A leading global supplier of engineered materials with a global presence had a disjointed financial system in place. The pressure to merge and deliver orderly financial statements was enormous, which prompted the company to look for solutions that enabled data integration. Its financial operations were also impaired by system landscape complexities, a lack of standardized processes for data validation, and manually tuned processes that resulted in a failure to add value and left significant room for error. The company needed to streamline its financial and operational planning with greater agility, uninterrupted forecasting, and reporting while redefining its corporate performance management vision.

An Intelligent Solution to a Classic Finance Problem

To transform and optimize its financial landscape, the company partnered with one of SAP’s consulting partners, to implement Group Reporting, a strategic solution that combined consolidation, analysis and reporting capabilities into a single financial solution. SAP’s Group Reporting, built specifically for S/4HANA, permitted financial consolidation tasks in real time. This approach allowed the company to post and correct at source for consistent data, all within the same ecosystem. The solution provided the following:

• Continuous accounting
• Reliable reports
• One version of the truth for financial data
• More insight into the origin of the data
• Predictive modeling to drive financial process transformation

The Approach

To replace its outdated financial solutions and streamline end-to-end consolidation processes, the company adopted an approach which focused on the following:

• Broad consolidation functionality (statutory and management matrix consolidation)
• A degree of integration between planned and actual data
• Contemporary digital technologies (in-memory, mobility, and Machine Learning)
• Predictive modeling for driving financial process transformation
• Combined prior consolidation solution experience (EC-CS, BCS, BPC)
• In-cloud or on-premise deployment options
• Flexible reporting options (Fiori, Analysis for Office and SAP Analytics Cloud)

A high-level roadmap for initial adoption was created with the following activities planned under the following phases: Preparation Phase (~2–3 weeks): Upfront data collection and review―current local and group reporting close and consolidation, reporting requirements and KPI’s (statutory, management, tax), planning Solution (strategic, budget, forecast), expected improvements (pain points) and high-level gap identification Exploration Phase (~ 5 weeks): Fit/Gap and Delta Design Workshops (initial adoption), data mapping and transfer, solution design document, solution backlog Realization Phase (~ 18 weeks): Delta and Gap Design, configuration sprints for baseline and final solution build and playbacks, integration and User Acceptance Testing, and historical data migration Deployment Phase (~ 6 weeks): Cutover preparation and reporting migration, production system preparation, data migration, and parallel close operation Phase 2 involved integration of financial planning data to support plan consolidations. The focus was also on adopting SAP Best Practices, which included the following:

• (1SG) Group Reporting/Financial Consolidation (statutory consolidation process and reporting)
• (3XL) Group Reporting/Matrix Consolidation (business consolidation to support segment reporting)
• (28B) Group Reporting/Plan Consolidation (plan data collection, version management, plan consolidation, comparative reporting, and forecasting) among other best practices
• Other best practices considered: (287) Group Reporting/Data from SAP Group Reporting Data Collection (non-S/4HANA data transfer), (2U6) Group Reporting/External System, Integration (API integration) as an option for ECC system data integration and (3JP) Group Reporting/Predictive Consolidation

Additionally, the approach called for engaging all impacted users and stakeholders, proactively preparing and driving decisions, finding the right balance between initial transformation risk and value creation, and building a dedicated project team.

SAP’s Group Reporting Solution: An Integrated Solution

The overall solution design for Phase 1 adoption involved the following:

• On-premise Group Reporting for S/4HANA 1909
• Fiori UX for all Group Reporting related processes
• Multiple financial data sources, including S/4HANA, SAP ECC and non-SAP accounting systems
• Total of 34 entities from S/4HANA, ECC and Dynamics
• Role-based model approach to mirror existing responsibilities
• Standard reporting that comprised a detailed analysis of Office 2.8 (Excel) and SAP Fiori reports
• Custom SAP BW4/HANA reporting, a real-time solution created within SAP BW4/HANA where the base group reporting was replicated to the underlying HANA database and ingested into the SAP BW4/HANA layers where BW queries were created.

SAP’s Group Reporting solution also allows group accounting along with management reporting and integration with SAP S/4HANA Finance. That allows direct access to legal and management accounting from the universal journal which facilitates increased data granularity in group reports. The unification of entity-close and group-close processes on a single physical system allows better decision-making, which accelerates the financial close process. Below are some of the advantages of implementing SAP’s Group Reporting solution.

• Real-time data access: Real-time data consolidation and replication is based on the deep integration between SAP S/4HANA and SAP Business Planning and Consolidation (SAP BPC).
• Continuous accounting: Validation of entries at the source allows translating a financial posting into group currency at the time of the initial posting, which in turn results in continuous accounting.
• Accelerated financial close process: No data movement eliminates the risk of reconciliation issues and ensures the integrity of financial data leading to an accelerated financial close process.
• Single source of truth: The use of S/4HANA Universal Journal as the single source of truth for all financial data allows posting and correcting at the source for fully consistent data across the entire finance function.
• Unified consolidation and transactional activities: These harmonize business flow with less time lapse from the close of books to the availability of fully consolidated statements.
• Reduced total cost of ownership: A single environment enables significantly less data movement to manage.

Before SAP’s Group Reporting solution implementation, the company operated with outdated processes for financial consolidation. By adopting the solution, the company was able to streamline end-to-end consolidation processes with actual and plan data and maximized the value of the consolidation process as the solution was adopted across its local entities and segments.

Conclusion

SAP’s Group Reporting strategic solution decreased manual, time-consuming data entry and reporting, and enabled harmonization and streamlining of financial reporting for the company. The solution allowed the organization to drill down to actual general ledger documents, gain better visibility of its finances, and also addressed the scattered system landscape. The solution functioned as a group financial data platform that allowed the centralized execution of financial transactions for entities across various systems.