sap master data governance for financials

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Orange County Convention Center Orlando, Florida | May 15-18, 2011

SAP Master Data Governance for Financials: What's Newwith SAP ERP 6.0 Enhancement Package 4 and 5

Pete Graham

Director, LoB Finance, Solutions

SAP Labs, LLC

SESSION CODE:

2010



© 2011 SAP AG. All rights reserved. 2

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FINANCIAL

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negligent.




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 accountingsystems

6. Wrap-up




High master datamaintenance costs

Need for multiple systems

to manage master data indifferent domains

Lack of flexibility in dynamicbusiness environments

Lack of consolidated view ofcustomer data across allchannels

Customer transactions arecompromised due to limitedview of the facts

Lack of transparency relatingto suppliers and products

High costs due to insufficientsupplier selection andrationalization

Loss of potential for benefitrealization (i.e. discounts,conditions, central contracts)

Limited availability of up-to-date master data in mybusiness network

Inconsistent financialmaster data across theenterprise

Manual efforts to updatefinancial master data inlocal financial systems

Risk of non-compliance toIFRS, SOX etc.

Slow group closes

Lack of transparency aboutchanges (Who, what, when,why?)

All Lines of Businesses (LOBs) Are Impacted by Master

Data Quality

Organizations & Roles

Challenges

IT

CIOCFOVP of Supply Chain,

VP of Planning

Financials Sales

(S)VP of Sales; (S)VP of

Sales & Marketing

Supply Chain




Process Excellence Demands a Robust Master Data

Solution

Financial master datadrives excellence in c riticalinternal processes

High quality of masterdata and a sing le versionof the truth

Business insights &governance towards allentities of the group

Integrate wide ranges of datafrom disparate financialapplications

“Central management of

master data drives

high performance”

Numerous users

Large number of

preceding systems

bundant org units in

several corporate

divisions

Many reporting units in

different countries and

territories

Financial system

Financial system Financial system

Financial system

Corporate

Master Data




SAP Solution Portfolio for MDMComprising Both Embedded and Enterprise MDM

SAP Master Data GovernanceSAP NetWeaver ® MDM

Out-of-the-box, domain-specific

master data governance applications

to centrally create, change and distributemaster data with a focus on SAP

Business Suite

Generic, mult i-domain

infrastructure supportingall domains and use

cases in the enterprise.

Enterprise MDM

Embedded MDM




What Kind of Master Data Can Be Maintained in Master

Data Governance for Financials?

Charts of Accounts and

GL AccountsCost Elements

Organizational Unit Companies

Profit Center

Cost Center

Controlling Objects Internal Orders

Fixed Assets

Financial Master Data

Products and Materials

Business Partners Customers

Vendors

Operational Master Data

Need for consistentmaintenance in

corporategroups

Scope of EHP 5




Financial Master Data:Pain Points & Solutions in MDGF

Pain Points Solutions in MDGF

Master data and other relevant information scatteredover several systems

MDGF as complete and single source of truth forfinancial master data and all relevant information

Inconsistent master data in local accounting systems

High effort for reconciliation in group close and corporateperformance management

Automated distribution from MDGF to all-consumingsystems via SOA (Service- Oriented Architecture) ordownload and upload

Central governance of local units by distributionmonitor in MDGF

High amount of manual work for maintenance of masterdata in local systems

Compliance requirements (e.g., SOX)Change request with workflow for:

Prophylactic information of stakeholders

Insight into all impacts

Decision support and approval

Audit trail

Data quality

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”




1. Request 4. Replicate3. Approve2. Change

EPM = Enterprise Performance Management

SAP Master Data

Governance

SAP BusinessObjects

EPM

Non-SAP

Non-SAP

Corporate Group

Systems

Local

Systems ERP

Corporate CoA

Operational CoAOrganization Unit

Consolidation Units

ERP

Corporate CoA

Operational COA

Organization Unit

Corporate CoA

Operational COA

Organization UnitCorporate CoA

Organization Unit

Consolidation Units

Corporate CoA

Organization Unit

Consolidation Units

OverviewMaster Data Governance for Financials




Ensuring Consistency of Financial Master Data

System controlled change process with flexibleapproval workflows

A change request describes the business reasons for arequired change of master data and controls the approvaland execution of the actual changes

Change request ensures auditability of any change: What,when, who, why, …

Flexible and comfortable maintenance in ONEcentral system

Web UI with customer enhancements

Customer-defined validations (Business Rule Framework:BRFplus)

Customer-defined authorizations

Mass change

Maintenance of hierarchies

Extensible Data Model for financial entity types

Data model delivered for standard SAP objects (e.g., Chartof Accounts)

Customer-defined enhancements of data model

Reuse of existing data elements in ERP

Use of existing ERP tables as look-up tables

Features

Automated distribution to consuming systems

Set of changes to an edition are distributed to severalsystems

Distribution preferably by service-oriented architecture

(SOA) services (or up & download)

Time/Period-dependant versioning

Edition: Defines changes of selected types of objects,which will become valid at a certain period

Reporting

Comparison of editions, change documents

Further reporting in SAP NetWeaver BW




Agenda

1. Consistent financial master data with Master Data Governance forFinancials (MDGF)





6. Wrap-up




CollectComments

Local Accountant

BI responsible

Change Process with Editions and Change Requests

Create ChangeRequest

Local Accountant/Corporate Accountant

Releaseedition

Head of CorporateMaster data

Approveby

BusinessMaster data council

Final Approval

Corporate master

data steward

Corporate master dataresponsible

Execute Changes- Single Maintenance

- Hierarchy Maintenance

- Mass Change

Createedition

Head of Corporate

Master data

ChangeRequests

Distributeedition

Adjust intargetsystem

Corporate Accountant

Local Accountant




Change Process Without Business Approval

and Immediate Replication

Change request type

Edition

Entity type

Block /Releaseedition

Corporate Master data

Adm in ist rator

DistributeChangeRequest

Adjustin targetsystem

Local Accoun tant s

Maintain MasterData

Local Ac countants /Corporate Accountant

Create changerequest &

maintain masterdata

Corporate master data

responsible

Approve Changes

Corporate master

data steward

Create

edition

Corporate Master data

Adm ini st rato r

Change

Requests




Demo

Change process demos




Agenda






6. Wrap-up




Entit ies 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




Master Data Governance for Financials A Solution for Financial Master Data in a Corporate Group

Central Financial Master Data System

Consolidation Chart of Accounts

Consolidation Configuration

Financial Customizing

Global ERP Customizing Template

Financial customi zing needed in MDGF

for input help and check

Mapping operational accountsto consolidation item

Consolid ation System


Hierarchies

Consolidation Configuration

BI System


Hierarchies

Operational Chart of Accounts

Operational ERP System


Operational Chart of Accounts

Financial Statement Versions

Financial Customizing

Recommendation: Customizing

template and MDGF can be i nstalled in

ONE system

Operational Charts of AccountsOperational Charts of Accounts

Hierarchies

Financial Statement Versions

BI: Business Intelligence (Business Information Warehouse)




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




SAP Master Data Governance Application Framework

Make SAP ERP data model

extensions

Standard models provided

Preconfigured data models, user interfaceconfigurations, workflows, and datadistribution are available

Changes expected

You can extend the existing models withyour own master data attributes, changethe UI configuration to your users’ needs,and customize the workflow anddistribution to define your specificgovernance processes

Define your ownTools allow you to define new objects andrelated processes in order to govern yourown master data domains




Agenda






6. Wrap-up




Relations of Configuration Objects in MDGF

Data Model

Edition Type

Change request

type

Entity Type

Maps the master data in the system: The entity types to process Their properties The relationships between the entity types

Defines edition type and entity types thatcan be changed

Role determination for workflow can bedefined per change request type

Represents thetype of masterdata within adata model

Version of the masterdata of specific entitytypes (for example,accounts) that is validfor a certain period oftime




Implementing a SOX-Compliant and Auditable Change

Process

How to implement a Sarbanes-Oxley compliant and auditable change processfor financial master data ...

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model

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:




1. Define Edition Type

The edition type defines which entity types are managed together in one edition In Customizing, choose: Financial Master Data ManagementWorkflow/Process Modeling Create Edition Type

Create a new entry for edition typefor your data model

Define the entity types to be managed inthe edition

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model*

* How to activate the data model is explained in previous chapters




1. Define Edition Type (cont.)

The edition type defines which entity types are managed together in one edition In Customizing, choose: Financial Master Data ManagementWorkflow/Process Modeling Create Edition Type (cont.)

Create a new entry for edition typefor your data model

Define the entity types to be managed inthe edition

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model*

* How to activate the data model is explained in previous chapters




2. Define the Change Request Type

The change request type determines which workflow steps and approvalbehaviors are used to edit an entity type

In Customizing, choose: Financial Master Data ManagementWorkflow/Process Modeling Create Change request type

Create a new entry for your change request type:Enter key and description and the edition type youare using

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model




2. Define the Change Request Type (cont.)

The change request type determines which workflow steps and approvalbehavior are used to edit an enti ty type

In Customizing, choose: Financial Master Data ManagementWorkflow/ProcessModeling Create Change request type(cont.) Create a new entry for your change request type:

Enter key and description and the edition type youare using

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model




2. Define the Change Request Type (cont.)

Now define the entity types to be processed with the change request typeGo back!

Select the line and click on New Entries

Select all entity types which you want to process together in one change request type

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model




3. Assign Processors to Workf low 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 realizechanges

You can use the pre-delivered Workflow Template and assign different users to yourworkflow steps to ensure a SOX-compliant process

One workflow template is delivered

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model




3. Assign Processors to Workflow Step (cont.)

In Customizing, choose: Financial Master Data ManagementWorkflow/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

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model




4. Activate the Workflow Assign Agents, Activate Event Linking

Finally, activate your workflow! In Customizing, choose: Financial Master Data ManagementWorkflow/Process Modeling Define Standard Tasks for Workflow

Define edition

type

Define change

request type

including entity

types

Assign

workflow

processors for

the change

request type

Activate the

workflow Activate

data model

Under “Assign Agents,” define all dialogstandard tasks as General tasks

There are other tasks executed in thebackground

With “Activate the linking” a workflow will beactivated after each change request creation




Agenda





5. Distributing financial master data to other financial accounting

systems

6. Wrap-up




Distr ibute Master Data from MDGF

Financial Master Data are usually distributed to ERP systems, consolidation systems, BIsystems, and non-SAP systems

Operational and consolidation systems: Service-Oriented Architecture (SOA) or fileexport (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




Replication (EHP5)Process and Technology Improvements

Master Data GovernanceHub

SAP NetWeaver

Process Integration

Local SAP ERPwith FI-GL

Corporate Consolidatione.g., SAP SEM-BCS

In EHP4, SAP NetWeaver Process Integration must be used in replication.In EHP5, P2P communication is used instead. SAP NetWeaver PI is not necessary anymore.In addition immediate distribution is available for change requests. The final approvedchange request can be replicated even the edition is not released.

optional




Distribution with SOA

How to distribute financial master data from a central master data system toother systems …

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

Create

Replication

Model

Assign receiver

systems to

replicationmodel

Distribute

Master Data

from

Distribution

Monitor

SAP NetWeaver PI

Configuration

(optional)




Profit Center Reorganization – and MDGFChange Cost Center

SAP Master Data

Governance

Corporate

SystemLocal

Systems

Ass ign new Prof it

Center PC01 to

Cost Center CC01

CC01 PC011

3

2Master Data: CostCenter CC01

Field: Profit Center

SOA-Service:Change

Cost Center

BAPI: Change

Cost Center to

PC01

FEH -System:

See Error Log

Forward Error

Handl ing System

4




Agenda






6. Wrap-up




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 accountingsystems 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, andcentral 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 systemto 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 ofaccounts

Profit center, cost center, companies



Thank You!

Contact information:

Pete GrahamDirector, LoB Finance, [email protected] Square, PA267-752-4056




] Thank you for participating.

SESSION CODE:

2010

Please remember to complete and return yourevaluation form following this session.

For ongoing education in this area of focus, visit

www.asug.com.




SAP Contact Slide

SAP LoB Finance, Solutions — Pete Graham [email protected]

SAP Field Services - ERP — Joe Svoboda [email protected]

SAP Solution Management Financials — Alfred Schaller [email protected]




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