October 11, 2012 // By: Gabi Visitin // Balancing the Books
Soon after project launch, the team very quickly identified a core issue at the heart of the implementation. SAP’s standard migration procedures, which are deployed successfully in many other companies, could not be used in this case due to the unique operational setup of the family-run business. So the project team had to come up with a tailored solution. “We did not want any externals to notice that we had changed the software backbone of our department,” said Olesch.
From a technical viewpoint, this meant retaining data quality and database one hundred percent. HARTING, Lynx, and SAP therefore decided to chart a course that had never been taken before: They would fuse the three SAP modules used in HARTING’s accounting system into a single data source and then migrate it to the new general ledger. This undertaking ended up consuming a lot more internal resources than planned. “It was tough work but the effort certainly paid off,” notes Olesh. During the migration, for example, he was able to expedite the cleaning of master data and movement data.
He was also able to create a ledger for the International Financial Reporting Standards (IFRS), at the same time and in addition to the three predefined ledgers. “This parallel filling used up more system resources during migration, but was less burdensome than setting up ledgers retroactively,” explains Olesch.
Because the new general ledger allows the use of different parallel ledgers, HARTING can now comply with German law requiring separate balance sheets for tax purposes and commercial purposes in traditional ledgers, and create local balance sheets for each country in a third ledger. The problem of having various fiscal years is now also a thing of the past: Group rights and local laws can now be harmonized.
The road to successful implementation was rocky, though. One of the main tasks, for example, was to split documents. To facilitate financial reporting that is accurate to the last cent for the smallest operating unit, the team had to define and use rules for splitting documents. Olesch explains: “To create a financial overview of each business unit, you need to split the documents in a way that depicts an end-to-end process – for example, from the creation of a financial claim through to its payment. In IT terms, this means that all characteristics of a process, from its start to finish, are inherited.”
You can tell when talking to Olesch that he has invested a lot of time and nerves in switching the company over from the old to the new general ledger. But in the end, he says, it is the end result that counts – in every sense of the word: “Today, even our galvanics division can generate a complete balance sheet.” What’s more, the many special solutions the company had to create for each country in the past are now history. Local ledgers enable HARTING to adapt its accounting procedures to the laws of each individual country – and at the same time, make it easier for the Group to compare numbers from those countries.
About HARTING Technology Group
The HARTING Technology Group is a family-owned business headquartered in Espelkamp, Germany. It is skilled in the fields of electrical, electronic and optical connection, transmission and networking, as well as in manufacturing, mechatronics and software creation. The Group uses these skills to develop customized solutions and products such as connectors for energy and data transmission applications including, for example, mechanical engineering, rail technology, wind energy plants, factory automation and the telecommunications sector. HARTING also produces electromagnetic components for the automobile industry and is a specialist in industrial applications such as enclosures and housings, the cabling and assembly of individual or complete systems, and automated vending systems.