Hi folks,
we are proud to announce the first release of SAP S/4HANA Cloud in 2020. With release 2002, Sourcing and Procurement comes with a bunch of new and enhanced features and functions in different areas. Please check out the following video to get an overview on our highlights in only 3 minutes:
This blog covers the following topics:
Intelligent Enterprise
Operational Procurement
Procurement Analytics
Contract Management Integration with SAP Ariba Contracts (4AZ)
Integration is important to us, this is why we continuously ship piece by piece. This time, one of the main highlights in Sourcing & Procurement is the integration of SAP S/4HANA Cloud with SAP Ariba Contracts, which is part of the end-to-end process Source-to-Pay (S2P).
In general, SAP S/4HANA Cloud includes all operational procurement processes that you need for your operations. In addition, SAP Ariba extends the SAP S/4HANA Cloud portfolio, as it covers network communication and strategic sourcing.
With the two solutions combined, users will have their suppliers in close proximity and can tackle all operational and strategic procurement tasks. Therefore, we offer pre-built integration between the two cloud solutions on basis of the native Cloud Integration Gateway (CIG). For more information use our Transformation Whitepaper for business process recommendations.
What does that mean for the 2002 release: Business users can use SAP Ariba Contracts to negotiate and determine prices with the goal of signing a legally binding contract with a supplier. A contract can be value- (WK) or quantity-based (MK). These are purchasing agreements for a company to order either material/lean services for a fixed amount of money or for certain quantities during a specified period. Once the contract is set up, reviewed and approved in SAP Ariba Contracts, the contract can be sent to SAP S/4HANA Cloud. Pricing details are passed on from SAP Ariba Contracts to the operational system, such that operational purchasers can use these prices to buy goods or services as required. An operational purchase contract is automatically created and approved. Therefore, customers currently need to configure automatic approval for this scenario. Manual approval support is planned for the next releases. In source determination in SAP S/4HANA Cloud, contracts can then be assigned in the source list as fixed sources of supply.
Fig. 1: Standard process flow for the SAP Ariba Contracts integration with SAP S/4HANA Cloud.
The integration of the two platforms helps, not only, to perform strategic sourcing activities, but users will benefit from reduced transaction costs as less manual steps are needed and contracts can be exchanged in an automated way.
We also plan to support automatic updates of the contracts on SAP Ariba side in future releases, e.g. providing information on the belonging purchase order. Moreover, the integration with Central Procurement is on our plate. We hope you are hungry!
For more information, please visit the documentation or the SAP Best Practice Explorer.
Check out the following demo to get a better understanding of the process:
Third-party Service Procurement starting with a Service Order
Until now, users were able to trigger a purchase requisition automatically out of a service order only for materials, like spare parts or free issue material. This process is now improved to support also lean services. Purchasers can create a purchase requisition for planned lean services directly out of a service order. In addition, it is possible to create a service entry sheet where the service order item can be used as an accounting object. This streamlined procurement process reduces manual effort to be efficient and cost effective. With this enhancement we enable a seamless process integration between service management and procurement. Check out the video below to get an impression on the process flow:
Procurement of Pipeline Material (41F)
A new process for the Procurement of Pipeline Material is being introduced. A pipeline material is a material that flows directly into the production process from a pipeline, e.g. oil, electricity.
With the 2002 release, a purchaser can create a purchasing info record for pipeline materials by providing information on the material, purchasing organization, plant etc. After the purchasing info record is created successfully, a warehouse clerk can record the consumption quantity of material withdrawn from the pipeline in a regular interval, e.g. on a daily or weekly basis. Now, the accounts payable accountant is able to trigger the settlement of the pipeline material liabilities. It is also possible to schedule a supplier invoice job. There is no need for creating a requisition, purchase order or anything else – lean and easy to use. Users benefit from a highly automated process for pipeline materials. If you want to know more on this topic, check out the SAP Best Practice Explorer.
Fig. 2: Process of the Procurement of Pipeline Materials and the respective roles.
Fig. 3: Pipeline settlement job scheduling.
Enhancements of the Purchase Requisition approval completion workflow
Last year, SAP S/4HANA Cloud introduced an option in the 'My Inbox'-app, which enables approvers to complete missing or wrong purchase requisition information before approving it. This reduces the inconvenience for approvers to reject the purchase requisition and send it back to the requestor in case corrections are needed.
With 2002 we introduce two more fields to be editable in the app 'Edit and Approve Purchase Requisition'. An approver can now edit the contact information such as Purchasing Group and Requisitioner of the purchase requisition. This is applicable for both header and item level approval. Approvers should be assigned to the role manager_procurement to make use of the improvement. Please keep in mind, there are certain types of purchase requisitions that do not support changes via this app. We continuously keep enhancing our product - because we care - this improvement increases customer's process efficiency through enablement of direct editing. For further information on this topic check out the community blog and watch the demo below:
Enhancements to the 'My Inbox'-app - Total valuation price at the item level
An additional field has been added to the 'My Inbox'-app. An approver of a purchase requisition can now view the total valuation price of a line item to be approved directly in the app. By that, users get the information directly where they need it. Seems minor but is impactful for user's experience.
Fig. 4: Additional field showing the total valuation price of a line item in the 'My Inbox'-app.
Embedded SAP Analytics Cloud Dashboard for Purchasing Spend
Analytics is key to steer processes. With release SAP S/4HANA Cloud 1911, we delivered a first part of pre-built SAP Analytics Cloud dashboards embedded into SAP S/4HANA Cloud to all our customers. One or the other might have followed this integration and is keen on seeing further dashboards being delivered.
For all of those: With 2002 we deliver the first dashboard in the area of Sourcing & Procurement. The 'Purchasing Spend Dashboard'-app gives buyers an overview on purchase spends in their organization to support them in real-time decision-making within the business process. The app comes per default with three different pages that provide tools to analyze the purchase order net amount by different dimensions like supplier, company code, material group and so on. Business users can adjust the view by applying filters according to their need and save their settings in a screen-variant or own tile.
By the way, key users with the role of an analytics specialists can access the pre-built dashboard using the 'Manage KPI and Reports'-app, copy the dashboard and customize it to increase efficiency and effectiveness of management decisions. This could be, for instance, switching a chart into a table, adding or removing dimensions & measures, adjusting colors or even adding additional data sources (CDS-Views) to the dashboard.
Check out the following video to see how a business user can work with it:
Providing real-time insights into Invoice Automation
Monitoring process automation is a key value driver in procurement. That's why we started shipping with SAP S/4HANA Cloud 1911 the 'PO Output Automation Rate'-app, which gives an overview of the number of purchase order outputs by output channel. Now, with 2002, we continue and introduce the 'Supplier Invoice Inbound Automation Rate'-app, which provides real-time insights into invoice automation to monitor the automation rate for incoming supplier invoices.
With this app, you can view the percentage of invoices that are generated automatically and get more insights on the degree of automation of sending and receiving documents. Furthermore, we provide information on the number of invoices that are generated manually or are self-billed. The degree of manual processing within your supplier invoicing processes can be derived and questions like - how did we receive invoices in our system? Have they been created manually, automatically through XML or network or are they self-billed? - answered. To support a smooth user experience, buyers can analyze the data in chart or tabular format, export the data to a spreadsheet or save their personalized settings as a tile. With that, we offer increased transparency and insight, which leads to more-efficient invoice processes.
For more information on SAP S/4HANA Cloud, check out the following links:
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