SAP Best Practices vs. SAP Model Company: What’s the Difference?

Let’s dive into the differences between these two SAP terms and what approach is best for your company.

SAP is one of the world leaders for enterprise resource planning (ERP) applications with more than 400,000 customers worldwide. With 50 years of experience designing and deploying business process management solutions, SAP has refined its offerings to reflect this experience.

They have created sets of pre-packaged, optimized, and standardized business process flows. These are the baselines of SAP Best Practices and SAP Model Company. With Best Practices and Model Company, SAP offers a wide range of flexible implementations.

  • Want to tailor every aspect of your SAP system while ensuring you’re compliant with local regulations? Then use SAP Best Practices.
  • Want to be up and running quickly using tools specifically targeted to your industry? Then choose SAP Model Company.

Let’s take a deep dive into the differences between these two often-confusing terms to help you decide which solution is best for your company’s needs.

What Are SAP Best Practices?

SAP Best Practices are ready-to-run modules that reflect SAP’s understanding of the best ways to run specific business processes. These insights are based on their many years of working with companies worldwide. SAP Best Practices set baseline configurations for implementing business processes across industries.

All SAP S4/HANA implementations include the Best Practices modules to simplify business practices and add value to your business. There are more than 250 SAP Best Practices covering all aspects of business operations.

At the highest level are Best Practices Solutions Packages, arranged by areas of interest such as S4/HANA, line of business, technology, and cloud. Each contain additional subcategories. Additionally, the SAP Best Practices Explorer includes a section for recent updates to the Best Practices Solutions Packages. You can access the entire collection of SAP Best Practices through the SAP Best Practices Explorer catalog.

Individual packages may appear in more than one area. Let’s say you are looking for financial planning solutions. You will find the SAP Extended Financial Planning rapid-deployment solution‎ package under S4/HANA on-premises, Line of Business finance, and Technology analytics.

For each package, SAP provides an overview of the package’s purposes, the business benefits of the package, and the applicable process flows. Each package also contains individual Best Practice solutions, known as scope items.

Returning to our financial planning example, we see that the Extended Financial Planning rapid-deployment solution package has three scope items: General Ledger (G/L) Financial Planning, Strategic Financial Planning, and Capital Expenditure Financial Planning. SAP users can pick and choose from the various scope items to build a system that best suits their individual needs.

While SAP Best Practices set a standard, cross-industry baseline, they go beyond a minimum necessary implementation to include actions required to ensure business processes are compliant with industry and country-specific requirements. SAP Best Practices are localized, enabling compliance with applicable local regulations and procedures. SAP also takes advantage of artificial intelligence and machine learning tools to enhance its business analytics.

As with packages, SAP details the purposes, business benefits, and process flows for each scope item, as well as the countries for which the scope item is available. Many of the scope items also include detailed process flow diagrams, which show the primary steps built into each Best Practice.

With such an extensive menu of Best Practices, companies may find it overwhelming to pick and choose among them to build the optimal setup. When upgrading your system, consulting with SAP experts may be necessary.

For companies looking for a more out-of-the-box SAP solution, there is SAP Model Company. Let’s dive into SAP Model Company.

What is SAP Model Company?

SAP Model Company is a pre-packaged, end-to-end collection of SAP applications and Best Practices narrowly focused on specific industries and different lines of business. While SAP Model Company includes and builds upon SAP Best Practices, it draws upon the entire range of the SAP application portfolio.

SAP already greatly simplifies companies’ operations, as it is one of the most effective measures for taking on complex tasks like monitoring company databases and ensuring cloud-based data security. SAP Model Company takes this a step further by deciding which Best Practices make sense for your company.

In essence, SAP Model Company is a complete one-stop digital transformation experience without the headaches. Model Company provides you with the specific pieces you need to build your system and gives you detailed instructions on putting it together. You are up and running quickly without a lot of unnecessary extra parts lying around.

SAP has refined both the construction of the individual parts and the process for assembling them over its half-century of experience. For each SAP Model Company, SAP provides an overview document that details the specific business processes associated with the Model Company, the applications related to the Model Company, and a description of delivery and implementation.

Say, for example, you may want to focus on supply chain management. The SAP Model Company for Supply Chain Planning includes sales and operation planning, demand planning, response and supply planning, inventory planning, and a supply chain control tower. It makes it easy to adopt SAP best practices for any business and learn the ropes quickly.

SAP Model Companies are interoperable, so your business can choose one or several depending on your needs. SAP offers the Recommender tool to help select the most suitable Model Company solutions given your criteria. The solutions are flexible and allow you to scale systems and applications without difficulty.

Although SAP intends Model Company to be an out-of-the-box solution, you can also get custom configurations. But unlike SAP Best Practices, SAP Model Company implementations are not included in the price of S4/HANA.

Choosing the Solution that Works Best for You

Whether your focus is on creating a highly tailored, individualized ERP solution or jumping into a ready-to-run package, SAP offers a solution to fill your needs. Consider upgrading your business processes today to streamline mission-critical SAP operations and stay updated with regulations and best practices. To learn more about SAP, visit our SAP insights page, where you can access SAP whitepapers, webinars, data sheets, and much more.