Brexit no-deal: How to prepare your SAP ERP system?
In our blog post “Brexit – Changes in SAP: what do you need to do?” we wrote about Brexit and their possible changes in SAP back in February 2019. Back then, Parliament was unable to find a way forwards and a no-deal Brexit was looming. We provided some basic advice about the “no-deal” implications for SAP systems and the adjustments to processes that might be required.
After two further extensions, one new Prime Minister, a renegotiated Brexit deal and a General Election, the situation is somewhat clearer: the UK left the EU at 23:00 GMT on Friday, 31st January 2020. However, this is not the end of the Brexit story…
Overall, it may be said that the decision of the UK to leave the EU will have a great impact on many economic activities and therefore also on SAP. Changes in SAP are expected to be in the areas of the organizational models, tax-VAT, goods movements, and many more. SAP itself keeps a close eye on this matter and provides support in different SAP OSS notes. In this blog post we’d like to provide you with an update of the implications that Brexit has on SAP ECC and SAP S/4HANA and their corresponding changes in these areas.
What changes for SAP ECC and SAP S/4HANA during the Brexit transition phase in 2020?
Now that the UK has left the EU, negotiations will begin to set out the future relationship and trading conditions. These negotiations must be completed by 31st December 2020. There was an option to extend the negotiations to 31st December 2022, however the UK government has passed legislation which means it would not request such an extension.
During negotiations, there will be a “transition phase”. In the transition phase, nothing directly changes – during this time, the future relationship between the UK and the EU will be negotiated and codified. It is crucial that you use the transition period to properly plan the required changes in your SAP system as they emerge.
At this stage, the exact changes to be made in your SAP ERP system depend on the outcome of the negotiation of the future relationship – and, at the time of writing, a “no-deal” Brexit in December 2020 is still possible.
A no-deal Brexit: what is the impact on your SAP ERP system?
If there is no ratified deal in place by 31st December 2020 (i.e. a “no-deal” Brexit), most changes in SAP ECC and SAP S/4HANA will be in the areas of:
- organizational structure
- taxes, VAT
- goods movements
…and many more.
If the UK leaves the European Union with a no-deal, then the UK will effectively become a “Third Country” from an EU perspective. From a UK perspective, there is no more “intra-community” trade. This means that your SAP system (and potentially business processes) may need adjusting or creating for the first time. Some of the main configuration changes that would be required in SAP are summed up in our infographic.
How can PIKON help you prepare your SAP ERP system for Brexit?
At PIKON, we recently launched our own Competence Centre for Legal Requirements, with the aim of making SAP ERP systems and processes compliant with legal requirements all over the world. Our team of experts combine SAP expertise with in-depth knowledge of the country-specific legal requirements and are backed by years of project experience.
This combination makes us ideal partners for your Brexit questions. PIKON’s experts in the areas of Finance, Logistics and Legal Requirements are monitoring the Brexit situation as it continues to develop and making plans for various scenarios as they emerge. With our presence in the UK as well as in the EU, we are approaching Brexit from both sides.
If you’d like further information about how PIKON can support your Brexit transition, please get in contact with us. We offer a variety of services in this area, starting with a free web meeting with one of our Brexit experts.