SAP S4HANA Sourcing and Procurement in Detail 20160215

S/4HANA Enterprise Management component is enhanced by LOB Solutions. In the area of Sourcing and Procurement, S/4HANA Enterprise Management is enhanced by capabilities in the Ariba Portfolio. This is the Ariba Business Network for supplier collaboration and Ariba Procurement Content in the area of Requisitions.

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Concur, Fieldglass and Ariba are the cloud LOB solutions for Sourcing and Procurement. SAP is investing in enhancing the digital core S/4HANA Enterprise Management by integrating the cloud solutions. With 1511 OP integration capabilities are available for the Ariba Network and Ariba Procurement Content.

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SAP S/4HANA Sourcing & Procurement provides an embedded operational procurement process as core procurement functionality within S4HANA Enterprise Management natively integrated into the Business Network.

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The capabilities listed under Enterprise Management Procurement are available in the core S/4HANA solution. These capabilities are differentiators to the known ERP product. Either a new Fiori UI and/or new features were built in 1511 On Premise for these capabilities.

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The capabilities in the grey boxes are optional extensions to the S/4HANA Enterprise Management solution.

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Key capabilities of Sourcing and Procurement:

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holistic procurement platform

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many-to-many networked collaboration

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Consumer-grade usability and mobility

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Benefits of Sourcing and Procurement:

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Effortless user experiences with unprecedented transparency into spend

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Faster order and invoicing cycle times

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Reduced total cost of ownership (TCO) due to less data replication, reduced effort for system setup and operation, and lower data footprint

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Streamlined Procure To Pay provides four end-to-end solutions:

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Operational Procurement

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Invoice and Payables Management

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Sourcing and Contract Management

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Supplier Information and Master Data

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Assigned to the end-to-end solutions are solution capabilities

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No changes: here no new development was done for 1511 On Premise

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Enhanced: new additional development was done for 1511 On Premise

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Fiori UI: one or more new Fiori UI / Fiori Apps was/were developed for this solution capability

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Let‘s start with the first end-to-end solution: Operational Procurement with these solution capabilities.

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Self-Service Requisitioning

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Requirement Processing

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Purchase Order Processing

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Service Purchasing

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Purchase Order Collaboration

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Procurement Analytics

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In case of functional enhancements or new Fiori Uis in S/4, two slides per capability are included in this section, showing the unique value and the before-after process.

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Usually in R/3 or ERP, purchase requisitions are transformed into a purchase order using e.g. transaction ME57. With S/4HANA Sourcing and Procurement a compelling Fiori UI with additional features is introduced to convert purchase requisitions into purchase orders.

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You can see the unique value of S/4HANA on the right hand side.

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The Fiori App comes with a standard smart filter bar on the top to dynamically change and adopt search criteria for the work list of unassigned purchase requisitions. The system already proposes available sources of supply for a specific item. After a source of supply (like purchase info record or supplier with price) is assigned, the purchase requisition can be transferred into a purchase order.

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A navigation to the detailed view of the purchase requisition is available as well as update options.

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On the left hand side, the process of assigning source of supply in a traditional R/3 / ERP is visualized. Search, filter criteria and follow-on documents are selected / changed separately.

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On the right hand side, the process with S/4HANA is shown. There is a Fiori UI with dynamic filtering options available. The available source of supply is proposed automatically by the system.

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Still, ME57 is available as GUI transaction in case the customer wants to stay with the GUI transaction.

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In many cases a purchase order is created automatically by the system. If a Purchase Order has to be created manually, this can be done using transaction ME21N.  With SAP S/4HANA the purchaser is supported with a variety of capabilities to speed up the processing of manually created purchase orders.

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The unique value of S/4HANA is listed on the right hand side. S/4HANA offers a Fiori UI for creating Purchase Oder's with dynamically prefilled fields, better usability and draft concept in case the session is lost.

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On the left hand side, the process of manual purchase order creation in a traditional R/3 / ERP is visualized, e.g. ME21N.

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On the right hand side, the process with S/4HANA is shown. There is a Fiori UI with dynamic filtering options available. An existing Purchase Order of a Purchase Info record can be used as template. This speeds up the processing of creating and submitting the purchase order.

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Since not all document types and item types are supported with the Fiori UI, the web gui transaction of ME21N is also provided as a tile to be started out of the Fiori Launchpad. (Create Purchase Order – Advanced).

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With 1511 On Premise 16 KPIs are delivered. The KPIs analyze purchasing spend, contract usage and compliance, invoice spend and supplier evaluation scores. Most used BW reports were used for the selection of these 16 KPIs.

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To visualize the KPIs the Smart Business Framework is used as technology. This technology is also used already in the context of Suite on HANA, e.g. when analyzing ERP KPIs on HANA.

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Smart Business Framework allows the user to self-define and configure the KPIs with regards to thresholds and visualization of the tiles and the graph itself.

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This capability is provided in addition to the BW extractors, which are still supported.

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Like described on the right hand side, the unique value of S/4HANA is

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Real-time calculation of key performance indicators

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Fast and highly configurable KPIs

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Instant insight to action capabilities by navigating to other Fiori Apps and Object Pages

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Dynamic supplier evaluation scoring based on procurement documents in real-time

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In a classical environment, data are extracted into BW to perform spend analysis there. This could lead to outdated data, as data extraction mainly does not happen in real-time.

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With S/4HANA data are accessed in real-time, by reading out data directly from purchasing tables like EKBE, EKKO, EKPO and visualizing the content directly on the Fiori Launchpad.

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The BW extractors are in addition to this additionally supported.

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Self-Service Requisitioning is a complete new capability in S/4, that was not existing in this way in ERP. Existing purchase requisitions in ERP are mainly material master or free-text items. The OCI interface that is available for ERP Purchase Requisitions is used very rarely.

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As it was decided to not co-deploy SRM on top of S/4HANA due to technical clashes with the CRM applications, the self-service capabilities were developed directly on top of the existing purchase requisition object.

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With S/4HANA the employee has three Fiori Apps to conduct a self-service requesting:

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Create Purchase Requisition

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My Purchase Requisitions

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Confirm Receipt of Goods

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With S/4HANA, the customers have the possibility to load internal and external catalog content into HANA database via OCI 5.0 interface or to integrate external catalogs via OCI 4.0 and punch-out.

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With that, the employee can search for the requested goods via a crosscontent search in HANA and select directly the relevant item to be moved into the shopping cart. In addition to this, also material master can be retrieved or free-text items can be created if no relevant content is offered so far. If necessary, small changes can be done on the items like accounting data or delivery address change. If no change is required, the employee can directly order the items in the same screen.

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In My Purchasing Requisitions, the user has the possibility to look after the requested goods, can check the status or if status allows it still change the items.

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With the confirmation the process is completed.

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All processes are provided via Fiori Apps.

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In addition to this, also the WEB Gui transaction for creating purchase requisitions can be started out of Fiori Launchpad (ME51N).

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In classical system set-up, customers can do the self-service requisitioning in ERP via OCI interface in Purchase Requisitions or Purchase Orders, or via a separate SRM implementation or SRM one-client deployment on top of ERP. However, this always means data replication and maintenance of interfaces.

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With S/4HANA, this capability is directly available in S/4 and employee can benefit from cross-content search (no need to take care in which catalog the item is available) and Fiori consumer grade experience.

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The Ariba Business Network is the strategic supplier collaboration platform for S/4HANA. Following this strategy, the interface technology has built natively into S/4HANA. With 1511 On Premise messages for Purchase Order Creation, Purchase Order Change, Order Confirmation and Advanced Shipping Notification can be exchanged with the Ariba Business Network.

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In classic ERP, a separate Add-On needs to be implemented on top of ERP, to exchange messages with the Ariba Business Network.

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With S/4HANA this is not required, as it is built in natively in S/4HANA.

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The second end-to-end solution is Invoice and Payables Management. It consists of the following solution capabilities.

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Invoice Processing

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Accounts Payable

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Invoice Collaboration

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The differentiators are new Fiori App for Invoice Processing and the native standard integration into the Ariba Business Network for supplier invoice collaboration.

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In addition to the Fiori Apps, also GUI transactions can be started out of the Fiori Launchpad like Create Supplier Invoice Advanced.

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Like for Operational Procurement, also for Invoice and Payables Management, new Fiori Apps are released with 1511 On Premise. Assigned to the capability „Invoice Processing“, this is Create Supplier Invoice and Supplier Invoice List.

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Supplier Invoices can be created with or without reference to a Purchase Order.

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To increase process efficiency, supplier invoices which were sent from suppliers via the Ariba Network, show up as draft invoices in the Supplier Invoice List and can be converted into complete Supplier Invoices.

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On the left-hand side, the invoice create transaction in ERP is shown. After providing search criteria, a list of invoices is displayed, which is hard to read. When changing search parameters, the users have to leave the screen and do the selection again.

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With S/4HANA, users can flexibly search for supplier invoice with the dynamic search options in smart filter bar. The processing and updating of supplier invoices is more user-friendly and accelerated.

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The Ariba Business Network is the strategic supplier collaboration platform for S/4HANA. Following this strategy, the interface technology has built natively into S/4HANA. With 1511 On Premise messages for Invoices and Invoice Status Update can be exchanged with the Ariba Business Network.

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In classic ERP, a separate Add-On needs to be implemented on top of ERP, to exchange messages with the Ariba Business Network.

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With S/4HANA this is not required, as it is built in natively in S/4HANA.

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The third end-to-end solution is Sourcing and Contract Management.

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It consists of these solution capabilities:

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Source Assignment

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Operational Contract Management

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Source assignment covers the managing of sources of supply like purchase information records and source lists. These sources of supply are maintained in the system and are available as potential source of supply for open purchase requisitions and purchase orders. They can be selected either manually in the source of supply assignment in Fiori App „Processing Purchase Requisitions“ are automatically e.g. during materials planning run.

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For operational contract management a new Fiori App is provided. Customers may use contract list transactions in ERP like ME3M. However, the new Fiori App provides the customers more information with less clicks.

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It is essential that buyers have an effective and efficient system support for monitoring contracts. Both cases, low usage but also high usage needs to be monitored to either renew the contract or phase out the contract.

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With the new Fiori app for manage purchase contracts, the users see immediately a high contract consumption and critical status. In addition to the smart filter bar for flexible search, this app also provide the quick action to directly renew (change validity end or target value) the contract while remaining in the app. The navigation to other object pages like supplier or contracts are also supported.

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On the left-hand side, you can see the traditional ERP transaction ME3M to list contracts. Many information like notes, approval status, consumption is missing. The user has to navigate back and forth in case filter criteria needs to be changed.

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See on the right-hand side the Fiori App for managing contracts. Change search and filters on the fly, get information about various helpful business data like consumption and status, update directly target value or validity end and navigate to more detailed information to the object pages.

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The fourth end-to-end solution is Supplier Information and Master Data.

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It consists of the solution capabilities:

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Classification and segmentation

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Supplier Evaluation

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Similar expenditure items can be grouped into Purchasing Categories, which is a new business entity in S/4HANA. Customers can group material groups into Purchasing Categories to better organize and analyze spend. The purchasing categories are used in Supplier Evaluation processes for softfacts and in purchasing real-time analytics as separate view when performing analyses.

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The new S/4HANA Supplier Evaluation for soft-facts are also not yet existing in ERP. Customers can define questionnaires, send them to employees or peers in the organization to get feedback about the performance of suppliers. This enriches the existing supplier evaluation for hard facts in S/4HANA. In future, also a combined hard and soft facts evaluation is planned for realtime analytics, showing both scores next to each other in one screen.

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These processes and capabilities have been copied over from SAP Supplier Lifecycle Management to S/4HANA, being launched in either Web Dynpro screens or Fiori Apps.

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Supplier classification and segmentation is an ongoing process in which customers assess and classify their suppliers at regular intervals and allocate their suppliers to segments of different importance. Customers can then focus especially on those suppliers that are strategically important and critical to their business, thus enabling customers to develop and manage own business relationships.

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These are the features:

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Purchasing Category:

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Manage suppliers according to specific categories of goods and services, for example, hardware and software, or installation and maintenance.

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Monitor the pool of suppliers and optimize the purchasing process

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They are also an important structuring element in the supplier evaluation process, to compare the evaluations of all suppliers in the same purchasing category.

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Assign important characteristics to the suppliers, such as the strategic importance (ABC classification) and the relationship (for example preferred supplier). A scorecard for each supplier enables the customer to monitor the supplier's corporate social responsibility compliance.

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Support of Integration of D&B Data  If the customer has a contract with D&B, they can directly review the D&B data of the supplier.

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On the left hand side, you see the screen of vendor master in ERP. Mainly control data are displayed with limited means to really classify suppliers or view related data like supplier evaluations or reports in D&B.

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In S/4HANA supplier classification is possible directly in S/4HANA. Users get a comprehensive overview across various criteria.

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Customers can evaluate suppliers to obtain a basis for the business relationship with them and for optimizing the supply base. Based on the feedback the purchaser gathers through questionnaires, the purchaser obtains a scorecard for each supplier evaluated. The scorecard helps to assess a supplier's strengths and shortcomings and to initiate measures for improvement. Evaluation scorecards also enable the purchaser to easily compare suppliers wit

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Evaluation Questionnaire: Customers can create questionnaires that can be sent out to internal stakeholders within the company to collect information about the suppliers. The questionnaires can contain different types of questions. If required, customers can translate the questionnaires into further languages.

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Supplier Evaluation Template: Customers can use evaluation templates to repeatedly generate evaluation requests that share the same properties. As an example, requests generated from the same template use the same questionnaires. In the evaluation process, evaluation templates are set up for peer groups of suppliers within particular purchasing categories. They include questionnaires that enable the customers to identify the strengths and shortcomings of the suppliers.

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Supplier Evaluation Request: The purchaser responsible for a purchasing category starts the evaluation process by sending out an evaluation request to appraisers.

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Supplier Evaluation Response: An evaluation response includes the answers given by an appraiser. If the questionnaires have been scored, the scores are shown in a score overview.

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Evaluation Scorecard: Evaluation scorecards show the overall result of a supplier evaluation for one supplier, aggregating the evaluation results from all appraisers. If customers evaluate a supplier in yearly intervals, customers have an evaluation scorecard for this supplier reflecting the scores for the entire year within a peer group.

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In classical Business Suite system landscape, supplier evaluation for softfacts using questionnaires is not available in ERP directly, but in the application SAP Supplier Lifecycle Management. There, questions and questionnaires can be defined. In ERP a very limited option to manually score a criteria is available. However there, a direct score is entered. There is no questionnaire capability in ERP directly.

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With S/4HANA, SAP Supplier Lifecycle Management coding has been copied over to S/4HANA directly. Hence, questionnaires for soft-fact based evaluations are available directly in S/4HANA, with the benefits mentioned on the previous slide and right-hand side:

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Define own questionnaires in S/4HANA directly

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Create Evaluation Request and distribute to appraisers

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Review consolidated evaluation result in evaluation scorecards.

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Monitor and search flexibly for evaluation responses and navigate to response details

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With S/4HANA a global search across all apps, business documents and master data is provided. By providing a search term on the top of the screen, the system starts a google-like search across various entities.

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The search result list is structured along categories like business documents (e.g. Purchase Orders) or master data (e.g. suppliers). The search term is highlighted in yellow.

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Depending on type of search result, the related object page is started or the transactional fiori app.

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To facilitate the decision about correct search result, already a preview of data related to the search result is provided.

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Users can drill from search result into related object pages to get more details. Object Pages are provided for various objects like master data or business documents.

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Beside showing all the details for the respective business entity, it is possible to navigate from one object page (like supplier) to other object pages (like purchase order) or to other transactional fiori apps (like manage purchase orders).

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With that concept, users can figure out each related information to a specific business question.

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In the classical system set-up there is no global generic search existing across business documents and master data. Users can start separately master data maintenance transactions but would not have the chance to see there relevant business documents and jump directly in this document.

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In S/4 users can use the generic search, Fiori Apps or object pages to view (other) object pages and jump from there again to other Fiori Apps, other object pages or Web Dynpro or Web Guis.

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Object Pages can also be shared via link and sent to other users to discuss business issues.

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SAP S/4HANA offers a generic workflow inbox for various workflow items. This enables the user to have a generic, holistic view across all workflow items. Precondition for showing up in the Fiori Inbox is a configured release strategy in the S/4HANA backend system.

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In addition to the generic workflow inbox, there are also single approval apps for purchase requisistion, contract, purchase order and invoice available.

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Along with the workflow items on the left-hand side, all the details to the workflow item are displayed in the main right side of the screen. Users can view attachments, notes and approval details and can take actions directly in the same screen.

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On the left hand side, the business workflow screen in ERP is displayed. A work item can be selected out of the list and the details are shown. Customers frequently ask for mobile workflow capabilities. This is not possible in standard ERP.

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On the right-hand side, you see the Fiori inbox, with all work items in one screen. The screen on the right hand is updated if another item on the left hand side is selected. In addition filtering and sorting is possible.

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Mobile approval is of course possible.

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There are three types of Fiori Apps: transactional Fiori Apps, analytical Fiori Apps and Object Pages.

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This slide shows the Fiori App Portfolio for SAP S/4HANA Sourcing and Procurement 1511 On Premise.

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The starting point for S/4HANA users is the Fiori Launchpad with transactional and analytical apps, as well as the generic HANA search.

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The tiles are logically grouped and redelivered in areas like Purchasing Analytics, Purchasing - Purchase Order Processing, Purchasing - Contract Management.

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Users can flexibly configure the Launchpad. Depending on the authorization and roles in the backend and the roles in the gateway system, the tiles are available and displayed in the Fiori Launchpad. The tiles can be removed, if not needed, the grouping and the sequence of the groupings can be changed and additional new groups can be created.

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SAP also pre-delivers tiles that launch the SAP WebGui, like “Create Purchase Order – Advanced”. Even though there is already a very good coverage of Fiori Apps provided, the business scope of the Fiori Apps might not be sufficient for all types of document. Hence, SAP offers already the launch of several SAP WebGui transactions directly as tile in the Launchpad.

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Some of the supplier management apps are starting in Web Dynpro, as the coding has been copied over from SAP SLC to SAP S/4HANA. It is planned to subsequently transform the web dynpros in Fiori Apps though.

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