Framework for SAP Central Finance and Mergers & Acquisitions

In this article, we’ll concentrate on how SAP S/4HANA Central finance, or CFIN for short, can make the M&A framework simple to use, repeatable, and add value to the organisation.

There is a tonne of information accessible on what S/4HANA, CFIN, and implementation, planning, and value discovery are, so I’ll simply quickly define each essential phrase before getting to the main point.

Term Definitions

A platform for processing large amounts of data quickly and in-memory is SAP HANA (High Performance Analytic Appliance).

SAP S/4HANA is a business suite that contains basic ERP components including finance, logistics, and sales. It was created to operate business activities and propel companies into the digital economy.

A part of S/4HANA that focuses on financial accounting, reporting, planning, treasury, and financial operations is SAP S/4HANA Finance.

In order to reduce landscape complexity and standardise operations, SAP Central Finance is a deployment approach that uses SAP S/4HANA as a stepping stone before shifting the processes to one core system.


In today’s world, where businesses are expanding quickly and organisations are using mergers and acquisitions as one of their strategies for long-term growth, market expansion, and market share, the landscape is extremely fragmented and disparate. This may include SAP systems of various releases, Non-SAP systems of different nature, and suppliers, and it goes without saying that some of them may also be out of maintenance. A few of the disadvantages of such a terrain include those listed below:

  • labor-intensive manual tasks
  • Issues with reconciliation
  • disruption of the standardising process
  • Financial closing delays
  • High ownership costs
  • An impediment to digitization and automation

Why is our landscape fragmented?

  • legacy-based organisational structure of the business
  • Modification of the company plan, including growth
  • fusions and acquisitions
  • Divestitures
    S/4HANA SAP For all of the aforementioned issues, Central Finance offers an immediate and long-term disruptive strategy and solution, allowing the organisation to progress toward harmonisation, simplification, and standardisation. Additionally, because there is only one source of truth, this can aid in accomplishing the lower aim.
  • Easy and seamless reporting
  • Simplified Analytics & Planning
  • reduction in reconciliation and improvement in standardisation for upcoming consolidation and intercompany reconciliations
    the direction of automation
  • If only one ERP is being used, another option is SAP Central Finance. Find out how here.

What role does central finance play in the M&A strategy?

Now that we have a better understanding of what central finance is and what the potential causes of the fragmented market may be, let’s look at how central finance can assist businesses in reaching their goals and overcoming the challenging realities.

Minimising complexity immediately


Due to the numerous structural improvements made by SAP as opposed to SAP ECC, SAP S/4HANA gives all the benefits to the enterprises, making it an M&A hub. SAP Central Finance allows non-disruptive, quick, and simple approaches for M&A activities. One of the key areas is the integration of OLAP and OLTP functionality at the HANA database level. Additionally, from an operational perspective, the Financial Accounting (FI) and Controlling (CO) data are integrated into one single table, increasing the system’s flexibility and usability as a single source of truth while reducing the need for internal system reconciliation.

From an architectural perspective, the organisation must build up a standalone SAP S/4HANA system for finance alone without altering or upsetting the current systems, processes, or internal users, and must bring finance within the umbrella of the organisation as a whole. Processes, logistics, and platform integration will be prioritised after finance, which is now leading the pack.

If an M&A transaction occurs in the future, the newly onboarded organization’s ERP system won’t need to be modified or quickly shut down; instead, it can be connected to the current SAP S/4HANA Central system.

Model based on templates

Each M&A event may result in a new ERP system based on the size, age, and nature of the impacted firm. M&A is not something that organisations perform once in a lifetime, and for major organisations, it is a regular practise to acquire small/mid-size and occasionally large companies. With this in mind, it is advised to design a template using current system information and to continually update it in light of new M&A events With this, the template must be followed each time an acquisition occurs, and the system can be linked to the central systems to immediately benefit from consolidation, reporting, and planning thanks to features like data harmonisation because the data from both organisations is in the same system and has the same set of data characteristics.

Rapid integration of M&A

Any M&A used to take months to integrate into the parent organisation from an operational standpoint, and this wasn’t just because of technology but also because of the legal procedure. After the legal structure is approved, it typically takes a few months to integrate the technology and personnel. Based on the template integration, technical integration can be sped up while maintaining the legal framework When you want to integrate an organisation with SAP or non-SAP systems, it can be done quickly because CFIN is already in place and all integrating systems are already up and running. You just need to add one more source system without having any negative effects on the organization’s processes or personnel, which is advantageous because after acquisitions, there is often an immediate concern about these effects, but they can be minimised and personnel organisation will now have time to think about long-term strategy. The organization’s data will be centralised, which will enable it to use its newly added organisational data set to inform its business plan.

Framework for project management

As Central Finance will also assist in supplying fresh insights and there may be a requirement to learn & execute the integration, it is usually advised to employ Agile methodology. Business-critical financial and management accounting knowledge can now be provided with much less time and effort thanks to Central Finance, which enables data modelling and simulations on the whole source systems data (which is kept on universal Journal in S/4HANA). Quick, need-based, and on-the-spot analysis is always valuable to the organisation.

Possibilities for Central Finance deployment

When Central Finance is introduced, it needs to have a vision and support because it affects data, people, and business processes in addition to IT. Technical design quality governs the entire process over the long term, and it should not only be high quality; it also needs to align with the future vision for improved business processes, architecture, and organisational structures. Various deployment scenarios could include:

  • Short Term Value Drop-in – CFIN is the way to go if enterprises want to immediately realise value based on SAP innovations with less expense and effort. Redesigning business processes and harmonising data structures, which serve as the cornerstone of long-term roadmaps and strategies, is a feasible first step. Connect source systems, harmonise data, and get the rewards of centralised reporting using data replication.


  • Future Finance Vision – With the help of the future finance vision, SAP S/4HANA will be used as the organization’s deployment strategy in the future. All financial and logistical operations will run on S/4HANA, eliminating the need for replication from the CFIN perspective, but it can also be used as a platform and approach to create a framework for upcoming mergers and acquisitions.


  • Consolidation in the final stage – In this strategy, it is assumed that organisations have finished simplifying their IT infrastructure and that there is no more room to cut back on their ERPs. In this case, Central Finance can be used as the central reporting platform for consolidating existing systems that are important to long-term strategy, and adding CFIN system on top will make reporting, consolidation, and planning easier at a centralised level.


  • Stepping Consolidation – In this scenario, the data from the source systems is replicated in step one, and then in step two, the finance operations are performed on that data. For instance, replicating data and then turning on central payments and credit checks, along with additional central functionalities, all while keeping finance in mind. The last step is moving the logistics operations from SAP S/4HANA’s traditional system to S/4HANA’s cutting-edge innovation and stunning Fiori user interface.

In conclusion, SAP Central Finance can be a key element of M&A strategy. It’s important to note that, more than IT, this transformation will be driven by business, keeping in mind the future vision. This opens the door to many opportunities, including the opportunity to revisit the architecture and landscape, rethink business processes, and establish new standards for technology, security, and compliance.

I hope that this provides some direction on how to use CFIN for M&A events.