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28 Sep 2017

The S4HANA Advantage for a Sourcing and Procurement Implementation

Procurement Implementation
Moving from an ERP on a traditional database to SAP S/4HANA over the cloud and line-of-business (LoB) solutions can have a direct impact on how your enterprise implements the sourcing and procurement process.

As businesses grow in today’s highly competitive world having a streamlined procurement policy and deliverability can be the difference between success and failure. For procurement leaders, this represents both an opportunity and a challenge. Organizations that are able to actively manage spending across various categories based on real-time insights will be able to generate significant cost savings. Similarly, organizations that still continue to rely on traditional spend management practices are likely to lose significant value.

SAP S/4HANA along with the use of SAP Ariba solutions enable a tangible step-change in performance, speed, visibility, and control for all such sourcing and procurement needs. SAP S/4HANA is able to offer enterprises the advantage of managing high volume of data with access to real-time digital visibility helping them refine and improve their sourcing and procurement plans.

S/4HANA advantages for sourcing and procurement
SAP S/4HANA for its coherent UX interface and agile advantages also offers sourcing and procurement advantage for enterprises. Organizations can now make use of an integrated way to manage procurement and associated business processes. It is the procurement department or procurement leaders who often face the massive burden of managing multiple suppliers, contracts, and materials.

Just the advantage of getting some real-time analytics can help procurement and sourcing department the clarity it may need to pick the right suppliers. S/4HANA is unique from the traditional classic procurement approaches used in various pre in-memory enterprise resources like SAP ERP/ECC. SAP S/4 HANA helps procurement leaders to be more productive by offering optimization of the procurement process.

Here are the core aspects where SAP S/4HANA can make the difference between an effective procurement and sourcing program implementation over other business suites procurement and sourcing plans.

1: Instant material search using SAP S/4HANA
SAP S/4HANA allows procurement department to search for any specific term using a search engine like field. So, if the procurement department is looking for a specific material supplier, all it has to do is type the lead in the Google type search box and then drill down to navigate at the various supplier object and material pages.

The search engine also allows for alternative suppliers for a searched material offering better leads at a lower price point. Unlike in traditional ERP business suites where the procurement officer had to deal with isolated searches, SAP S/4HANA allows searches across various documents and master data sets. So, a faster instant material search for effective sourcing options is possible due to SAP S/4HANA.

2: The advantage of real-time supplier evaluation
The one big advantage that SAP S/4HANA offers is the ability to generate real-time analytics. Such insights and advanced analytics are essential for procurement officers when evaluating suppliers. The use of SAP Fiori user experience means that supplier analytics are traced on various parameters like on time deliverability, pricing, quantity variance, etc. Everything from a vendor’s contract expiry date to used contracts and contact leakages are also mapped.

SAP S/4 HANA also looks into spend analytics like purchasing spend and/or of-contract spend to correlate a final real-time data analytics for the procurement officer to consider. Such real-time analytics help procurement officers to take instant decisions. Any change in any deliverability will ensure KPI gets reflected to the procurement officer making the department choose only the best supplier as per its needs.

3: Proactive supplier collaboration with S/4 HANA
SAP S/4HANA allows for a native integration with the Ariba Network without the need of any specific add-on as was the case with SAP ERP. With SAP S/4HANA implementation with the Ariba Network is prebuilt which means everything from order creation, to confirmation as well as shipping notifications can be sent to the Ariba network seamlessly. SAP S/4HANA as a result allows for a better facilitation and collaboration between suppliers and the parent organization. Orders are created in SAP S/4HANA and sent to suppliers on the Ariba Network for processing.

Conclusion: SAP S/4HANA as a new generation digital technology is playing a proactive part in ensuring procurement functions are simplified leading to improved sourcing and procurement for the enterprise.