Sourcing and Procurement with SAP S/4HANA

English (original)

1.1 Sourcing and Procurement: From Basic to Strategic Sourcing is a process of matching requirements and needs originating from an organi- zation with a supplier to provide the needed goods and/or services, preferably under a negotiated price and set of conditions. Sourcing entails identifying and understanding the requirements, identifying the most viable set of suppliers, requesting information and bids from the suppliers, awarding the purchase to a supplier, and creating the fol- low-on documents, such as contracts, scheduling agreements, and purchase orders, via the procurement process. Procurement often takes up where sourcing leaves off, issuing purchase requisitions and purchase orders for goods and/or services with the supplier identified during the sourcing process as the source of supply and then receiving and processing the receipts and invoices in the follow-on accounts payable processes. Sourcing and procurement are essential, core processes in enterprise resource planning (ERP). Without sourcing and procurement, production of a good or service isn’t possible, and without produc- tion no goods/services are produced. Without goods/services to provide, no spending justification can be made by a government entity, nor can sales/revenues be obtained by a firm. Following this logic to its conclusion, without input, a government or enter- prise can’t deliver its goods and services, and without sourcing and procurement, you can’t obtain input. Without sourcing and procurement, therefore, you can’t run a firm 1 Introduction to Sourcing and Procurement 32 or government. The next section hones in on sourcing, and from there we’ll move on to operational procurement.

עברית · תרגום מקצועי

Sourcing הוא תהליך התאמת דרישות וצרכים של ארגון לספק שיספק את הסחורות/השירותים, רצוי במחיר ובתנאים מנוהלים. כולל זיהוי והבנת הדרישות, זיהוי קבוצת הספקים הבת-קיימא, בקשת מידע והצעות, הענקת הרכש לספק, ויצירת מסמכי המשך (contracts, ‏scheduling agreements, ‏purchase orders) דרך ה-procurement. ‏Procurement נוטל היכן ש-sourcing מסתיים — הנפקת purchase requisitions ו-purchase orders לסחורות/שירותים מהספק שזוהה, וקבלה ועיבוד של ה-receipts וה-invoices בתהליכי ה-accounts payable. ‏Sourcing ו-procurement הם תהליכי ליבה חיוניים ב-ERP. בלעדיהם, אין ייצור; ללא ייצור, אין סחורות/שירותים; ובלעדיהם אי-אפשר להפעיל חברה או ממשלה. הסעיף הבא מתמקד ב-sourcing, ומשם ל-operational procurement.

English (original)

1.1.1 Sourcing Sourcing of goods and services is critical for an organization to meet its objectives and obligations in the marketplace and/or for its stakeholders. An example of a direct input driving strategic sourcing can be found in the airline industry. Airlines provide a ser- vice that is heavily dependent on fuel and its costs. The price of fuel can change daily, with airlines not always able to pass the costs (or, more recently, the rising costs) directly to their end customers. Fuel can comprise up to one-third of an airline’s oper- ating costs. At this level, fuel easily qualifies as a strategic sourcing area for an airline. Unlike one-off items ordered by employees in the office or on the shop floor, strategic sourcing items have more predictable and sizeable quantity requirements and antici- pated costs. If an organization fails to adequately estimate its needs in the strategic sourcing area, the consequences can be severe. Securing too little fuel at an airline can mean having to buy fuel on the spot market at much higher costs or even grounding flights. Sourcing from untested or appropriately vetted suppliers for strategic input can undermine the brand image, as products are shipped with a built-in point of failure. In severe cases, some organizations may not get a second chance to “make it right” and may be immediately cast into the dustbin of history. Quality control begins at the sup- plier level for any organization, especially if your products and services are the sum of your suppliers’ inputs. From a systems standpoint, strategic procurement requires three things from SAP S/4HANA: First, you must have robust forecasting to accurately estimate supply needs. Some companies and organizations run forecasting for their business in Excel sheets and rely on historical experience. This is a 1.0 approach and doesn’t scale well for larger enter- prises. Second, strategic sourcing requires an understanding of inventory and supply chains. If you have supply requirements from end customers forecasted at a certain level, what does this mean at all levels of your production? Do the suppliers have enough lead time to provide the input required? Do the areas of production have the adequate inven- tory and quality-management processes in place to fulfill these requirements within the timeline required? Third, do you have the right suppliers for this undertaking at the opti- mal price? This is perhaps the most challenging area for SAP S/4HANA because it requires collaboration, a weak point for the system. All of these areas were tested to an extreme during the COVID-19 pandemic. The supplier collaboration area is a weak point for SAP S/4HANA because, by definition, SAP S/4HANA can’t connect to the outside world unencumbered by security require- ments and concerns. Yet SAP ERP forms the basis for forecasting and the interconnected production planning areas in the strategic procurement equation. SAP S/4HANA is tightly integrated with inventory management and planning modules, which can be © 33 1.1 Sourcing and Procurement: From Basic to Strategic used to drive strategic purchasing automatically for purchases, issuing POs based on stock levels and forecast models. While basic supplier collaboration capabilities are available in SAP S/4HANA, this type of collaboration is best conducted in a demilitarized zone, in which the organization doesn’t have to risk its ERP crown jewels regularly to trade simple and complex pieces of information at a system level with the outside world. This is why SAP Ariba and SAP Business Network are the go-to solutions for stra- tegic sourcing, product collaboration, and logistics execution, especially when multiple exchanges need to occur with suppliers for an optimal process. In summary, strategic sourcing is central to an organization and spans many core areas, including finance, inventory management, logistics, asset and quality manage- ment, product development, production, and sourcing. From a systems standpoint, both SAP ERP systems and supplier collaboration platforms/solutions are required to cover this area. The supplier collaboration platforms from an SAP solutions standpoint are SAP Busi- ness Network and SAP Ariba Strategic Sourcing Suite. To cover all strategic sourcing, using SAP Ariba alone isn’t feasible because it would only be able to cover parts of the process and would need to integrate with the SAP ERP backend for others. However, handing this process entirely in SAP ERP creates its own challenges: supplier collabora- tion areas, from request for quotation/purchase/information (RFX) scenarios to con- tract negotiation to network-enabled suppliers for document exchange in the SAP Business Network, are not as robust or aren’t available at all in SAP ERP standalone.

עברית · תרגום מקצועי

‏sourcing קריטי לעמידת הארגון ביעדיו. דוגמה ל-input ישיר המניע strategic sourcing — תעשיית התעופה. חברות תעופה תלויות מאוד בדלק ובעלותו. מחיר הדלק משתנה יומית, ולא תמיד ניתן לגלגלו ללקוח. הדלק עד שליש מעלויות התפעול — ולכן בבירור תחום strategic sourcing. בניגוד לפריטים חד-פעמיים, פריטי strategic sourcing בעלי דרישות כמות צפויות וגדולות. כשל באומדן הצרכים — תוצאות חמורות. דלק מועט מדי — קנייה ב-spot market במחירים גבוהים או קרקוע טיסות. ‏sourcing מספקים לא-מבוקרים פוגע בתדמית המותג. בקרת איכות מתחילה ברמת הספק. מבחינה מערכתית, ‏strategic procurement דורש שלושה דברים מ-SAP S/4HANA: ‏(1) forecasting חזק לאומדן מדויק (גישות Excel הן 1.0 ואינן מתרחבות); ‏(2) הבנת inventory ושרשראות אספקה (זמן אספקה, מלאי, QM); ‏(3) הספקים הנכונים במחיר אופטימלי (האזור המאתגר ביותר — דורש collaboration, נקודת תורפה של המערכת). כל אלו נבחנו בקיצוניות בקורונה. ‏supplier collaboration היא נקודת תורפה כי S/4HANA אינה יכולה להתחבר לעולם החיצוני ללא דרישות אבטחה. אך SAP ERP הוא הבסיס ל-forecasting ול-production planning. S/4HANA משולבת היטב עם inventory management ותכנון — ניתן להניע רכש אוטומטית (POs לפי רמות מלאי ומודלי תחזית). שיתוף פעולה מורכב מתבצע ב-demilitarized zone, ולכן SAP Ariba ו-SAP Business Network הם הפתרונות ל-strategic sourcing, ‏product collaboration, ו-logistics execution. לסיכום, ‏strategic sourcing מרכזי ומשתרע על finance, ‏inventory management, ‏logistics, ‏asset/quality management, פיתוח מוצר, ייצור, ו-sourcing. נדרשים גם SAP ERP וגם פלטפורמות collaboration. הפלטפורמות — SAP Business Network ו-SAP Ariba Strategic Sourcing Suite. ‏Ariba לבדה אינה מספיקה (תכסה רק חלקים, נדרש שילוב עם ה-ERP backend). אך טיפול מלא ב-ERP בלבד מאתגר — ‏RFX, ‏contract negotiation, וספקי רשת אינם חזקים/זמינים ב-ERP standalone.

English (original)

1.1.2 Operational Procurement Operational procurement keeps the lights on and the office supplies stocked for an organization. Much of this type of procurement can be driven directly at the employee level, rather than by a designated buyer aggregating demand and then placing larger orders. Depending on the industry, the process, and the system maturity of an organi- zation, operational procurement is pushed all the way down to the requesting employee and centralized at a buyer level, often at the site, company division, or a cen- tralized buying group for the entire company. Operational procurement is transactional and conducted on a day-to-day basis to sup- port the ongoing operations of the firm or government entity. Some direct procure- ment may be included in this designation, which usually is defined along the lines of cost, type, and volume. If any of these three characteristics is relatively high or classi- fied as a direct, mission-critical input to an end product or successful execution of a ser- vice, the procurement of this good/service may be deemed strategic. By and large, strategic procurement usually centers on strategic sourcing for direct procurement activities, but an indirect product or service that has particularly high volume or cost relative to the operating costs of a company may also qualify. 1 Introduction to Sourcing and Procurement 34 Pushing procurement down to the employee level requires system support and capa- bilities. Employees must be able to quickly, intuitively find what they are looking for in the system; order it and have it approved by the corresponding manager with adequate approval authority; and then have the order either routed for sourcing and processing by a buyer or, if already sourced, sent directly to the designated supplier for fulfilment. In a buyer-brokered model, employees on a shop floor, for example, go to their point of contact for purchasing and place orders and requests. These are then routed for approval and sourced either by the designated buyer or by a buyer group once approved. Many times, this model is positioned as the only option, due to system lim- itations or the inability of the general staff to create coherent orders in a system. The designated shopper and/or buyer model is seen as a way to get all orders into the sys- tem cleanly and with minimal issues. However, this puts the onus on, and creates a bot- tleneck with, the designated buyers: the employees have to explain to an individual what they need purchased, and the buyer needs to translate this to an order, source it, and process the shipment or have the supplier deliver to the original requestor. Issues relating to transcription errors (if the supplier has questions, the buyer is caught in the middle on every order), receiving (who handles the goods receipt—the buyer or the requestor), and invoice processing (who approves payment for the order having been fulfilled) all can detract from the centralization model’s strengths. Another factor to consider is the aspect of relevance to total spend. Indirect spend usu- ally comprises no more than 17 to 20 percent of total spend, which may be too small an amount to prioritize from a systems standpoint or procurement standpoint in general. Each dollar of savings is essentially profit, however. Many large companies and organi- zations ignore potential savings of millions in operational procurement, not realizing that they will have to sell the equivalent of hundreds of millions of dollars of additional goods and services to realize the corresponding amount they just passed up by neglect- ing this area of their operations. For operational procurement, it is preferable from a systems and process standpoint to push the procurement decision-making and ordering out to the point of need—that is, the employee with job responsibilities that require this good or service. This requires enablement of the procurement process and simplification, to ensure that a casual user with a minimal amount of training can walk up, log in, and order an item in a small amount of time in an intuitive manner, providing the eventual supplier with a clear understanding of the product required, quantity with unit of measure, terms and con- ditions, expected delivery date, delivery address, any discounting, and a host of other information a typical casual user may not be able to provide or be interested in provid- ing. Much of the information provided in this order to the supplier needs to be auto- matically generated so as to not risk burdening the casual user with unnecessary steps and requirements to complete an order. Finally, operational procurement done correctly requires, like most iterative processes, a phase of analysis and application of lessons learned, to make the process and the © 35

עברית · תרגום מקצועי

‏operational procurement שומר על האורות דולקים ועל מלאי הציוד המשרדי. רובו ניתן להנעה ברמת העובד, במקום buyer ייעודי המאגד ביקוש. לפי התעשייה והבשלות, ‏operational procurement נדחף עד לעובד המבקש או ממורכז ברמת ה-buyer (אתר, חטיבה, או קבוצת רכש מרכזית). ‏operational procurement הוא טרנזקציוני ויומיומי לתמיכה בתפעול. חלק מהרכש הישיר (direct) נכלל, מוגדר לפי עלות, סוג, ונפח. אם אחד מהשלושה גבוה יחסית או הוא input ישיר קריטי-למשימה — הרכש עשוי להיחשב strategic. בדרך כלל strategic procurement מתמקד ב-strategic sourcing לרכש ישיר, אך מוצר/שירות עקיף בנפח/עלות גבוהים עשוי גם להיחשב כך. דחיפת הרכש לרמת העובד דורשת תמיכה מערכתית — מציאה מהירה ואינטואיטיבית, הזמנה ואישור ע"י מנהל מורשה, וניתוב ל-sourcing/עיבוד ע"י buyer או ישירות לספק. במודל buyer-brokered, עובדים בקומת הייצור פונים לאיש הקשר ומזמינים. ההזמנות מנותבות לאישור ו-sourcing ע"י ה-buyer הייעודי. לעיתים זו האפשרות היחידה (מגבלות מערכת). אך זה יוצר צוואר בקבוק אצל ה-buyers, ובעיות תמלול (שגיאות), קבלה (מי מטפל ב-GR), ועיבוד חשבוניות (מי מאשר תשלום). שיקול נוסף — רלוונטיות לסך ההוצאה. ‏indirect spend בדרך כלל 17–20% מסך ההוצאה — קטן מכדי לתעדף. אך כל דולר חיסכון הוא למעשה רווח. חברות רבות מתעלמות מחיסכון של מיליונים, מבלי להבין שיצטרכו למכור מאות מיליונים בסחורות נוספות. ל-operational procurement, עדיף לדחוף את ההחלטה לנקודת הצורך — העובד. זה דורש enablement ופישוט, כדי שמשתמש מזדמן עם הדרכה מינימלית יוכל להזמין במהירות ואינטואיטיביות, ולספק לספק הבנה ברורה (מוצר, כמות עם יחידת מידה, תנאים, תאריך אספקה, כתובת, הנחות). רוב המידע ייווצר אוטומטית כדי לא להעמיס על המשתמש. לבסוף, ‏operational procurement תקין דורש שלב ניתוח ויישום לקחים.

English (original)

1.2 Sourcing and Procurement from End to End procurement activities iteratively more effective at an individual and an aggregate level. The aggregate analysis, in particular, needs to be conducted by someone tasked with understanding things at this level, usually a procurement specialist. In summary, operational procurement is best initiated at the employee level, sup- ported by adequate system and data processes, such as intuitive UIs, approval work- flows, and minimal steps, as well as clean master data, contracts, and catalog items to populate the order with all of the required information for the supplier, purchasing, and accounts payable, while minimizing manual entry on the part of the employee. Each iteration needs to be examined at the process and data level to make the next time the process is conducted more efficient and cost-effective. The next section looks at the holistic processes around sourcing and procurement. 1.2 Sourcing and Procurement from End to End As with all core processes within an organization, sourcing and procurement can be competitive differentiators and sources of strength. An organization that understands its supply base thoroughly and collaborates with its suppliers in an efficient manner can bring more innovation, lower prices, and quality to its customers than an organiza- tion that doesn’t manage these processes and relationships. A company that fails to obtain effective pricing on its inputs usually begins to lose to a competitor that does. In certain scenarios in which much of the supply chain is vertically integrated into one company or entity, external procurement may not be as big a factor as other core pro- cesses in the success or failure of the firm. A vertically integrated firm would not have too much to procure from outside suppliers for its direct inputs, by virtue of owning the input production upstream. Most entities today, however, are not vertically inte- grated like automakers of yore, which owned the rubber plantations, oil fields, iron ore, components manufacturing, and so on required for making their products. Vertical integration often is the most compelling in an undeveloped market, where suppliers don’t exist or are unreliable partners, or where legal recourse for enforcing agreements and contracts is arbitrary or even rigged by local operators. Monopolistic or oligopolis- tic markets also encourage vertical integration. Why pay a monopoly its additional “rent” if a customer can take production of this good or service in house and produce it for less cost? Equally, if an organization has large pricing power with suppliers due to its monopoly or oligopoly status and a corresponding monopsony, where a product has a limited or a single number of potential buyers, in purchasing a good or service, it may choose to squeeze suppliers for their margins. Size tends to beget size in these scenar- ios, with suppliers attempting to bulk up to the size of their largest customer in order to maintain some pricing power. Yet even in a vertically integrated organization, the process of procurement doesn’t go away; rather, it becomes an intercompany purchasing activity, an activity with its own 1 Introduction to Sourcing and Procurement 36 set of internal procurement intricacies and cost accounting decisions. Understanding where an organization fits in to the overall marketplace is the first step in formulating an effective sourcing and procurement strategy. The need to source inputs in the most efficient manner possible remains constant, whereas the dynamics of the marketplace and optimal approaches of the enterprise for obtaining these inputs can be subjected to a constant state of flux.

עברית · תרגום מקצועי

(המשך 1.1.2) — להפיכת הפעילויות ליעילות יותר ברמה הפרטנית והמצרפית. הניתוח המצרפי בידי מומחה רכש. לסיכום, ‏operational procurement מיטבי ביוזמה ברמת העובד, נתמך בתהליכי מערכת ונתונים (UI אינטואיטיבי, אישורים, צעדים מינימליים, נתוני אב/contracts/catalog נקיים), תוך מזעור הזנה ידנית. כל איטרציה נבחנת לייעול. ‏sourcing ו-procurement יכולים להיות מבדלים תחרותיים ומקורות עוצמה. ארגון המבין את בסיס האספקה ומשתף פעולה ביעילות מביא חדשנות, מחירים נמוכים, ואיכות. חברה שנכשלת בתמחור מתחילה להפסיד למתחרה. בתרחישים של שרשרת אספקה מאונכת (vertically integrated), ‏external procurement פחות משמעותי. רוב הארגונים כיום אינם מאונכים. ‏vertical integration משכנעת בשוק לא-מפותח (ספקים לא קיימים/לא אמינים), או בשווקים מונופוליסטיים/אוליגופוליסטיים. ‏monopsony (קונה יחיד) מאפשר לחיצת ספקים על מרווחיהם. גודל מוליד גודל. אך גם בארגון מאונך, ה-procurement אינו נעלם — הופך לפעילות רכש בין-חברתית (intercompany) עם מורכבויות וחשבונאות עלויות. הבנת מיקום הארגון בשוק היא הצעד הראשון לאסטרטגיית sourcing/procurement.

English (original)

1.2.1 Ideal Procurement Ideally, sourcing and procurement operations want to understand demand down to the lowest detail level possible as far out as possible in order to focus their activities and discussions with the appropriate suppliers, discussing the applicable quantities, pric- ing, and timelines. Foresight usually equals cost savings, and cost savings is one of the key value-adds of procurement. Foresight can also bring the added benefit of building the appropriate level of relationship and understanding with a supplier prior to need- ing a product or service in a rush. The other value generator within sourcing and pro- curement is obtaining the right product or service from the right supplier. The procurement line of business is traditionally grouped with the cost centers of a company—which is to say, an area to be managed closely by finance types. Too often, sourcing and procurement are reduced to a tactical exercise of obtaining the lowest cost with the least amount of personnel and systems investment possible, but cost savings isn’t the only goal. The lowest cost doesn’t always equal optimal procurement for an organization, as the lowest cost can bring a host of trade-offs, such as lower quality and lower supplier reliability. Some commodity businesses value cost savings over many other aspects, whereas businesses competing in areas of innovation and quality value these characteristics in their supply base over cost and can be quite cost-insensitive, so to speak. From luxury goods to mobile phones to fast food, examples abound of companies working tightly with suppliers to ensure the best quality possible or impactful innova- tion or other drivers beyond cost to move the needle for their businesses. Government has countless examples as well, even in situations in which corruption or ineptitude is not the driving force behind choosing a supplier with higher prices. In fairness, it should be noted that government entities do not have a monopoly in this area. There is plenty of ineptitude in the corporate world in procurement as well, especially in industries with oligopolies or competitive moats. As with economics, our models and processes for procurement assume rational actors operating with near-perfect infor- mation, which is rarely the case. © 37 1.2 Sourcing and Procurement from End to End

עברית · תרגום מקצועי

אידיאלית, רכש רוצה להבין ביקוש ברמת הפירוט הנמוכה ביותר וככל שניתן רחוק קדימה, כדי למקד את הפעילות מול הספקים (כמויות, תמחור, לוחות זמנים). ראייה מקדימה = חיסכון (אחד מערכי ה-procurement), ובניית קשר עם הספק לפני צורך דחוף. מחולל הערך השני — קבלת המוצר/השירות הנכון מהספק הנכון. ה-procurement מקובץ מסורתית עם cost centers — תחום שמנוהל בקפדנות ע"י finance. לעיתים קרובות מצמצמים אותו לתרגיל טקטי של עלות מינימלית, אך חיסכון אינו המטרה היחידה. עלות נמוכה ביותר אינה תמיד אופטימלית — מביאה trade-offs (איכות נמוכה, אמינות נמוכה). עסקי commodity מעריכים חיסכון; עסקי חדשנות/איכות מעריכים מאפיינים אלו ויכולים להיות חסרי-רגישות לעלות. מ-luxury goods ועד טלפונים ומזון מהיר — דוגמאות לעבודה צמודה עם ספקים לאיכות/חדשנות מעבר לעלות. גם בממשל יש דוגמאות. המודלים מניחים שחקנים רציונליים עם מידע כמעט-מושלם, מה שנדיר.

English (original)

1.2.2 Source-to-Pay and Procure-to-Pay Procure-to-pay processes in an enterprise often are extended to encompass the plan- ning, forecasting, sourcing, and analytics steps that surround this process. This is called source-to-pay, but the term is somewhat misleading, as finding a source of supply may not be the first step in the procurement process every time. Sometimes the sourcing happens prior to the requisition being created and approved, but many times it hap- pens after a requisition has been approved with no source of supply. Other times sourc- ing is triggered by strategic planning or even buyer hunches for upcoming demand. Regardless of how the process is organized sequentially, there are two components to procurement: a cerebral, planning-and-analysis-based side; and a transactional com- ponent of creating and issuing agreements, whether sourcing and contracts or actual purchase orders, then receiving and paying for these purchase orders via an invoice process in accounts payable.

עברית · תרגום מקצועי

תהליכי procure-to-pay מורחבים לעיתים לכלול תכנון, תחזית, ‏sourcing, ואנליטיקה סביב התהליך — נקרא source-to-pay. אך המונח מטעה במקצת, כי מציאת מקור אספקה אינה תמיד הצעד הראשון. לעיתים ה-sourcing קודם ליצירת ה-requisition; לעיתים אחריו (requisition מאושר ללא מקור); לעיתים מופעל מתכנון אסטרטגי או תחושות buyer. ללא תלות בסדר, שני רכיבים ל-procurement: צד מוחי מבוסס-תכנון-וניתוח; ורכיב טרנזקציוני של יצירת והנפקת הסכמים (sourcing/contracts או POs בפועל), ואז קבלה ותשלום דרך תהליך ה-invoice ב-AP.

English (original)

1.2.3 Key Process Areas There is no catchall process flow for sourcing and procurement; some individual activ- ities can move in sequence, depending on the type of sourcing and procurement, as well as the organization’s and/or industry’s norms for procurement processes. It’s eas- ier to break up procurement into some general areas and categories, as in Table 1.1. Procurement Process Area Description Occurrence in Source- to-Pay Process Main SAP S/4HANA Integration Points with Other Areas Operational purchasing Transactional procure- ment, core purchase order, goods/service receipt, invoice Before invoice and pay- ables management Finance, inventory management, production planning Collaborative sourcing and contract management Request for quote, pur- chase, information pro- cess, source selection via bidding or single source, and contract definition Either after or before operational purchasing Finance, inventory management, production planning, materials management Invoice and payables management Invoice submission by supplier, verification, and payment by accounts payable (AP) After operational purchasing Finance Table 1.1 Procurement Process Areas 1 Introduction to Sourcing and Procurement 38 One of the challenges ERP systems face within sourcing and procurement is in sup- plier collaboration. The more tightly integrated sourcing and procurement are with the organization’s ERP system, the more real-time information is available for analy- sis. This in turn allows ERP areas such as finance and inventory management to sup- port the procurement process seamlessly. However, supplier processes may differ from your internal processes, and supplier systems will differ from your internal sys- tems. Herein lies the issue with an ERP system’s architecture. The supplier cannot be given access to everything in an organization’s ERP system, and in many instances a firewall blocks access even to relevant information and functionality the supplier could leverage. System-to-system communication has to be negotiated on a one-to- one or one-to-network basis in ERP systems, between customer and supplier. This is costly, time-consuming to set up, and often still limits the interaction. Areas such as RFX processes/bidding, contract negotiation, and supplier portals remain challenges for an ERP-only approach to procurement as these areas often require itera- tive collaboration with suppliers. SAP S/4HANA is a transactional, command-and-control environment with high security requirements due to the sensitive data contained in many SAP S/4HANA areas. SAP S/4HANA Finance, SAP Core Human Capital Manage- ment for SAP S/4HANA, and other data mandate stricter firewall requirements than needed in a collaborative environment, and if one has to preclude the other, security will almost always carry the day. This has led to earlier iterations of purchasing systems, such as SAP Supplier Relationship Management (SAP SRM) and supplier self-services (SUS), branching off from SAP S/4HANA but remaining integrated with the backend SAP ERP system and still installed on premise, albeit on a separate client/server. Although Supplier management Supplier designation, master data and per- formance manage- ment Run in parallel to the other process steps and/or beginning/end of the procurement process SAP S/4HANA master data Procurement analytics Analysis of core, key performance indica- tors (KPIs), such as spend analysis, demand/forecast plan- ning, as well as supplier performance and con- solidation Run in parallel to other process steps and/ or the end of the procurement process Finance, inventory management, transportation man- agement, logistics management Procurement Process Area Description Occurrence in Source- to-Pay Process Main SAP S/4HANA Integration Points with Other Areas Table 1.1 Procurement Process Areas (Cont.) © 39 1.2 Sourcing and Procurement from End to End this allows for focused purchasing activities, organization structures, and the support of casual users, actual supplier collaboration is limited and still requires a one-to-one negotiated setup for the supplier to access the customer’s portal or receive electroni- cally transmitted purchasing documents beyond fax/email. The next wave of purchasing systems embraces the cloud/software as a service (SaaS) model. SAP Ariba was at the forefront of this shift, taking indirect procurement transac- tions into a focused, multitenant, cloud-based environment in which a much greater degree of collaboration with suppliers, improved ease of use, and richness of content are available. Most customers still need to connect to a backend SAP ERP environment, at least for financials. Many customers run a split environment, sourcing and purchasing indirect items in their SAP Ariba environments while covering their direct procurement— direct procurement meaning the purchasing of input related directly to the end products and services produced by the firm or government entity—directly via SAP S/4HANA. Direct procurement and capital purchasing are particularly integrated with other areas in SAP S/4HANA, such as inventory management, SAP Enterprise Asset Management (SAP EAM), and both SAP Extended Warehouse Management (SAP EWM) and embed- ded EWM. For most firms, procurement is a vital aspect of their operations and their strategy, often with direct procurement deemed strategic and indirect deemed tactical. This can reinforce boundaries at a system level further, as direct procurement is typi- cally conducted out of SAP S/4HANA and indirect out of SAP Ariba. Yet strategic sourc- ing for direct procurement activities often requires more supplier collaboration during the RFX process than sourcing for operational procurement. (Chapter 11 in this new edi- tion focuses on product sourcing, an exciting new sourcing solution pioneered for com- plex direct procurement sourcing activities.) The divisions between ERP and collaboration environments in procurement are further exacerbated by traditional divisions within a procurement organization between direct and indirect groups. Often, buyers of direct materials and services are embedded within a particular organization, combining the inputs into the end products, such as produc- tion/manufacturing, whereas the indirect buyers are grouped under a central, shared services organization covering multiple divisions and company codes. As is often the case with groups largely similar yet different, rivalries and tribalism can quickly develop, fragmenting the overall focus and cohesion of the procurement group. And this is before accounting for the cross-organization frictions between finance and pro- curement groups, as discussed earlier in this chapter. Now that we've covered SAP S/4HANA processes, let's explore the innovations offered by SAP S/4HANA with regard to sourcing and procurement. The following section will introduce SAP S/4HANA and look further into these integration areas with cloud-based solutions. 1 Introduction to Sourcing and Procurement 40

עברית · תרגום מקצועי

אין process flow אחד ל-sourcing/procurement; פעילויות נעות ברצף לפי הסוג והנורמות. קל יותר לחלק לתחומים (טבלה 1.1). **טבלה 1.1 — תחומי תהליך ה-Procurement:** | תחום | תיאור | מיקום ב-Source-to-Pay | נקודות אינטגרציה עיקריות | |---|---|---|---| | Operational purchasing | רכש טרנזקציוני, ‏PO ליבה, ‏goods/service receipt, ‏invoice | לפני invoice/payables management | Finance, ‏inventory management, ‏production planning | | Collaborative sourcing & contract management | RFX, בחירת מקור (bidding/single source), הגדרת contract | אחרי או לפני operational purchasing | Finance, ‏inventory management, ‏production planning, ‏materials management | | Invoice & payables management | הגשת invoice ע"י הספק, אימות, ותשלום ע"י AP | אחרי operational purchasing | Finance | | Supplier management | designation, נתוני אב, וניהול ביצועים | במקביל ו/או בתחילת/סוף התהליך | SAP S/4HANA master data | | Procurement analytics | ניתוח KPIs (spend analysis, ‏demand/forecast planning, ביצועי ספק) | במקביל ו/או בסוף התהליך | Finance, ‏inventory management, ‏transportation/logistics management | אתגר מרכזי ל-ERP — ‏supplier collaboration. ככל שה-sourcing/procurement משולבים יותר עם ה-ERP, מידע רב יותר בזמן-אמת לניתוח, ו-finance/inventory תומכים בחלקה. אך תהליכי ומערכות הספק שונים מהפנימיים. הספק אינו יכול לקבל גישה לכל ה-ERP, ו-firewall חוסם. תקשורת מערכת-למערכת מנוהלת אחד-לאחד או אחד-לרשת — יקר, איטי, ומגביל. ‏RFX/bidding, ‏contract negotiation, ו-supplier portals נותרים אתגר לגישת ERP-בלבד (דורשים collaboration איטרטיבי). S/4HANA היא סביבת command-and-control טרנזקציונית עם דרישות אבטחה גבוהות (SAP S/4HANA Finance, ‏HCM). אם צריך לבחור — האבטחה תמיד תנצח. זה הוביל לאיטרציות מוקדמות (SAP SRM ו-SUS) שהסתעפו אך נותרו משולבות ו-on-premise. הגל הבא של מערכות הרכש מאמץ cloud/SaaS. ‏SAP Ariba היה בחזית, והעביר רכש עקיף לסביבת ענן רב-דיירת עם collaboration רב יותר. רוב הלקוחות עדיין מתחברים ל-ERP backend (לפחות ל-financials). רבים מפעילים סביבה מפוצלת — רכש עקיף ב-Ariba, רכש ישיר ב-S/4HANA. ‏direct procurement ו-capital purchasing משולבים במיוחד עם inventory management, ‏SAP EAM, ו-SAP EWM/embedded EWM. בדרך כלל ישיר = strategic (ב-S/4HANA), עקיף = tactical (ב-Ariba). אך strategic sourcing לרכש ישיר דורש לעיתים collaboration רב יותר ב-RFX (פרק 11 — product sourcing). החלוקות בין ERP ל-collaboration מחריפות עם חלוקות מסורתיות בין קבוצות direct ל-indirect. ‏direct buyers מוטמעים בארגון; ‏indirect מקובצים תחת shared services. יריבויות ושבטיות מפצלות את המיקוד. הסעיף הבא יציג את SAP S/4HANA ואת תחומי האינטגרציה עם פתרונות הענן.

English (original)

1.3 Procurement with SAP S/4HANA SAP’s vision is to enable every organization and every industry to become a network of intelligent, sustainable enterprises. Table 1.2 explains SAP’s strategic priorities further. SAP sees the procurement line of business (LoB) through the lens of its overarching intelligent enterprise initiative. Rather than having to choose between on premise and cloud for procurement activities, there is an SAP procurement strategy to fit every organization’s size and needs. The core SAP procurement solution strategy today lever- ages SAP S/4HANA Enterprise Management as the digital core, with SAP Ariba, SAP Business Network, and SAP Fieldglass as the go-to solution portfolio for procurement transformation. Further emphasis in SAP’s procurement suite is placed on a seamless user experience, an aligned domain model for integration, one workflow inbox to pro- vide a unified view of approvals and tasks, consistent security, and cross-suite analytics to unify reporting and decision-making. This combination of SAP S/4HANA Enterprise Management, SAP Ariba, SAP Business Network, and SAP Fieldglass allows you to take control in the following areas:  Transform procurement Savings from strategic sourcing, scaling supplier management, and efficient opera- tional procurement can be found in SAP Ariba procurement solutions.  Achieve digital IT transformation Next-gen SAP ERP solutions for IT transformation, procurement in the digital core, and a simplified digital landscape can be found in SAP S/4HANA and SAP Business Network.  Realize digital IT transformation with procurement Next-gen digital landscape procurement savings and engagement at scale across the enterprise can be found in SAP S/4HANA, SAP Ariba procurement solutions, SAP Fieldglass, and SAP Business Network. Go-to-Market Strategy Product People and Operations  Drive growth with com- pelling value proposi- tions and scaled demand generation  Maximize customer lifetime value together with SAP’s ecosystem  Strengthen SAP’s core to grow from its installed base and win net new names  Make SAP’s portfolio of cloud applications the leading suite for every business  Make SAP BTP the platform for SAP and its ecosystem  Scale SAP’s new growth areas and identify future innovations  Empower people to thrive in the future of work  Accelerate the cloud transformation  Innovate business through technology Table 1.2 SAP Strategic Priorities © 41 1.3 Procurement with SAP S/4HANA The three main paths for procurement transformation with SAP all include SAP Busi- ness Network. There is no substitute or on-premise alternative for SAP Business Net- work, and the power of the network for supplier collaboration at every step of the procurement process can be leveraged by small and large organizations alike. Regardless of your choice of ERP system, you can run SAP Ariba in the cloud with SAP Business Network to transform your procurement operations. Smaller businesses with less than $1 billion in revenue annually can run their procurement operations directly in SAP S/4HANA, with supplier collaboration supported by SAP Business Network and SAP Ariba Catalog. For larger enterprises, SAP recommends running SAP Ariba solu- tions and SAP Business Network for all source-to-pay business processes integrated into SAP S/4HANA as the digital core. The next section will explain the differences between multitenant and single-tenant cloud environments. From there, we’ll move on to discussing strategic sourcing, procurement, accounts payable and invoicing, and SAP Fiori roles and applications.

עברית · תרגום מקצועי

חזון SAP — לאפשר לכל ארגון וכל תעשייה להפוך לרשת של intelligent, sustainable enterprises (טבלה 1.2). ‏SAP רואה את ה-procurement LoB דרך עדשת ה-intelligent enterprise. במקום לבחור בין on-premise ל-cloud, יש אסטרטגיית רכש לכל גודל. אסטרטגיית הליבה ממנפת את SAP S/4HANA Enterprise Management כ-digital core, עם SAP Ariba, ‏SAP Business Network, ו-SAP Fieldglass כפורטפוליו לטרנספורמציה. דגש על UX חלק, מודל domain מיושר, ‏workflow inbox אחד, אבטחה עקבית, ו-cross-suite analytics. השילוב מאפשר שליטה ב: • **Transform procurement** — חיסכון מ-strategic sourcing, ‏supplier management, ו-operational procurement (ב-SAP Ariba). • **Achieve digital IT transformation** — פתרונות ERP דור-הבא (ב-S/4HANA ו-SAP Business Network). • **Realize digital IT transformation with procurement** — חיסכון ומעורבות בקנה-מידה (S/4HANA, ‏Ariba, ‏Fieldglass, ‏Business Network). **טבלה 1.2 — עדיפויות אסטרטגיות של SAP:** | Go-to-Market | Product | People and Operations | |---|---|---| | הנעת צמיחה עם value propositions; מיקסום customer lifetime value עם האקוסיסטם | חיזוק הליבה; הפיכת פורטפוליו הענן למוביל; ‏SAP BTP כפלטפורמה; הרחבת תחומי צמיחה | העצמת אנשים לעתיד העבודה; האצת מעבר לענן; חדשנות דרך טכנולוגיה | שלושת הנתיבים לטרנספורמציה כוללים את SAP Business Network — אין תחליף או חלופת on-premise לו. ללא תלות ב-ERP, ניתן להריץ Ariba בענן עם Business Network. עסקים קטנים (< $1 מיליארד הכנסה) — רכש ישירות ב-S/4HANA, עם collaboration דרך Business Network ו-SAP Ariba Catalog. ארגונים גדולים — SAP ממליצה להריץ Ariba ו-Business Network לכל source-to-pay, משולבים ב-S/4HANA כ-digital core. הסעיף הבא — ההבדל בין multitenant ל-single-tenant, ואז strategic sourcing, ‏procurement, ‏AP/invoicing, ו-Fiori roles/apps.

English (original)

1.3.1 Multitenant Cloud versus Single-Tenant Environment for ERP Systems SAP S/4HANA Enterprise Management is the latest ERP platform from SAP. SAP S/4HANA Enterprise Management is a new, separate product line completely rearchi- tected to run natively on the SAP HANA in-memory computing platform and opera- tional database system (ODS) pioneered in house at SAP. SAP S/4HANA is therefore not a legal successor version of SAP Business Suite or SAP ERP; SAP ERP and SAP Business Suite products will still be available as separate product lines. SAP S/4HANA Enterprise Management thus charts a new path, but it isn’t a complete break with the previous SAP ERP product lines. Much of the functionality offered in SAP S/4HANA and even the on-premise configuration approaches remain the same or similar. There is also an upgrade path on offer from SAP ERP and SAP Business Suite powered by SAP HANA to SAP S/4HANA. SAP S/4HANA is also referred to as the digital core, serving as the foun- dational environment of an enterprise, as explained in the next section. Digital Core SAP is pursuing a digital core strategy from its traditional position of strength in ERP systems. SAP S/4HANA serves as the core, and the cloud solutions in the SAP portfo- lio then integrate with and augment the core. For sourcing and procurement topics, SAP S/4HANA is the logical area to support procurement processes with heavy cross- module dependencies, such as direct procurement, inventory management, and accounts payable. The digital core does not mean on premise, necessarily. SAP S/4HANA has two deployment options or editions: the single-tenant environment of SAP S/4HANA and SAP S/4HANA Cloud. The single-tenant environment was formerly called on premise and largely uses a flexible, customizable code base from that system. Most single-tenant environments, 1 Introduction to Sourcing and Procurement 42 however, are hosted and thus not technically on premise at the customer site. Similar to SAP Business Suite products, the single-tenant environment edition supports over 30 lan- guages, over 60 country versions, and over 20 industry solutions. SAP S/4HANA Cloud has a more restricted scope of supported languages and industry solutions to date, with the goal of adding further supported areas in the coming quarters. SAP S/4HANA Cloud covers specific business scenarios for the marketing LoB and for the professional services indus- try, as well as the most essential scenarios to run an entire enterprise in the cloud with a digital core, including finance, accounting, controlling, procurement, sales, manufacturing, plant maintenance, project system, and product lifecycle management. Marketing, profes- sional services, and enterprise are the three main SAP S/4HANA Cloud options currently available, and these instances integrate with overall universe of SAP solutions and pro- cesses, as depicted in Figure 1.1. Figure 1.1 SAP’s Intelligent Suite The most obvious differences from previous iterations of SAP ERP and SAP S/4HANA, for either cloud or single-tenant editions, are threefold. First, the improvements in speed are breathtaking, especially in the areas of in-system analytics. Even the table structures and SAP ERP applications themselves have been completely overhauled to run optimally in an in-memory database environment. In the past, multiple indices and tables were pre- built to minimize the impacts of calculations on system performance. These tables cre- ated inflexibility and complexity challenges of their own, however. Lead-to-ca s h D e sig n-to-operate S o u r c e t o p a y R e c r u i t t o r e t i r e E n d - t o - e n d b u s i n e s s p r o c e s s e s Seamless user experience Consistent security and identity management One workflow inbox Aligned Domain Models, APIs, and Events Embedded and cross-product analytics Coordinated lifecycle management End-to-end process blueprints Intelligent enterprises are integrated enterprises Suite qualities SAP Business Technology Platform I n d u s t r y - s p e c i fi c a n d s u stain a b l e E c o s y s t e m s o l u t i o n s Cloud ERP Spend management and business netwirk Human capital management Customer relationship management © 43 1.3 Procurement with SAP S/4HANA Second, the user interface (UI) is completely reengineered for SAP Fiori. Having a uni- fied UI, one of the key priorities of SAP’s suite strategy, allows for a seamless user expe- rience and enhanced efficiency, even when multiple systems and data repositories are being accessed behind the UI. Third, there is extensibility via native and almost native integrations with SAP cloud solutions like SAP Ariba and SAP Fieldglass, as well as the optimizations and consolidations of functionality areas requiring separate clients and interface layers in SAP Business Technology Platform (SAP BTP) and more robust inte- gration layers such as SAP Integration Suite, managed gateway for spend management and SAP Business Network, formerly known by its (somehow) less wordy moniker, SAP Ariba Cloud Integration Gateway. These advances further boost performance of the sys- tem and streamline the system landscape requirements, also enabling integration with the next section’s focus, cloud procurement. Cloud Procurement SAP has cloud-based solutions for all of the major and minor areas of procurement. The most straightforward approach to understanding where SAP’s procurement cloud solutions, such as SAP Ariba and SAP Fieldglass, fit with SAP S/4HANA in your overall solution landscape is to look at your organization’s requirements and size, as well as your in-scope business processes. Supplier management and risk, strategic sourcing, and contract negotiations are driven through SAP Ariba. The result is negotiated savings, which now need to be realized. To drive that price and contract compliance, there are two main buying channels: direct procure- ment, which happens in SAP S/4HANA and is plan, replenishment, or materials require- ment planning (MRP) driven; and plant maintenance in SAP S/4HANA, accessing the SAP Ariba Catalog to find materials and services. End-user-driven indirect procurement of maintenance, repair, and operating (MRO) supply, services, and indirect materials happens in SAP Ariba through an intuitive, policy-driven, guided buying experience to drive ease of use for all employees of a company. Supplier collaboration for all procurement scenarios coming from SAP S/4HANA or SAP Ariba will occur via SAP Business Network. This recom- mendation drives simplicity and fast speed to value. Cost savings from the SAP Ariba busi- ness case can self-fund digital transformation or other customer initiatives. SAP Ariba is the go-to solution for strategic procurement requirements going beyond the traditional capabilities in SAP ERP, and this will continue to be the case in SAP S/4HANA. With SAP Business Network, SAP Ariba is also the main solution for net- work-supported transactions and collaboration, and SAP Ariba Catalog is the main solution for content management. In this hybrid approach, SAP S/4HANA supports the operational procurement side, including the full purchase order management process and supplier management, with tight integration into other logistics areas. Figure 1.2 details the procurement process areas covered by SAP S/4HANA Sourcing and Procurement, as well as the SAP Business Network, SAP Ariba, and SAP Fieldglass cloud solutions. 1 Introduction to Sourcing and Procurement 44 Figure 1.2 SAP S/4HANA Sourcing and Procurement Integration with SAP Business Network, SAP Ariba, SAP Fieldglass, and SAP BTP You can run buying and delivery, also called self-service procurement, for example, in either SAP S/4HANA or SAP Ariba Buying and SAP Ariba Invoicing, or in both, depend- ing on the type of procurement. Where it makes sense, cloud options should always be evaluated, and between SAP Ariba and SAP Fieldglass, there is a cloud procurement solution for almost every procurement scenario available. Although the focus of this book is on SAP S/4HANA, we will highlight integration opportunities in various pro- curement scenarios, with SAP cloud solution counterparts noted where applicable. The next section focuses on strategic procurement in the cloud, for which the emphasis is still on cost savings and efficiencies, with the buying group often playing with much larger stakes.

עברית · תרגום מקצועי

‏SAP S/4HANA Enterprise Management היא פלטפורמת ה-ERP העדכנית. היא קו-מוצר חדש ונפרד, שנבנה מחדש לרוץ נטיבית על SAP HANA in-memory ו-ODS. ‏S/4HANA אינה גרסת-המשך חוקית של SAP Business Suite/SAP ERP (שיישארו זמינים). אך אינה שבר מלא — רוב הפונקציונליות וגישות התצורה ה-on-premise זהות/דומות. יש upgrade path מ-SAP ERP/Business Suite powered by HANA. ‏S/4HANA נקראת גם digital core. **Digital Core:** SAP רודפת אסטרטגיית digital core מעמדת הכוח ב-ERP. ‏S/4HANA היא הליבה, ופתרונות הענן משתלבים ומגבירים. ל-sourcing/procurement, ‏S/4HANA הוא האזור הלוגי לתהליכים עם תלויות חוצות-מודול (direct procurement, ‏inventory management, ‏AP). ‏digital core אינו בהכרח on-premise. ל-S/4HANA שתי אפשרויות פריסה: ה-single-tenant (לשעבר on-premise, קוד גמיש וניתן-להתאמה; רובם hosted ולא ממש on-premise), ו-SAP S/4HANA Cloud. ה-single-tenant תומך ב-30+ שפות, ‏60+ גרסאות מדינה, ו-20+ פתרונות תעשייה. ‏S/4HANA Cloud מוגבל יותר (עם יעד להוסיף). ‏Cloud מכסה תרחישי marketing, ‏professional services, ו-enterprise (finance, ‏accounting, ‏controlling, ‏procurement, ‏sales, manufacturing, ‏plant maintenance, ‏project system, ‏PLM). שלוש האפשרויות משתלבות עם יקום פתרונות SAP (Figure 1.1). ההבדלים הברורים מאיטרציות קודמות, שלושה: ‏(1) שיפורי מהירות עוצרי-נשימה, במיוחד ב-in-system analytics — מבני הטבלאות והאפליקציות שופצו ל-in-memory (בעבר נבנו אינדקסים וטבלאות מראש, מה שיצר נוקשות). ‏(2) ה-UI שופץ ל-SAP Fiori — ‏UI מאוחד ל-UX חלק. ‏(3) extensibility דרך אינטגרציות נטיביות עם פתרונות ענן (Ariba, ‏Fieldglass), ו-SAP BTP, ושכבות אינטגרציה כגון SAP Integration Suite, managed gateway for spend management and SAP Business Network (לשעבר SAP Ariba Cloud Integration Gateway). **Cloud Procurement:** ל-SAP פתרונות ענן לכל תחומי הרכש. להבנת ההתאמה — בחנו את דרישות הארגון, גודלו, ותהליכיו. ‏supplier management/risk, ‏strategic sourcing, ו-contract negotiations מונעים דרך SAP Ariba — התוצאה חיסכון מנוהל שיש לממש. לציות מחיר/contract, שני ערוצי קנייה: ‏direct procurement (ב-S/4HANA, מונע plan/replenishment/MRP); ו-plant maintenance ב-S/4HANA הניגש ל-SAP Ariba Catalog. רכש עקיף מונע-משתמש (MRO, שירותים, חומרים עקיפים) ב-Ariba דרך guided buying. ‏supplier collaboration לכל התרחישים — דרך SAP Business Network. ‏SAP Ariba הוא הפתרון ל-strategic procurement מעבר ל-ERP מסורתי. עם Business Network, גם לטרנזקציות נתמכות-רשת. ‏SAP Ariba Catalog ל-content management. בגישה ההיברידית, ‏S/4HANA תומך בצד ה-operational (כל ניהול ה-PO ו-supplier management). ‏Figure 1.2 מפרט את התחומים ש-S/4HANA Sourcing and Procurement מכסה, יחד עם Business Network, ‏Ariba, ו-Fieldglass. ניתן להריץ buying and delivery (self-service procurement) ב-S/4HANA או ב-SAP Ariba Buying/Invoicing, או בשניהם. הספר מתמקד ב-S/4HANA אך מדגיש הזדמנויות אינטגרציה.

English (original)

1.3.2 Strategic Sourcing One of the areas with clear advantages for the cloud is strategic sourcing. Here, a buyer needs to interact and collaborate with multiple suppliers, many of whom may not be onboarded yet. The buyer needs a platform from which to establish sourcing strategies and publish requests for pricing, quotes, information, and bid responses. Auctions and other activities also need to be supported. At the end of the sourcing event, a buyer uses the system to generate a contract and/or purchase order (PO), confirming the sup- plier and price. For contracts, the handoff from the bidding process to contract negoti- ation and finalization ideally should be seamless. As per Figure 1.3, the recommended approach from SAP is to leverage SAP Ariba for project/category management, sourcing, SAP Ariba solutions Invoice & Pay Source & Contract Plan & Forecast Buy & Deliver BUSINESS APPLICATIONS Process blueprints available at SAP API Business Hub SAP Business Network SAP S/4HANA SAP Fieldglass Solutions Third-Party Partner SAP BUSINESS TECHNOLOGY PLATFORM Unified Services Offering and Operations SAP One Domain Model: Supplier | Product Suite Qualities SAP API Business Hub © 45 1.3 Procurement with SAP S/4HANA contracts, and catalogs while operationalizing the contract in SAP S/4HANA to have a source of supply for any purchasing activities initiated in the core, such as plan-driven direct procurement. Figure 1.3 Source-to-Pay Flow

עברית · תרגום מקצועי

אחד התחומים עם יתרון ברור לענן — strategic sourcing. ה-buyer צריך לשתף פעולה עם ספקים רבים (חלקם טרם onboarded). נדרשת פלטפורמה להקמת אסטרטגיות sourcing ולפרסום requests for pricing/quotes/information ותגובות bid. נדרשת תמיכה ב-auctions. בסוף ה-sourcing event, ה-buyer מייצר contract ו/או PO, מאשר ספק ומחיר. ל-contracts, ההעברה מ-bidding ל-negotiation צריכה להיות חלקה. לפי Figure 1.3, ‏SAP ממליצה למנף Ariba ל-project/category management, ‏sourcing, ‏contracts, ו-catalogs, תוך הפעלת ה-contract ב-S/4HANA כמקור אספקה לפעילויות רכש בליבה (plan-driven direct procurement).

English (original)

1.3.3 Procurement For MRO, indirect, and services procurement, SAP Ariba Buying for SAP S/4HANA pro- vides a consumer-grade guided buying experience that leverages negotiated contract pricing, company policies, and a spot marketplace for longtail spend, and it drives easy, effortless employee requisitioning through the shopping cart process using SAP Busi- ness Network Supply Chain Collaboration and SAP Ariba Catalog. This process then integrates with the SAP S/4HANA environment for PO execution and inventory man- agement, and it backs up to SAP Business Network for PO and invoice collaboration and finally to SAP S/4HANA for accounts payable processing (see Figure 1.4). Figure 1.4 Indirect, MRO, and Services Procurement SAP Ariba Buying for SAP S/4HANA is a key solution of SAP Ariba: end users require easy and simple user experiences combined with rich catalog content, which is man- aged and requires no maintenance from buyers. All of this is combined with deep inte- gration with core processes in SAP S/4HANA, including operational transactions, ƒ Sourcing pipeline ƒ Category management ƒ Savings tracking ƒ Bidding (RFI, RFQ, RFP) ƒ Auctions ƒ Category best practices ƒ Contract authoring ƒ Workflow approval ƒ Contract repository Catalog SAP Ariba Sourcing SAP Ariba Sourcing SAP Ariba Contracts SAP Ariba Catalog Project/Category Management Sourcing Contract Contract Monitoring Operational Contract SAP S/4HANA SAP S/4HANA ƒ Contract release ƒ Contract update ƒ Contract distribution ƒ Contract consumption Value Drivers Price reduction, contract compliance, supplier consolidation, integration to contract terms, and pricing ƒ One place to go ƒ Consumer-grade user ƒ Policy and price compliance ƒ Managed content ƒ Spot buy marketplace ƒ Contract Compliance ƒ PO execution ƒ Inventory reservation ƒ Inventory transfer ƒ POC, POA, ASN, SES ƒ Smart invoice ƒ Payment status ƒ Goods receipt ƒ Invoice receipt ƒ Invoice work ow Guided Buying Catalog Supplier Collaboration Goods Receipt Invoice Receipt Purchase Order or Reservation Value Drivers Simplicity/end user adoption, contract compliance, policy enforcement, process eciency, supplier compliance SAP S/4HANA SAP S/4HANA SAP Ariba Buying SAP Ariba Catalog SAP Business Network 1 Introduction to Sourcing and Procurement 46 inventory management, and plan-driven procurement. This makes the process a strong one to take advantage of the cloud. On the direct procurement side, things are somewhat flip-flopped between SAP Ariba and SAP S/4HANA. Here, the trigger for the procurement proposal occurs during an MRP run or is created manually in response to a need in production and planning. These processes take place in SAP S/4HANA, and the requisition, source determination, and purchase order can follow in SAP S/4HANA. All supplier collaboration for direct materials happens over SAP Business Network. With SAP Business Network Supply Chain Collaboration, you also have the capability to support the more complex types of ordering found in direct procurement, such as scheduling agreements, forecasting, and contract manufacturing, seamlessly at the collaboration point in the transaction in the SAP Business Network, as shown in Figure 1.5. Figure 1.5 SAP Business Network and SAP S/4HANA Plan-Driven Procurement For procurement activities originating in plant maintenance or in project manage- ment, as shown in Figure 1.6, more dynamic sourcing and content management is typ- ically required. Here, the transaction originates in SAP S/4HANA but is then sourced by leveraging SAP Ariba Catalog. SAP Ariba Catalog in turn can host large MRO supplier catalogs and apply contract pricing to these items for plant maintenance requestors. Once the PO is created, the PO/invoice collaboration process is supported in SAP S/4HANA via SAP Business Network as in the other scenarios, returning finally for goods receipt and invoice processing to SAP S/4HANA. Figure 1.6 SAP S/4HANA and SAP Ariba Work Order and Project-Driven Procurement ƒ MRP run ƒ Supply plan ƒ Min/max replenishment ƒ MRP generates reqs ƒ Schedule lines ƒ Scheduling agreement ƒ Auto source of supply ƒ Source lists ƒ Quota arrangements ƒ Purchase order creation ƒ Price compliance to ƒ Outline Agreements/PIRs ƒ Forecast/Commit ƒ Schedules, POC, POA, ASN ƒ Consignment, Contract Mfg ƒ Smart invoicing MRP Requisition Source Determination Supplier Collaboration Purchase Order SAP S/4HANA SAP S/4HANA SAP S/4HANA SAP S/4HANA Value Drivers Plan-driven process automation, lower inventory, compliance, lower expediting, invoice accuracy SAP Business Network Plant Maintenance/ Project System Managed Catalog Supplier Collaboration Goods Receipt Invoice Receipt Purchase Order or Reservation SAP Ariba Catalog SAP S/4HANA SAP S/4HANA SAP S/4HANA Workorder/project Component planning Materials and services ƒ Supplier managed content ƒ Contracted prices ƒ ƒ ƒ ƒ Spot buy marketplace ƒ PO execution ƒ Inventory reservation ƒ Inventory transfer ƒ POC, POA, ASN, SES ƒ Smart invoice ƒ Payment status ƒ Goods receipt ƒ Invoice receipt ƒ Value Drivers Increased asset parts ordering and uptime, simplicity for maintenance operations, contract compliance, lower inventory, process e ciency, supplier compliance SAP Business Network © 47 1.3 Procurement with SAP S/4HANA

עברית · תרגום מקצועי

ל-MRO, עקיף, ושירותים — ‏SAP Ariba Buying for SAP S/4HANA מספק guided buying ברמת-צרכן הממנף מחירי contract, מדיניות, ו-spot marketplace ל-longtail spend, ומניע requisitioning דרך shopping cart (עם SAP Business Network Supply Chain Collaboration ו-SAP Ariba Catalog). משתלב עם S/4HANA לביצוע PO ו-inventory management, חוזר ל-Business Network ל-collaboration של PO/invoice, ולבסוף ל-S/4HANA ל-AP (Figure 1.4). ‏SAP Ariba Buying for SAP S/4HANA הוא פתרון מפתח — UX קל ותוכן catalog עשיר (מנוהל, ללא תחזוקת buyer), עם אינטגרציה עמוקה לליבה (טרנזקציות תפעוליות, ‏inventory management, ‏plan-driven procurement). בצד הרכש הישיר, התפקידים מתהפכים. ה-trigger מתרחש ב-MRP run או ידנית בתגובה לצורך בייצור/תכנון. אלו ב-S/4HANA, וה-requisition, ‏source determination, ו-PO עוקבים ב-S/4HANA. כל ה-collaboration לחומרים ישירים דרך Business Network. עם Supply Chain Collaboration, תמיכה גם בהזמנות מורכבות (scheduling agreements, ‏forecasting, ‏contract manufacturing) ב-Business Network (Figure 1.5). לפעילויות מ-plant maintenance או project management (Figure 1.6), נדרש sourcing דינמי ו-content management. הטרנזקציה מתחילה ב-S/4HANA אך מקבלת sourcing דרך SAP Ariba Catalog (המארח catalogs גדולים של ספקי MRO ומחיל מחירי contract). לאחר יצירת ה-PO, ה-collaboration נתמך ב-S/4HANA דרך Business Network, וחוזר ל-S/4HANA ל-GR ועיבוד invoice.

English (original)

1.3.4 Accounts Payable and Invoicing Finally, for accounts payable and invoicing, SAP Ariba offers an array of solutions that go well beyond the simple transfer and processing of invoice documents. SAP Ariba allows all sizes of suppliers to create electronic invoices, email-based smart invoices, or business-to-business connections to buyers. SAP Ariba Invoice Management leverages smart invoice rules and invoices based on contracts (rate sheets) to reduce invoice errors, drive price and tax regulatory compliance, and ultimately allow buyers to receive a clean, error-free, 98 percent touchless invoice in SAP S/4HANA or SAP ERP, all to help drive automation and close the financial books faster. In addition to supporting collaboration between supplier and buyer and allowing for rules-based invoice submis- sion, SAP Ariba also offers dynamic and self-service discounting for the suppliers and supply chain financing in SAP Pay, as shown in Figure 1.7. SAP S/4HANA serves as the digital core for accounts payable transactions, receiving an invoice and creating pay- ment runs, but the frontend collaboration with the supplier can be significantly aug- mented from efficiency and discount standpoints via the inclusion of SAP Business Network and the SAP Pay solution. Figure 1.7 SAP Ariba and SAP S/4HANA Smart Invoicing and Contract Invoicing Two other additions were made to SAP’s overall payment area in procurement recently: SAP Ariba Central Invoice Management and Taulia. For now, SAP Ariba Cen- tral Invoice Management connects to SAP S/4HANA Cloud, public edition and allows for invoicing as shown in Figure 1.8. SAP also acquired Taulia in 2022. Taulia’s solutions allow you to rapidly onboard suppli- ers and provide them with more efficient financing, freeing up working capital in an era of rapidly rising interest rates and financial tightening. SAP has embraced a cloud strategy that spans its entire solution portfolio. When assessing any SAP solution area, including procurement, you should aim to under- stand your options in the cloud, as well as the SAP roadmap and investment plans, from a product standpoint. Value Drivers Invoice exception reduction, rate card compliance, reduce over payments, close the books faster SAP Pay SAP Business Network SAP Pay ▪ Electronic invoicing ▪ Invoice rules ▪ Invoice against contract ▪ Invoice two-way match ▪ Rate sheet ▪ Invoice receipt ▪ Invoice workow ▪ Invoice status ▪ Dynamic discounting ▪ Supply chain nance ▪ Settlement with AP ▪ Remittance ▪ Payment SAP S/4HANA SAP S/4HANA Self-service, Discounting, SCF Settlement Payment Execution Invoice Receipt and Approval Smart Invoicing Contract Invoicing 1 Introduction to Sourcing and Procurement 48 Figure 1.8 SAP Ariba Central Invoice Management

עברית · תרגום מקצועי

ל-accounts payable ו-invoicing, ‏SAP Ariba מציע פתרונות מעבר להעברת מסמכי invoice. מאפשר לספקים בכל גודל ליצור invoices אלקטרוניים, ‏email-based smart invoices, או חיבורי B2B. ‏SAP Ariba Invoice Management ממנף smart invoice rules ו-invoices מבוססי-contract (rate sheets) להפחתת שגיאות, ציות מחיר/מס, ולקבלת invoice נקי ו-98% touchless ב-S/4HANA/SAP ERP — לאוטומציה וסגירת ספרים מהירה. מציע גם dynamic ו-self-service discounting ומימון שרשרת אספקה ב-SAP Pay (Figure 1.7). ‏S/4HANA הוא ה-digital core לטרנזקציות AP (קבלת invoice, ‏payment runs), אך ה-collaboration החזיתי מוגבר ע"י Business Network ו-SAP Pay. שתי תוספות לתחום התשלום: ‏SAP Ariba Central Invoice Management (מתחבר ל-S/4HANA Cloud, public edition; ‏Figure 1.8) ו-Taulia (נרכשה 2022 — onboarding מהיר של ספקים ומימון יעיל, משחרר הון חוזר). SAP אימצה אסטרטגיית ענן חוצת-פורטפוליו. בהערכת כל תחום, הבינו את אפשרויות הענן, ה-roadmap, ותוכניות ההשקעה.

English (original)

1.3.5 SAP Fiori Roles and Applications As with previous UIs, the concept of roles is central to SAP S/4HANA Sourcing and Pro- curement. The principal roles are listed in Table 1.3. Perhaps equally important, several procurement apps are available for SAP Fiori in SAP S/4HANA. These apps fall into transactional, analytical, and navigational categories. SAP Ariba Central Invoice Management SAP S/4HANA Cloud, Public Edition Send Receive Transform Verify and Complete Approve Manual Adjustment Pay Upload Invoice OCR Recognition (Document Information Extraction) Prefilling Invoice Data Customer Email Service** Extract Attachments (iRPA Bot)** Adjust Invoice Manually Adjust Invoice with Errors & Post Optional: Approval Workflow *** Scheduled for Payment Payment Success -fully Posted? Auto Processing? Manual Eamil Advanced edit Yes Yes No No Account and Tax Defaulting Rules SAP S/4HANA Sourcing and Procurement Role Description Employee procurement Manages purchase requisitions: creates purchase requisi- tions, confirms goods receipt and/or services performed, returns deliveries, approves supplier invoices, and evaluates suppliers Manager procurement Approves purchasing documents: requisitions, contracts, and purchase orders Operational purchaser Manages purchase orders, including the creation and track- ing of these documents, and monitors requisitions and con- tracts Strategic buyer Manages sourcing, including supplier evaluation; manages purchase contracts and purchase orders; and monitors req- uisitions Accounts payable accountant Manages supplier invoices, including the creation of sup- plier invoices and release of blocked invoices Table 1.3 SAP S/4HANA Sourcing and Procurement Roles © 49

עברית · תרגום מקצועי

כמו ב-UIs קודמים, מושג ה-roles מרכזי ל-S/4HANA Sourcing and Procurement (טבלה 1.3). חשוב לא פחות — מספר אפליקציות procurement ל-Fiori, בקטגוריות transactional, ‏analytical, ו-navigational. **טבלה 1.3 — Roles ב-S/4HANA Sourcing and Procurement:** | Role | תיאור | |---|---| | Employee procurement | מנהל purchase requisitions: יצירה, אישור GR/שירותים, החזרות, אישור invoices, והערכת ספקים | | Manager procurement | מאשר מסמכי רכש: requisitions, ‏contracts, ‏POs | | Operational purchaser | מנהל POs (יצירה ומעקב), מנטר requisitions ו-contracts | | Strategic buyer | מנהל sourcing (כולל supplier evaluation), ‏purchase contracts ו-POs, מנטר requisitions | | Accounts payable accountant | מנהל supplier invoices (יצירה ושחרור invoices חסומים) |

English (original)

1.4 Summary All told, there are over 500 SAP Fiori apps already available for SAP S/4HANA Enterprise Management and over 100 roles. This provides a wide array of prebuilt options with which to tailor the user experience and process optimization. For further requirements beyond the prebuilt roles and apps, customizing apps and roles further to a company’s needs has never been easier and more mobile-ready than with the SAP Fiori–based UI. This book’s focus is on the SAP S/4HANA Sourcing and Procurement capabilities and SAP Ariba’s business scenarios integrated with SAP S/4HANA. For an in-depth look at the functionality and implementation approaches for SAP Ariba, there is a dedicated title available from SAP PRESS: SAP Ariba (2021, https://www.sap-press.com/sap-ariba_5214/). 1.4 Summary As business computing concepts, procurement and enterprise resource planning have been around since the inception of computing itself. Up until recently, analytics and transactions had to run in separate environments because of computing constraints. Over time, computing became faster, but complexity, requirements, and data loads grew at a similar pace, moving in lockstep with the improvements in computing hard- ware and software speed. Now, we’re at an inflection point with SAP S/4HANA Enter- prise Management, in which both software and hardware advances are able to support the reunification of analytics and transactions into one unified platform, as well as col- laborative procurement processes via integrations with the SAP Business Network and SAP cloud solutions for procurement, such as SAP Ariba and SAP Fieldglass. Each process area will require a level of effort and strategy to achieve a comprehensive implementation of SAP S/4HANA Enterprise Management. With SAP S/4HANA Sourc- ing and Procurement, the procurement processes are a core part of this new platform and the focus of this book. In the following chapters, we’ll lay out a roadmap toward realizing a successful, comprehensive implementation of SAP S/4HANA Sourcing and Procurement. ©

עברית · תרגום מקצועי

(המשך 1.3.5) — בסך הכול, 500+ אפליקציות Fiori ל-S/4HANA Enterprise Management ו-100+ roles — מגוון רחב להתאמת ה-UX ולאופטימיזציה. להתאמות מעבר למוכן, הוספת apps/roles מעולם לא הייתה קלה ו-mobile-ready יותר. הספר מתמקד ביכולות S/4HANA Sourcing and Procurement ובתרחישי SAP Ariba המשולבים. למבט מעמיק על Ariba — ספר ייעודי ב-SAP PRESS: ‏SAP Ariba (2021). **סיכום:** ‏procurement ו-ERP קיימים מאז ראשית המחשוב. עד לאחרונה, analytics וטרנזקציות רצו בסביבות נפרדות בשל מגבלות. עם הזמן המחשוב האיץ, אך המורכבות והנתונים גדלו במקביל. כעת, בנקודת מפנה עם S/4HANA Enterprise Management — חומרה ותוכנה תומכות באיחוד analytics וטרנזקציות לפלטפורמה אחת, ובתהליכי רכש שיתופיים דרך אינטגרציות עם Business Network ו-Ariba/Fieldglass. כל תחום תהליך ידרוש מאמץ ואסטרטגיה ליישום מקיף. הפרקים הבאים יציגו roadmap ליישום מוצלח של S/4HANA Sourcing and Procurement.