Service Procurement capabilities include managing resources and cost for the entire range of services, including maintenance and construction type of services with hierarchical structures. It is often seen as more complex and less standardized because the requirement of a service is undefined in quantity, duration, and price at the point of requirement definition and purchase.
The Service Procurement Classic is a new scenario available with SAP Business Suite 7. It is available as an integrated scenario with SAP SRM 7.0 and SAP ERP 6.0 Enhancement Package 4.
The sourcing and procurement processes have resulted in cost saving and improvement in efficiencies for spend categories, such as direct materials and indirect materials. Services, which are fast becoming one of the major spend category in terms of percentage of total spend amount, were still untapped.
The pain points were lack of advanced sourcing capability and lack of transparency in order collaboration for services.
The existing capabilities in ERP MM-SRV are used for Service Definition. The requirement can come from user department such as maintenance. This requirement is then sent to SRM for sourcing.
SRM offers the advance sourcing capability for demand aggregation, source determination and supplier collaboration. The bidding process includes response modification which facilitates supplier collaboration for elaborate service definition. Response comparison and award based on criteria including weights and scores results in determining the best vendor for the requirement. The follow-on purchasing document is created in ERP including any items modified and accepted during bidding.
The ERP MM and SRM SUS (Supplier Self Service) has been enhanced to include Services including hierarchy structure.
Suppliers are able to acknowledge the purchase order based on service item and also create Service Entry Sheet, including unplanned activities based on limits as defined in the purchase order. The supplier is also able to post invoice based on confirmed service entry sheet.
Key features of Service Procurement Process:
- Service requirements driven by Plant Maintenance /Project System
- Description of services from model service specification
- Limit specification for unplanned services
- Automated transfer of Service specification for SRM Sourcing
- Supports hierarchical definition of services
- Response modification based on preceding requirement
- Allows modification (addition to) of original service structure
- Backend Purchase Order or Contract creation and fulfillment of initial Purchase Requisition based on SRM quote including modified items
- Catalog integration
- Supports collaboration with the supplier on purchase orders containing service item hierarchies
- Suppliers can create confirmation for services performed
- Automatic creation of ERP Service entry sheet based on confirmation submitted by supplier
- Supports limits for unplanned services
- Catalog integration
The integration between SRM and ERP uses the SOA technology. Please see the Enterprise Service Bundle for Service Procurement.
The Service Procurement scenario offers the advanced sourcing capability using the Bidding Engine (RFx) in SRM. Supplier collaboration is enhanced during service definition and order collaboration for hierarchy service structure.
Enforcing compliance, reducing offline process, increasing efficiency and accuracy throughout the service procurement process are other key benefits of the process.