What’s New in Two-Tier ERP with SAP S/4HANA Cloud 2208

Co-Author: Paval,  Sahil Grover

Welcome to the latest innovation highlights for Two-Tier ERP with SAP S/4HANA Cloud 2208 release. You can click here for a recap on 2202 release highlights.

We bring in new innovations in Finance, Professional Services Projects, Sustainability and Analytics in Two-Tier ERP. Lets begin.

In-House Banking for Two-Tier ERP

With in-house banking, headquarters can maintain internal bank accounts for subsidiary companies thus lowering the number of external bank accounts and bank connectivity cost for the group. In-house banking enables headquarters to centralize and streamline all payment transactions such as processing intercompany payments, payments on behalf of subsidiaries. It is fully integrated with SAP Advanced Payment Management solution, provides standard integration with SAP Bank Account Management, SAP Multi-Bank Connectivity, SAP Accounting, SAP Cash Management and SAP Bank Communication Management.

Intercompany Payments

We see the first use case with intercompany payments. Subsidiary 1 can send the payment to subsidiary2 via its in-house bank account. At the headquarters, the Advanced Payment Management solution recognizes the payer as subsidiary 1 and the account as in-house bank account through the payment file and executes the payment. Through G/L Transfer, payment item is transferred to financial accounting.  Clearing at subsidiaries takes place with the help of bank statement.

Payment on behalf

The headquarter can also pay to external business partner on behalf of subsidiary through in-house bank accounts. Subsidiary sends payment file, for external business partner to headquarter SAP Advanced Payment Management solution which receives the file and recognizes that the payer holds in-house bank account. All the bank accounts are uploaded in SAP Bank Account Management so it’s easy to check if its internal or external bank account. Cash management is updated, and release of payment takes place from headquarter external house bank to the business partner bank. Through G/L transfer, payment item is transferred to financial accounting and subsidiary receives bank statement. Headquarter receives external bank statement from its external bank after the payment to the external business partner of subsidiary is complete.

Analytics in Two-Tier ERP

In any Two-Tier ERP deployment, typically headquarter would want visibility of subsidiary processes.

SAP Business Application Studio is a service on SAP BTP which provides a tailor-made development environment for various development scenarios, such as SAP Fiori, SAP S/4HANA extension, and Workflow. Thus, it allows to create different types of applications including Fiori based analytics with visualization techniques like graphs & charts. An example would be an application to retrieve sales order data from subsidiary to headquarter.

Read the detailed blog post on technical set up here.

Responsible Design & Production for Two-Tier ERP

Next we talk about Sustainability & Circular Economy. SAP Responsible Design and Production for Two-Tier ERP gives headquarter the ability to calculate and manage EPR fees and plastic taxes for all materials globally and manage all obligations related to producer responsibility organizations. Headquarters can optimize material choices in design phase with a full lifecycle view of financial cost and planetary impact of design choices and evaluate more sustainable options to make the right choice.

SAP Responsible Design and Production is offering predefined Excel templates for each business object that is needed from the backend ERP and PLM system and for SAP S4HANA On Premise 2021 onwards you get out of the box integration by activating OData service for CDI extraction to share data such as enterprise structure, master data, material documents, outbound deliveries and BAdI implementation to share the packaging data.

Intercompany Prof Services Projects for Two-Tier ERP

With this 2-Tier ERP scenario, Organizations can leverage their service capabilities across the globe to deliver the customer projects efficiently saving cost & time at the same time. The intercompany projects are executed with a purchase order and sales order route for professional services companies.

A purchase order can be created in headquarters (on ECC or SAP S/4HANA) which triggers customer project in the subsidiary (on SAP S/4HANA Cloud) via cloud Integration. The purchase order fields in the outbound IDOC created from headquarters are used to map and call the customer project create API to create a customer project, work package and roles required for the project in the subsidiary. Post creation, the project is set to “Contract Preparation” and then a sales order is created. The invoicing between the subsidiary and headquarters is executed via an Iflow.

If your headquarter is on SAP S/4HANA Cloud, Purchase order in headquarter can be triggered to create sales order in subsidiary via an inbound IDOC, which then triggers creation of a project system’s project via assemble to order processing. The material used for creating the sales order is linked to a standard project and standard network to trigger creation of an operating project which is executed in the subsidiary. The invoicing back to the headquarters from the subsidiary can be executed via resource related billing for Time and Material cases and regular Fixed Price billing.

Read the detailed blog post on this scenario here.

Your Voice Matters!

If you want to learn more and actively engage with SAP subject matter experts on SAP S/4HANA Cloud, join our SAP S/4HANA Cloud Community – now fully integrated with SAP Community. The community brings together SAP S/4HANA Cloud customers, partners and SAP experts and has a clear mission: deliver an interactive community to engage with one another about best practices and product solutions. We invite you to explore the new SAP S/4HANA Cloud Community ‘one-stop shop’ as the central place for all resources, tools, content questions, answers and connect with experts to guide you through your SAP S/4HANA Cloud journey.

Watch the Replays of Our SAP S/4HANA Cloud 2208 Early Release Series!

We’ve hosted a series of compelling live sessions from the heart of the SAP S/4HANA Engineering organization. Missed the live sessions? Watch our replays on demand!

Here, you can find 21 replays and presentations as well as demos for the topics listed in this blog post and many more as part of the SAP S/4HANA Cloud 2208 release. For more information on the SAP S/4HANA Cloud Early Release Series and how to sign up for it, see this link.

Thanks for your interest, stay tuned with the latest updates.

More Information on SAP S/4HANA Cloud:

  • SAP S/4HANA Cloud release info here
  • Latest SAP S/4HANA Cloud Release Blog Posts here and previous release highlights here
  • Product videos on our SAP S/4HANA Cloud and SAP S/4HANA YouTube playlist
  • SAP S/4HANA PSCC Digital Enablement Wheel here
  • Early Release Webinar Series here
  • Inside SAP S/4HANA Podcast here
  • openSAP Microlearnings for SAP S/4HANA here
  • Best practices for SAP S/4HANA Cloud here
  • SAP S/4HANA Cloud Community: here
  • Feature Scope Description here
  • What’s New here
  • Help Portal Product Page here
  • Implementation Portal here