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For SAP S/4HANA Cloud, 2018 will be the year of the intelligent ERP. To enable you to run your business more intelligently, we will ship plenty of great new innovations. With 1802, we are already taking the first step on this intelligent ERP journey for 2018. While we of course ship many innovations across all LoBs, Procurement is again in the driver seat to deliver on the intelligent ERP promise. Therefore, in this blog I would like to showcase what procurement highlights we have in store for you in our new 1802 release.

Situation Handling for PO Confirmation and Professional Purchase Requisitions

First, I would like to start with an innovation that has our “intelligent ERP” paradigm at its core, the situation handling for purchase order confirmation and professional purchase requisitions. Accordingly, the new situation handling functionality proactively alerts purchasers of any business risk, as well as proposes actions to improve business transactions.

Since the new situation handling capability is actually applicable for two scenarios, let me start off with the first one for purchase order confirmations. In this case, whenever a purchaser creates a purchase order and sends it to a supplier, but the supplier misses to send a confirmation for the PO within due time, the purchaser will get an alert. The alert will pop up in the notifications area of the SAP Fiori Launchpad and inform the user of any POs with a close delivery date that are still outstanding supplier confirmation.

Clicking on the respective notification, the “Monitor Supplier Confirmation App” will launch and the purchaser can then accumulate more details. The purchaser can then take actions to safeguard the delivery date of the required goods, like reaching out to the supplier to get a confirmation.

As you can imagine that bears huge benefits for procurement organizations. Especially companies utilizing JIT production which heavily rely on a continuous supply of material for production. Whenever, there is a shortage of production material this will have severe implications for such companies and result in huge costs. With this new situation handling functionality, purchaser can drastically reduce the risk of delayed deliveries and ensure a constant supply for their production.

Let`s now turn to the second scenario, situation handling for Professional Purchase Requisitions.In this scenario, purchasers will be automatically informed whenever a new purchasing contract has been created that can serve as a source of supply for existing open purchase requisitions. Here again, with only one click purchasers can get more situation-specific information and can then directly assign the new available contract to the purchase requisitions that are relevant and can benefit from the new contract. In that manner, it is ensured that you don`t miss any opportunities to use your purchasing contracts and can keep off-contract spend minimal. As you know off-contract spend is the most important KPI for purchasers and should be kept as low as possible to ensure that you always source products for the best price possible leveraging volume discounts.

As you can see this innovation truly can be a game changer and delivers a lot of value to purchasing organizations.

SAP S/4HANA Cloud for Extended Procurement - Central Purchase Contracts

Another key highlight of the 1802 release, is central purchasing contracts. In case you are one of our devoted SAP S/4HANA Cloud followers, you already know that back in 1708 we launched SAP S/4HANA Cloud as a central system to centralize procurement processes with deep integration into the customer's landscape to enable central requisitioning. With SAP S/4HANA Cloud for Extended Procurement you can integrate SAP S/4HANA Cloud as a hub system with SAP ERP and/or SAP S/4HANA. If you are not familiar with this yet, you can follow up on my past blog here.

Now with 1802, we build on the already released functionality and enable global purchasing contracts. Leveraging global purchasing contracts, headquarters can create contracts that can then be distributed to subsidiaries to generate local contracts. In that manner, a purchaser in the headquarters can launch the SAP Fiori app “ Central Purchase Contracts” and create a new central purchase contract, then within the usual contract setup he can specify which subsidiaries shall be able to use the contract and how much of a percentage they are allowed to consume. Along those lines, purchasers can allocate 30% of the contract volume to a subsidiary in China and the remaining 70% to a subsidiary in Australia. Using the local purchasing contracts, subsidiaries can replenish their material by creating purchase requisitions and purchase orders on demand. The respective supplier will then deliver the ordered goods to the local subsidiary stock.

However, one limitation of the 1802 release is that central contracts only work for those connected backend systems that are any SAP ERP except for SAP S/4HANA. We will enable SAP S/4HANA as a backend system for central contracts with 1805.

Being able to centralize your procurement operations has the huge benefit that you can lower your operational costs based on scaled purchasing and central negotiation efforts. And as you have global contracts you also get much better prices due to purchasing higher volumes.

SAP S/4HANA Cloud for Legal Content– Enhanced authorization concept and approval workflow

In our 1708 release, we launched SAP S/4HANA for legal content, a solution that enables digitization of legal transactions within organization. It provides a central layer for legal content and an integrated platform for legal technology (catch up on past releases here and here).

As part of the current release, we enable an enhanced authorization concept, that customers can use to setup distinct profiles for legal transactions. To do so, SAP released a new SSCUI “Define Profiles” that customer can utilize to create profiles and assign them to different contexts and/ or legal transactions. With this SSCUI, customers can restrict the visibility of data sets, such as internal/external contact, entities, linked objects, etc. As you can imagine, from a legal perspective this is very critical to segregate responsibilities and authorizations.

In addition to the authorization concept, we released the functionality to set up an approval workflow for several tasks in legal contexts. As you know from past releases, you can set up your own legal contexts to describe a particular scenario or circumstance within which legal transactions are processed in a similar pattern. Within a context, you can predefine settings for transactions, which support a more standardized processing for them. While assigning a context to a transaction, these preconfigured settings get inherited to the item during creation. Let me give you some real-world examples, so you can understand the context functionality better. As a company, you might want to set up a legal context for specific countries. Legal requirements in countries vary and in order to stay compliant you need to cater to those differences and adhere to the legal regulations within the specific country. Also, you might want to set up a legal context for a specific material group, such as wheels for a car. There might be specific legal requirements for the car wheels that you need to adhere to so you can protect yourself from any litigations in case the car wheels did not conform to quality standards and caused an accident.

Now with 1802, you define a workflow for contexts. As you can see from the screenshot below, you can do that in the tasks section of the context. Clicking on the “Add” button you can set up a new workflow for the specific context on hand.

For the workflow, you can select different types, such as “Approval“, “Information“, “Processing“ or “Review“. Subsequently, you can define to whom the workflow should be routed to either by role or a specific user and whether all or simply one of the recipients need to provide their approval.

Leveraging the enhanced authorization concept and the new approval workflow for contexts, customer can achieve their compliance goals and adhere to company policy.

Down Payment Monitor

The last innovation, I would like to highlight today, is our new down payment monitor that integrates procurement and finance. With this new down payment monitor, users can gain a quick overview of all documented down payments in purchase orders. To get this overview, you can launch the SAP Fiori app called “Monitor down payments in purchase orders”.

As you can tell from the screenshot above, the app is actually an Analytical List Page, with all the usual capabilities that come with this format, such as filtering using the graphical display or the normal filtering fields. From the graphical display of committed down payments, users can directly go down to the respective purchase order and investigate more in detail. All down payment parameters can be maintained in the “Advanced Purchase Order” app.

In the next release, we will extend the down payment monitor by enabling the function to “Create Down Payment Request”, directly from the app without having to switch between different apps. Of course then after the down payment is settled, the supplier invoice is being reduced by the amount you already paid upfront.

As you can see, with this new functionality companies gain full transparency and visibility of all their committed liabilities for payment. Leveraging the insights provided by the down payment monitor, companies can plan and optimize their liabilities and cash flow more intelligently.


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