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This blog provides you an overview of key highlights in the area of Sourcing & Procurement of our SAP S/4HANA Cloud 1708 release. As part of our 1708 release, we again ship various innovations to help customers transform their procurement processes to achieve ultimate value.

SAP S/4HANA for legal content

One of the main highlights of 1708 is legal content management. Using SAP S/4HANA for legal content, customers can create and manage all legal documents they require for their business operations, such as contracts with customers and suppliers, non-disclosure agreements, policy statements, etc. With this solution, you have a central repository for all legal transactions including their proper documentation. Currently we have integrated SAP S/4HANA for legal content into purchasing contracts and RFQs.

Especially for procurement organizations it is mandatory to ensure legal compliance to both company policy and state legislation. Even though this is very true for all companies in all industries, there are some industries where this is even more important, such as high tech or manufacturing. All companies that rely on intellectual property as their main assets and unique competitive advantage, will need to protect this intellectual property thoroughly. In case they are cooperating with other companies, subcontract parts of their production or source products with unique specifications, they require legally sound and well documented non-disclosure agreements. With SAP S/4HANA for legal content, those companies can now ensure the protection of sensitive data when sending out RFQs to eligible suppliers.

Manufacturing companies rely on a consistent stream of material for their production. For manufacturing companies using just-in-time production receiving ordered parts in due time is particularly pressing. If production has to stop, costs can easily explode within a short period. Such companies usually rely on cut throat purchasing contracts with huge penalty payments in case of orders being delivered late.

Integration with OpenText

Another highlight is the integration with OpenText for simplified supplier invoice processing. Based on this integration, customers can automate the processing of supplier invoices they receive either on paper or electronically via email. To get those invoices into the SAP S/4HANA Cloud system, customers can use the SAP Fiori Upload Supplier Invoices app. Subsequently, those uploaded files will be send to OpenText for optical character recognition. The supported formats of the digital files are PDF, JPEG and TIFF. After the data in the electronical supplier invoices has been read out by OpenText, it will be send back to the SAP S/4HANA Cloud System. There, a supplier invoice will be posted automatically. In case there is some mandatory information missing, an invoice draft will be created. A purchaser can then enter the missing information manually. As many companies still receive their invoices on paper, this integration is an immense efficiency boost. You can access a demo of the integration here.

Centralized Requisitioning

The next innovation I would like to point out, has been highly anticipated by a lot of customers. Nowadays, the majority of large and midsize companies have centralized buying departments or shared service centers. Those companies need a central hub deployment for their procurement operations. With 1708, we deliver the Central SAP S/4HANA Procurement Hub enabled for purchase requisitions. Even though customers might have a cluttered system landscape with different SAP ERPs (also not SAP S/4HANA) they can connect all of those SAP ERPs to their SAP S/4HANA Cloud system, which will serve as the hub system for centralized purchase requisitioning. As a consequence, all connected systems will share all the data that is needed to have a central purchasing hub. In that manner, the SAP S/4HANA Cloud system acting as the central procurement hub will push down all transactional data into the other SAP ERPs which are connected. On the other hand, the SAP ERPs will share the required master data, to perform the transactions.

This bears a lot of benefits for procurement organizations. In large multinational corporations, all employees scattered across the globe can be connected to a Central Requisition application. Therefore, employees benefit from a unified user experience across the entire organization. More importantly though, all employees, even those in subsidiaries running any SAP ERP, have access to one shared global catalog for purchasing. This way, employees gain access to an even bigger variety of goods and suppliers than they might have with localized buying departments. Correspondingly, the approval of purchase requisition can be handled centrally as well.

As you can see the Central SAP S/4HANA Procurement Hub brings many advantages for large enterprises. For organizations, this translates not only into more satisfied workers, but also into quite substantial cost savings. But this is only the first step. With upcoming releases, we enable the central procurement hub also for purchasing contracts, current planning is 1802.

Flexible workflow for purchase orders and supplier invoices

If you have followed our past releases closely, you know that we have shipped flexible workflow capabilities for purchase requisitions. Now with 1708, we extend the flexible workflow capabilities to other purchasing documents as well, namely purchase orders and supplier invoices.

To define the workflow for purchase orders and supplier invoices we have two new SAP Fiori apps: “Manage Workflows for Purchase Orders” and “Manage Workflows for Supplier Invoices”. Both of them are very much in line with the older “Manage Workflows for Purchase Requisitions” app.

Using the two apps, you can easily and intuitively setup all desired workflows for your purchasing documents, while it is not required to have any programming skills or deeper IT knowledge. In the apps, you can choose dynamic start conditions, such as total net amount higher than x, certain material groups, document types, purchasing groups and others. Subsequently, you can define the steps you want the workflow to follow. Generally, you can define n-steps and you are also flexible with the number of approvers. There, you can also state whether all approvers are required to give their approval or whether one of them is sufficient. For each workflow that you have defined, you can also declare a validity period. As a small side note, it is not possible to mix release strategy and flexible workflow for the same document type. In a nutshell, you can now easily set up a dynamic n-step approval workflow with dynamic approver determination as well for purchase requisitions, purchase orders and supplier invoices.

Purchasing analytics

Last but not least, we provide several new enhancements for purchasing analytics. In this blog, I would like to highlight two of them.The first one offers embedded analytics in the source of supply determination. Following older releases, you already know that when you are creating a purchase requisition, SAP S/4HANA Cloud will automatically propose the appropriate suppliers to source the items listed in the purchase requisition. This functionality is now extended by embedded analytics. When you click on the analytics button, an embedded analytics chart will pop up.

This screen visualizes how the suppliers are rated in terms of price, evaluation score and spend. With this graphical representation, it is then very easy for the purchaser to select the best supplier for the products he wants to source.

The second enhancement in purchasing analytics is in the area of purchasing contracts. In the “Monitor purchase contract items” app, you get an overview of all your existing contracts

including the most important information, such as the released value of the respective contract. Now with 1708, when you click on this released value you will see an embedded analytics screen which shows you how much value you released over time.

This way you can quickly investigate any volatilities and whether one needs to take actions to mitigate any risks arising from extreme volatile spending behavior. With this information on hand, you can then make a better decision  on how to deal with the underlying purchase contract. In case you decide it is necessary to renew the contract, you can do this directly in the app as well and do not need to launch the Manage purchase contract app. As you can see, both enhancements take our instant insight to action paradigm to heart and make procurement in SAP S/4HANA Cloud even more effective.

To familiarize yourself with the new innovations, watch this video:

For more information on SAP S/4HANA Cloud, check out the following links:

Follow us via @SAP and #S4HANA, or myself via LinkedIn