Sourcing & Procurement in SAP S/4HANA Cloud 2102
Welcome to 2021 and the first release of SAP S/4HANA Cloud in this special year. Let’s make the best out of it and continue learning about some long awaited features and innovative functions in Sourcing & Procurement. As always, check out the below video for a quick update on our 3 highlights for 2102.
- Inquiry in the approval process of Purchase Requisition documents through workflows
- Enhancements to the Workflow for Purchase Requisitions
- Account Assignment & Schedule Line Information in Purchase Order approval via My Inbox
- Purchase Order item attachments in Purchase Order Output
- Specify certain shipping and packaging instructions
- New iRPA use case: Manage Catalog Items from Excel*
Invoice and Payables Management
- Tax Fulfillment Date and Financial Transaction Type availability
- Enhanced Manage Workflows for Supplier Invoices
- Block and unblock of items and distribution lines in Central Purchase Contract*
- Support of ‘Material Unknown’ in Central Purchase Contract*
- Enhancements in ‘Manage Purchase Requisitions Centrally’-app*
- Support of lean service items in Request for Quotations with SAP Ariba Sourcing*
- Support of limit items in Guided Buying requests with SAP Ariba Buying*
Enterprise Contract Management
- Enhancements of the log of Legal Transactions to show deleted Legal Documents*
- PDF format support for Virtual Document*
- Extensibility for the request of a Legal Contract*
Central Invoice Management
Inquiry in the approval process of Purchase Requisition documents through workflows
We improve our workflow processes for Purchase Requisitions, by providing approvers the possibility to communicate with requestors for any queries or rework. That way approvers can receive the needed information in the ‘MyInbox’-app without having to approve or reject the purchase requisition in the first place. This holds for the self-service as well as the professional requisitioning process and enables requestors to read the comments from the approver and take action accordingly. So, in case an employee requested an item and forgot to mention a detail that is required for a successfull order, the approver can ask for rework. The employee will be notified about this request and can edit the Purchase Requisition accordingly.
How do you benefit from it? Its simple: the chances of purchase requisition rejections are reduced and the collaboration between requestor and approver is simplified – this is not only in times of home office a valuable thing.
Demo 1: This demo shows an example workflow for Purchase Requisitions that require rework (no voice available).
By the way, if you want to benefit from this, make sure to adjust your workflows accordingly. A new workflow step type ‘Overall release of reworkable purchase requisition’ needs to be configured. This type offers also the possibility to define different scenarios via Exception Handling e.g. a rework step could be repeated several times until the work item is approved by the manager.
Fig. 1: New workflow step type ‘Overall release of reworkable purchase requisition’ and rework exception handling options.
Enhancements to the Workflow for Purchase Requisitions
In addition to the above, we have three additional enhancements:
Firstly, we want you to be able to ensure the four-eye review principle, thus we allow to exclude the requestor and creator of the Purchase Requisition from the approver list. Naturally, this does not hold for an automatic release of a Purchase Requisition. Configuration Experts can define the exclusion of certain personas in the respective step properties in the workflow configuration as shown in the screenshot.
Fig. 2: Exclusion of the requestor also being approver of the same Purchase Requisition.
Secondly, we enhance transparency and process efficiency in the approval process of self-service requisitioning with the display of approval steps and details at header and/or item level based on the workflow configuration. The details include type of workflow, name of workflow, status, processor and recipient of the Purchase Requisition. The status of a step can be ‘Ready’ (i.e. awaiting approval), ‘Planned’ (i.e. step not yet created), or the outcome of the step, e.g. ‘Purchase Requisition Released’/’Purchase Requisition Rejected’. If there are multiple approvers and each one needs to approve, the status will show a processing bar displaying the execution in percentage.
Fig. 3: Approval details and status for an item of a Purchase Requisition in the ‘My Purchase Requisitions’-app showing the quick view on item level.
And last but not least, we add workdays as a measurement option for deadlines in the approval process for Purchase Requisition and Purchase Order. Last year we introduced deadlines for pending approvals (check out my blog entry) by minutes, hours or days. In order to use workdays, custom logic needs to be defined (otherwise each day is considered a workdays). This can be achieved via the factory calendar for deadline calculations in the ‘Custom Fields and Logic’-app.
Fig. 4: ‘Custom Fields and Logic’-app adding a custom logic for the BAdI ‘Determination of Factory Calendar for Workflow Deadline’.
Account Assignment & Schedule Line Information in Purchase Order approval via My Inbox
The next update on operational procurement comes for the Purchase Order approval process, where the ‘My Inbox‘-app now also provides an overview of account assignment details of all items as well as an overview of account assignment details of the schedule lines of non-limit items. This facilitates the decision process and provides full transparency over the purchase order.
Demo 2: The demo shows how to navigate in the ‘My Inbox’-app to see details on accounting as well as schedule line information of a Purchase Order in approval (no voice available).
Purchase Order item attachments in Purchase Order Output
Additional enhancements to the Purchase order include purchase order item attachments to be part of the purchase order output depending on their classification. Check out how to add attachments in ‘Manage Purchase Orders’-app here. This provides users the ability to influence which attachments shall be send to the supplier and which not.
Fig. 5: Select from the list of Document Types: Simp. Logist. Internal (SL9) and Simplified Logistics (SL1), where only SL1 classified documents will be relevant for output.
As a prerequisite, to make use of item attachments in purchase order outputs, administrators need to configure the Document Types and Output Settings upfront. Check out the screenshot below and follow the instructions here.
Fig. 6: The ‘Manage your solution’-app offers to configure Document Types and to define Output Settings accordingly.
Specify certain shipping and packaging instructions
Configuration Experts can can specify custom shipping and packaging instructions in purchase orders for suppliers. Furthermore, they can define if the shipping instruction should be printed on the Purchase Order or not. Purchasers can then select the respective shipping instruction while creating the Purchase Order via ‘Create Purchase Order – Advanced’-app. This improves transparency and communication between supplier and customer as additional information given to suppliers ensures seamless shipping.
Fig. 7: Define shipping instructions from ‘Manage Your Solution‘-app.
New iRPA use case: Manage Catalog Items from Excel*
This intelligent RPA use case helps to automate the creation of catalog items in an SAP S/4HANA system using Excel as a source and the ‘Manage Catalog Items‘-app. With the help of this process bot, the purchaser is enabled for mass creation of catalog items with a pre-defined Excel template.The automated creation of catalog items from spreadsheet reduces manual effort and speeds up processes.
- The bot extracts the data from the Excel template and navigates to Catalog Management for Purchasing in the SAP S/4HANA system.
- The bot will then create catalog items using the ‘Manage Catalog Items’-app according to the input from the Excel file.
Please note that the change, update and deletion of catalog items is currently planned and not yet covered. For more information and access to the package, see the SAP Intelligent Robotic Process Automation Store here.
Watch the below demo video to get a better understanding of the process flow.
Demo 3: Manage Catalog Items from Excel – showing the process bot in action (no voice available).
Short digression: SAP intelligent Robotic Process Automation
SAP Intelligent Robotic Process Automation (iRPA) uses intelligent bots to automate repetitive manual processes. iRPA helps to reduce human errors, improves user satisfaction and pride by removing tedious tasks from the process, improves operations and generates savings by cutting process execution time.
If you want to know what additional bots we have for Sourcing and Procurement, please see the below list including links to more information. For more help wth the topic also check on our Help documentation here.
- Manage Purchase Info Records from Excel*: The Purchasing Info Record contains information on a specific material and a vendor supplying the material. This intelligent RPA bot allows users to manage – create, update and delete purchasing info records using a pre-defined Excel template.
- Source List Creation from Excel*: The combined information of material and vendor is kept in the purchase info record. But a material can be ordered from different vendors in different time intervals. This information can be maintained in a Source List. The intelligent RPA bot imports the details from an Excel template to SAP S/4HANA Cloud. Source Lists are created or updated automatically. The maintained recipient will receive an email notification with the Source Lists details that are processed successfully.
- Simple Purchase Requisition Creation via Excel*: Creating Purchase Requisitions manually is not just time taking, but also a tedious and monotonous task. Sometimes it is easier to compile Purchase Requisition details into an Excel template and to provide this as input to a intelligent RPA bot. The bot reads those details and creates Purchase Requisitions and sends the report email to the recipients. Please watch a demo here.
- Purchase Order Confirmations*: Stay up-to-date and automate the update of the Purchase Order status using a intelligent RPA bot. Update product quantity, price and delivery date in order to allow for better planning due to quicker Purchase Order status. The bot processes each Purchase Order number and line item confirmation detail from incoming email response. The bot performs manual steps to update the Purchase Order with information via API. For a quick demo, play this end-to-end video here.
- Automatic Upload of Supplier Invoices*: Businesses receive invoices from suppliers in different formats like PDF, JPEG, PNG, XML etc. as attachments in emails. These documents then have to be manually created which is a time consuming process and requires effort. This process bot automates the upload of supplier invoices into SAP S/4HANA Cloud. The bot reads the emails with invoices as an attachment and calls uploads the invoices accordingly.
- Automated Release of Blocked Supplier Invoices*: This intelligent RPA bot automates the process of releasing blocks on Item Amount for multiple supplier invoices. The bot is based on the ‘Release Blocked Invoices‘-app where it can apply specific filters like company code, fiscal year etc and then cancels the blocking reason for all the filtered data set.
Parts per Million in Supplier Evaluation
With the real-time key performance indicator Parts Per Million, which we introduced last year with release 2008, users can analyze the return deliveries and quality notifications created for goods received. As this measure is an indicator for the performance of the supplier, it can now also be included in the supplier evaluation score calculation and displayed/used via the apps ‘Manage User Defined Criteria for Supplier Evaluation‘, ‘Overall Supplier Evaluation‘ and ‘Supplier Evaluation by User Defined Criteria‘. The weighting and scoring of the Parts Per Million criteria can be defined in the ‘Supplier Evaluation Weighting and Scoring‘-app.
Fig. 8: Parts Per Million as measure in the ‘Supplier Evaluation By User Defined Criteria’-app.
Via the new app ‘Schedule Persistency of Parts Per Million Data‘ Configuration Experts can schedule a batch job to persist the Parts Per Million figures.
To benefit from this update, Configuration Experts need to activate Parts Per Million as a user defined criteria via the ‘Manage Your Solution‘-app once.
Fig. 9: The screenshot shows where to activate user defined criteria for supplier evaluation from the ‘Manage Your Solution’-app.
Fig. 10: Enable Parts Per Million as user defined criteria in the configuration step ‘Activate User Defined Criteria for Supplier Evaluation’.
Invoice and Payables Management
Tax Fulfillment Date and Financial Transaction Type availability
Accountants can enter the Tax Fulfillment Date on which the tax becomes chargeable, for example, the date on which goods or services are supplied in the supplier invoice. In general, they can now differentiate between the following dates: 1) The date on which the taxes on sales/purchases is due (tax fulfillment date) and 2) The date on which the tax must be reported to the tax authority (tax reporting date). This enhancement accommodates new validations issued by national tax offices.
A prerequisite to make the new field available is that the ‘Tax Reporting Date Active in Documents’ indicator must be set for the relevant company code in the ‘Manage Your Solution‘-app for the Organization application area and the Organization sub application area under Company Code Master Data. This is a step your Configuration Expert can do for you.
FYI, in case you need to change the tax fulfillment date of multiple supplier invoices at the same time use the ‘Mass Change of Posting Date’-app or job scheduling.
Fig. 11: New field available to enter the Tax Fulfillment Date when creating supplier invoices.
In addition, it is possible to enter the Financial Transaction Type when making direct postings to G/L accounts.
Fig. 12: New field available to enter the Financial Transaction Type when creating supplier invoices.
Enhanced Manage Workflows for Supplier Invoices
In order to increases flexibility when defining the approval processes for blocked or parked supplier invoices, the workflow scenarios ‘Workflow for Blocked Invoice’ and ‘Workflow for Parked Invoice as Complete’ now support two new start and/or step conditions in the ‘Manage Workflows for Supplier Invoices‘-app:
- Trigger the invoice approval process if the invoice contains at least one non-purchase order item
- Trigger the invoice approval process if a goods receipt is or is not expected for at least one item of the invoice:
- The invoice consists of at least one item for which no goods receipt is expected, this applies if the invoice contains purchase order items for which no goods receipt is expected or the invoice contains only items for G/L account posting.
- The invoice consists only of items for which goods receipts are expected. This applies to purchase order items for which the ‘Goods Receipt’ indicator is set.
Fig. 13: Configuration Experts can add new start and/or step conditions here for the Workflow for Blocked Invoices.
Block & unblock of items and distribution lines in Central Purchase Contract*
We offer better and centralized control for the Central Purchaser to stop further call-offs of a Central Purchase Contract. Why is that important? Imagine your supplier cannot supply a material out of some reason for a particular time period or you need to wait for an internal decision before purchasers from various parts of a company at different locations are allowed to use the outline agreement as source of supply. Thus we now allow to block and unblock item and distribution lines of a Central Purchase Contract via the ‘Manage Central Purchase Contracts‘-app. Once an item is blocked from the hub system the information is passed to all the connected systems and their local contracts or scheduling agreements. Furthermore, all distribution lines corresponding to that item will be blocked as well.
Since transparency is important between central and local teams, the Central Purchaser can maintain a blocking reason to trace the decision taken. Different reasons need to be centrally defined by a Configuration Expert via the ‘Manage Your Solution‘-app upfront.
Check out the demo below to see the functionality in action.
Demo 4: From maintaining reasons to blocking item and distribution lines to displaying the outcome in a local system (no voice available).
Support of ‘Material Unknown’ in Central Purchase Contract*
Small update with huge impact for some of you! Central Purchasers can now create contracts for item category ‘Material Unknown’ (M) in case they need a contractual agreement (value/quantity contracts) to procure similar materials with the same price but different material numbers. See the documentation for Central Purchase Contracts here.
Demo 5: Central Purchase Contract Item with Item Category ‘Material Unknown’ (no voice available).
Enhancements in ‘Manage Purchase Requisitions Centrally’-app*
The first enhancement comes with the possibility to mark Purchase Requisition items for central processing. That means, Central Purchasers can restrict the editing of Purchase Requisition items in the connected system and centrally block the automatic creation of follow-on documents in connected systems, i.e. Purchase Orders, Central Purchase Contracts and Central Request for Quotation. This is the case if the ‘Process Centrally’ switch is turned to ‘ON’ by the Central Purchaser in the ‘Manage Purchase Requisitions Centrally‘-app . This results in better transparency for Purchasers in the connected system regarding the processing of Purchase Requisitions in the central hub system as it is clearly indicated.
Fig. 14: Item list page in ‘Manage Purchase Requisitions Centrally‘-app showing the ‘Process Centrally’ switch per item in the central hub system.
Fig. 15: Purchase Requisition Item providing a blocking indicator and text.
In addition to the above enhancement, we improve the user experience and make it easier for Central Purchasers to get creator and supplier related contact information of a Central Purchase Requisition in a quick and efficient way. That way Central Purchasers can easily access the username, name, phone number and email of a supplier or the creator of an item if the data it is maintained.
Fig. 16: Quick view on supplier contact information from ‘Manage Purchase Requisitions Centrally‘-app.
Fig. 17: Quick view on creator contact information from ‘Manage Purchase Requisitions Centrally‘-app.
The following paragraph is written by my colleague Harish Mangtani, who will take care of the Sourcing & Procurement release blogs for the next couple of releases. Join me in welcoming Harish 🙂
Support of lean service items in Request for Quotations with SAP Ariba Sourcing*
As we already know, by integrating SAP S/4HANA Cloud system with SAP Ariba Sourcing, you can identify sources of supply using the community of suppliers on the Ariba Network and the SAP Ariba Sourcing solution for your Purchase Requisitions in SAP S/4HANA Cloud. A benefit of Ariba Network is the possibility to select the best and cost-effective bid from millions of suppliers.
Now with the SAP S/4HANA Cloud 2102 release, we also support sourcing of lean service items along with the sourcing of material items. If you are a Purchaser, now you have flexibility in sourcing material and service both in SAP S/4HANA Cloud to the SAP Ariba Sourcing. You can set a start and end date for a service and delivery date for a material in SAP S/4HANA Cloud. These timelines are visible to several bidders in the souring event in SAP Ariba Souring.
How does the process then look like: you as a Purchaser can create a Request for Quotation (RFQ) for SAP S/4HANA Purchase Requisitions and include both material and service, then send the RFQ to the SAP Ariba Sourcing. You speak to the Sourcing Manager to get the best possible vendors from SAP Ariba Sourcing and provide him with the RFQ ID. The Sourcing Manager in SAP Ariba Sourcing can view the created sourcing request with the RFQ ID. He invites all suppliers for bidding, suppliers get to see all the items and dates and they submit bids in a usual manner using the SAP Ariba supplier portal. After receiving suppliers’ responses, the Sourcing Manager performs other sourcing related activities as usual to finalize the best possible bid and award. Now he sends the awarded bids automatically to SAP S/4HANA Cloud where forwarded bids, purchase orders, or operational contracts are created.
Please check on the documentation for Sourcing with SAP Ariba Sourcing here and for Automation of Source-to-Pay with SAP Ariba here. Please be aware that this innovation is available as soon as SAP Ariba 2102 is released.
Let me demonstrate you this feature:
Demo 6: End-to-End process demo from creating a request for quotation with lean service items in SAP S/4HANA Cloud to awarding bids in SAP Ariba Sourcing (no voice available).
Support of limit items in Guided Buying requests with SAP Ariba Buying*
With SAP S/4HANA Cloud release 2102 the guided buying capability in SAP Ariba Buying allows buyers to add limit items to Purchase Requisitions in guided buying requests for goods and lean services and send them to SAP S/4HANA Cloud. The requests for limit items are characterized by validity periods to define the effective dates of the procurement process and predefined amount limits to control item prices.
Buyers can transfer limit items, replicate approved requisitions from SAP Ariba Guided Buying to SAP S/4HANA Cloud as Purchase Requisitions, and can create Purchase Orders automatically from those requisitions.
Please be aware that this innovation is available as soon as SAP Ariba 2102 is released. More information can be found in our documentation here.
Fig. 18: Support of limit items via checkbox in guided buying requests with SAP Ariba Buying.
Enterprise Contract Management
Enhancements of the log of Legal Transactions to show deleted Legal Documents*
Legal Counsels can now keep track of all legal documents in the change log of the legal transaction. This will help to effectively audit the legal documents in legal transactions and provides insight into the legal documents deleted from legal transaction. Please find more information here.
Fig. 19: The history function displays the change log for the legal transaction including deletion information.
PDF format support for Virtual Document*
We allow users of the ‘Manage Legal Document‘- app to generate a PDF file from a virtual document. This option helps to bring the virtual document process to a completion, by enabling you to generate a PDF file manually or automatically. Please find more information on virtual documents here.
Fig. 20: New option to generate a PDF file of a virtual document.
Extensibility for the request of a Legal Contract*
Users can extend the application to use custom fields in the ‘Request Legal Contract‘-app. This helps users to create custom fields in addition to the existing fields, to suit their specific business needs.
In order to make usage of this innovation, administrators need to configure the required custom fields using the ‘Custom Fields and Logic‘-app and these fields will then appear in the ‘Manage Context‘ app. It is possible to implement the field control for the custom fields, i.e. the following control values are available mandatory, optional, read-only, and hidden. Legal counsels or content management employees can then maintain values for the custom fields in the ‘Manage Context‘ or in the ‘Request Legal Contract‘-app. The values specified in these custom fields will be transferred to the legal transaction automatically.
Fig. 21: Maintain values for the new custom fields in the ‘Manage Context‘-app.
Fig. 22: Maintain values for the new custom fields in the ‘Request Legal Contract‘-app.
Central Invoice Management*
Now it’s time to talk a bit about SAP Central Invoice Management (CIM), therefore I would like to use this blog and introduce the concept and what we are heading to (subject-to-change). Typically, customers have multiple ERP system landscape to run their company. But multiple systems come with a variety of different inbound channels, when receiving invoices (e.g. local scanning, Excel upload, ERS etc.), which makes centralized access to invoice data difficult. This is where we position SAP Central Invoice Management on top of the customer landscape with the goal to centralize the display and processing of invoices in an efficient and automated way. As a first step we will provide accountants a central document list that gives an overview of all the available documents in the different connected backend systems, which in turn simplifies the search for a specific invoice. This central access point provides a complete and comprehensive overview of all invoice data in one screen (i.e. header, line information, attachments, process status etc.). Of course, there will be the possibility to directly navigate from the central document list into the backend to view and work with the documents there. In the first phase, of course, we will provide the best possible experience when using SAP backend systems, but we plan to have open interfaces which allows to connect non-SAP backends as well. So stay tuned for more updates.
Important to mention here is that SAP Central Invoice Management will not only provide benefits for multi backend customers but also for single backend customers. How? We plan to provide multiple features like new workflows or escalation and rejection processes which are relevant for all customers especially when it comes to end-to-end processes. For example, customers can then choose to continue using their existing workflows or use the new ones that we provide. For now SAP Central Invoice Management will complement existing inbound processes, later in time it will support the full end-to-end process.
Fig. 23: The ‘Manage Supplier Invoices Centrally’-app displays the list of all invoices from the connected backend systems.
Fig. 24: An example invoice opened from the list view providing different details and attachments.
Furthermore, in the future we plan to have a centralized document entry point which allows to connect for example Ariba Network not to all backend systems separately but directly to SAP Central Invoice Management. SAP Central Invoice Management will then take care of the document distribution in a central way. That will result in new options to standardize processes independent from the backend systems and offer new possibilities to support the full end-to-end process from invoice receival to posting and releasing. Of course, we also plan to include optical character recognition (OCR) in SAP Central Invoice Management and will provide capabilities to match the invoice against Purchase Orders and to enhance invoices without Purchase Orders as well, for example by automatically providing G/L account suggestions via Machine Learning. There is enough food for thought, let’s get our hands dirty.
I hope you like what we do ? For more information on SAP S/4HANA Cloud, check out the following links:
- SAP S/4HANA Cloud release info: http://www.sap.com/s4-cloudrelease
- Sven Denecken’s SAP S/4HANA Cloud 2102 Release Blog
- The Link Collection for Sourcing & Procurement here
- Latest SAP S/4HANA Cloud Release Blogs here
- Product videos on our SAP S/4HANA Cloud and SAP S/4HANA YouTube playlist
- Inside SAP S/4HANA Podcast here
- Best practices for SAP S/4HANA Cloud here
- SAP S/4HANA Cloud Community: here
- What’s New here
- Implementation Portal here
Follow us via @SAP and #S4HANA, or myself via LinkedIn / Twitter
* Not part of SAP S/4HANA shipment; requires additional products.
Thanks for sharing the update for new release!
Great blog! If you are more interested what else is coming the next release related to the Source to Pay Intelligent Enterprise processes (SAP S/4HANA Cloud - SAP Ariba integrations) - check out the SAP Road Map Explorer
Thank you for sharing this comprehensive blog post!
Thank for sharing, Great blog post.
I did not get require rework while approving the Purchase request in Inbox.
Inquiry in the approval process of Purchase Requisition documents through workflows
APPROVE REJECT REQUIRE REWORK
but i am in SAP 2020 FS00 onpremise
any task to add?