Simpler Treasury Implementation – SAP Activate & Best Practices for SAP S/4HANA
December 2022
10 min read
Author:
Greg Williams
Share:
The SAP Activate approach and Best Practices for SAP S/4HANA can help organizations deliver a fast, simplified adoption of SAP treasury functionality within S/4HANA.
Greg Williams, senior manager at Zanders, tells us what this is, how it can accelerate implementations, and informs us about new developments in 2023.
In previous articles we covered a perspective on the different types of deployment options available for SAP S/4HANA – i.e. On-Premise, Public Cloud and Private Cloud. In this article we look to provide insight into how to leverage SAP’s Activate implementation methodology and Best Practice content to accelerate your adoption of SAP’s S/4HANA treasury capability.
Previously, SAP had what they used to call ‘rapid deployment solutions’ (RDS) and content to aid implementation. But the replacement SAP Activate approach is a far more complete way to build and deploy systems. It has also evolved and matured over the years, since the first release in 2015, so it is important to keep up-to-date. The offering is now supported by very rich and mature Best Practice content that includes detailed business process documentation and test scripts.
Implementation Methodology
SAP Activate is an agile methodology that leverages the various accelerators mentioned above. In reality, most implementations will not necessarily adopt the full methodology completely, only taking what is relevant to them. However many aspects of it should be leveraged in formulating some type of hybrid agile / waterfall methodology for a treasuries implementation project – based on all of the complex real-world factors that any given organization has to accommodate.
In this article we will provide some insight into the SAP Activate elements and methodology and then look at it from a treasury perspective, examining the treasury specific scope items included in SAP’s Best Practices run-through. We will drill down into the specific detail so that you get a feel for both the breadth and depth of what SAP has to offer.
This will be like a visual tour from the highest level, with lots of graphs to come, through to the lowest level of detail. The key thing to remember is that the Best Practices content and SAP Activate methodology is applicable to the full array of system functionality and herein lies the benefit in that all parts of the business embrace this same content and approach.
SAP Activate
First let’s have a brief look into SAP Activate. Starting with the elements that are included and then looking at the phases in the project lifecycle, which will give greater insight into the methodology. The elements are:
the methodology,
tools, which are very much supported by SAP’s Solution Manager,
& then the content, including for example the Best Practices advice, which we will unpack a bit later.
The elements provide the project team with ready-to-use templates and accelerators, which can be used in the entire Activate journey with the help of step-by-step guidelines. We will cover what needs to be delivered in each phase and how to deploy the solution in Cloud/On-premise, according to the business needs.
Figure 1: SAP Activate elements.
Source: SAP
In SAP Activate, there are six phases. At the end of each phase, quality gates are present to make sure respective deliverables in each phase are completed, as per the standards.
This methodology is an agile framework and hence all these phases are run in an iterative manner in order to build a solution. The six phases are: Discover, Prepare, Explore, Realize, Deploy and Run.
Figure 2: SAP Activate phases.
Source: SAP.
SAP Best Practices Content
The SAP Best Practice content is currently accessed through the SAP Best Practices explorer. This application is planned to be discontinued by end of June 2023, whilst it will not be replaced SAP will provide an entirely different application that will also cover SAP Best Practices solutions. The first release of the new application is planned prior to the end of June 2023.
Turning to the SAP Best Practices advisory content next, there are two diagrams below that show all the lines of business and business areas included in Best Practices approach for SAP S/4HANA. These diagrams are logically split between what the vendor calls Operational ERP and Administrative ERP. Treasury Management forms part of the Finance subset under the Administrative ERP side.
Figure 3: SAP Best Practices – Operational & Administrative ERP.
Treasury Management Scope Items, are important aspects of SAP’s Best Practices implementation methodology. We will now focus Debt and Investment Management, diving into the details. Scope Item 1WV (Debt and Investment Management) is shown on the Best Practice Explorer module below, Including Process Flows and Test Scripts.
Figure 5: An example of a scope item – for debt & investment management – in SAP’s Best Practices content.
Source: SAP.
There are 13 Process flow diagrams for scope item 1WV – Debt and Investment – alone in SAP Best Practices. A view of the debt and investment management overview process flow diagram is provided in figure 7. The process steps in the Debt and Investment Overview include: (1) Create Debt and Investment Contract; (2) Correspondence; (3) Principal Payment; (4) Period End Closing; (5) Interest Rate Adjustment; (6) Interest Payment; (7) Nominal Amount Adjustment; (8) Reclassification; (9) Terminate Deposit at Notice; (10) Transaction is Premature; (11) Transaction is Mature; (12) Reports. Scope Item 1WV also has a 188-page word based test script document. Additionally, a test script template for Cloud Asset and Liability Management (ALM) risk purposes is also included in the same content.
A view of the debt and investment management overview process flow diagram is provided below:
When you embark on the initial phases of your treasury implementation you can also use the SAP Solution Builder to deploy the Best Practice content into a working sandbox test system.
You need to select the scope items for inclusion in the solution build option. It will then build the system, including configuration and master data, such that you will be able to follow the test scripts, and run the business processes. This means you can quickly and easily explore the system according to the documented functionality very early on in your project.
A good approach is to keep a dedicated Best Practices sandbox client in your development environment where you can deploy and explore content at the start of your project, and also use it for future initiatives.
It is clear that you should be able to leverage significantly faster implementation times and to get value quickly, using as much of this vendor provided advisory content as possible. In addition, it is going to be crucial to have a consistent approach for all lines of business and business areas within the project. All areas need to embrace what is on offer in a universal manner, so that the benefit of a more unified approach to your transformation journey can be fully realized. As ever, good project management and perhaps consultancy advice if it is deemed necessary, can improve any implementation template so bear in mind some thought power will still be needed by the project management team.
At Zanders we are striving to embrace the new approach to SAP S/4HANA implementations discussed in this article, while still drawing on the depth of experience and knowledge we’ve built up from both a treasury business and technology perspective over the years on more traditional approaches we’ve used in the past. This can and should be seen as a healthy tension – comparing what has worked previously with what is possible now to find the best pathway forward. This synthesis allows for the benefits of both schools of thought to be leveraged when guiding our customers through their treasury transformation journeys on SAP.
In the high-stakes world of private equity, where the pressure to deliver exceptional returns is relentless, the playbook is evolving. Gone are the days when financial engineering—relying
The Basel IV reforms, which are set to be implemented on 1 January 2025 via amendments to the EU Capital Requirement Regulation, have introduced changes to the Standardized Approach for
With the introduction of the updated Capital Requirements Regulation (CRR3), which has entered into force on 9 July 2024, the European Union's financial landscape is poised for significant
The heightened fluctuations observed in the commodity and energy markets from 2021 to 2022 have brought Treasury's role in managing these risks into sharper focus. While commodity prices
VaR has been one of the most widely used risk measures in banks for decades. However, due to the non-additive nature of VaR, explaining the causes of changes to VaR has always been
The Covid-19 pandemic triggered unprecedented market volatility, causing widespread failures in banks' internal risk models. These backtesting failures threatened to increase capital
Challenges with backtesting Expected Shortfall
Recent regulations are increasingly moving toward the use of Expected Shortfall (ES) as a measure to capture risk. Although ES fixes many
Across the whole of Europe, banks apply different techniques to model their IFRS9 Expected Credit Losses on a best estimate basis. The diverse spectrum of modelling techniques raises the
As organizations continue to adapt to the rapidly changing business landscape, one of the most pivotal shifts is the migration of enterprise resource planning (ERP) systems to the cloud.
While many business and SAP users are familiar with its core functionalities, such as limit management applying different limit types and the core functionality of attributable amount
In brief:
Prevailing uncertainty in geopolitical, economic and regulatory environments demands a more dynamic approach to default modelling.
Traditional methods such as logistic
The recent periods of commodity price volatility have brought commodity risk management to the spotlight in numerous companies, where commodities constitute a substantial component of the
In brief
Prepayment modelling can help institutions successfully prepare for and navigate a rise in prepayments due to changes in the financial landscape.
Two important prepayment
The corporate landscape is continuously reshaped by strategic realignments such as mergers, divestments, and other M&A activities, wherein a company divests a portion of its business
The evolving economic landscape has placed a spotlight on the critical role of treasury in value creation. Our latest roundtable, themed ‘Treasury’s Role in Value Creation,’ delved
This article highlights key points mentioned in our whitepaper: Treasury 4.x - The age of productivity, performance and steering. You can download the full whitepaper here.
Summary:
Whether a corporate operates through a decentralized model, shared service center or even global business services model, identifying which invoices a customer has paid and in some cases,
The final article from Zanders on the DRM model presents the lifecycle of the DRM model over a single hedge accounting period and the prospective and retrospective assessments that are
The corporate treasury agenda continues to focus on cash visibility, liquidity centralization, bank/bank account rationalization, and finally digitization to enable greater operational and
The Basel IV reforms published in 2017 will enter into force on January 1, 2025, with a phase-in period of 5 years. These are probably the most important reforms banks will go through