Source to Pay: Optimize procurement efficiency across your enterprise
With economic volatility at an all-time high, organizations are dealing with extreme pressure to control costs, manage risks, sense opportunities and increase efficiency and productivity and to do it all without slowing down progress. Customers are demanding more from the organizations they buy from and work with – more speed, better quality, the best experience and full transparency. These demands have increased the need for procurement agility and integrated platforms more than ever before. A few of the strategic priorities on the minds of procurement executives are:
- Strengthening supply-chain resilience
- Category management
- Supplier collaboration, transparency and 360-degree visibility
- Embedded intelligence and automation
- Engaging the changing workforce
Procurement is at the center stage and has taken a critical position as part of digital transformation initiatives. The need to source essential supplies faster and more effectively than ever before, while continuing to increase productivity and reduce costs and risk. That means enterprises must move beyond traditional mindsets to a more strategic, scalable approach – one that allows them to transform efficiently across every part of the source to pay (S2P) process.
However, enterprises are not currently completely equipped to be responsive as they are still dealing with a reality of complex heterogenous systems, multiple platforms, data inconsistencies, fragmented stacks, varied user experiences and integration challenges.
SAP addresses these challenges by bringing together best of breed SAP procurement applications on a common platform with universal data models and user experiences. Leveraging data across applications, SAP is uniquely positioned to provide out-of-the-box real time analytical insights and intelligence with technologies such as machine learning and chatbots that enhance the decision-making capability of an organization.
Within S2P, SAP can help enterprises manage every part of the procurement process and all spend categories so they can move faster, run leaner, and stay ahead of customer demands and shifting economic factors. S2P spans SAP Procurement solutions including SAP S/4HANA Cloud, SAP Ariba and SAP Fieldglass along with Ariba Network to provide enterprises with capabilities and tools that optimize strategic, tactical and operational procurement as well as supplier management and trading partner collaboration.
- Supplier management and trading partner collaboration – Ariba Network helps organizations move beyond traditional, linear supply chain models and into a lean, dynamic, collaborative supply network across trading partners. Supplier management capabilities with SAP S/4HANA Cloud and SAP Ariba solutions help unify supplier records with consistent qualification, segmentation and supplier risk management.
- Source and contract – Sourcing capabilities with SAP S/4HANA Cloud and SAP Ariba solutions help manage sourcing, contracting and spend analysis processes for all types of spend integrated into execution and procurement processes.
- Procure to pay – Procurement capabilities with SAP S/4HANA Cloud, SAP Ariba and SAP Fieldglass solutions provide a smart, intuitive and simple persona-based guided buying experience and invoice management capabilities on a single, extensible and scalable platform.
SAP Intelligent Enterprise Framework is SAP’s approach to connect experiences and operations using experience management solutions, a business technology platform and a suite of applications – all in a well-integrated manner, improving SAP’s integration DNA and encompassing the complete business process. As part of S2P with SAP Intelligent Enterprise framework, SAP continues to heavily invest in enabling complete business process integration across SAP S/4HANA, SAP Ariba and SAP Fieldglass solutions, enabled and supported by a business technology platform that uses cross-application data to deliver insights and innovations.
Reimagined integrations were initially rolled out with all cloud variants including SAP S/4HANA Cloud, SAP Ariba and SAP Fieldglass. As part of this innovation journey, SAP has now started rolling out processes adopting enhanced integration capabilities, using aligned business APIs and SAP Ariba Cloud Integration Gateway (CIG) as the integration layer with a hybrid system landscape of SAP S/4HANA(On-premise).
Customers can now leverage the following end-to-end S2P sub-processes, starting with the 2020 SAP S/4HANA release:
- Employee self-service procurement with guided buying capability for SAP Ariba and SAP S/4HANA:
- This sub process creates a simple, smart and elegant purchasing experience that increases user engagement across all spend areas. Guided buying serves as a central place where all buyers can shop across all goods and services. It enables procurement and individual line-of-business owners to specify procurement policies and inform and guide users whenever there appear to be policy conflicts. These capabilities enable purchasers to collaborate directly with suppliers and other procurement users in the context of the procurement need, making procurement more efficient.
- SAP S/4HANA central procurement solution offers a centralized requisitioning process with guided buying that lets organizations scale purchasing processes across the whole unit through a centralized procurement system. It connects guided buying in the SAP Ariba Buying solution to the customer’s ERP or SAP S/4HANA Cloud systems and exchanges business documents to support end-to-end business processes across finance and logistics that run in the connected systems. The integration allows transfer and updates of the requisition as well as necessary master data between the two applications.
- Automation of order to invoice with Ariba Network: This process helps suppliers exchange sales data with buyers from Ariba Network automatically.
- Order requests, advanced shipping notices and invoice data are received and sent digitally.
- Suppliers experience greater automation and efficiency gains in exchanging sales documents with buyers from Ariba Network.
- Suppliers can correspond with buyers faster and with less manual effort.
- External workforce procurement via SAP Fieldglass solution & SAP S/4HANA: Integration helps organizations support, automate and extend external worker and statement of work (SOW) hiring and management processes.
- Digitization of the processing of job postings and SOW for work order creation lead into requisition, order, service entry sheet and invoice process well integrated with SAP Fieldglass & SAP S/4HANA solutions.
- Enablement of timely and automated payments while reduce the cost and risk associated with outstanding payments.
- Support for accurate, consistent and compliant booking of time and expenses for the external workforce increases efficiency and productivity.
- With our API-first development strategy, customers and partners can now leverage SAP S/4HANA APIs (refer to the SAP API Business Hub) to enhance their ability to integrate and extend functionalities based on modern technologies and open industry standards.
Following is an example of the detailed best-practice process blueprint related to the above mentioned scenario of using guided buying with SAP S/4HANA for central procurement:
In addition, the below scenarios are already available with SAP S/4HANA Cloud and groundwork is being laid to enhance and release the same offerings as part of the SAP S/4HANA 2020 feature pack releases in the near future
- Automation of S2P with Ariba Network – This process lets customers focus on value-driven activities with SAP Ariba Commerce Automation integration with suppliers on Ariba Network.
- Sourcing with the SAP Ariba Sourcing solution and centralized sourcing capabilities within SAP S/4HANA for central procurement for multiple backends helps customers extend SAP S/4HANA operational procurement processes to SAP Ariba Sourcing and select the most cost-effective bids from millions of suppliers on Ariba Network.
- Contract management with the SAP Ariba Contracts solutions and centralized contracts within SAP S/4HANA for central procurement for multiple backends enables procurement professionals to run strategic sourcing activities and integrate prices from SAP Ariba Contracts into their operational systems. With enterprise-wide management, customers can identify opportunities to pursue and improve negotiation efficiency.
Moving forward SAP plans to expand cross-product integration scenarios using aligned API-based integrations with SAP Ariba Cloud Integration Gateway for:
- Services procurement scenario addressing variants of service and external workforce procurement with SAP S/4HANA, SAP Ariba and SAP Fieldglass solutions.
- Ariba Network and Supply Chain collaboration scenarios managing processes for Materials requirement planning exception, subcontracting and planning collaboration processes with SAP Integrated Business planning.
- Supplier and product master data replication based on SAP Cloud Platform Master Data Integration with aligned domain models across all the various procurement applications.
Overall, SAP is investing in simplifying procurement by rolling out end-to-end processes with more robust business processes and master data integrations across applications, enabling faster adoption of preconfigured best practice content that is based on industry reference architecture. Enterprises can benefit and embark on the intelligent enterprise journey by adopting processes delivered with embedded insights, intelligence and automation, leveraging a unified, open and modular platform with consistent semantics across all SAP applications.
Explore our offering in S2P business processes with the SAP Road Map Explorer. For more details about available functional scope and integration assets, please visit our SAP Best Practices Explorer. Also, check out the S2P reference architecture and business blueprints on the SAP API Business Hub. And learn more about SAP procurement strategy by reading our whitepaper, Transform Procurement with SAP solutions.