Why the Way Forward Starts with the Integration of Finance and Procurement

Even as businesses enter a new normal, digital transformation is still front and center. The entire world is engaged in this gigantic global experiment that is testing the foundation to which organizations have dedicated considerable time, money, and resources to build.

No matter how integrated a business’ systems and processes were before the COVID-19 pandemic, significant disconnects across all organizations are beginning to emerge. For example, planning and risk analysis often lack the depth required to fully understand the potential impact and importance of critical decisions. Meanwhile, no one knows with certainty whether end-to-end workstream processes are running as efficiently as they should.

Such a situation is far from ideal for a workforce that is now primarily remote. Any hint of a complex process that is predominantly manual and highly customized with out-of-system workarounds is no longer reasonable. However, the inability to consume and deploy software cost-efficiently and fast enough is hampering efforts needed to close those gaps and ensure business continuity.

SAP is firmly committed to supporting customers as they navigate through unexpected disruptions – whether it be repatriating stranded travelers, automating contact tracing of COVID-19 patients, or countless other initiatives. A portfolio of solutions and services help businesses innovate and adopt at lightning speed with out-of-the-box capabilities and ready-to-run processes. These deployments can be further accelerated with software-as-a-service (SaaS) and cloud solutions that are supported by SAP Model Company, SAP Advanced Deployment, and SAP Activate.

Uniting Finance and Procurement with Intelligence and Governance

With a global, distributed, and diverse operational ecosystem, companies can maintain analytical and operational transparency as well as control business-wide compliance. And for many companies, it all begins with the integration of finance and procurement operations.

The SAP Services and Support portfolio is uniquely qualified to help businesses overcome these challenges  quickly, seamlessly, and intelligently. The portfolio blends established applications with emerging technologies and draws on the latest innovations, industry experts, and ecosystem of innovators from SAP. With a strategy based on a consistent core of data and delivered through out-of-the-box functionalities and, when needed, limited customization, it brings an opportunity to further optimize operations and initiate change faster with less risk. The reasoning behind this approach is based on five fundamental principles of transformation:

  • Focus on improving processes and optimizing change management, not just enabling technology and IT platform innovation
  • Drive changes necessary to improve functionality, efficiency, and effectiveness with a business-led initiative
  • View the IT platform as an enabler of the business and its capabilities
  • Ensure innovations reflect breakthrough industry trends and value driver aspirations and expectations for change
  • Align business needs and technology investments to achieve mutual organizations goals

This mindset allows us to enable customer success through advisory services that challenge transformation journeys and reimage processes. In addition, the latest relevant industry innovations are used to support the realization of business value with a standard service option for transforming finance and procurement operations — a selective data transition with centralized processes across procurement and finance.

In this scenario, our customers maintain existing operations in legacy applications while moving adopted capabilities into two editions of SAP S/4HANA step by step and at their own pace.

SAP S/4HANA for central finance foundation can accelerate digital transformation programs by providing a modern, innovative platform and a common user interface for centrally managed finance operations. It captures real-time financial transactions from multiple source systems to consolidate financial reporting and transactional processing without disrupting SAP or third-party enterprise resource planning (ERP) systems. The solution also comes with a set of enabling technologies that allow customers to innovate with SAP S/4HANA Finance within a few months, depending on scope.

SAP S/4HANA for central finance foundation
Figure 1: The architecture of a single, unified finance platform (Click to enlarge.)

With the central finance solutions, our customers can gain a reconciled general ledger foundation that supports on-demand finance consolidation and analysis of key performance indicators during a specific period. They can drill down to the source line-item detail and identify errors in the closing process early on through integrated validation.

On the other side of the integration is SAP S/4HANA for central procurement. The solution supports organizations that require multiple business units to operate independently based on industry complexity, legal and regulation compliance, and defense and security requirements. It collects and merges procurement activity while significantly reducing the replication and consolidation of master data. Procurement activity is also combined and aggregated into a single instance of SAP S/4HANA to increase visibility into purchasing decisions, communicate better with suppliers, analyze spend comprehensively, and foster compliance with shared services centers.

For example, the guided buying capability, available in the SAP Ariba Buying solution, can be integrated into SAP S/4HANA for central procurement to guide employees through requisitioning, contracts, and purchasing goods and services. Additionally, procurement data is distributed to local, operational backend systems to give organizations insight into their buying habits and budget needs.

Backend ERP and legacy system independence is another set of critical value drivers for centralized procurement. It allows business units to operate independently and retain unique business processes while leveraging the global spend capabilities of an entire organization. Negotiating global agreements and distributing them to all connected backends enable related spend from all systems to be accrued automatically in the central contract. In return, the business gains significant savings for all purchasing groups and business units.

Moving Beyond Disruption with a New Approach to Digital Innovation

Considering the pace of change right now, reporting and analytics tools must provide the visibility and insight needed to address the everyday minutia of change. This requires tight integration across the entire heterogeneous system landscape, tying together everything from legacy applications to the latest technology residing on premise and in the cloud.

This reality is what inspires SAP Business Transformation Services to help customers succeed in challenging transformation journeys. We help reimagine business processes and support the latest and most relevant industry innovations by analyzing our customers’ current states, recommending the best architecture to deliver on their expectations, and defining their transformation road map. Best of all, everything we do is delivered with a commitment to realize business value on our customers’ terms.

Now more than ever, businesses must reduce risk and realize short-term benefits. This requires an agile approach to integrate business functions, such as finance and procurement operations, and SAP Services and Support offerings are ready to deliver such an intelligent operation.


Stay in the conversation by following SAP Services and Support on YouTube, Twitter, LinkedIn, and Facebook.


Gary Feist is a services architecture expert and principal architect at SAP.
Michael Parfenov is a services architecture expert and principal architect at SAP.
Sobana Iyengar is an enterprise architect at SAP.