Part 2 – SAP MDG – A Stepping Stone for SAP S/4HANA Journey

[Antony_Prasanna]

Introduction

Clients across the globe are getting into the transformation journey started with SAP S/4HANA.

In this blog, we will take one of the use cases to discuss how the master data (MDG)  journey will be the stepping stone for SAP S/4HANA Transformation and the needed steps to achieve it.

This is the second blog on this topic. For Part 1, kindly refer

https://blogs.sap.com/2023/01/27/sap-mdg-a-stepping-stone-for-sap-s-4hana-journey-part-i/

Use Case ( Recap)

Business Context

• In the current landscape, there are 3 separate SAP ECC instances for each region: APAC, Europe and the Americas

• The business process for both master data and transactional data is different by country within a single Region ( ECC instance) and also across regions ( Other ECC Instances)

• The best practices are not fully adhered to in many cases, so in the long run, it is expected to optimise the process for better efficiency

IT Context

• In the roadmap, a single instance of SAP S/4HANA to replace the 3 separate ECC instances in the phased manner

• A dedicated master data system to ensure the governance, data quality and unified master data send across the landscape for business operations

Key Aspects for MDG : Deep Dive

A.    Initial Setup

A.2 Account Group Consolidation ( As needed)

As MDG going to the central master data systems catering for 3 ECC systems & future S/4 system, it is important to finalize the account groups

Customer master will be taken as an example for this discussion

Current State in ECC

In the current ECC system, due to the existing business process, there could be multiple account groups for the same definition

In the above example, we have 2 types of challenging scenarios

• In Europe, the Sold-To account have been created by business units to bifurcate the customers

• In Americas, Sold-To account have been created by regions

The field properties, number ranges could be different for these account groups. The account group have been setup to have duplicate within the ECC due to the existing way of working.

What’s for MDG

For setting up account groups in MDG, we have 6 different account groups that have duplicates within & across ECCs.

For MDG, what should be the design of account groups; Can we do a Lift and shift of existing account groups into MDG?

The answer is “Definitely No”. We need to see the opportunity to unify and harmonise account groups.

High-Level Overview

1. Account Groups: As-Is Analysis

The account group analysis needs to be done in various dimensions

This analysis provides the insights and usages of account groups across business processes, IT dependency will enable to take the right decision for future design

2. Define To-Be

As MDG is considered as the stepping stone for future SAP S/4HANA program, the account group setting needs to be aligned with the future.

The account groups can't be created independently without understanding or finalization of future business processes.

The keywords are business process standardization & business process optimization.

The functional experts from each stream such as SOTC, P2P,R2R will be conducting the Fit-To-Standard workshops to get the requirements/needs of any customization

In the given example, there are multiple Sold-To’s in an ECC. The As-Is analysis will give an insight into whether it is done for Legal / Fiscal / Statutory needs. If No, we have an opportunity here

A decision needs to be made whether the same process is to be taken in to future state as well. If that’s not the case, it needs to be taken under either standardization/optimization

The finalization of the business process & solution design will provide the finalized account group to be taken forward

3. As-Is vs To-Be

New Account Group Definition: Field Properties and Number ranges need to be done

The existing account groups need to be compared against the newly finalised account groups

Account Groups Consolidation

Account Group Standardization: In the given example, based on the Fit-To-Standard, there is a decision to stick to 1 account group for Sold-To.

This brings the account group consolidation on the ECC side from the business process perspective

Data Perspective

1. Legacy Data (Existing) – There will not be changes to the account group for the existing master data. However there would be data quality-specific activities such as enrichment, and deduplication needs to be done to enable data migration & quality. This will be discussed in detail in the data migration section (C.3)
2. New Master Data (Post MDG) – New master data will be created in the new account group and sent it to ECC. In ECC, it will be created under a new account group

While the account group is discussed here, the Business Partner (BP) Group strategy needs to be defined as well. This will be discussed in S/4HANA specific section (C.2)

4. Realization

The new account groups need to be configured in MDG and also in each ECC system.

Remediation

Based on the As-Is analysis, the identified impact on transactions, interface, data needs to be remediated in ECCs to run the business process for new account groups

As there is a mix of master data with old account groups and new account groups in ECC systems, the remediation needs to be done in such a as way to support both.

Reporting and downstream systems are a few of the key factors to be considered with the mixed-operating master data model

In Section E, there will be a brief on the approach of tools, risk, and testing on the remediation

Business Process Adoption

By this enablement, the business process needs to follow the standardized model. Which means there is a change / adoption needs to do so in ECC.

The system-related (technology) will be covered by remediation; people & processes related to be handled through a change management process such as training , documentation etc.

A.3 Number Ranges

Once the account group have been finalised, the key topic would be the number ranges.

Following are some of the key factors to be considered for number range finalization

• The number range to be checked across all ECC systems and find out the available slot

• As-Is Analysis: Whether any intelligent numbering has been used

• To-Be: The opportunity to move into a non-intelligent numbering

• Internal or External Numbering

• Same number range to be used for various account groups for a master data object (Ex. Customer) vs Specific number range by account group within a master data object

Various topics discussed in the account group section will apply to Number ranges as well.

General Questions

In the transformation program, generally, there will be questions as below related to the account group & number range which can be covered in this section :

Why I should Go Away from Intelligent Numbering as it does work perfectly today?

Intelligent numbering of the master data is a common practice across organizations in the legacy world.

People, Processes and Technology have been made to support intelligent numbering to make the process work.

Is this a concern for standardization, and data quality? A point of view on this topic

What are the benefits of business process standardization & consolidation of account groups done in ECC ahead of SAP S/4HANA, knowing the fact that ECC will go away with SAP S/4HANA in the future?

Preparation Work

• For any transformation program, business case creation is the first step.

• Identifying the key pain points and areas of improvements

• Creating measurable KPIs for business value realization

• Have alignment on Return on Investment (ROI) with a timeline plan

With the above preparation work done for the MDG program, the following could be additional dimensions to be considered for response

• What is the timeline of MDG solution connected to each of ECC’s systems?

• What is the timeline of interim period , some of ECC’s system still operative, while the other is already implemented on SAP S/4HANA?

• What will the overall timeline from MDG program start to End state – 1 SAP S/4HANA?

The timeline & current pain points will provide the initial idea in terms of investing in ECC’s for remediation.

• Before starting the SAP S/4HANA, having multiple preparation projects will help to solve issues ahead

• Another key is having a clear end state, strategy and vision will help the investment on ECC’s being beneficial for S/4HANA program.

In the next blog, I will cover other topics in detail.

About the Author,

Antony Prasanna has been working in SAP master data space since 2006. Have experience working across multiple large transformation programs on SAP S/4HANA including SAP MDM, MDG and Data Migration tools.