Innovation: Sourcing and Procurement in SAP’s Cloud ERP World – Part 1

The aim of this two-part blog post is to give an update on the latest Sourcing and Procurement innovations in S/4HANA Cloud. Each quarter, SAP releases a new wave of innovations, which helps solve the problems typically faced by procurement organisations. In the role of a consultant, I often speak with these organisations and hear about their pain points e.g. problems maintaining strong relationships with top-performing vendors or issues gaining value for money. With a cloud-based ERP, many of these problems are solved and a traditional organisation can be transformed into a next-generation intelligent business.

But first, how did the innovations of the 1905 release help our customers? Last release, we saw exciting enhancements in areas such as Image-Based Buying (3UH), which enables users to search catalog entries by image. Other innovations included: Situation Handling for Predictive Contract Consumption (BMD), Monitor Central Purchase Requisition Items (1QR) and Centralised Business with Central Purchase Requisitions & Central Procurement Operations Monitor (2XT, 1XI). For more information on the 1905 release for Sourcing and Procurement, check out my colleague’s blog post.

Fast-forward to today – What’s planned with the latest 1908 release? And how will this help customers to run a seamless and intelligent procurement process? Part one of this blog will look at the innovations in Operational Procurement and Sourcing and Contract Management. Part two will focus on those across Central Procurement, Procurement Analytics and Invoice and Payables Management. For each enhancement, we’ll look at common pain points and the innovations helping to overcome these. For further information on the latest release in Sourcing and Procurement, you can also read this blog post.

Operational Procurement

Pain Point: Lack of efficiency in viewing required information, Slow turnaround time

1908 Innovation: Improve information visibility by reflecting original status of a purchase requisition after copying

• Self-service users can now edit a copied purchase requisition

Pain Point: Poor process transparency/efficiency, Too much navigation required

1908 Innovation: Increase process transparency by displaying the status of purchase requisitions in the header

• Users can now gain a quick view of key details in the purchase requisition such as: Overall status, quantity, price and approval comments

Pain Point: Lack of efficiency in approving/rejecting workflows

1908 Innovation: Increase employee productivity by informing users about workflow rejections or approvals through e-mail

• Requester is now enabled to take follow-on-actions upon receipt of email notification, without needing to be logged into the system to receive notifications

Pain Point: Poor cost control, planning and settlement, Complex integration

1908 Innovation: Deliver flexible integration of transportation management into purchase order processing

• Integration of transportation management into S/4HANA Cloud (ability to now trigger settlement of transportation costs)
• Lean services – Integrated use of purchase orders
• Information of origin and destination country for accurate tax determination during transportation settlement (information forwarded from transportation management upon initiation of a purchase order)

Pain Point: Poor transparency, Slow issue resolution, Low level of understanding

1908 Innovation: Improve operational efficiency by providing configuration options for rules and partner functions

• Full flexibility for use of partner functions inside purchase orders through following self-service configuration user interfaces (SSCUIs): Define Partner Schemas, Assign Partner Schemas to Account Groups, Assign Partner Schemas to Document Types, Define Partner Roles, Define Permissible Partner Roles per Account Group

Pain Point: Lack of efficiency, Detailed scrutiny, Stagnant level of productivity, Delays

1908 Innovation: Increase employee productivity by providing intelligent purchase requisition approval using Machine Learning

• Confidence level is now provided for a purchase requisition with item-level approval in SAP Fiori app My Inbox – Indicating level of criticality of purchase requisition item approval. The top parameters contributing to confidence level for a purchase requisition are now also displayed in the app

Pain Point: Complex processing, Complex integration

1908 Innovation: Increased process efficiency through external processing of purchase requisition items originating from external sources

• Enable external sources to use purchase requisition OData API to do the following: Create purchase requisition items that are in process externally, enable purchase requisition items for purchasing or discard purchase requisition items from purchasing

Pain Point: Slow turnaround time, Poor process efficiency

1908 Innovation: Improve turnaround time by enabling employees to perform partial confirmations from the SAP Fiori app My Purchase Requisitions

• Employee now enabled to perform partial confirmation of a purchase requisition once purchase order has been created

Paint Point: Lack of flexibility, control and adherence

1908 Innovation: Increased flexibility by using customer cloud business add-ins (BAdI) for field control of follow-on documents

• Cloud BAdI for determining whether a follow-on flag is for display only or editable in a customer-specific implementation. BAdI Change of Field Control for Purchase Order Itemsenables user to influence the field control of specific fields in purchase order apps. User can now change status of fields that affect settings for follow-on documents, such as goods receipt or final invoice

Pain Point: Information maintenance, Impact of price changes, Difficulties in triggering logistical processes

1908 Innovation: Improve operational efficiency by providing self-service configuration for stock transport order inside a plant

• Activation of self-service configuration user interfaces (SSCUIs) for using “stock transport orders” functionality inside a single plant enabling users to: Activate stock transfers for storage locations, define shipping data for stock transfer between storage locations and determine pricing schemas for stock transport orders

Pain Point: Stagnant employee productivity

1908 Innovation: Increase employee productivity by displaying commitments in Manage Purchase Orders Fiori App

• Enable the option “display of commitment information” for all items in a purchase order

Sourcing and Contract Management

Pain Point: Low levels of compliancy, Too many business transactions with embargo business partners

1908 Innovation: Deliver flexible integration of global trade services in purchase contract

• User now enabled to perform global trade services checks on purchase contracts, such as embargo checks/watch list screening checks
• Ensures that contract complies with international trade laws and restrictions

Pain Point: Low level of usability, Slow processing

1908 Innovation: Increase process efficiency by creating call-off purchase orders from purchasing contracts directly

• Use Manage Contract app to create call-off order for one/several items of contract
• Retrieve pertinent data from contract when creating purchase orders

Pain Point: Loss of time/money

1908 Innovation: Improve operational efficiency by proactive situation management in case the request for quotation (RFQ) is near the submission deadline with a low number of quotations

• Automatic system detection of critical situations in sourcing process
• Information provided to responsible purchaser in timely manner to resolve situation

Pain Point: Basic Functionality, Problems with contract processing

1908 Innovation: Improve cycle time for new contract creation by providing reference number and additional filters in legal documents

• Reference-number field in document header
• Filter for main entity/organization and stamps in document list page
• Ability to link external objects to legal transactions

Pain Point: Lack of consolidation of automation rules, Manual intervention, Requirement to optimise purchasing process

1908 Innovation: Increase process efficiency by enabling automation of purchase requisitions through configuration of standard rules

• Define rules for automating business processes for assigning unique sources of supply and creating purchase orders for purchase requisition items
• Automate source-of-supply assignment and purchase order creation
• Define and automate custom actions for implementing checks and modifications
• Schedule execution of defined rules in background app

Pain Point: Dependency on GUI applications

1908 Innovation: Improve operational efficiency by supporting subcontracting, consignment, and pipeline processes for purchasing info records

• Create info records supporting other info record categories e.g. consignment, subcontracting, and pipeline, standard categories
• Display info records for all info record categories supported in list page of app

Stay tuned for the second part of this blog post which will list the rest of SAP S/4HANA Cloud’s 1908 innovations for Souring and Procurement!

Important Links:

• Best Practices for SAP S/4HANA Cloud
• SAP S/4HANA Cloud Customer Community
• SAP S/4HANA Cloud Help Portal
• SAP Innovation Discovery
• Sven Denecken’s SAP S/4HANA Cloud 1908 Release Blog
• 1908 Feature Scope Description
• What’s New 1908
• Transform Procurement with SAP Solutions

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