Orange County Convention Center Orlando, Florida May 15-18, 2011 SAP Master Data Governance for Financials: What's New with SAP ERP 6.0 Enhancement Package 4 and 5 Pete Graham Director, LoB Finance, Solutions SAP Labs, LLC SESSION CODE: 2010 ]
SAP Solutions for Finance Achieve Financial Excellence with SAP Software SAP s SOLUTIONS FOR FINANCE REGULATORY COMPLIANCE & EFFECTIVE RISK MANAGEMENT OUTPERFORM STAKEHOLDERS FINANCIAL EXPECTATIONS SUPERIOR SERVICE AT REDUCED COST Manage Enterprise Risk and Compliance Accounting and Financial Close Treasury and Financial Risk Management Manage Financial Performance Shared Service for Financials Receivables Management Invoice to Pay Travel Management SAP s comprehensive portfolio of applications and end-to-end processes help you achieve Financial Excellence Strong cash flow and liquidity Compliant and accurate financial reporting Maximized profitability Reduced cost of finance 2011 SAP AG. All rights reserved. 2
Legal Disclaimer This presentation outlines our general product direction and should not be relied on in making a purchase decision. This presentation is not subject to your license agreement or any other agreement with SAP. SAP has no obligation to pursue any course of business outlined in this presentation or to develop or release any functionality mentioned in this presentation. This presentation and SAP s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or noninfringement. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent. 2011 SAP AG. All rights reserved. 3
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 4
All Lines of Businesses (LOBs) Are Impacted by Master Data Quality Organizations & Roles Financials IT Sales Supply Chain CFO CIO (S)VP of Sales; (S)VP of Sales & Marketing VP of Supply Chain, VP of Planning Challenges Inconsistent financial master data across the enterprise Manual efforts to update financial master data in local financial systems Risk of non-compliance to IFRS, SOX etc. Slow group closes Lack of transparency about changes (Who, what, when, why?) High master data maintenance costs Need for multiple systems to manage master data in different domains Lack of flexibility in dynamic business environments Lack of consolidated view of customer data across all channels Customer transactions are compromised due to limited view of the facts Lack of transparency relating to suppliers and products High costs due to insufficient supplier selection and rationalization Loss of potential for benefit realization (i.e. discounts, conditions, central contracts) Limited availability of up-todate master data in my business network 2011 SAP AG. All rights reserved. 5
Process Excellence Demands a Robust Master Data Solution Business insights & governance towards all entities of the group Financial master data drives excellence in critical internal processes Numerous users Large number of preceding systems Abundant org units in several corporate divisions Many reporting units in different countries and territories Financial system Financial system Corporate Master Data Financial system Financial system Integrate wide ranges of data from disparate financial applications Central management of master data drives high performance High quality of master data and a single version of the truth 2011 SAP AG. All rights reserved. 6
SAP Solution Portfolio for MDM Comprising Both Embedded and Enterprise MDM Enterprise MDM Embedded MDM SAP NetWeaver MDM Generic, multi-domain infrastructure supporting all domains and use cases in the enterprise. SAP Master Data Governance Out-of-the-box, domain-specific master data governance applications to centrally create, change and distribute master data with a focus on SAP Business Suite 2011 SAP AG. All rights reserved. 7
What Kind of Master Data Can Be Maintained in Master Data Governance for Financials? Scope of EHP 5 Need for consistent maintenance in corporate groups Financial Master Data Charts of Accounts and GL Accounts Cost Elements Organizational Unit Companies Profit Center Cost Center Controlling Objects Internal Orders Fixed Assets Operational Master Data Products and Materials Business Partners Customers Vendors 2011 SAP AG. All rights reserved. 8
Financial Master Data: Pain Points & Solutions in MDGF Pain Points Master data and other relevant information scattered over several systems Inconsistent master data in local accounting systems High effort for reconciliation in group close and corporate performance management High amount of manual work for maintenance of master data in local systems Compliance requirements (e.g., SOX) Data quality Solutions in MDGF MDGF as complete and single source of truth for financial master data and all relevant information Automated distribution from MDGF to all-consuming systems via SOA (Service- Oriented Architecture) or download and upload Central governance of local units by distribution monitor in MDGF Change request with workflow for: Prophylactic information of stakeholders Insight into all impacts Decision support and approval Audit trail Delayed information of local stakeholders Web access to MDGF and information by workflow Time-dependent validity of master data Complete time-dependent versioning by editions 2011 SAP AG. All rights reserved. 9
Overview Master Data Governance for Financials 1. Request 2. Change 3. Approve 4. Replicate SAP Master Data Governance Corporate CoA Operational CoA Organization Unit Consolidation Units Corporate Group Systems SAP BusinessObjects EPM Local Systems ERP ERP Corporate CoA Operational COA Organization Unit Corporate CoA Organization Unit Consolidation Units Non-SAP Corporate CoA Organization Unit Consolidation Units Non-SAP Corporate CoA Operational COA Organization Unit EPM = Enterprise Performance Management 2011 SAP AG. All rights reserved. 10
Ensuring Consistency of Financial Master Data Features Extensible Data Model for financial entity types Data model delivered for standard SAP objects (e.g., Chart of Accounts) Customer-defined enhancements of data model Reuse of existing data elements in ERP Use of existing ERP tables as look-up tables Time/Period-dependant versioning Edition: Defines changes of selected types of objects, which will become valid at a certain period Flexible and comfortable maintenance in ONE central system Web UI with customer enhancements Customer-defined validations (Business Rule Framework: BRFplus) Customer-defined authorizations Mass change Maintenance of hierarchies System controlled change process with flexible approval workflows A change request describes the business reasons for a required change of master data and controls the approval and execution of the actual changes Change request ensures auditability of any change: What, when, who, why, Reporting Automated distribution to consuming systems Comparison of editions, change documents Further reporting in SAP NetWeaver BW Set of changes to an edition are distributed to several systems Distribution preferably by service-oriented architecture (SOA) services (or up & download) 2011 SAP AG. All rights reserved. 11
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 12
Change Process with Editions and Change Requests Local Accountant/ Corporate Accountant Local Accountant BI responsible Head of Corporate Master data Create Change Request Collect Comments Head of Corporate Master data Corporate Accountant Create edition Final Approval Corporate master data steward Change Requests Execute Changes - Single Maintenance - Hierarchy Maintenance - Mass Change Approve by Business Release edition Master data council Distribute edition Adjust in target system Local Accountant Corporate master data responsible 2011 SAP AG. All rights reserved. 13
Change Process Without Business Approval and Immediate Replication Corporate master data responsible Local Accountants / Corporate Accountant Local Accountants Corporate Master data Administrator Create edition Create change request & maintain master data Approve Changes Corporate master data steward Change Requests Maintain Master Data Distribute Change Request Block / Release edition Adjust in target system Corporate Master data Administrator Change request type Edition Entity type 2011 SAP AG. All rights reserved. 14
Demo Change process demos 2011 SAP AG. All rights reserved. 15
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 16
Entities in Master Data Governance for Financials Chart of Accounts (CoA) Group CoA with Financial Statement Items and Accounts Operational CoA with GL Accounts Cost elements Financial Statement Version User defined hierarchies (no SOA support, only download) Group Companies Global Company Data (e.g., for table T880 in SAP ERP) Consolidation units (e.g., for SAP SEM-BCS) Controlling Objects Profit Center with Profit Center groups and hierarchy Cost Center with Cost Center groups and hierarchy Custom Defined Objects Customer can define additional financial dimensions 2011 SAP AG. All rights reserved. 17
Master Data Governance for Financials A Solution for Financial Master Data in a Corporate Group Central Financial Master Data System Consolidation Chart of Accounts Hierarchies Consolidation Configuration Operational Charts of Accounts Operational Charts of Accounts Financial Statement Versions Financial Customizing Consolidation System Consolidation Chart of Accounts Hierarchies Consolidation Configuration BI System Consolidation Chart of Accounts Hierarchies Operational Chart of Accounts Global ERP Customizing Template Financial customizing needed in MDGF for input help and check Recommendation: Customizing template and MDGF can be installed in ONE system Operational ERP System Consolidation Chart of Accounts Operational Chart of Accounts Financial Statement Versions Mapping operational accounts to consolidation item Financial Customizing BI: Business Intelligence (Business Information Warehouse) 2011 SAP AG. All rights reserved. 18
Enhancing Pre-Delivered Data Model The Data Model can be enhanced to: Add new attributes to existing entity type Add new entity type to data model* Add additional entity types in hierarchy (hierarchy over several objects) Add relationships for entities In Customizing, choose Financial Master Data Management Data Modeling Edit Data Model * Planned feature 2011 SAP AG. All rights reserved. 19
SAP Master Data Governance Application Framework Make SAP ERP data model extensions Standard models provided Preconfigured data models, user interface configurations, workflows, and data distribution are available Changes expected You can extend the existing models with your own master data attributes, change the UI configuration to your users needs, and customize the workflow and distribution to define your specific governance processes Define your own Tools allow you to define new objects and related processes in order to govern your own master data domains 2011 SAP AG. All rights reserved. 20
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 21
Relations of Configuration Objects in MDGF Maps the master data in the system: The entity types to process Their properties The relationships between the entity types Data Model Version of the master data of specific entity types (for example, accounts) that is valid for a certain period of time Edition Type Entity Type Represents the type of master data within a data model Change request type Defines edition type and entity types that can be changed Role determination for workflow can be defined per change request type 2011 SAP AG. All rights reserved. 22
Implementing a SOX-Compliant and Auditable Change Process How to implement a Sarbanes-Oxley compliant and auditable change process for financial master data... For processing changes in MDGF you always need: An edition A change request This ensures: Versioning of master data System integrated approval process Controlled audit trail Implementation steps: Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 23
1. Define Edition Type The edition type defines which entity types are managed together in one edition In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Create Edition Type Create a new entry for edition type for your data model Define the entity types to be managed in the edition Activate data model* Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow * How to activate the data model is explained in previous chapters 2011 SAP AG. All rights reserved. 24
1. Define Edition Type (cont.) The edition type defines which entity types are managed together in one edition In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Create Edition Type (cont.) Create a new entry for edition type for your data model Define the entity types to be managed in the edition Activate data model* Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow * How to activate the data model is explained in previous chapters 2011 SAP AG. All rights reserved. 25
2. Define the Change Request Type The change request type determines which workflow steps and approval behaviors are used to edit an entity type In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Create Change request type Create a new entry for your change request type: Enter key and description and the edition type you are using Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 26
2. Define the Change Request Type (cont.) The change request type determines which workflow steps and approval behavior are used to edit an entity type In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Create Change request type (cont.) Create a new entry for your change request type: Enter key and description and the edition type you are using Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 27
2. Define the Change Request Type (cont.) Now define the entity types to be processed with the change request type Go back! Select the line and click on New Entries Select all entity types which you want to process together in one change request type Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 28
3. Assign Processors to Workflow Step To enable a SOX-compliant workflow it is necessary to realize dual control Make sure that different parties in your organization request, approve, and realize changes You can use the pre-delivered Workflow Template and assign different users to your workflow steps to ensure a SOX-compliant process One workflow template is delivered Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 29
3. Assign Processors to Workflow Step (cont.) In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Assign Processor to Workflow Step (simple or advanced) Create new entries for each step of the change request type: Type of change request Assign Workflow step Object type: User, position, job, org. unit Agent ID Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 30
4. Activate the Workflow Assign Agents, Activate Event Linking Finally, activate your workflow! In Customizing, choose: Financial Master Data Management Workflow/Process Modeling Define Standard Tasks for Workflow Under Assign Agents, define all dialog standard tasks as General tasks There are other tasks executed in the background With Activate the linking a workflow will be activated after each change request creation Activate data model Define edition type Define change request type including entity types Assign workflow processors for the change request type Activate the workflow 2011 SAP AG. All rights reserved. 31
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 32
Distribute Master Data from MDGF Financial Master Data are usually distributed to ERP systems, consolidation systems, BI systems, and non-sap systems Operational and consolidation systems: Service-Oriented Architecture (SOA) or file export (see next slide for different options in the consolidation systems) Export to SAP NetWeaver BW with extractors Non-SAP: Map SOA service to a Web service or use file export 2011 SAP AG. All rights reserved. 33
Replication (EHP5) Process and Technology Improvements In EHP4, SAP NetWeaver Process Integration must be used in replication. In EHP5, P2P communication is used instead. SAP NetWeaver PI is not necessary any more. In addition immediate distribution is available for change requests. The final approved change request can be replicated even the edition is not released. Local SAP ERP with FI-GL optional Master Data Governance Hub SAP NetWeaver Process Integration Corporate Consolidation e.g., SAP SEM-BCS 2011 SAP AG. All rights reserved. 34
Distribution with SOA How to distribute financial master data from a central master data system to other systems SAP NetWeaver PI Configuration (optional) Create Replication Model Assign receiver systems to replication model Distribute Master Data from Distribution Monitor Releases to consume SOA: Central system: SAP ERP 6.0 with ERP Enhancement Package 4 Local system: SAP ERP 6.0 as of ERP Enhancement Package 4 Releases < SAP ERP 6.04: Use ALE scenario 2011 SAP AG. All rights reserved. 35
Profit Center Reorganization and MDGF Change Cost Center Corporate System Local Systems 3 1 SAP Master Data Governance Assign new Profit Center PC01 to Cost Center CC01 CC01 PC01 2 SOA-Service: Change Cost Center BAPI: Change Cost Center to PC01 Master Data: Cost Center CC01 Field: Profit Center 4 Forward Error Handling System FEH -System: See Error Log 2011 SAP AG. All rights reserved. 36
Agenda 1. Consistent financial master data with Master Data Governance for Financials (MDGF) 2. Maintaining financial master data 3. Entities and Data Model of Master Data Governance for Financials 4. Implementing SOX-compliant change process 5. Distributing financial master data to other financial accounting systems 6. Wrap-up 2011 SAP AG. All rights reserved. 37
Key Points to Take Home Solution for central maintenance and governance of financial master data (MDGF) MDGF assures consistent financial master data from multiple financial accounting systems to quickly and accurately produce consolidated financial statements Sarbanes-Oxley compliant and auditable change process for financial master data by system integrated change process, versions of master data changes, and central audit trail SAP pre-delivered data model that is extensible to your particular requirements Automated distribution of financial master data from a central master data system to other systems such as financial accounting systems in your SAP landscape Scope of delivered data model: Chart of accounts and accounts for operational and consolidation chart of accounts Profit center, cost center, companies 2011 SAP AG. All rights reserved. 38
Thank You! Contact information: Pete Graham Director, LoB Finance, Solutions pete.graham@sap.com Newtown Square, PA 267-752-4056
Thank you for participating. ] SESSION CODE: 2010 Please remember to complete and return your evaluation form following this session. For ongoing education in this area of focus, visit www.asug.com. 2011 SAP AG. All rights reserved. 40
SAP Contact Slide SAP LoB Finance, Solutions Pete Graham pete.graham@sap.com SAP Field Services - ERP Joe Svoboda joe.svoboda@sap.com SAP Solution Management Financials Alfred Schaller alfred.schaller@sap.com 2011 SAP AG. All rights reserved. 41
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