Your Digital Core —which could be S4, ECC or even an off-brand ERP— runs your enterprise. Finance, Sales, HR, Procurement and Supply Chain with tight integration between all the modules. Now that’s fine for a Journal Voucher or Stock Movement, but most business transactions touch an external trading partner: a customer, supplier, contractor or bank.
Here’s the shocker. Traditional ERP systems, do not have Native connectivity to the outside world.
That’s like the situation of having a brand new iPhone with no Sim card.
No-one is going to drop $1000 if you can’t access the outside world. Before we look at the solution, lest look at how companies are struggling to do this today.
The current state of the art
A large number of documents into and out of an Enterprise are on Paper. And even if not physical paper, then often a poor quality scan or hard to decipher PDF.
Much buying still happens by phone, but this is especially true for re-scheduling, confirming an order, query a shipment or checking the status of payment. And every phone call has to go through an expensive call centre.
EDI was a good step forward, but it is reliant on technologies that are decades old, and is slow to roll out. Most small suppliers, the ones you need to add innovations in your product line, they have never heard of EDI and have no capability to set it up.
Both scanning and re-keying are error prone. And most re-keying takes information that was already in another computer somewhere, often the supplier's. And paper gets lost, PDFs get sent to the wrong person. Data Entry gets backed up, so when a supplier indicates that a shipment will be late, this introduces latency into your planning, with knock-on effects such as stock-outs or hyper correction.
Data Entry clerks, scanners, off-site archiving, document management software are all expensive.
You can't run an Intelligent Enterprise on Analogue Data
But most importantly, we are trying to run an Intelligent Enterprise here. How intelligent can it be when most of the data never enters the enterprise at all; and if it does is late and often wrong. What kind of actionable intelligence can you derive from that?
What is we could change all of this? Sweep away these old techs, and get access to digital data without the complexity and poor adoption of EDI?
Introducing the Digital Supplier Network
The Digital Supplier Network from SAP gives your ERP system, be that ECC or S/4 immediate access to the Trading Partners in your supply chain. One digital connection powered by the Ariba Network, which is proven to be mature, scalable and secure.
And better, there’s already millions of suppliers enabled many of whom you’re already trading with, others who are waiting to share innovations with you.
The Network has business rules on it that you can set to filter out transactions which would cause exceptions. Meaning the supplier gets a chance to fix the transaction: saving time on both sides.
With machine-to-machine communication latency is eliminated. When a supplier sends an Order Confirmation from their dispatch system, it can be sitting in your S/4 system just a few minutes later.
Rapid Deployment by the SAP Partner Community keeps implementation times down, and because many suppliers are already transacting, integration and testing costs are cut as well. Native SAP Technologies, built on SCP and wired right into S4 or ECC, cuts the TCO cost compared to alternatives, such as developing and running your own portals.
Digital Data drives the Intelligent Enterprise
So much data can flow into the Business Technology Platform that you can start firing up intelligent technologies around machine learning. For example, there are fields in SAP Plant Maintenance, relating to vendor promised delivery dates which are never typically updated: now they are automatically populated, leading to whole new intelligent scenarios.
120+ smart business rules means that contract compliance, price tolerance can be set by procurement teams, and invalid documents from suppliers get screened out.
Manual processes in Accounts Payable can lead to a high number of late payments. That’s bad for business and bad for your reputation. One of our Australian customers say they have improved on-time payment of small suppliers from 19% to over 90% by connecting with them digitally.
Furthermore, quick invoice processing and data accuracy, minimises wrong or duplicate payments, while improving accounting processes and overall financial visibility for treasurers trying to manage cash.
Having a Digital connection to suppliers allows you to manage risk in your business. You can react more quickly to potential shortages, and set up quality management protocols, as well as monitoring slipped shipments from suppliers. And with encryption and other high-end security protocols you can reduce the risk of data theft when your critical data leaves the four walls.
If your enterprise could gain from better supply chain visibility, improved cash flow and reduced risk, get in touch with a DSN Deployment Partner.
This blog is about a 4 minute read, in that time 20 companies will have joined the millions already there. Its 2020, the age of the Intelligent Enterprise, I mean, who gets a phone without a Sim card.