer data)

    • Material data harmonisation (consolidating parts’ details and records etc.)

MDM in Central Finance is always an activity best completed with a subject matter expert. That’s because you want to be confident that the postings and mappings you establish will remain intact and consistent throughout, thereby giving you one system with a single set of transactions based on harmonised data across all systems.

 

Master Data Creation and Master Data Mapping for SAP Central Finance

Getting MDM right for Central Finance involves both master data creation and master data mapping.

  • Creation – which is a process that let’s you:

    • Identify and remove duplicate or redundant master data objects

    • Harmonise master data from diverse systems

  • Mapping – which enables you to:

    • Consolidate data objects from different systems

    • Redesign the master data structure within your new ERP

Get this right – an action that involves automating the process and ensuring master data governance throughout – and you can eliminate the legacy system technology that typically forces information to be dispersed to any number of different places.

 

In my next post I’ll take a more in-depth look at the main integration tasks involved with Central Finance. 

 

If you’re fast approaching a Central Finance project (or knee-deep in one) and want to better understand the support available for making the process run without any drama – feel free to connect with us at Syniti.

Previous Article
4 Keys to Successful Data Integration in SAP Central Finance
4 Keys to Successful Data Integration in SAP Central Finance

Creating a Single, Integrated View of Your Enterprise Financial Data

Next Article
Central Finance: The First Step on the Road to S/4HANA
Central Finance: The First Step on the Road to S/4HANA

How Central Finance Acts as the Foundation for an S/4HANA Deployment