Issue

The Treasury process currently performed Quantum was recently approved to be part of the SyWay project scope.  A decision is now required as to when to deploy Treasury activities, whether in Group 1, Group 2, or after Group 2 with the In-House Bank deployment.  With the multi-group deployment, managing the complexity of the interim period between Group 1 and Group 2 is a challenge for the Treasury activities.

Recommendation: Option F: Deploy; Treasury (Treasury Risk Management & Cash Management) with Group 2, IHB in Group 2, Syensqo SA in Group 2

The optimal timing to deploy Treasury is with group 2.

In-house banking and the Syensqo SA entity are significantly integrated with Treasury, as such the recommendation is to deploy them at the same time in Group 2.  As such the timing of In-House Bank deployment will move earlier to be within Group 2.  The deployment of the Syensqo SA entity will move later i.e. from Group 1 to Group 2.

Main supporting factors for the recommendation: 

Cash Management: All entities will be operating with S4 at the Group 2 stage, and Cash Management will have a full view of the cash in the company.  With the centralization of cash within the In-House Bank, it is also best to align Treasury and IHB deployments.  

Exposure Management: Similar to the above point, All entities will be operating with S4 at the Group 2 stage, and Treasury Risk Management Cash Management will have a full view of the exposures in the company.  With the centralization of exposures within the In-House Bank, it is also best to align it's deployment.  

Accounting for Treasury Deals:  This option allow streamlining of the accounting postings to support the treasury deal processing.  In the interim period the current as-is Quantum process will continues. Once TRM is live in Group 2, all posting will be automated within S4.  There is no need to build and deploy any new interim interfaces to manage Treasury postings.

Accounting for In-House Banking: The added complexity whereby the IHB currently resides in the separate PI2 system, it is optimal to align its deployment with Treasury and the Syensqo SA for ease of accounting postings, and avoiding the need to build any new interim interfaces for accounting purposes. 

Inter-Company Loans: IC loans will be managed in the new TRM module of S4. As all entities will be operating in S4 at the Group 2 stage, both sides of the loan relationship are in the one system allowing the IC loans process to operate effectively.  Similarly loan settlement for principal and interest using In house bank accounts and the End of day process of IHB including interest postings are all within the one system.   This all contributes to eliminating the need to build and deploy new interfaces for the interim period.

Treasury Deals outside of the central treasury entity: Group 2 deployment will allow treasury to best manage the need to deal directly for entities within Sysensqo group.  The as-is Quantum processes will continue in the interim. Once TRM is live in Group 2, deal processing will transition to S4.  Again avoiding the need to build new interfaces for the interim period. 

Cost Savings: A Group 2 deployment avoids interfaces for the interim period.  Avoiding the cost to build, test and deploy loans interfaces.  Avoiding spend that would only be necessary for the period between Group 1 and Group2.

Cut-Over activities: Treasury and IHB will deploy with the rest of Group 2, aligning with the wider cut-over planning any avoiding additional cut-overs and potential downtime.

Background & Context

Key Decision Document KDD075 - Future system to support Treasury activities

Change Request CR0003 - Transition Treasury from Quantum to S/4HANA

The above KDD and Change Request were approved to bring Treasury activities into the scope of the SyWay project,

A decision in now required as to when the deploy the Treasury modules within the SyWay deployment Groups, which is the focus of this KDD. 

There are currently two official deployment groups, Group 1 and Group 2.  

Relevant Treasury Modules in S/4HANA

• Treasury Risk Management (TRM)
• Cash Management (CM)
• Inter-Company loans will also be fully managed within TRM.

Systems

   Quantum: is the current Treasury systems

   PI2:  The treasury accounting and also the IHB reside in this separate system.  Relevant company codes are 2232 & 4044.

   PF2: The legal entity for Treasury and IHB is Syensqo SA, and this entity resides in PF1. The relevant company code in this system is 2002.  Local Statutory reporting is performed from this entity\system.  Non IHB exposures need to be interfaced to PI2.

   WP2: For Treasury exposure management, the non IHB exposures for the entities within WP2 are required.

   BFC:  for Consolidation purposes, Syensqo SA (2002), send packages to BFC for Consolidation.

Assumptions

SyWay deployment for Release 4 will be execute in two groups, Group 1 & Group 2.   Multiple group go-lives adds significant complexity in regards to Treasury deployment. 

Constraints

Existing Quantum License expires 14th June 2028.

Impacts

KDD070 - Deployment Approach for In-House Bank (IHB)

Extract from KDD070

Recommendation:  Option E - Defer the deployment of In-House Bank functionality for all GBUs and Entities until after the second group go-live.

This Conceptual Design recommendation will be re-assessed during Detailed Design when more information will be available to support a decision. Options B, C, and E will form part of the reassessment. Any long lasting impacts on S/4HANA from the legacy interim IHB requirements will also be considered at this time. 

Impact

Treasury and In-House bank are heavily integrated, as such the deployment timing of the In-House Bank comes into consideration.

The Conceptual design recommendation was to deploy the IHB "after Group 2". For the ease when reviewing the options within this KDD, IHB go-live will be referred to as "Group 3" instead of "After Group 2".  Note: there is no official Group 3.

The Syensqo SA entity (ECC Company code 2002).

Local Statutory Reporting for this entity is performed in 2002 \ PF2.

Treasury

2002 holds the accounting for both Treasury and the In House Bank.

Accounting entries from the PI2 system are interfaced into 2002 in PF2 to produce statutory accounts, and also interfaced to BFC from PF2 Group Consolidation.

Non- Treasury

Relevant non Treasury Activities also occurs in this entity, including Head Office activities and Intercompany service billing which 1) receives charges from other entities 2) send invoices to other entities within the Group 3) Interfaces with WP2. 

SyWay will introduce a new process for Intercompany Service Billing.  This process will receives input from other Syensqo entities, and also sends Inter-Company Invoices to entities within the group..   

Impact

Treasury: The current system design for this entity adds complexity to the deployment approach for Treasury, which is one part of the Syensqo SA entity. Analysis conducted for this KDD highlights that it is optimal (less interim interfaces) to deploy entity Sysensqo SA with the rest of Treasury and IHB.

Inter-company service Billing: This process will also have the complexity of multiple systems in the interim (between Group 1 and Group 2 Go-Lives).

Go-Live Timing

Entity 2002 Syensqo SA resides in PF2 and hence is currently scheduled to go-live with Group 1.

The Go-Live timing decision for the Syensqo SA entity will be decided outside of this KDD. Should Syensqo SA Go-Live in Group 1, the recommended option within this KDD will move from Option F to Option E.  Option E still recommends Treasury and IHB going live in Group 2. The difference between Option E & F is when the Syensqo entity goes live, and it going live in Group 1 increases number of interim interfaces resulting in increase complexity and cost.

Business Rules

There are no relevant business rules at this point in time.

Options considered

The main deployment consideration is Treasury TRM & CM.

However the decision requires consideration of;

a) Go-live timing of IHB.

b) Go-live timing of the Syensqo SA entity.

The below table represents the go-live timing for Treasury TRM & CM, IHB and Syensqo SA.

Options Summary

Option A:  Deploy Treasury with Group 1.  In addition, deploy IHB in Group 3, Syensqo SA in Group 1

This option supports the treasury deals process and the related accounting of the deals. However is it complex for cash management, inter-company loans, exposure management, IHB accounting and any treasury deals directly in the GBUs.  It is of higher complexity and cost resulting from the number higher new interim interfaces that will be required for the interim period between Group 1 and Group 2 go-lives.   

Option B:  Deploy Treasury with Group 1.  In addition, deploy IHB in Group 3, Syensqo SA in Group 2

This option is similar to Option A, and reduces the complexity of the IHB accounting,  however there is added complexity for the accounting of the Treasury Deals.  Still a higher complexity\cost option due to higher number of interim interfaces.

Option C:  Deploy Treasury with Group 2.  In addition, deploy IHB in Group 3, Syensqo SA in Group 1

This option is an improvement to Options A and B and there is a reduction in complexity\cost for new interim interfaces, However complexity and new interim interfaces are still required to support cash management, exposure management and intercompany loans. 

Option D:  Deploy Treasury with Group 2.  In addition, deploy IHB in Group 3, Syensqo SA in Group 2

Similar to Option C, but further a further reduction of complexity\cost in the accounting for the treasury deals and the IHB. . 

Option E:  Deploy Treasury with Group 2.  In addition, deploy IHB in Group 2, Syensqo SA in Group 1

If the Syensqo SA entity cannot move from Group 1 to Group 2, the this will become the recommended option.  

Option F:  Deploy Treasury with Group 2.  In addition, deploy IHB in Group 2, Syensqo SA in Group 2

Recommended option, as outline in the Recommendation section.  

Option G:  Deploy Treasury with Group 3.  In addition, deploy IHB in Group 3, Syensqo SA in Group 1

Although this option support treasury deals, cash management and inter-company loans, complexity\cost\interim interfaces remains to support non-IHB exposures and the IHB accounting.  In addition, this option requires additional cut-over. 

Evaluation

Criteria	Option A	Option B	Option C	Option D	Option E	Option F	Option G
	Treasury:  Group 1	Treasury:  Group 1	Treasury:  Group 2	Treasury:  Group 2	Treasury:  Group 2	Treasury:  Group 2	Treasury: Group 3
	IHB:  Group 3	IHB:  Group 3	IHB:  Group 3	IHB:  Group 3	IHB:  Group 2	IHB:  Group 2	IHB: Group 3
	Syensqo SA:  Group 1	Syensqo SA:  Group 2	Syensqo SA: Group 1	Syensqo SA:  Group 2	Syensqo SA: Group 1	Syensqo SA: Group 2	Syensqo SA: Group 1
Ease of integration of Cash Management (CM)	IHB, where majority of cash resides, still in PI2 until group 3, interim interface needed, with large amount of data to support Cash Forecast underlying items. Group 1 entities in S4 and visible in CM Group 2 entities not in S4, interim interfaced needed from WP2 to S4 with large amount of data.	As Option A As Option A	IHB, where majority of cash resides, still in PI2, interim interface needed, with large amount of data Group 1 entities in S4 and visible in CM Group 2 entities in S4 and visible in CM	As Option C As Option C	IHB where majority of cash resides, will be in S4 and visible in CM Group 1 entities in S4 and visible in CM Group 2 entities in S4 and visible in CM	As Option E	As Option E
Rating	Low	Low	Medium	Medium	High	High	High
Efficient Management of IHB Exposures	IHB/PI2 goes live in Group 3 IHB/PI2 to send exposure details to S4. New Interim interface needed.	As  Option A	As  Option A	As  Option A	IHB and TRM go-live in S4 together. Interim: PI2 data would continue to go to Quantum. As-is to continue.	As Option E	As Option E
Rating	Low	Low	Low	Low	High	High	High
Efficient Management non-IHB Exposures	S4 TRM will replace Quantum in Group 1. New "interim" interface needed to bring Group 2 entity exposure to S4	As  Option A	S4 TRM will replace Quantum in Group 2. All entities and exposures are is S4 in Group 2  New "interim" interface will be needed to send Group1 entity exposures from S4 to Quantum.	As  Option C	As  Option C	As  Option C	S4 TRM will replace Quantum in Group 3.  New "interim" interface will be needed to send Group1 & 2 entity exposures from S4 to Quantum.
Rating	Medium	Medium	Medium	Medium	Medium	Medium	Low
Ease of Accounting for Treasury Deals (from Header Entity)	Deals will be processed in TRM\S4 from Group 1.  TRM\S4 will automatically Post to "2002" in S4. Syensqo SA entity "2002" live in Group 1 All entries are automatically posted in S4. No interim interface needed.	Deals will be processed in TRM\S4 from Group 1.  Syensqo SA entity "2002" live in Group 2 (not in S4 as yet).   New interim interface needed to send postings from TRM\S4 to PI2.	Deals will be processed in TRM\S4 from Group 2.   Syensqo SA "2002" live in Group 1. Interim: Deal continue to be processed in Quantum for the interim Interim: Current as-is process to continue for the interim period, posting accounting entries in PI2 for deals processed in Quantum. No new interim interface needed.	Deals will be processed in TRM\S4 from Group 2.   TRM\S4 will automatically Post to "2002" in S4. Syensqo SA "2002" live in Group 2. All entries are automatically posted in S4. Interim: Deal continue to be processed in Quantum for the interim Interim: Current as-is process to continue for the interim period, posting accounting entries in PI2 for deals processed in Quantum. No new interim interface needed.	Deals will be processed in TRM\S4 from Group 2.   Syensqo SA "2002" live in Group 1. Interim: Deals continue to be processed in Quantum for the interim Interim: Current as-is process to continue for the interim period, posting accounting entries in PI2 for deals processed in Quantum. No new interim interface needed.	Deals will be processed in TRM\S4 from Group 2.   TRM\S4 will automatically Post to "2002" in S4. Syensqo SA "2002" live in Group 2. All entries are automatically posted in S4. Interim: Deal continue to be processed in Quantum for the interim Interim: Current as-is process to continue for the interim period, posting accounting entries in PI2 for deals processed in Quantum. No new interim interface needed.	Deals will be processed in TRM\S4 from Group 3.   Syensqo SA "2002" live in Group 1. Interim: Deal continue to be processed in Quantum for the interim Interim: Current as-is process to continue for the interim period, posting accounting entries in PI2 for deals processed in Quantum. No new interim interface needed.
Rating	High	Low	Medium	High	Medium	High	Medium
Ease of Accounting for IHB entities (2232 & 4044).	2002 moved to S4 in Group 1 New interim interface required to post 2232\PI2 accounting into 2002\S4.	IHB entity 2232 is in PI2. 2002 is in PF2 until Group 2 As-is current process posts PI2\2232 into PF2 2002. No new interim interface needed	IHB in 2232 in PI2.  2002 moved to S4 in Group 1   New interim interface required to post 2232\PI2 accounting into 2002\S4.	IHB entity 2232 is in PI2. 2002 is in PF2 until Group 2 As-is current process posts PI2\2232 into PF2 2002. No new interim interface needed	IHB moves to S4 in Group 2 2002 moves to S4 in Group 1 As-is current process continues to send postings from PI2\2232 into PF2 2002 New interim interface needed to send postings from PI2\2232 into 2002\S4	IHB moves to S4 in Group 2 2002 moves to S4 in Group 2 As-is current process continues to send postings from PI2\2232 into PF2 2002 no new interface in the interim	As Option E
Rating	Low	High	Low	High	Low	High	Low
Ability and ease to implement and manage Intercompany Loans	IC Loan config resides in  S4\TRM     In the interim, Group 2 entities are not on S4, hence new interim interface is required to send accounting posting to WP2 IC Settlement:  payments to be sent from TRM\S4 to IHB\PI2 New interim interface will be needed for IC loan settlements via the IHB in PI2	As Option A	IC Loan config resides in  S4\TRM Group 1 & 2 entities are operating in S4.  Accounting postings are within S4 No new interim interface needed. IC Settlement:  payments to be sent from TRM\S4 to IHB\PI2 New interim interface will be needed for IC loan settlements via the IHB in PI2	As Option C	IC Loan config resides in  S4\TRM    Group 1 & 2 entities are operating in S4.  Accounting postings are within S4. No new interim interface needed. IHB is also in S4, hence IC Settlements now occur within S4  payments to be sent from TRM\S4 to IHB\PI2. No new interim interface needed. Current as-is process to continue in the interim.	As Option E	As Option E
Rating	Low	Low	Medium	Medium	High	High	High
Ability and ease to perform Treasury transactions outside of central Treasury Entity	TRM goes live in Group 1. Deals for Group 1 entities can be processes in S4.  Deals for Group 2 entities will not be can be processes in S4. Manual deal process will be required in the interim for Group 2 entities	As Option A  As Option A	TRM goes live in Group 2. Deals for Group 1 & 2 entities can be processes in S4. Existing Process with Deal in Quantum to continue in the interim period.	As Option C	As Option C	As Option C	As Option C
Rating	Low	Low	Medium	Medium	Medium	Medium	Medium
Implementation Cost Savings	5 new interim interfaces required	5 new interim interfaces required	3 new interim interfaces required	3 new interim interfaces required	1 new interim interfaces required	NIL new interim interfaces required	NIL new interim interfaces required
Rating	Low	Low	Medium	Medium	Medium	High	High
Ease of Cut-over at implementation	No extra cut-over for TRM  Extra cut-over for IHB	As Option A  As Option A	As Option A  As Option A	As Option A  As Option A	No extra cut-over for TRM No extra  cut-over for IHB	No extra cut-over for TRM No extra  cut-over for IHB	Extra cut-over for TRM  Extra cut-over for IHB
Rating	Medium	Medium	Medium	Medium	High	High	Low
SUMMARY	High x 1 Medium x 2 Low x 6	High x 1 Medium x 2 Low x 6	High x 0 Medium x 7 Low x 2	High x 2 Medium x 6 Low x 1	High x 4 Medium x 4 Low x 1	High x 7 Medium x 2 Low x 0	High x 4 Medium x 2 Low x 3
OVERALL RATING	Low	Low	Medium	Medium	Medium	High	Medium

See also

Change log