Application Choices and Decisions for Procure to R...

Bahitra · ‎2025 Apr 21

Summary

This article seeks to provide guidance on deciding the most suitable target application architecture to support Procure to Receipt needs of an organization, in the context of Source to Pay end to end cycle.

With SAP Ariba, SAP Fieldglass and S/4HANA, all delivering solution capabilities around Procure to Receipt, enterprises now have multiple options to choose from and need to make their selection by comparing their organization’s business capability requirements to the solution capabilities the different applications offer.

The licensing aspects of the components discussed should be considered during target architecture design and is beyond the scope of this evaluation.

Business Requirements

Purpose

Procure to Receipt is the cycle of requesting, ordering and receiving physical items or services from suppliers. The Deliver to Fulfill cycle, dealing with transportation and warehousing and the Invoice to Pay cycle, dealing with supplier payment are tightly interwoven with the execution of the Procure to Pay process.

Basic Process

Purchase requisitions can be generated automatically based on firm and forecasted demand, reorder point and existing stocks or manually based on demand perception
Source assignment and pricing can then happen based on suppliers and rates identified during the Source to Contract cycle, i.e. either through contracts or purchase inforecords
Purchase requisitions can thereafter be converted to purchase orders and communicated to the supplier after suitable approvals
Goods are then delivered by the supplier in line with the purchase order, goods receipt is carried out and the items are taken into stock
In case of services, service confirmation is done instead of goods receipt to confirm service delivery

Applicable SAP Best Practices

Business Capabilities

Solution Options

SAP S/4HANA (private and public cloud)
SAP Ariba Procurement, Cloud Edition
SAP Ariba Sourcing, Cloud Edition
SAP Business Network for Procurement and Supply Chain
SAP Integration Suite Managed Gateway for Spend Management
SAP Business Network for SAP S/4HANA

Characterization of the Solution Options

Determining solution options depends on the solution capabilities available
Available solution capabilities help with delivering the required business capabilities
Required business capabilities can be identified from applicable critical process variants
For Procure to Receipt, the following process variants are deemed critical
1. Direct Physical Products
2. Direct Physical Products with Scheduling Agreement
3. Indirect Products and Services
4. Subcontracting
5. Service Self Billing
6. Indirect Products and Services Tactical Sourcing
7. Direct Physical Products Scheduling Agreement Subcontracting
8. Direct Physical Products Consignment

Critical Process Variant 1 - Direct Physical Products : Capability Distribution

Critical Process Variant 2 - Direct Physical Products Scheduling Agreements : Capability Distribution

Critical Process Variant 3 – Indirect Products and Services : Capability Distribution

Critical Process Variant 4 – Subcontracting : Capability Distribution

Critical Process Variant 5 – Services Self-Billing : Capability Distribution

Critical Process Variant 6 – Indirect Products and Services Tactical Sourcing : Capability Distribution

Critical Process Variant 7 – Direct Physical Products Scheduling Agreement Subcontracting : Capability Distribution

Critical Process Variant 8 – Direct Physical Products Consignment : Capability Distribution

Criteria to determine the most suitable target solution

Required business capabilities have already been identified from critical variants
Solution capabilities linked to applications may deliver required business capabilities
Business Capability : Solution Capability = 1:n
Solution Capability : Application = 1:1

Critical Process Variant 1 – Direct Physical Products : Application Map

Critical Process Variant 2 – Direct Physical Products Scheduling Agreement : Differential Applications Only

Critical Process Variant 3 – Indirect Products and Services : Differential Applications Only

Critical Process Variant 4 – Subcontracting : Differential Applications Only

Critical Process Variant 5 – Services Self-Billing : Differential Applications Only

Critical Process Variant 6 – Indirect Products and Services Tactical Sourcing : Differential Applications Only

Critical Process Variant 7 – Direct Physical Products Scheduling Agreement Subcontracting : Differential Applications Only

Critical Process Variant 8 – Direct Physical Products Consignment : Differential Applications Only

Evaluation Table

As one can observe from the previous section, the same set of business capabilities are often enabled by multiple solution capabilities, and thus the choice of application would require more than just an identification of differential business capabilities across the critical process variants.

The following additional business and IT considerations should therefore be applied in order to determine the most appropriate application architecture for Procure to Receipt :

Conclusion

The basic Procure to Receipt process, sans any collaboration with business partners, can run entirely on SAP S/4HANA
For collaborative procurement and inventory management, Business Network for Procurement and Supply Chain will be required additionally.
For self-service requisition and procurement with guided buying, the following applications are required
- SAP Ariba Procurement, Cloud Edition
- SAP Integration Suite Managed Gateway for Spend Management and
- SAP Business Network for SAP S/4HANA
For collaborative sourcing with suppliers, the following applications will be necessary
- Ariba Sourcing, Cloud Edition and
- Business Network for Procurement and Supply Chain
For extensive external workforce driven service execution, monitoring, confirmation and payment, SAP Fieldglass Vendor Management System is the designated solution.

SamiNas · ‎2025 Apr 22

How can we easily and pragmatically compare/test the process variants and pick the best fit option?

Bahitra · ‎2025 Apr 22

Picking the best fit variants for an organisation depends on its business practices, e.g. a company heavily engaged in contract manufacturing needs to consider the subcontracting variant.

Testing the variants can be done by following the test scripts of the appropriate best practices, e.g. BMY for subcontracting.

Application Choices and Decisions for Procure to Receipt Process