Sourcing and Procurement in SAP S/4HANA Cloud
With SAP S/4HANA Cloud (SAP Business Suite 4 SAP HANA Cloud), SAP is providing a new generation of business applications – simple enterprise software for big data and agility. SAP S/4HANA Cloud is fully built on the in-memory platform SAP HANA. Using the advanced potential of SAP HANA, SAP S/4HANA Cloud is designed for business and provides an instant insight by using a single source of truth, real-time processes as well as by dynamic planning and analysis. With SAP Fiori user experience and less complex data model it is designed to run simple, and in parallel reduces the data footprint of your company. SAP S/4HANA Cloud is also already connected to business networks and company-internal collaboration networks and prepared for the Internet of things. With all these aspects, SAP is protecting your investments by facilitating next generation business applications. SAP S/4HANA Cloud is available as software-as-a-service.
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Visibility is key to identifying the right mix of suppliers and reducing supply risk. SAP S/4HANA Cloud automated sourcing and procurement management software helps streamline your processes – while delivering near-real-time insights into organizational spend, suppliers, and market information.
- Centralized purchasing for greater flexibility and visibility across your organization
- Machine learning-based analytics that accurately predict contract consumption
- Real-time insights to improve supplier negotiations and material management
- Automated payables matching and clearing with proposals for difficult-to-match items
Procurement Solution Landscape
SAP S/4HANA is our next-generation business suite, delivered in the cloud and on premise.
SAP S/4HANA Cloud has all core ERP capabilities fully integrated.
SAP invests in seamlessly integrated scenarios to extend the core SAP S/4HANA Cloud procurement capabilities with leading cloud application portfolios. Such as SAP Ariba, SAP Fieldglass, SAP Concur, and SAP Ariba Network for supplier collaboration.
SAP S/4HANA Cloud provides complete end-to-end business scenarios that run all enterprise processes.
SAP S/4HANA Cloud Sourcing and Procurement provides an embedded operational procurement process as core procurement functionality within SAP S/4HANA Cloud integrated into the business network. This core functionality supports all spend segments. The line-of-business solutions Collaborative Planning and Sourcing adds strategic procurement processes to the core procurement functionality.
The line-of-business solutions can continue to be used as standalone solutions or as part of the SAP S/4HANA Cloud Line-of-Business solutions. This option gives more choice to customers, allowing for true hybrid scenarios and incremental deployments.
Intelligent Procurement
SAP solutions enable a combination of machine and human intelligence across all business functions. Comprehensive integration and embedded intelligence allow you to streamline and automate your procurement processes.
Intelligent Procurement Today
Procurement capabilities in SAP S/4HANA Cloud
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Operational Procurement
Sourcing and Contract Management
With SAP S/4HANA, automated and manual processes for source assignment to operational demands, use of source lists and purchase information records, are supported.
You can monitor contracts in a contract work list and receive instant information about consumption, status, and validity.
If no accurate source of supply is available, you can initiate a sourcing event in SAP Ariba or a price request in the Ariba Network from SAP S/4HANA Cloud.
Source Assignment
Many different types of sources of supply are available to fulfill purchasing demands. Purchasing information records, contracts, quota arrangements and source lists ensure automated source of supply assignment and frictionless production. Where a source of supply is assigned manually, it might be necessary to find an appropriate source of supply by starting a sourcing event.
The following are the key features of Source Assignment:
- Managing source lists
- Managing info records
- Making mass changes to purchasing info records and monitoring them
- Managing quota arrangements
SAP S/4HANA Cloud supports the integration with external procurement systems (for example SAP Ariba Sourcing), also in combination with a business network (for example Ariba Network) to enable a seamless and highly efficient collaboration between your buying organization and your suppliers in the sourcing process.If an external procurement system (for example SAP Ariba Sourcing) and potentially an external business network (for example Ariba Network) are integrated and support the features listed below, SAP S/4HANA Cloud enables you to use the following key features:
- Managing requests for quotations
- Managing supplier quotations
- Comparing supplier quotations
- Situation handling
- Managing purchase contracts
- Using the approval workflow
- Output management
- Situation handling
Purchase Contract Management
Contract management is the process of managing contract creation, execution, and monitoring to maximize operational and financial performance. Organizations encounter an ever-increasing amount of pressure to reduce costs and improve company performance.
The following are the key features of Purchase Contract Management:
- Making mass changes to purchase contracts and monitoring them
- Managing purchase scheduling agreements
- Making mass changes to scheduling agreements and monitoring them
Invoice and Payables Management
With the Supplier Invoice List and the Create Supplier Invoice apps, SAP S/4HANA Cloud offers business users the option to create supplier invoices with or without reference to a purchase order. You can also view and directly correct inaccurate supplier invoices. Integration capabilities between the apps and object pages accelerate the completion of processing supplier invoices. An out-of-the-box predictive model is leveraged for resolution of a payment block on invoices. A standard integration into the Ariba Network and SAP Fieldglass is provided in SAP S/4HANA Cloud.
Invoice Processing
A supplier invoice is a document from a supplier for materials that were delivered or services that were performed. The supplier invoice triggers the payment.
The following are the key features of Invoice Processing:
- Managing supplier invoices
- Using time-dependent taxes
- Managing supplier invoices with reference to purchase order limit items
- Integrating freight orders
- Uploading invoice documents
- Working with supplier invoice lists
- Releasing supplier invoices
- Approving supplier invoices
- Working with goods receipt and invoice receipt clearing accounts
- Consignment and pipeline settlement
- Automatic settlement of invoices
- Supplier invoice jobs
- Down payment monitoring for purchase orders
Invoice Collaboration
SAP S/4HANA Cloud supports the integration with business networks or external systems (for example, Ariba Network) to enable you to collaborate with your suppliers on invoices. You can do this by exchanging invoice-related messages between SAP S/4HANA Cloud and the business network or external system.
If a business network or external system (for example, Ariba Network) is integrated and supports the features listed below, SAP S/4HANA Cloud enables you to use the following key features:
- Receiving supplier invoices
- Sending CC invoices
- Sending status updates for supplier invoices
Procurement Analytics
SAP S/4HANA Cloud Sourcing and Procurement enables users to gain deep, real-time insights through advanced analytics capabilities. Embedded analytics capabilities such as spend visibility, contract analytics, and supplier evaluation can run data from SAP S/4HANA Cloud in real time without the need to extract the data into a separate data warehouse.
Key performance indicators immediately turn red when user-defined thresholds are affected.
This responsiveness allows procurement managers to make instant decisions about which suppliers to choose based on up-to-the-minute information. They can act instantly to resolve business issues by seamlessly navigating from analytical applications to transactional applications and back.
Spend Visibility
Pressured to reduce supply costs, companies are seeking greater efficiencies and savings from their procurement operations. With SAP S/4HANA, purchasers get role-based and quick access to the procurement information they need to analyze purchasing spend, suppliers, and contracts in real time.
The data that simplifies your daily work can be visualized in various chart types and by criteria such as supplier, purchasing group, purchasing category, or material group. The key performance indicators allow you to directly navigate into other apps, where you can immediately solve business issues.
The following are the key features in Spend Visibility:
- Purchasing and invoice spend
- Purchase requisitions
- Supplier evaluation
- Contracts and scheduling agreements
Real-Time Reporting and Monitoring
The procurement overview provides you with a set of actionable cards that you can easily rearrange as required. You no longer need to start different transactions and reports separately: both operational and analytical cards are visible on one single page. You immediately see your most relevant tasks and can navigate to KPI drilldowns, worklists, or specific object pages to get more detailed information and take immediate action.
In addition, the monitoring of purchasing document items enables you to immediately assess and resolve critical situations for your company. The supplier object page is enhanced by analytical real-time insights into supplier evaluation scores, purchase requisition types, as well as purchasing and off-contract spend.
The following are the key features in Real-Time Reporting and Monitoring:
- Operational cards
- Analytical cards
- Filtering
- Monitoring:
- Overdue purchase order and scheduling agreement items
- Next delivery dates and quantities for subcontracting documents
- Missing supplier confirmations
- Request for quotation items for which no bids were submitted in time for the deadline
- Expiring purchase contract items
- Variances of material prices in purchase contracts and info records
- Purchase requisition items
- Request for quotation types
- Missing exchange rates for the currencies used in the analytical apps
- Scheduled jobs that failed for supplier evaluation scores
- Scheduled extraction jobs that failed for central purchasing data from the hub system to an optimized analytical table
- Purchase order documents, for which the goods receipt based invoice verification flag is not set, but the goods receipt is posted and returns or cancellations exist.
- Product Sourcing Overview
Spend Reporting
An SAP Analytics Cloud dashboard where buyers can view insights of the purchasing and off-contract spend. The analyzed data is presented in a broad range of graphs, such as bar charts, column charts, and tables.
The following are the key features in Spend Reporting:
- Purchasing spend
- Off-contract spend
Supplier Management
With Classification and Segmentation, SAP S/4HANA Cloud offers a logical grouping of similar expenditure items, such as expenses for advertising agency services or IT hardware. This grouping into purchasing categories helps you organize your spend, responsibilities, and organizations.
Also, suppliers are classified and managed using attributes and master data. Continuous activity and task management supports supplier development.
Supplier evaluation across hard and soft facts allows for holistic supplier performance monitoring.
Classification and Segmentation
Supplier classification and segmentation is an ongoing process in which you assess and classify your suppliers at regular intervals and allocate your suppliers to segments of different importance. You can then focus especially on those suppliers that are strategically important and critical to your business, thus enabling you to develop and manage your business relationships.
The Purchasing Category is the key feature of Classification and Segmentation.
Purchasing categories allow you to manage your suppliers according to specific categories of goods and services, for example, hardware and software, or installation and maintenance. They enable you to monitor your pool of suppliers and optimize the purchasing process. Purchasing categories are also an important structuring element in the supplier evaluation process. They enable you to compare the evaluations of all suppliers in the same purchasing category.
Supplier Evaluation
In supplier evaluation, you send out supplier evaluation requests to appraisers, asking them to fill out questionnaires about a supplier. You first create the questions and the corresponding answer options and then include the questions in one or several questionnaires. You can include the questionnaires in evaluation templates that serve as the basis for sending out evaluation requests. You create questions in the question library. For a better overview, you can use sections to structure the questions. You can display the evaluation scorecards that show the overall result of a supplier evaluation for one supplier.
The performance of suppliers is evaluated at frequent intervals. The score is calculated automatically in real time by the system, comparing purchase order data with goods receipt and invoice data. Employees and purchasers can also rate the performance by filling out questionnaires. A key performance indicator shows the scores across both hard and soft facts. SAP S/4HANA Cloud provides the tools for a rounded approach to supplier evaluation. The features are:
- Combined hard and soft facts in one system.
- Real-time calculated hard facts for delivery time, ordered quantity and price accuracy without any aggregates.
- Questionnaire-based supplier evaluation scorecards.
- Combined scores in procurement analytics with navigation to scorecards and business documents.
With SAP S/4HANA Cloud, Supplier Evaluation, allowing you to:
- Define your own questionnaires in SAP S/4HANA directly.
- Create evaluation requests and distribute them to appraisers.
- Review the consolidated evaluation result in evaluation scorecards.
- Monitor and search flexibly for evaluation responses and navigate to response details.
Central Procurement
NoteThe following videos show you an overview of Central Procurement.
SAP Fiori Apps for Sourcing and Procurement
The search tool in the SAP Fiori launchpad offers the following features:
It is available from the launchpad at any time.
The result list highlights every search match.
The search result list is across all business objects.
A specific result list is available per document type.
Navigation to related objects shows an object page for the document.
Navigation to a related transactional app is provided to start maintaining the business object.
The object pages have the following features:
There are object pages for Supplier, Purchase Requisition, Purchase Order, Purchase Contract, Invoice, and Info Record.
The object page design provides quick navigation to related areas and quick navigation to related business documents.
There are additional links to related follow-on functions. For example, from the Purchase Order object page, you can navigate to the Manage Purchase Order app to maintain or change data.
The SAP Fiori launchpad has the following features:
It acts as a single entry point for all user activities.
The SAP HANA database search tool is available from the launchpad at any time.
The apps are clustered by areas (for example, Home area, Accounts Payable area).
Transactional apps and KPI apps are supported.
Personalization options are available for the launchpad entry page.
A new in-app help function provides contextual help, guided tours, and learning content.
Road Map
You can view the SAP S/4HANA Cloud product road map using SAP Road Map Explorer. By filtering the Sourcing and Procurement line of business, you can see the current and planned innovations for procurement. You can access and browse all SAP Road Maps using the following link: SAP Road Maps.
