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Product and Topic Expert
Product and Topic Expert


Service Procurement is the process of buying services from other Companies / Suppliers. These services can be specialized skills missing with your organization or to supplement your own staff for additional demand. In today’s globalized world and emerging skills, the percentage of service procurement has been rising consistently.

SAP supports the process in its different solutions like ERP (S/4HANA or S/4HANA Cloud), SAP Fieldglass & SAP Ariba. Fieldglass offers extensive details and can be considered by companies having significant proportion of services procurement or ones who offer Services to others.

SAP Ariba also supports service procurement extensively and there are various ways to manage the process depending on the use case at hand. Ariba’s collaboration with SAP Business Network (earlier Ariba Network) helps managing the overall process for both Buyer & Supplier efficiently. It can also be integrated with ERP or Fieldglass to supplement the specific cases.

While supporting the SAP Ariba solutions, it was realized that a short comprehensive document providing overview of different Service Procurement options & related resources could be very helpful. It would assist in the selection of appropriate option while designing the overall procurement process or extending existing one as per current need. This blogpost is an attempt to cater to this need.

Service Procurement in SAP Ariba

SAP Ariba supports the complete service procurement cycle with Ariba Buying & Business Network. For integrated systems, process can run in ERP (Service PO, SES Approval, etc) & Business Network (Suppliers creating SES, Invoice, etc). We can manage the Service Procurement process in SAP Ariba with any of these ways or combination of the ways.

  1. Standard Purchase Order

  2. Purchase Order with Service Entry Sheets

  3. Release Contracts / BPOs

  4. No-Release Contracts / BPOs

  5. Non-PO Invoices

You can refer to article Services Spend Capabilities for more details on this.

Standard Purchase Order

In case of Standard POs, the process followed is more like material procurement. For complex services, you can choose PO with Service Entry Sheet (SES).

Purchase Order with Service Entry Sheets

SES are used for procurement of complex services. Here, you can manage Services in Parent-Child hierarchy (planned services) and Suppliers can create SES against the Child lines. You can also allow Supplier to enter Child lines (Service or Material) on his own during SES creation (unplanned services). You need to enable Supplier punch-in for this.

To enable Service Procurement in Ariba, we need these 2 Parameters enabled:

  • Application.Procure.EnableServiceItemFieldInRequisition

  • Application.Procure.EnableItemCategoryOnRequisitionLine (for SAP-variant realms)

Additionally, for SES to work, we need to ensure that the parameter Application.Procure.EnableSimpleServices is set to No, as simple services procurement does not permit creating SES. You can refer this article for more details on this.

How do I enable service entry sheets?

SES can be created by Supplier by default. For Buyer to be able to create SES on behalf of Supplier, we need to enable Feature 'CreateServiceSheet'. Also, the User must belong to the groups, Service Sheet Entry User & Service Sheet Editor.

By default, Ariba does not add child lines cost to Parent line. We can enable Parameter  Application.Procure.AddChildItemAmountToParentServiceItem if we need the amount value for child items to add to the amount value for the parent service item.

SES Approval can be configured in P2P (Ariba Buying) or can be sent to ERP for approval.

You can manage the Service Procurement in a different way by enabling Feature ‘Item Category Mapping ServiceLine’. This feature helps to enable Item Category on non-catalog Requisition line Item. This feature is optional, and you can still run the process in standard Ariba way without enabling this feature.

Release Contracts / Release BPOs & No-Release Contracts / No-Release BPOs

Ariba Contracts can also be used for Service procurement. Both Release-based & No-release Contracts can be used for their own advantages. The quantities and amounts for the parent and the child items are accumulated against their respective contracts.

You can make use of Release Contracts in case of planned services typically needed over a year with fixed pricing.

Blanket Purchase Order (BPO) can be used for ad-hoc service requests where overall cost is negotiated upfront and flexibility over the Price & Quantity of each request is needed. In Ariba, you create a BPO as an attribute of a Contract. BPOs can be release order or no-release order type contracts. Defining a contract as a BPO contract provides additional benefits compared to a non-BPO contract.

A No-release order Contract provides additional pricing terms for fixed and recurring fee items and for costs and expenses. Contract terms are applied during invoicing when users create an invoice against the contract and, depending on your enabled features, during receiving. Evaluated Receipt Settlement (ERS) is supported in this case.

You can refer section 'Managing Contract Compliance' in SAP Help for more details. For difference between a BPO Contract & a non-BPO Contract, refer this link.

Non-PO Invoices

Non-PO Invoices can be posted for miscellaneous services performed and there is no need to follow the complete procurement process for them. Paper Invoices from Supplier can be reference against which Buyer or Supplier (if allowed by business rules) can enter it in P2P or Network respectively. Please refer below links for more details on this.

Other Service Procurement related Topics

SAP Ariba offers extensive Features & Parameters to further supplement the service procurement process. Kindly note that some of them may have interdependency and limitations. It would be a better practice to review the overall services procurement needs in totality and test these thoroughly for process consistency.

1. Simplified Procurement of Services (Simple Services)

For industries, where service sheets are not mandatory for invoicing of service POs, Ariba supports simplified procurement of services. If a buyer enables this capability, suppliers can directly create invoices for the service purchase orders of that buyer, without adding child items and without service sheets. This capability simplifies and expedites the ordering and invoicing process for the procurement of services.

We need to note here that Simple Services flow is enabled via a realm level parameter. This means that ALL service requisitions / purchase orders will follow this flow and its characteristics if the parameter is enabled. This means that you can either have Simplified procurement of services OR Complex Services (Parent-Child) working at a time in a particular realm, not both.

Standing orders or Limit Orders can be used with either of the above. With Limit Orders functionality, ERP POs are created with Item Category B.

There are few restrictions with Simple Services which needs to be considered before deciding for this. Details in links below.

2. Lean Services Procurement

It is like Simple Services feature of Ariba but meant for Ariba Guided Buying - S/4HANA Cloud Integration scenario. It is suited for procurement of simple services that do not require detailed requirement specifications using parent-child item hierarchies. They can be either Lean Service items (for planned lean services) or Limit Service items (for unplanned lean services).

You can refer this link for details.

3. Automatic Service Entry Sheet

In general, Supplier would create Service Sheet and then Invoice it. Auto receiving settings in P2P does not help in case of services. We can enable Invoice creation of Service items without SES for Buyer with Feature SINV-5052. Also, we can enable auto creation of SES for such Invoices in P2P. For Suppliers, above feature does not make any change. Supplier still needs to create SES before Invoice.

If you need the Suppliers to be able to post Invoices against Service POs without SES, it can be done with separate Ariba Network entitlement (KBA 163542) by SAP Team. Then the Transaction Rule needs to be set.

To generate SES automatically on the Ariba Network (AN), enable the transaction rule 'Auto-generate service sheets from service invoices'. We can also restrict Suppliers from creating SES (Rule - Do not allow suppliers to manually create service entry sheets for service orders).

4. Service Entry Sheet Import / Export

Buyers have an option to upload SES in Ariba Network on behalf of their supplier. Refer below KBA for details.

Buyers can also import service sheets from SAP ERP systems into the Ariba buying and invoicing solutions using web services. The import is also supported through SAP Ariba Cloud Integration Gateway, add-on for SAP ERP. Two web services enable this capability - Import Service Sheets from External Application Asynchronously and Export Service Sheet Response to External System Asynchronously. Refer below KBA for details.

For details on exporting SES to ERP, refer below KBA.

5. Further Process Control with Parameters / Default Configuration Rules / Features

Service procurement process in Ariba can be further controlled using Parameters, Default Transaction Rules on Buyer Network and service-related Features. SAP Help Portal (few links below) is recommended for more details on it.

Additional Features for consideration