Successful transformation

Due to its global activities and the desire to be able to manage individual segments and product groups in a more targeted manner, the international company wanted to reorganize existing procedures for determining costs and revenues, refine accounting options and align them with parallel accounting standards.

In accounting, the total cost method was used, and there was no continuous reporting by profit center. This meant that a detailed analysis of the monthly sales development of individual product groups and divisions was very time-consuming.

Schwabe was not able to create this automatically at the push of a button. The existing reporting also lacked transparency for quick comparisons with the key figures of the American company.

For tax and commercial law purposes, it was not possible to generate a joint SAP balance sheet. This was to change at the beginning of 2012. In addition, due to its increasing international activities, Schwabe also wanted to align and standardize its balance sheet in accordance with the corresponding accounting standards IFRS (International Financial Reporting Standards) and US GAAP (United States Generally Accepted Accounting Principles).

The company therefore decided to migrate the German SAP system to the New SAP ERP General Ledger in order to establish it as a global solution and to take advantage of the specific functionalities offered by the New General Ledger for segment-based management and parallel accounting in the international business environment.

Specifically, the existing nature of expense method was to be extended to include the cost of sales method. In addition, complete balance sheets at profit center level were to be made possible. To do this, profit center accounting first had to be introduced. This was a technically demanding task.

7.5 million vouchers

The central prerequisite for the successful introduction of the New General Ledger was the conversion of the documents of the current fiscal year, including all open items, to the new structures.

This affected a total of 42 Group companies mapped in company codes, such as Schwabe GmbH, Deutsche Homöopathie Union and W. Spitzner Arzneimittelfabrik.

The project - from analysis to go live of the New General Ledger - began with a two-month conception phase and was carried out according to the M-cbs methodology developed by cbs. This ensures an approach adapted to the specific customer situation and project type.

The volume of data and documents that had to be converted from the old to the new logic as part of the project was quite respectable: seven million documents had to be analyzed and subsequently transformed.

At the beginning, the Schwabe team was faced with the extensive analysis and documentation of all documents from the previous and current year in 42 company codes that had not yet been archived.

Specifically, the aim was to review all business transactions and the corresponding document types in order to be able to define the types of document split. This involved all documents from the past two fiscal years, which were examined in detail within six weeks, grouped into process clusters and divided into "SAP standard" and "special cases".

In joint workshops, the key users from the Finance and Controlling departments reviewed, for example, which business transactions are posted and how, to ensure that all processes can be covered by the new general ledger.

Questions about possible inconsistent postings and how these will be brought into line with the regulations of the account assignment manual in the future were also resolved in the workshops. The standard software cbs ET Enterprise Transformer was used for the technical conversion of the system to the new logics.

The Enterprise Transformer offers great advantages, especially for the changeover to the new SAP ERP general ledger. For example, the transformation date can be chosen at will, i.e., in contrast to other procedures, also independently of the end of the fiscal year.

The transformation scope, such as balance transfer, partial or complete transfer of the history, can be flexibly defined. Thus, even historical documents appear as if they had already been posted in the New General Ledger.

An automated reconciliation process of balances and balances ensures the identity of data from the old to the new world; specific analysis tools additionally identify incorrect posting logics, missing or incorrect master data.

Technical system implementation

The previous year was defined as the start date for the data conversion, because older documents had already been partially archived and were no longer available in the production system. During the transformation, all relevant documents and summary tables from Finance and Controlling were automatically transferred to the tables of the new general ledger with account assignment features such as cost center and profit center.

However perfect the customizing may be, only a test will reveal whether the conversion to the tables of the New General Ledger and the splitting of the documents actually works smoothly.

The new solution was tested in detail over two weeks in three integration tests. Based on the test results, the solution was then released for the final user acceptance test, in which the technical migration and the functionality of all business processes were tested and approved.

After approval, cbs carried out the technical migration in the productive environment in the same way as it had previously done for the acceptance test. All relevant changes to the system were automatically logged to ensure audit-compliant implementation. The takeover and system conversion took place within twelve hours on a non-working weekend. Production operation was not disrupted.

More perspective

The benefits of using the New SAP ERP General Ledger for the Schwabe Group in the pharmaceutical market are obvious: From now on, the company will be able to create balance sheets at profit center level and a profit and loss statement using the cost of sales method for the first time.

The newly created real-time integration between CO and FI provides transparency across all company divisions at all times and enables reporting according to any dimensions. The economic development of individual company areas can be compared more easily.

For Schwabe, the most important advantage of using the cbs ET Enterprise Transformer was the specific approach and the flexible, customized conversion scenario from the classic to the new SAP ERP general ledger.

Based on the experience gained from hundreds of SAP transformation projects of various orientations, the cbs consulting team was able to provide Schwabe with professional and technical support in all steps of the transformation.

Last but not least, Schwabe achieved the important goal of know-how transfer: During the project, the key users from the Finance and Controlling departments learned by doing all the important steps about customizing in the parts of the New General Ledger that were crucial for them, in the area of document splitting, and in related areas such as real-time integration FI-CO, so that they could later make customer-specific adjustments independently.

"Thanks to the expertise and support of the cbs consultants and with the help of the standard ET software, the transformation to the new general ledger went smoothly. cbs stood by us 100 percent with technical support, specialist know-how and a best-practice approach.

This ensured rapid and problem-free implementation. With their holistic view of business requirements and technical implementation, the consultants made a significant contribution to the introduction of a more efficient reporting structure and thus to higher information availability".

confirms Roswitha Weiser, Project Manager in Financial Accounting and Project Manager Migration NewGL.

The internationalization of the SAP solution is currently on the agenda at the Schwabe Group. In 2013, the rollout in the USA is to be completed - also with the support of cbs Corporate Business Solutions.