SAP Central Finance: 4 myths and 1 truth

1 – Myth: Central Finance is only relevant for organizations with multiple source systems 

While it is true that Central Finance brings a lot of value to organizations with multiple SAP and non-SAP ERPs, it also reduces the risk for organizations going through a financial transformation. Several SAP customers are already leveraging Central Finance as a stepping stone to SAP S/4HANA. By starting the project with Finance, companies are able to cut back on the number of decisions needed at one time. Also, running Central Finance in parallel to their existing ERP limits the disruption to operations and significantly lowers the risk that a full ERP migration represents. 

2 – Myth: Central Finance prevents the adoption of SAP S/4HANA 

To the contrary. Central Finance extends upon a full SAP S/4HANA system. As such, Central Finance eases the adoption of SAP S/4HANA with a phased approach. Most organizations implementing Central Finance start with Central Reporting. From there, they can introduce financial shared services like Central Payments, Central Credit Check, or Tax Reporting. Later, Central Finance can serve as a platform for downstream systems like a data warehouse, planning, or consolidation system. Last, when the time is right, the source system can be fully migrated to the SAP S/4HANA platform. [1] 

3 – Myth: Central Finance is an expensive short-term solution 

Every organization tries to avoid or minimize temporary solutions that contribute to “regret costs”. Contrary to traditional data warehousing or custom reporting solutions, Central Finance leverages standard solutions for the load and replication of finance and controlling transactions. In addition, since the platform is based on SAP S/4HANA, all the configuration and migration work that occurs during a Central Finance project would also need to occur during an S/4HANA implementation. 

4 – Myth: Central Finance only works with SAP source systems 

Long-term SAP customers know that the support of non-SAP solutions is limited. This is simply because SAP developers are limited in their ability to work with “third-party” solutions. In the context of Central Finance, the solution lies in staging tables available on the SLT server. 

In addition, the SourceConnect solution by Magnitude offers out-of-the-box integration between the most popular ERP systems and SAP Central Finance. [3] 

Third-Party Integration for Central Finance. Source: SAP [2] 

5 – Truth: Central Finance is stable and scalable 

Central Finance is a component of SAP S/4HANA that has been available since release 1610. With 2 major releases under its belt, the component is now very stable, especially considering that more than 250 customers have bought the license, more than 100 projects have started, and about 40 customers are live. 

Central Finance is part of S/4HANA and relies on SLT. Source: TruQua 

In addition to being part of S/4HANA, Central Finance relies on tried and true components like the SAP Landscape Transformation (SLT) and Application Integration Framework (AIF). All this contributes to an architecture that’s reliable and scalable for all scenarios. 

Conclusion
Like many solutions, SAP Central Finance is complex and evolving rapidly. Don’t hesitate to reach out to our experts to validate your assumptions before starting a proof of concept or implementation project. 

Authored by: Julien Delvat is the SAP S/4HANA Practice Lead at TruQua Enterprises, LLC.

Sources: 
[1] Best-Practice Document – Elements for Designing a Transition Roadmap to SAP S/4HANA
https://d.dam.sap.com/a/OymUv/VA_S4HANA_17Q4_Dsgn_Trans_Rdmp_Whitpaper.pdf  

[2] Third-Party System Interface to Central Finance: Process and Architecture
https://help.sap.com/viewer/26c2d5e366bc44c1a98f2a9212a0c49d/1709%20002/en-US/a1f017a504d44b9ebaa8018170d5b8b2.html  

[3] Magnitude SourceConnect – Third Party Integration for SAP Central Finance
https://magnitude.com/blog/third-party-integration-sap-central-finance/ 

For more information about TruQua, fill out the form below and we will contact you soon.