I am not going to write about what is ERP and SAP as there are lot of materials already available and most of the professional colleagues are acquainted with the basics. Let us look at SAP from professional career perspective and the opportunities it can offer for working and practicing Finance Professionals like CMA, CA, CS and MBA.
A Complete Product Eco-System
SAP is a product, ecosystem and a professional career. There are not many products that have become career for several thousands of consultants and perhaps millions of end-users as SAP had been able to do over last three decades. There are finance professionals who started career in domain/ function, enriched their skills by learning SAP and became SAP professional.
I started working on SAP in 1997 as a finance analyst with General Motors (then Fortune #1) and became Grad. CWA (now CMA) in the year 1998. I learnt finance & costing as well as business processes that were executed in SAP. There were no free videos available those days. The only way to learn was to read through SAP Help guide, which was written in such a complex language that it will leave you confused rather than enlightened, and hands-on work experience on SAP.
Over years, I could enhance my SAP skills and got opportunity to lead core team in SAP implementation projects. I could then pivot my career from finance into SAP consulting and implementation. The journey that started 23 years back with SAP continues and I hope to remain an SAP-lifer!!
SAP has built a strong ecosystem with large number of SAP Partners who implement SAP solutions in client businesses across the world. IBM, Capgemini, Accenture and several others are SAP partners in implementation. It also has partners that impart education in SAP products/ technologies. SAP conducts certification exams and provides a highly recognized certification in various modules, products and technologies. Thereby it created a pool of certified SAP resources that could be employed by partners and deployed at various client sites.
Building Foundational Skills
SAP ERP requires combination of business/ domain skills along with strong SAP product knowledge. A typical SAP consultant or SAP power user would have spent several years working in finance department or shop floor understanding the processes and activities involved. They also develop an understanding of how their organisation is working together to deliver on common goals. These domain/ functional skills and strategic understanding of the organisation are extremely important when you start working in SAP either as an end-user/ power user or SAP Consultant.
SAP is built based on standard business practices that are followed in various industries and companies across the world. Hence, all the business processes and activities of finance department or shop floor are built into SAP and gets recorded as transactions. Therefore, strong domain/ functional knowledge along with SAP ERP product knowledge is needed for an end-user/ power user and Functional SAP Consultant for working in SAP environment.
By now we have understood that success in SAP requires Domain/ Functional skills,
Organizational skills and product skills. These skills should not be seen in isolation. As you will see from below discussions, they overlap with each other. Let us try to understand each of these better.
Domain/ Functional skills are the skills that you acquire while working in a function of an organisation. For example, bank reconciliation, invoice accounting, accruals, taxation, cost controlling. Product costing, income statement profitability analysis etc. for finance professional who is working in finance department of an organisation. Similarly, there will be domain skills for professionals working in purchasing, production, sales, quality and other departments.
Organisation skills are developed over a period depending on the role and level of interactions of the individual. These skills develop an understanding of how various units within an organisation interact and work together to deliver value to the customer. For example, posting an invoice can be seen either as an accounting entry or taking a larger perspective, it is one of the steps in the process that covers business partner (vendor), purchasing, warehousing, production, customer and finance. Order from customer triggered a material purchase requirement, PO was raised, warehouse received material, liability got created, manufacturing converted material and sales team delivered to the customer. Now invoice for material purchased is with finance executive for processing. SAP is built to integrate and automate organisation-wide processes to deliver goods to the customer on time.
SAP Product skills can be divided into two broad categories for the purpose of this discussion viz., Transaction Processing and SAP Configuration skills.
Transaction Processing skills involve knowledge of SAP transactions, master data and reporting. For example, if there is a price adjustment and a debit note need to be issued to a customer, there are specific transaction screen in SAP to be used. Also, master data for customer should have been created or updated. Reports on net payable or receivable from customers can be generated. Similarly, there are transactions to calculate standard cost for product, posting of production variances or periodic depreciation run amongst several hundreds of SAP transactions. It is important to have this skill to ensure that transactions are recorded correctly in the system.
SAP requires skills to configure enterprise structure, build business processes and prepare the system for transaction processing after go-live. These tasks are done by specialized resources called SAP functional consultants. There are SAP technical consultants involved as well. For this discussion, let us focus on functional. SAP requires functional consultants for several areas like finance, controlling, materials management, sales & distribution, quality, project system etc.
Roles for different organization needs
Let us understand various roles in SAP environment and the skill requirements in each of the roles.
For the purpose of simplicity, let me classify roles into three categories:
1. End user
2. Power User
3. Functional Consultant
Please note that I am discussing these roles only from the perspective of SAP skills. Also, an organisation may not have same nomenclature of the roles as I have used above. Actual role name may be different and require several other skills besides SAP.
End user can be a staff whose role is primarily into transaction processing. For example, a Finance Executive is responsible for Accounts Payable. In this role, he will primarily use SAP ‘MIRO t-code’ and process invoices. His level of interaction in the larger organisation is low.
Power user can be an end user who has grown as power user or can be someone appointed as a senior resource. Power user is go-to person for end users for any SAP related issues. Power user can train/ coach end user in the right way of using SAP. Power user also have larger role in the organisation and interacts with counterpart in sales, purchase, manufacturing etc. SAP Functional Consultant interacts with power user to understand business requirements and involve them in testing solutions before they are deployed in production system.
Functional consultants have techno-functional skills. They have solid understanding of SAP technology, functionalities, enterprise structure and various configuration. They prepare business requirement documentation, design the system, conduct unit testing, oversee quality testing and prepare for transport in the production environment. They also interact with technical consultant for the development of solution for which SAP may not have a standard solution.
Opportunities combining Roles & Skills
Now let me put skills and roles together so we can understand the bigger picture.
High, medium and low indicates approximate level of skills. Please note that for functional consultant I have kept domain and transaction as medium as over the period, developing skills in configuration takes a higher priority. Since functional consultant also work with power user, he complements his skill with that of power user.
Now let us come to the point that we discussed at the very beginning, opportunity for Finance Professionals in SAP environment. There are lot of opportunities as working professional and practicing professional. It depends on their passion, training they have undergone and practical experience working on SAP.
As a working finance professional, the initial year may be of an end user developing skills in domain and transaction processing. This is also the time to start understanding the organisation and processes. Over a period, they may take up higher role and can become power user. Knowledge of SAP and business processes will be beneficial even when they become CFO and oversee entire finance department.
As a finance professional, if you want to pivot your career from domain into consulting, then learning configuration becomes important. But the domain knowledge gained over years of working in finance function is highly valued in SAP consulting assignment.
For practicing professionals, there are opportunities as system advisor, SAP auditor, steering committee member etc.