A big step for SAP and a giant leap for SAP users
With a turnover of €27.55 billion, SAP is the largest software company in Germany and Europe worldwide. This is also reflected in the 44% market share in “EMEA” (Europe, Middle East and Asia). For companies of this size, innovations or new products are nothing really special, but the exception to this rule is certainly the announcement that the core product will not be renewed, but replaced. This happened in 2015 with the release of SAP S/4HANA as the fourth generation of the SAP application suite.
Shortly after the presentation, SAP already pushed for a tight schedule and proclaimed 2025 as the end of support for existing systems, although the period has now been extended to 2027 or 2030, but the large number of outstanding transformation projects alone, together with the clear market of competent service providers, shows what a wave is still to come here. This assumption is also confirmed by the DSAG Investment Report supported:
- Increase in S/4HANA users from 3% to 10%
- Rate of switchers increased from 5% in 2018 and 2019 to 9% in 2020
- 40% of respondents plan to switch over the next 3 years
There is still no clear trend in the preferred conversion scenario. 20% of companies in the DACH region prefer a new implementation (“greenfield”), 39% prefer a system conversion (“brownfield”) and 34% are still undecided. Accordingly, no winner is yet apparent.
What has emerged so far, however, is the desire for harmonization, for example, a PwC study on the topic has shown that 75% of the companies surveyed want to standardize their processes.
Opportunity for accounting
However, if the goal is harmonization or standardization, then this has a direct impact on processes in the accounting of every company. The big task or challenge here is to perceive this change not as a threat, but as an opportunity and to actively participate in shaping it. Although there is of course an SAP standard, it also offers room for design.
If the system is not up to date, technical topics are in the foreground at first. Above all, the introduction of the new general ledger (new G/L) and the new asset accounting (EAFIN) as well as the switch to the business partner as the central master data construct. However, these more technical topics are then also linked to organizational and technical questions:
- What will master data maintenance look like in the future for accounts, debtors and creditors?
- If I prepare a financial statement in several accounting rules, how can or must my transactions be adjusted?
- Do I need to adapt my processes in asset accounting?
This opens the door to questioning one’s own ways and processes, but also the opportunity to change. In cooperation with IT, the processes in the company can be improved and, ideally, digitized or optimized.
If you believe the studies, the stumbling blocks on this path are summarized above all a lack of knowledge in the company, the lack of qualified external consultants and long conversion times, combined with high costs.
Our experience shows that a successful S/4HANA project is a project that is thought of and implemented from the very beginning in the interaction between the business department and IT, regardless of the implementation scenario.
Transformation, IT and technical know-how with accounting outsourcing
You may have been skeptical about outsourcing (sub-)processes so far. But a look at the age structure of the department and/or the goal of digitizing accounting can be arguments to think about business process outsourcing. In addition, there is the associated opportunity to switch to standard processes that scale with your company’s development.
Outsourcing processes or sub-processes to specialized service providers with the conversion to SAP S/4HANA opens up the opportunity to put accounting on a modern IT basis with optimized, digitized processes. In addition, the outsourcing partner secures the operational implementation of the tasks assigned to it in the long term and gives the outsourcing company the freedom to concentrate on its core business.
Often, your own IT or specialist department already has a huge project backlog. In addition, there is no capacity to acquire the new expertise needed and there is little to no experience with large transformation projects because they are not part of the day-to-day business. However, in order for SAP S/4HANA to be ready for use quickly and all relevant processes to run smoothly, the support of competent external consultants and service providers is required.
No matter where you are on the way to your journey, even if it’s just to get an independent opinion, feel free to contact us and let’s talk.
Image source: stock.adobe.com, Photographer: photon_photo
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