At the point that companies near the go-live of an SAP system, they need to decide on the cutover strategy. A cutover...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
strategy is an approach to migrating data from a legacy system to a new system -- in this case an SAP system. It's one of the most important keys to the project's success. Cutover data includes data on financial and materials balances that SAP must carry forward, and also how to handle open transactions from the legacy system. Open transactions are those business transactions that are still under process when the company switches from the legacy system to the SAP system.
Let's take an example where the cutover date is Dec. 31. After this date, the company must transition to the SAP system and must also ensure to enter backlog data from Jan. 1 onwards.
One of the cutover strategies that the company can adopt is to minimize the open orders that will need to go into the new SAP system. An open order can be a sales, production or purchase order that has been partially processed. To achieve this objective, the company can declare a "blackout period," during which all open orders in the legacy system will be closed and no new entries will be made in the legacy system. To achieve a smooth blackout, the company requests that vendors deliver goods in advance, requests raw materials it will need for production during the blackout period, and even make maximum deliveries to customers in advance.
Here are some additional tips to creating a successful cutover strategy:
Financial balances: All open balances, such as outstanding payments to vendors or outstanding payments from customers, are directly managed in the SAP Financial Accounting component.
Materials balances: Only the open balances that require materials movement -- such as raw materials or packing materials still awaiting vendors' deliveries, or the company's own products ready for dispatch to customers during the blackout period -- are managed in the SAP system.
Production balances: While work-in-process is kept to the minimum, only open production or process orders are managed in the SAP system, and are then settled in the SAP Managerial Accounting (Controlling) component.
Maintenance balances: Like open production or process orders, open maintenance orders will only account for the remaining (open) maintenance work and associated spare parts required to perform maintenance work.
Sales balances: The company should not create a sales order if goods are already delivered to the customer and only payment is awaited. The SAP Financial Accounting component can manage this business process by directly entering the customer's payment. However, the business user will need to create a sales order for open order quantity in the SAP system, and process it as normal business process.
Small to medium-sized enterprises discuss successful SAP implementation
How to prevent SAP failure
Why SAP HANA needs a phased implementation
SAP S/4HANA release was a leading SAP news item in 2015
Dig Deeper on SAP implementation and upgrades
Related Q&A from Jawad Akhtar
The SAP ERP system -- also known as ECC -- is the foundation for many companies' ERP implementations. Here's a look at its core components and what ...continue reading
Significant planning and preparation prior to integrating SAP ERP Warehouse Management with Extended Warehouse Management can help ensure success. ...continue reading
If your company is thinking about implementing SAP Supplier Relationship Management, you'll want to know how it works with Materials Management and ...continue reading
Have a question for an expert?
Please add a title for your question
Get answers from a TechTarget expert on whatever's puzzling you.