What does SAP Central Finance have to do with S/4HANA?

What does SAP Central Finance have to do with SAP S/4HANA?

SAP Central Finance is based on SAP S/4HANA - and is seen as a door opener for SAP's latest ERP suite. Under the motto "Finance First," companies can switch to SAP Central Finance before migrating to SAP S/4HANA in its entirety.

Those who take this route not only receive a modern financial controlling and reporting platform very quickly - they also benefit directly from SAP S/4HANA in one of the core areas of companies, finance. In addition, much can be learned from this process for further projects - such as the subsequent implementation of SAP S/4HANA.

What are the advantages of this approach?

One of the biggest advantages is that the introduction of SAP S/4HANA - via the starting point of SAP Central Finance - takes place gradually and agilely with this approach.

Compared to the traditional waterfall methodology with "big bang", such a project is easier and faster to execute and plan. The complexity of the overall project is reduced, and the risk is also lower.

With SAP Central Finance, companies first introduce a finance and controlling platform. The existing SAP and non-SAP systems are connected to SAP Central Finance and can continue to be used. The conversion of these other individual ERP instances to SAP S/4HANA takes place - in a second step - later, usually successively.

This approach gives companies time and space for further planning. During the Central Finance project, they can deal in parallel with the desired target architecture for SAP S/4HANA and the planning of the system conversion of other instances.

Above all, companies benefit earlier from the advantages of SAP S/4HANA: The solution's finance and reporting functions - such as the Universal Journal or Cash Management - are available to them much faster than in a traditional project implementation.

The same applies to many other SAP S/4HANA innovations, such as real-time reporting and analytics, which lay the foundation for better decision-making. Companies can leverage such business benefits of SAP S/4HANA more quickly by going through Central Finance than with the classic, direct implementation.

Last but not least, by implementing SAP Central Finance, companies gain valuable experience for the subsequent implementation of SAP S/4HANA in other areas and for further transformation projects.

The advantages at a glance:

  • Rapid entry into the world of SAP S/4HANA
  • Less complexity in the implementation of SAP S/4HANA
  • Agile, step-by-step approach - no "big bang".
  • Lower risk by equalizing the scope of the project and dividing it into subprojects
  • Faster access to SAP S/4HANA innovations
  • Gathering of experience for further projects and the implementation of SAP S/4HANA

Who is this path suitable for?

The path to SAP S/4HANA via SAP Central Finance is particularly suitable for companies that have a distributed IT and SAP system landscape (comprising SAP and non-SAP systems).

As a rule, these tend to be larger, internationally active companies and groups that want to centralize and harmonize their system landscape. It is also often a question of being able to benefit quickly from the advantages and innovations of SAP S/4HANA - and to achieve a rapid aromatization of investments.

When does the direct path to SAP S/4HANA make more sense?

For example, if a company already has a comparatively homogeneous system landscape and, for example, only one ERP instance, this does not speak in favor of the path via Central Finance.

SAP Central Finance is also not an option for smaller, fast-growing midmarket companies - here, direct implementation of SAP S/4HANA with a greenfield approach would be more appropriate. This also applies to new SAP customers who do not yet use an SAP system.

However, whether the route via Central Finance is worthwhile or the direct route to SAP S/4HANA makes more sense depends on many, often very individual factors. Every company is different and the options must therefore be examined on a case-by-case basis. Appropriate preliminary studies ("proof of concept") provide clarity.