Is SAP S/4HANA Global Trade Management the Right Fit for Your Business? 10 Key Questions to Find Out
One question I am frequently asked by customers and partners is: How can I determine whether SAP S/4HANA Global Trade Management (GTM) is the right solution for my company?
To provide a practical answer, I have put together 10 key questions that characterize typical GTM business scenarios. If several of these points apply to your organization, GTM could be an excellent fit for your business and trading processes.
1. Are you operating in the wholesale (B2B) sector?
GTM is designed for trading large volumes of goods between business partners. It is primarily used by companies operating in B2B markets, rather than those serving end consumers.
2. Do you trade products internationally rather than exclusively within your domestic market?
GTM is specifically designed to support import, export, and offshore trading processes. While it can also handle domestic trade operations, companies engaged in international trading are far more likely to benefit from and utilize GTM.
3. Is your organization structured into trading, trade execution, and accounting functions?
Companies that use GTM are often organized around these three core functions.
The trading department is responsible for purchasing and selling specific products or managing trading activities within designated regions. Traders typically oversee both procurement and sales activities.
The trade execution function manages the supply chain, including logistics, transportation, customs compliance, and the physical fulfillment of trading contracts.
The accounting function handles financial accounting, management accounting, treasury operations, and foreign exchange management related to trading activities.
4. Are suppliers and customers managed from a relationship perspective in a similar way?
In many trading organizations, a trader is responsible for both purchasing and selling activities. As a result, traders maintain close relationships with both suppliers and customers and actively manage these business partnerships. Compared to other types of businesses, trading companies often work with a relatively limited number of suppliers and customers while handling high transaction volumes with each.
5. Do you typically trade large quantities of goods per transaction (e.g., full truckloads or shiploads)?
Trading companies often deal with large contract volumes, which typically results in a smaller number of suppliers and customers compared to other industries.
Depending on the type of commodity or product being traded, contract quantities may correspond to full truckloads, railcar shipments, container loads, or even entire vessel cargoes.
6. Do you primarily manage and discuss trades in terms of quantities rather than values?
Each trading contract is typically negotiated individually. As a result, prices, payment terms, and delivery conditions may vary significantly from one transaction to another, even for the same product.
The most consistent and comparable characteristic across contracts is often the traded quantity. For this reason, many trading companies manage and monitor their business through quantity-based commitments rather than value-based agreements.
7. Is your planning process based on back-to-back trading or long/short position management?
In a back-to-back trading model, purchases are planned specifically to fulfill existing sales contracts, matching required quantities and delivery dates as closely as possible.
In contrast, long/short position management focuses on balancing the overall supply and demand position across a product portfolio. Companies monitor future purchase and sales commitments to identify potential surpluses or shortages.
A company is considered long when its expected incoming quantities exceed its sales commitments, and short when future sales commitments exceed anticipated supply.
To effectively manage and monitor these positions, businesses require a solution that can establish and track relationships between purchase and sales contracts.
8. Do you require sales contracts to be approved according to the four-eyes principle?
Because trading contracts are often negotiated individually and may involve significant commercial risk, many organizations require both purchase and sales contracts to undergo an approval process based on the four-eyes principle.
9. For drop-shipment scenarios, do you need to invoice customers before the corresponding supplier invoice has been settled?
In many trading businesses, particularly in drop-shipment scenarios, it is essential to invoice customers independently of the supplier payment process.
Only GTM supports this requirement by enabling customer invoicing to proceed before supplier invoices have been paid.
10. Do you need real-time visibility into the profitability of each trade?
Trading-related costs can be assigned directly to individual trading contracts throughout the entire lifecycle of a transaction.
As additional logistics, transportation, storage, customs, or other costs arise, they can be recorded against the relevant trade. Cost updates are continuously reflected in profitability calculations, providing ongoing visibility into both the expected and actual profit or loss of each trading contract.
Assessment
The questions above serve as indicators for determining whether a product or trading business should be managed using SAP S/4HANA Global Trade Management (GTM).
While the first five questions (1–5) represent softer indicators of a trading business model, questions 6–10 are considered strong indicators. If your answer to any of these latter questions is "Yes", GTM is likely to be a highly suitable solution for managing your trading operations.