For the past 6 months or so I have been asked the same single question the most, 'is there really a benefit of moving to ECC6.0?'

Firstly lets breakdown the jargon. ERP is Enterprise Resource Planning. These type of systems have been around for 20 or so years and the aim is to have a single system for this. R/3 used to be SAP's product in this area, and there were various releases: 3.0, 3.1, 4.0, 4.5, 4.6 and 4.7 (or R/3 Enterprise). Now there is a revamped, enlarged product from SAP called mySAP ERP, where the functionality that used to be in R/3 is now contained in the ERP Central Component (ECC). In terms of ECC, we have recently had 5.0 & lastly ECC6.0.

There has been a lot of documentation from SAP trying to convince clients to make the jump, move to the dark side, but these documents don't seem to be pitched at the right level for the key business people to make an informed decision. The documents are either too high level, where the pictures seem nice but the text is too general, or the document is too detailed, and lists too many vague benefits, of which many may seem irrelevant to the reader. This document is written to be the middle ground and should be able to help the key business decision maker to make an informed decision.

Timing

In terms of timing, when should we upgrade? Well, if you are on 4.6c or older now is the right time. In terms of support, SAP will now start to charge you a small premium on your current licensing. This cannot be used as the single reason for upgrading as any extra cost you incur here would not justify the cost of any upgrade. However, later on in this blog I will list some benefits that could add weight to your business case. Benefits aside, one factor that often affects timing is a fear that once an upgrade project completes, SAP will release another, newer version of the same product. Over the past few years SAP have had many releases, and they have recognised the confusion that has given its customers. With SAP ERP 6.0 (ECC6.0), SAP have promised that there will not be any more major releases until 2010.

Benefits 

Let's start our tour of the product where most of the confusing talk lies - Netweaver. How will this affect a business? In truth the business community won't see any physical benefit from most of the functionality in Netweaver. There is one major exception that we will cover later on. In simple terms Netweaver is the foundation that you must build from. It leads to possibilities in terms of system landscape and integration. It is required in all new implementations, so if you implement SAP ERP 6.0, you get Netweaver.

In terms of Finance, or Financials as SAP likes to refer to it now, there has been plenty of change recently. The core of any ERP system is the Finance module. Most Finance processes have to be done in a similar way and so there has been little scope for change to the core product. Adding benefit therefore is that bit harder. The main aim of the new version has been adding value to the client, empowering them to make the right decision at the right time. The New GL is one such area. It allows the business to move away from a two pronged approach of Financial and management accountants reviewing different data by bringing profit centre accounting directly into the General Ledger. It also allows for real time analysis such as balance sheets by profit centre, as documents can be split per business rule as they are posted, rather than at period end. This will lead to a reduction in month end closing, provide real time reporting and reduce any manual work that is done outside of SAP in spreadsheets to get the breakdown. Recent legislation in Europe (International Accounting Standards) forces listed Companies to provide detailed information on areas of the business that produce more than 10% of turnover. SAP tries to resolve this by enabling the use of a new field called a Segment. This can be defined by linking master data, for example Profit Centers or SAP provides code so this can be defined elsewhere. This can be linked to multiple ledge views to provide reporting for Local and Group GAAP. These parallel accounting principles and valuations providing balanced books by any GL dimension for management and segment reporting in essence this will replace the Special purpose ledger. Lastly on this point there is a closing cockpit, where the Financial Controller can track the month end tasks, and get a real time view of where any potential errors may be, enabling a quicker close.