SAP E-Sourcing integration to ERP and SRM

SAP E-Sourcing application helps customers in streamlining the sourcing processes, managing procurement risk and compliance, reducing supplier costs and accelerating procurement cycle times. The benefits and the value are derived by supporting the following procurement processes within the E-Sourcing application:

• Sourcing Project Management (A project is a strategic sourcing effort that organizes multiple sourcing events and ensures consistent buying discipline)
• Request for Quote/Information/Proposal
• Online Reverse Auction
• Bidding and bid optimization
• Contract Management
• Supplier Registration/Evaluation/Selection

In order to deliver closed process loop and provide additional value on top of the value derived by core E-Sourcing functionalities it is required to integrate SAP E-Sourcing application with overall operational sourcing and source-to-contract scenarios in backend ERP as well as SRM applications.

Standard, out-of-the-box E-Sourcing integration to ERP 

The E-Sourcing product to be released in 2009 (version 6.0) will delivered containing standard, out-of-the box integration with ERP component of Business Suite 7. This standard integration between ERP and E-Sourcing will support all ERP releases starting from 6.0 (including all enhancement packs).

The processes to be supported with the standard E-Sourcing integration to ERP will be as following:

The key features and benefits of the standard integration are:

• Streamlined master data handling and alignment with ERP
• Unified User Interface (E-Sourcing 6.0) with SRM / ECC
• ERP Purchase Requisition transfer to E-Sourcing via intermediary ERP RFQ document (which can be automated)
• Improved error handling and integration troubleshooting via synchronous interfaces
• Standardized business document cross-referencing for full process completion
  Multi-language support
• Configurable Integration parameters via Integrated Document Types (e.g. pricing conditions, text ID’s)
• Local document validation prior to transfer to ERP for added consistency
• Performance enhancements and extensibility improvements using standard ERP interfaces
• Significantly faster deployment and configuration via standard integration content and components
• Outline Agreement can either be a contract or a scheduling agreement

The PI (Process Integration) component also known as Exchange Infrastructure or XI is a mandatory component for the standard integration between E-Sourcing and ERP.

E-Sourcing/ERP Integration Package

For the releases of ERP (versions 5.0 and below) and E-Sourcing (versions 5.1 and below) the E-Sourcing/ERP Integration Package is available. It allows for the replication of a subset of master data from SAP ERP to E-Sourcing and enables business process integration to support procurement process flow. The supported scenarios of the Integration Package are the same as for the standard E-Sourcing/ERP integration (see the chapter above).  

The Integration Package is delivered as a packaged solution with the following required components:

• ERP integration components (Programs and function modules, technical interface definitions)
• E-Sourcing integration components (Configuration workbooks, Java libraries)
• XI Content (Data mappings, Interfaces)
• Configuration and user guide

The effort to deploy, connect and configure all of the components will depend on the available skills. SAP as well as its partners offer services to quickly deploy all of the components resulting in a fast time to value for customers.

The current integration package is the best starting point for any integration project between SAP E-Sourcing (ver. < 6.0) and SAP ERP (ver. < 6.0):

• It offers well documented and described procedures to achieve integration inclusive of all the required objects and coding
• It has been created to “jump-start” the integration efforts between SAP E-Sourcing and SAP ERP
• With adaptation, it can easily be leveraged to integrate SAP E-Sourcing with non-SAP backends or SRM
• This integration enables the process from initiation of a Purchase Requisition through to the creation of an Outline Agreement in the SAP ERP system.
• This integration also minimizes errors or omissions by reducing the manual effort required to enable follow-on processes
• In addition, the integration enables the synchronization of master data (such as materials and suppliers) between SAP ERP and SAP E-Sourcing to ensure one source of master data
• By enabling the creation of ERP Outline Agreements as a continuation of the natural business process, this integration also enables the contract compliance process which is becoming more important to the customers

The E-Sourcing/ERP Integration Package supports E-Sourcing releases 5.0 and above and ERP 4.7 and above and the E-Sourcing customers have been using it to connect to their productive ERP systems.

E-Sourcing Integration to SRM

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• Master data are in sync between the ERP, SRM and E-Sourcing system. It must be ensured the same master data are present in E-Sourcing as in SRM. This is a process consideration and standard interfaces can be used for replication of master data from ERP to SRM as well as from ERP to E-Sourcing
• SRM requirements (shopping carts) are transferred to E-Sourcing RFx via ERP Purchase Requisitions and RFQ. The ERP RFQ is simply a technical grouping mechanism and a starting point for the transfer of requirements from ERP to E-Sourcing and does not play a major role in the overall process
• The above approach assumes SRM deployment in the so called “Classic” mode
• The standard outbound mechanisms for document publishing are leveraged from E-Sourcing, in other words either from an Award or an Agreement in E-Sourcing standard outbound integration is used into XI. In the XI system it is necessary to decide if the document will be replicated to ERP or SRM. This can be modeled based on the content of the transactional document e.g. document type, organizational data or custom attributes
• The Custom API in ERP can be quickly built based on the standard SRM interfaces

The integration approach for SRM described above can be used to integrate E-Sourcing versions 5.0 and above with SRM 5.0 and above and ERP 4.7 and above.

E-Sourcing integration with multiple backend systems  

One of the challenges for integrating E-Sourcing with SRM or ERP is in circumstances when there are multiple backend ERP systems.  SRM natively supports multiple backend system handling in master data and transactional layer. However, the E-Sourcing does not have those capabilities. The presence of multi ERP backend systems is addressed through the concept of key compounding. Let’s consider an example:

(SYS1 and SYS2 are different backend systems). The master data are extracted from both ERP systems and sent to E-Sourcing. Good business practice would suggest to perform some sort of matching/normalization/de-duplication via MDM system for reporting or roll-up purposes but this is an optional task and depends on the overall quality of the master data.

For example material #1000 can exists in both SYS1 and SYS2 systems. When importing the master data via PI (Process Integration) component the qualifier is added to the master data so in E-Sourcing system two materials are created (SYS1.1000 and SYS2.1000, etc). This way the same material or supplier can exists in the ESO database because of the qualifier.

Apart from materials and suppliers it may be necessary to compound plants, purchasing organizations, purchasing groups, company codes, payment terms etc; depending on the overall quality of the master data.

In the example above, once the custom API in SRM receives the message it can determine which master data are used and successfully create contracts. In SRM SYS1.1000 and SYS2.1000 now revert back to their original form of 1000 and the standard SRM functionality can process the data and create transactional documents.

Scripts could be developed in E-Sourcing for dropdown search where the results set is filtered by the users organization assignment; SYS1 or SYS2. This way the material(s) and vendor(s) associated with the user’s system are used in E-Sourcing tranactions. If the user is assigned/using SYS1 organization then only data for SYS1  will be displayed in search results.

E-Sourcing integration with SAP Spend Analytics

Apart from standard ERP integration E-Sourcing can also integrate with SAP Spend Analytics component. From reports executed in SPend Analytics component it is possible to initiate E-Sourcing project or an RFx event. This integration is supported as of E-Sourcing 5.1 and SAP Spend Analytics 2.0.

For more details please visit SAP Service Marketplace on: https://service.sap.com/srm -> E-Sourcing 5.x