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SAP S/4 HANA Central Procurement Overview

SAP S/4 HANA Central Procurement Overview

Introduction:

In this blog i will discuss about the capabilities of  SAP S/4 HANA Central Procurement and the business scenario supported, which enables organizations to streamline and centralize their procurement process. Central Procurement system acts as a central system and provides control and visibility to the company’s overall procurement expenditure (Ex: Company headquarters where the central procurement software is installed and configured).

The product serves businesses spread across multiple region with multiple ERP or S/4 HANA system instances.

How does the central procurement landscape look like?

What are the Deployment Options and supported release?

Central HUB System:

  • SAP S/4 HANA Cloud 1811*
  • SAP S/4 HANA OP 1709 >= SP01*

  Connected system:

  • SAP S/4 HANA from 1709*
  • SAP ERP 6.0 EHP 6*
  • SAP S/4 HANA CE 1811*

       Note:  * Signifies onwards release

What are the supported middle-ware options?

  • Process integration
  • Point to Point
  • Communication arrangement– Cloud systems

What are the business scenarios supported?

  • Central Requisitioning (ESS)
  • Central Purchasing
  • Central Purchase Contracts
  • Analytics

How does the Central Procurement master scenario flow look like?

The central procurement end to end business scenario flow is shown below

 

 

What are the capabilities Central Requisitioning?

 Central requisition scenario supports the casual buyers who procure on based on the self needs, central procurement system is mainly coupled with supplier catalog, where the employee gets the advantage of directly accessing the products from  the different catalog (OCI 4.O) and the Employee has visibility on the progress of the order and Employee also has visibility on products imported from the backend system in cross catalog search (OCI 5.0). The capabilities of Central Requisitioning scenario are listed below.

  • Creating central purchase requisition from the hub system.
  • Supports central flexible workflow approvals for shopping cart .
  • Updating the backend PR information as history in the HUB system
  • Real time access to the supplier catalog data (Supports OCI 4.0)
  • Importing material and sources of supply information from the connected system to hub system and can be ordered via cross catalog search (OCI 5.0)
  • Supports Material, free text and simple service requisition creation from hub system
  • Real time Value helps (account assignment, supplier etc.) to fetch the results directly from the connected systems
  • Automatic conversion of purchase requisition to purchase orders
  • Efficient tracking on the status of the requested item
  • Posting goods receipt for purchase orders against the PR in the app “Confirm Receipt of Goods” in hub system
  • Fiori based user experience to the employee
  • Provides standard integration interface to connect multiple systems (PI or P2P or communication arrangement).
  • Monitoring the replicated XML docs (inbound/outbound) via AIF monitoring.

 

What are the capabilities of Central Purchase Contracts

Central purchase contract is used to negotiate a global long-term agreement between an organization and a supplier regarding the supply of material and service. This enables purchasers from various parts of company at different locations to take advantage of negotiated terms and conditions and the central contract features listed below

  • Creating central contracts from the hub system and distributing them to multiple connected systems
  • Supports header and item level distribution of central contracts to the connected systems
  • Re triggering of distributed central contracts in hub system in case of any errors received from the connected system.
  • Supports flexible workflow process for central purchase contracts approval
  • Enables condition type mapping between HUB and connected system
  • Associating call off orders against the central contract created from the hub system and display of release orders that are issue against the distributed contracts
  • Analytical fiori app for Monitoring central purchase contract consumption in Hub system
  • Fiori based user experience to the central purchasers
  • Provides Standard integration interface to connect multiple systems (PI or P2P or communication arrangement)
  • Monitoring the replicated XML docs (inbound/Outbound) via AIF monitoring

 

What are the capabilities of Central Purchasing?

Central purchasing system help professional purchasers who procure on company behalf and enables companies to consolidate the vital procurement artifacts like purchase requisitions, purchase orders held by backend systems to be easily processed by central purchasers and the features as follows

  • Importation of Procurement artifacts like Purchase requisition & purchase orders from Connected system
  • Source of Supply assignments for the imported PR in HUB directly from backend
  • Converting imported Purchase requisition to purchase orders in the central hub system
  • Editing backend Purchase Requisitions directly from the HUB system
  • Creating purchase orders directly in the backend system from hub system
  • Blocking backend purchase requisitions from the hub system
  • Centralized approval of backend purchase orders in the hub system via flexible workflow
  • Fiori based user experience to the central purchasers
  • User interface navigation from HUB central system to the connected system.
  • Integration with responsibility management for central workflow and Purchasing documents
  • Analytical fiori app for Monitoring purchase order item in the hub system.

 

Conclusion

To conclude central procurement provides complete control to the  Chief purchasing director/central purchasers/purchasing heads who wanted control and visibility on the companies overall spend or in the individual subsidiaries  location,  central procurement provides centralized view of purchasing documents in the Central hub system and with centralized approval for decision making on the purchasing spend across subsidiaries locations globally, It also help to central purchasers to negotiate a global  contract and the employee who wanted to fulfill his/her purchasing needs.

 

DISCLAIMER

All views expressed in this blogs are my own, it may also subject to change.

 

 

 

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