Along the entire source-to-contract process, S/4HANA offers new functionalities and simplifications. We give you an overview of the most important of them.
Needs analysis
Precise knowledge of requirements is essential for deriving commodity group strategies in purchasing. Various Fiori apps can be used for requirements analysis under S/4HANA, with which, for example, requisition items can be mapped in diagrams and displayed at any depth thanks to the drill-down function.
Those who wish can also put artificial intelligence to work for demand analysis. With machine learning-based contract mapping, users can analyze spend to reduce "non-managed spend." Further, machine learning can be used to determine the master contract rate and suggest the values for sourcing. This involves analyzing the data available in the system and displaying suggestions on where an RFP could be placed to negotiate contracts.
Supplier Management
Supplier management consists of a continuous cycle of supplier onboarding, evaluation, classification, development, and phase-out. The supplier classification is integrated into the material group management or into the purchasing categories newly introduced with S/4HANA.
Various Fiori apps are available in S/4HANA for supplier rating, which are grouped into the tile group "Supplier information and master data" and "Supplier rating". For example, classification and segmentation take place in the "Display scorecards" app. Here, processes and functions were taken over from the former SAP module Supplier Lifecycle Management (SLC) and transferred with the classic supplier assessment of the so-called "hard facts" (quality, time, quantity, price). In S/4HANA, an extended assessment can now be created via questionnaires ("Soft Facts") and distributed internally for the annual assessment.
With the use of supplier management in S/4HANA, various integrated additional functionalities are available that simplify the management of expenses, responsibilities and organizations. For example, similar spend items can be grouped into purchasing categories and suppliers can be classified according to various dimensions such as strategic importance, supply risk or compliance. Data such as questionnaires as a basis for supplier evaluation and purchasing analyses are available in real time. To enrich the data, integration with external providers such as Dun & Bradstreet is also possible.
For a portal-based supplier onboarding process, Ariba Supplier Lifecycle & Performance (SLP) can be connected (optional). A major advantage here is that master data, questionnaires and certificates are uploaded by the suppliers themselves and are therefore always up-to-date. A connection to SAP ERP is made via the Ariba middleware Cloud Integration Gateway (CIG) and the Data Replication Framework (DRF) or via alternative architectures.
Manage tenders
The previous request process in ERP with a 1:1 relationship between request and offer is to be replaced in the medium term by the Fiori-based tender process with bidder lists. The tender process is started via the Fiori app "Manage tender"; the supplier offers can be managed internally or sent to external tender platforms such as Ariba via an interface.
In addition to a direct connection to suppliers via the Ariba Supplier Network (ASN), Ariba Sourcing also offers functionalities such as tender templates and procurement projects for professional tender management.
It should also be mentioned at this point that Fiori offers extended functionalities with the best practices "Direct Material Sourcing" and "Legal Content Management". A comparison of the different scenarios is definitely worthwhile before implementation.
Manage purchase contracts
Purchasing provides the users with pre-negotiated sources of supply via quantity or value contracts. Accordingly, the so-called "master contract ratio" is an important indicator for evaluating purchasing performance.
S/4HANA provides a "Manage purchasing contracts" app via Fiori. It provides an overview of all currently running contracts along with consumption in % as a bar chart, the target value, the validity period, and other data that can be shown or hidden as required. In S/4HANA, contracts can be conveniently monitored via worklists; the user has immediate access to additional information without having to leave the worklists. In addition, notifications for expiring contracts can be triggered via Situation Management, for example.
As with other processes, analytical apps with "out-of-the-box evaluations" support strategic purchasing in contract management. For example, one app graphically displays the degree of utilization for contracts.
Purchasing analyses
A practical "cockpit" for purchasing is the so-called procurement overview. Here, the most important information and tasks for purchasing are summarized on individual cards.
The apps can be arranged as desired via drag & drop, but can also be shown and hidden. With the standard filter functions, the user can explicitly display the figures for required values, for example, for a specific material group or a supplier.
There is also the "Purchasing Analyses" group with Fiori apps that provide the most important data for strategic decisions. These apps are displayed in groups in the overview. The apps offer the most important key figures right from the start - usually already supported by diagrams - without the user having to jump to the respective application.
Strategic purchasing benefits from the numerous innovations in S/4HANA. Real-time analyses and ready-made evaluations facilitate strategic decisions and can be automated even further through the use of machine learning.
Summary
S/4HANA has a lot to offer strategic purchasing: Real-time analyses and various out-of-the-box evaluations support strategic decisions. These can be automated even further through machine learning. Supplier evaluation is supported by integrated functions from the former SLC module. Tender and contract management can be made more professional. A direct connection to suppliers is possible via Ariba.
Processes that were perhaps still in the drawer of many a strategic buyer can now be professionally designed.
