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SAP S/4HANA for central procurement overview

SAP S/4HANA for central procurement, what it’s all about?

 

The Procurement line of business in larger companies is organized mostly either globally or structured in divisions and channels, responsible for regions, countries and locations. They manage the spend processes often in distributed procurement landscapes with numerous ERP back-end systems.

Procurement is particularly impacted by this lack of centralization to improve and automate scale and volume in order to save costs and process more efficient.

SAP S/4HANA for central procurement provides a unified interconnection Hub, that allow procurement teams to work as a shared service across multiple ERP systems of global organizations, divisions, and channels.

It delivers the benefits of a centralized procurement system without requiring a massive shift of already established local procure to pay process flows. It operates across such buying channels without the need to rework them.

SAP S/4HANA for central procurement, solution overview

 

SAP S/4HANA for central procurement delivers company-wide visibility based on roles and permissions across a company’s ERP landscape. Lead buyers can access contracts, requisitions, orders, status and spending across the company.

Usually a purchaser works in one or multiple SAP ERP or SAP S/4HANA back-end systems. With central procurement, they can use a single SAP S/4HANA system to monitor, process and analyze the relevant documents centrally.

A strategic purchaser or commodity manager is able to structure global contracts hierarchically and to distribute them into local sources of supply in terms of outline or scheduling agreements.

The solution covers the following business scenarios:

  • Central Requisitioning (2FI)

  • Central Sourcing (3ZF)

  • Central Purchase Contracts (2ME)

  • Central Purchasing (2XT)

  • Central Purchasing Analytics (1JI, 2ME, 2XT)

  • Guided Buying for Central Procurement with SAP Ariba Buying (3EN)

We recommend Customers with multiple back-end SAP ERP + SAP S/4HANA systems to use SAP S/4HANA for central procurement as the interconnection point and hub between all back-end systems, SAP Ariba solutions, and Ariba Network.

Occasional User leverage Guided Buying capability for self service procurement activities. Guided Buying is also integrated into SAP S/4HANA for central procurement in a multi-back-end system deployment. In this case, the integration of the solutions takes place through the purchase requisition initiated by Guided Buying in SAP S/4HANA for central procurement and distributed into the relevant back-end System to process the follow-on purchase order.

This is also a Use Case for existing SAP SRM Customers to replace parts of SAP SRM Processes, like central requisitioning or central contract management by SAP S/4HANA for central procurement.

  • For more information about SAP S/4HANA for central procurement, see the e-book Introducing Central Procurement with SAP S/4HANA, available for purchase on SAP PRESS.

Conclusion

 

The Global controls over regional and local systems help increase transparency. This can lead to cost savings through better negotiations, maverick spending reduction, and better economies of scale.

Beyond central requisitioning, contracting, purchasing, sourcing, and analytics in SAP S/4HANA for central procurement, additional scenarios together with SAP Ariba solutions and APIs for heterogeneous back-end systems are planned.

We offer with SAP S/4HANA for central procurement the foundation for the digital transformation in Procurement, be it the harmonization of spend activities or the flexible adoption of further SAP S/4HANA and SAP Ariba Solutions to realize benefits in fast consumable potions.

The need to modernize Procurement with SAP Intelligent Spend Management should always consider SAP S/4HANA for central procurement as a facilitator in an Multi-Backend Environment.

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