Glossary

Issue

Syensqo is currently using a SaaS application named ‘CCH Tagetik’ provided by Wolters Kluwer for I/C reconciliations carried out as part of the local and group period-end closing activities. The application has also been integrated into the current consolidation system used at Syensqo through custom API developments to provide data feeds for easy reconciliation and faster group closes.

In S/4 HANA, a not entirely new but completely revamped I/C reconciliation tool and solution has been introduced under the product name 'Intercompany Matching and Reconciliation' or in short ICMR. It has a lot of benefits compared to its predecessor with view to ease of use, automation and integration and following the project's overarching principle of 'SAP first' this document is meant to outlay and evaluate possible deployment options for ICMR at Syensqo.

Recommendation

While the new ICMR tool available in S/4 HANA is a game changer for I/C reconciliations compared to the obsolete special ledger solution previously available in SAP ECC systems, it is only able to play out its full potential of technical and business benefits once all operational entities have started using S/4 HANA.

While some cost savings could be reaped from an immediate deployment of ICMR in S/4 HANA and the replacement of the current ‘CCH Tagetik’ solution from a licensing cost perspective, additional customization would be required to integrate the ICMR tool with the existing diverse SAP landscape upstream for local closing activities and down-stream for group closing activities under the assumption that the current degree of automation of the respective process designs should not be decreased in S/4 HANA.

As such it is recommended to go with option 2 and deploy ICMR together with the new consolidation software at a later stage in the S/4 HANA transformation program to keep business disruptions minimal and capitalize on its full capabilities through its native integration with Group Reporting in S/4 HANA.

Background & Context

ICMR is a newly developed and advanced tool introduced in S/4 HANA designed to facilitate and speed up Financial closing processes. It comes with the following features and functionalities out of the box and as part of the core Finance S/4 HANA licensing package at no additional cost:

• Built into SAP S/4HANA for Finance
• Transactional-level matching and real-time reconciliation
• Automatic discrepancy resolving
• In-app communication and workflows
• Flexible modeling based on various organizational dimensions, such as company, profit center, and consolidation unit.
• High performance in matching and reconciliation
• Intercompany elimination integrated with Group Reporting

Besides all that, it provides machine-learning capabilities to increase the rate of automated matching and discrepancy resolution, but this add-on is considered an advanced feature of the tool which requires additional licensing.

It also seamlessly integrates with Group Reporting as a consolidation tool and can support the consolidation process such as I/C eliminations through automated flows of data and information across the various modules and teams involved in the entity and group closes.

Compared to its predecessor in ECC, the ICMR tool in S/4 HANA has the following capability upgrade and business benefits:

Assumptions

• S/4 HANA will be implemented adopting a phased go-live approach with Syensqo entities operating in S/4 and ECC simultaneously in the interim.
• Group Reporting will be used as to-be consolidation system in S/4 HANA.

Constraints

None identified in the conceptual design phase. This section may be further updated during the detailed design phase when processes are further fine-tuned.

Impacts

Describe the impact of the decision on other aspects such as other processes, infrastructure, other SAP modules or systems, data cleansing and migration, developments, automations, interfaces, in-flight projects, etc.

Business Rules

None identified in the conceptual design phase. This section may be further updated during the detailed design phase when processes are further fine-tuned.

Options considered

Option A: Immediate Deployment of ICMR in S/4 HANA

The main idea in this option is to deploy ICMR immediately as part of the initial go-live of S/4 HANA.

Keeping the currently envisioned phased go-live approach for the S/4 HANA transformation program in mind, it is rather unlikely that all Syensqo entities will start operating on S/4 HANA systems at the same time.

One of the main drawbacks of the current ICMR solution in S/4 HANA is that it requires all entities participating in the I/C reconciliations to be running on S/4 HANA and ideally in the same instance as it cannot source data from satellite systems via remote connections. There are APIs and direct file upload functionalities available but that would lead to additional customization and/or manual efforts for the business to load periodic data from the respective source system which is not desirable.

The current solution ‘CCH Tagetik’ is able to source and process transactional data from multiple source systems through API technologies that were implemented over the years.

Regarding the integration with downstream consolidation system, ICMR doesn’t natively integrate with the currently used consolidation software SAP BFC. Should an automated data flow between the two systems be required to support group close activities, additional customization would be required.

While ‘CCH Tagetik’ also doesn’t natively integrate with SAP BFC, interfaces have been developed that feed the necessary data into the consolidation engine to support group close activities.

Option B: Deferred Deployment of ICMR in S/4 HANA (together with new Consolidation system)

In this option, the deployment of the ICMR solution in S/4 HANA will be carried out at a later stage in the transformation program together with the implementation of a new Consolidation system.

As the current plan for the deployment of a new consolidation system for Syensqo foresees a deferred deployment towards the final phases of the S/4 HANA transformation program once all operational entities have been onboarded to S/4 HANA, the deployment of ICMR in S/4 HANA would follow this timeline for the following reasons:

1.) ICMR can be used as I/C reconciliation tool without further customization or manual loading activities for local closes as transactional data for all operational S/4 HANA entities can be sourced directly and in real-time from the underlying database tables in S/4 HANA.

2.) ICMR provides real-time and native data feeds into Group Reporting where the information can be used to facilitate and speed up group close activities, e.g. I/C eliminations.

3.) No disruptions to current business processes and closing activities as existing interfaces between Tagetik and SAP BFC would be phased out simultaneously.

Evaluation

Outline why you selected a position. The best format could be a pro/con table (sample below), but is up to you as the author. You must consider complexity, feasibility, cost/effort to implement, but also ongoing operational impact and cost. You must consider the program principles and explain any deviations in detail. This is probably as important as the decision itself.

	Option A	Option B	Option C	Option D
Criterion 1	Pro Con	Pro Pro	Pro Con	Pro Con
Criterion 2	Pro Con	Con	Pro Pro	Con Con
Criterion 3	Pro	Con	Con	Pro

See also

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

Change log

Workflow history