There’s more to SAP Central Finance than you might think

If you think SAP Central Finance is all about better reporting, think again. Many companies are using it for much more. While it started out as a key enabler for broader, faster financial reporting and analytics, its power extends to three transformational capabilities.

First, you can use SAP Central Finance as a “finance first” springboard to speed your journey to SAP S/4HANA. As more and more functions are folded into Central Finance, this ultimately becomes the long-term S/4-based ERP. This is particularly valuable for organizations with large SAP footprints where technical debt, user adoption and business disruption are major challenges.

You can also use Central Finance as your single, core finance application. By centralizing finance processes globally, this can deliver tremendous value to multinational, multi-business-unit companies with diverse and heterogeneous ERP landscapes. For organizations like these, Central Finance can be used to bring together core processes from reporting to month-end close, reconciliation, and payables and receivables.

Third, Central Finance can bring unprecedented speed, agility and insight to M&A. As well as integrating an acquisition’s financial reporting into your own systems with minimal disruption, Central Finance can become your single source of the truth, accelerate synergies and allow for rapid divestments when needed.

Getting started on your Central Finance journey

Extreme uncertainty and volatility mean that it’s never been more important for companies to accelerate their digital transformation. Central Finance can play a big part in making that happen. So how do you pave the way to a successful (and rapid) Central Finance journey?

With the north star for your finance ERP landscape in mind – whether it’s a single, global instance of SAP S/4HANA or Central Finance as the common central finance application across your complex organization – consider the sequence of the Central Finance capabilities you want to enable.

It all starts with evaluating which Central Finance capabilities provide specific value to your organization. This evaluation charts the course and also defines at which point the costs outweigh the benefits.

Next, I believe three essential building blocks have to be in place: technology, data and governance. Together, they provide the foundation for everything that follows.

This means focusing on three things:

1. Understand what your current technology footprint looks like and how it can integrate with Central Finance.
2. Know your data – and its gaps. Central Finance can be unforgiving if details in your finance transactions are inconsistent or unpredictable. This can significantly impact a program’s costs and completion time.
3. Know your global stakeholders and be clear about how you make and hold to finance decisions. Identify where you need to be standardized vs where you have to be unique.

Once you’ve got clarity on these foundations, your journey can get truly underway.

There are three major capability bundles to consider:

• Centralized Reporting – this enables you to drive reporting and analytics in real time across the business dimensions you can actually make decision with, a real game changer for many of our clients.
• Book of Record and Consolidation – this bundle includes capabilities to elevate your corporate finance processes to Central Finance and take advantage of the single source of data as the basis for your corporate accounting, consolidation, planning, budgeting and forecasting processes. Imagine a single global close process, providing instant visibility into financial performance, driving advanced forecasting based on today’s data. 
• Centralized Finance Operations – these are the core transactional Finance processes that can provide significant value within your business case. Modernizing and centralizing processes like Accounts Payable, Receivables Management, Statutory and Tax Accounting can drive productivity and efficiency in process execution, and be key enablers for a top-quartile centralized shared-services function.

How are companies using Central Finance today?

We see our clients leveraging Central Finance in three key ways:

1.  Jumpstarting an SAP S/4HANA digital transformation – by establishing the core foundation for an SAP S/4HANA enterprise transformation with “Finance First.”
2. Centralizing the Finance function – using Central Finance as the end-state platform for a multi-business, multi-industry company to harmonize and transform finance processes from reporting, to month-end close, reconciliation, and payables and receivables.
3. Accelerating M&A integration – creating a platform for rapid M&A insights, as well as predictably enabling accelerated post-merger integrations.

Whatever stage of the journey you’re at right now, understanding the value that Central Finance can bring to your business will enable us to help you choose the right way forward. We’ll look beyond standard automation, which often only provides a small improvement, toward truly transforming your finance processes through intelligent automation. Supplying advanced insights through analytics, this is what will drive process efficiency and unlock exponential value.

To find out more about Central Finance as the launchpad for S/4 and next-generation finance, please get in touch. I’d love to hear from you.