New GL and Classic GL are two ways to implement General Ledger functionality in SAP ECC5 and ECC6. New GL provides lot of benefits over classic GL. The New GL benefits
- Provide an extension to the existing functionality in classic GL, or
- Provide new functionality compared to classic GL, or
- Provide a technologically superior way to perform a functionality in Classic GL
Continue reading "Comparative Analysis between New GL and Classic GL" »
Let me first table the various models that we have been talking about
1. Pricing linked to percentage of spend – The provider will charge a % of the spend processed through the platform. There would be no limitations on the transactions.
From a customer’s perspective the model lacks the granularity of the effort based pricing. As for long providers have been providing FTE based pricing which is directly attributable to the number of FTE deployed on the job. Some customers find the spend based model to be opaque and hard to compare.
On the other hand from a provider’s perspective any “end to end” or managed services model like platform has to be linked to the business outcome. The business of procurement is to manage spend and hence a provider who helps manage spend should charge as per the spend processed rather than the underlying transactions.
I guess a change in outlook coupled with mechanisms to measure service providers value-add in terms of impact of spend can help move to this model
Is moving to ERP 6.0 really the end of journey for Upgrades? Not necessarily so, please read on..
Master Data Management as a concept has existed as long as the ERP market or even before. The concept has been to help efficiently manage transactional and reporting functions within an application by having a separate repository for master data. The master data function gets called dynamically within the execution of a transaction.
This concept has evolved over the years, due to complexity of businesses and hence the IT Systems that are required to support it. In recent years the concept is gaining maturity by looking at Master data as a function to feed systems enterprise wide, not ERP alone. Hence MDM is now being viewed as a de-coupled application from the ERP applications.
Many vendors, some niche and other ERP vendors, have products to address this space. Though Gartner has reported the relative capability across various products in the ‘Magic Quadrant’, Consultants and Clients alike, are aware that none of the products have matured enough to warrant the name of ‘MDM Package Solution’. The products are still in the form of a tool/platform and a basic framework over which clients are expected to build a custom solution. Depending on what the client wants to achieve, the solution build up can be as expensive as a custom solution on any other platform.
SAP’s MDM product addresses master data across the enterprise like Material, Vendor and Customer. It also has certain content that is much suited for an SAP environment, hence there is good amount of data modeling effort that can be saved if the company has a SAP based landscape. These are some of the key differentiators for SAP MDM against other contemporaries.
The other features, like de-duplication, merging, harmonization etc are also part of the Product offerings.
However, the above alone does not make the offering a rich or a mature one. Today, the companies need to orchestrate and manage master data as a central application to the Enterprise. This needs a robust, user friendly and configurable package with a host of functionalities. The requirement from the Industry is the following:
What can SAP do to meet the above requirements with the current MDM package?
SAP needs to work on maturing the product to make it a robust single unit, than expect customers to work on multiple components such as BPM, EP, Webdynpro and MDM to put up a MDM Solution. Essentially, the concept can be borrowed from ECC, where-in you have; Transactional processing UI; Configuration and Developer workbench. The skills required for the same are Functional and ABAP technical and it is easy to implement and use.
The skills required for setting up the current MDM solution –using number of SAP components- are too many and can act as a big entry barrier for larger customer adoption.
In the recent past we had multiple interactions with prospects and existing customers on the pricing model for Platform based solutions for "Source to Pay" (managed services).Various stakeholders have expressed opinions which rightly address their concerns but it’s hard to conclude to a single model.
Let me start out with a fundamental argument. What is the objective of an outsourcing engagement? Is it to impact business process from a business requirement standpoint or to impact at transactional level?
In my view a transactional view does not enable a service provider to create any transformational value for clients. Service providers will perform the transactional work as per agreed SLA but will not be in a position to appreciate or contribute larger business goals that client organizations strive for. The transactional view probably provides benefits which are tangible, but are far from business benefits that is the need of the hour.
A pricing model should also reflect the basic premise (transformational v/s transactional) and should use the right metrics accordingly. In the next post I would like to discuss with the audience various pricing models that can be proposed. Till then please feel free to share your views on pricing.
SAP introduced New General Ledger functionality with the Enterprise release (ECC 5). The SAP FI/CO components for Classic General Ledger, COS Ledger, Reconciliation Ledger, Special Purpose Ledger and Profit Center Accounting have been merged to provide an integrated solution known as New GL. New GL provides document splitting functionality that enables generation of financial statements for Segments (As per IAS 14 Accounting Standard, segment reporting is a legal reporting requirement for specific business or geographical segments). New GL supports multiple ledgers, hence, reducing the need to rely on Special Purpose Ledgers for parallel valuation. New GL facilitates real time FI-CO Integration resulting in real-time legal and management reporting. An integrated solution like New GL ensures better SOX compliance and Fast Period End Close resulting in reduced TCO.
