Tips for Business Partner Adoption for SAP S/4HANA

  • by Gaurav Agarwal, Principal Consultant, SAP S/4HANA Finance, Infosys Limited
  • June 13, 2017
Looking to embrace SAP S/4HANA as the next leapfrog step in your IT strategy? Are you facing challenges in master data governance for your massive customer or supplier master data records, leading to high master data maintenance costs and a frequent need to reconcile and check duplicates? You might have heard of various mandatory functionalities and data migration needs for SAP S/4HANA. Business partner is one such area that resulted in the simplification of data structure and the master data maintenance approach around customers and suppliers. This business partner approach helps you overcome the challenges related to customers or suppliers that are the primary building blocks for most business transactions.
Learning Objectives

By reading this article, you will learn:

  • The business partner concept for SAP S/4HANA
  • Key tips during a business partner adoption journey
Key Concept
SAP already has made business partner mandatory to manage customers and suppliers in SAP S/4HANA Enterprise Management, making the way for its unified use across logistics and finance. SAP S/4HANA enables simplified and standardized master data maintenance for customers and suppliers centrally in the form of business partners.

The traditional SAP system has various inconsistent and duplicate objects for master data for common information, such as customer, supplier, or employees, making it difficult to maintain it on an ongoing basis and causing the waste of an organization’s resources. It can result in erroneous correspondence with your customers or suppliers, leading to their lack of confidence in your organization’s accounting system and increased mailing costs for any corrections. There are also limitations when the details for customers or suppliers are changed from a particular validity date, which sometimes results in more duplicate master data creation rather than reuse of the same objects.

In SAP S/4HANA, a vendor has been renamed as a supplier.

SAP S/4HANA has largely tackled these issues with the concept of a business partner by making it mandatory and a single point to handle master data for customers or suppliers. Business partner itself is not a new element in the SAP system. It was used earlier in applications related to Financial Supply Chain Management (FSCM), but now it has been extended extensively in other applications involving customers or suppliers.

SAP ran with a customer or supplier approach for decades. An organization created its customer and supplier in a siloed manner with both being distinct master data objects even if they belonged to same legal entity or group. Organizations started using the SAP core product Financial Accounting (FI). Later on they shifted to newer dimensions, such as SAP Treasury and Risk Management and Loans Management, that needed a business partner setup. Now SAP has also brought the business partner concept to the logistics and core finance areas by making it mandatory in the latest SAP S/4HANA versions. A business partner can take on different business partner roles that allow you to have different views on customer or supplier master data depending on the business function being performed.

So why do you need to move to a business partner for SAP S/4HANA? Let’s first consider the main limitations in the previous customer and supplier model:

  • The customer or supplier might belong to same legal entity as they can be affiliated companies in one group and may be dealing with your organization in different capacities (e.g., one unit procuring some finished products from you and another unit supplying some raw materials). However, they have to be created in the classical SAP system as separate objects. This leads to data duplication for common information, such as general data and bank accounts.
  • The customer or supplier can have only one address in one master record, so it poses a practical difficulty when the entity has different addresses and then needs to have various multiple master data.
  • The customer or supplier can’t be created or maintained based on validity dates. So if a change is made, that change affects all the transactions and correspondences that read the data from master data dynamically.

All three issues listed above are solved if an organization implements business partner functionality.

With SAP S/4HANA, SAP has extended the business partner concept to cover suppliers and customers from the SAP ERP Central Component (ECC). Business partner roles are integrated to various components, including logistics and finance, for various business transactions. However, in the future SAP S/4HANA direction the classical tables, such as LFA1 and KNA1, will also be unnecessary, leading to a unified back-end data structure without any duplication. There is only one transaction code (BP) in SAP S/4HANA to create, edit, or display a customer, supplier, or business partner. For now, SAP has kept the back-end tables for customer and suppliers intact (for example, LFA1 and KNA1). These tables are filled from the business partner transaction code BP. Figure 1 shows the main benefits of the business partner approach.

Figure 1
Key features of the business partner object

Gaurav Agarwal

Gaurav Aggarwal is SAP S/4HANA lead consultant at Infosys Limited. He has more than 14 years of experience, including 11 years in SAP Finance. He has expertise in both SAP FI and Controlling (CO) with integration to other modules in manufacturing and process industries. He is a chartered accountant and SAP Certified Financial Consultant. He holds a bachelor’s degree in commerce and is a techno-functional expert with thorough knowledge of the necessary ABAP for functional experts. He is a veteran in G/L, AR, AP, banking, FA, Travel Management, and closing cockpit and has handled greenfield implementation, upgrades and conversions, rollouts, and support projects.

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