SAP S/4HANA for Central Procurement
Our large market customers who have a variety of ERP landscapes by region or by Business Process. Trying to centralize these ERP systems might not make a lot of sense due to the nature of how businesses are structured and consolidating the process together comes up with a very high Total Cost Of Ownership for customers.
Customers need a solution where they can get the benefit of centralization such as oversight, intelligence and consistency without paying the price of trying to align the subsidiary systems to operate with a high degree of autonomy. So, with Central Procurement, we are able to deliver the undisruptive value, but still respecting the backend diversity. So there is a perfect balance between oversight of centralized systems and autonomy of these systems.
Why SAP S/4HANA for Central Procurement?
SAP S/4HANA for Central Procurement stands out for its ability to streamline and enhance procurement processes. Key benefits include a design partnership approach, fostering collaboration and customization.
The hub system setup centralizes access to all connected SAP systems within an organization, simplifying oversight and management. This centralization allows for viewing, creating, and modifying documents and details within a single system, enhancing efficiency and consistency. Importantly, it provides centralized control and compliance, even in environments with multiple backend systems, ensuring uniformity and adherence to corporate and regulatory standards across the entire procurement landscape.
All about Central Procurement
With Central Procurement, you can integrate your SAP S/4HANA Cloud system (which acts as a hub system) with other connected systems in your system landscape. SAP S/4HANA, SAP S/4HANA Cloud, or SAP ERP act as connected systems.
Central Procurement allows for the integration of your SAP S/4HANA Cloud system, serving as a hub, with various interconnected systems in your organizational landscape, such as SAP S/4HANA, SAP S/4HANA Cloud, or SAP ERP. These cloud integration scenarios facilitate the creation of shared services, enabling centralized control of procurement processes across multiple connected systems from a single, primary system.
This scenario encompasses the following key components:
1XI — Central Processing of Purchase Requisitions provides a unified approach to managing requisitions throughout various industries, seamlessly merging with the customer’s existing operational systems. It interfaces with the customer’s ERP systems, facilitating the transfer of master data and business documents, which is essential for comprehensive business operations in finance and logistics across the connected systems.
This solution presents a singular platform where procurement experts can efficiently manage requisitions from various entities within the organization. The system’s centralized nature benefits not just day-to-day operational procurement but also enhances strategic procurement functions like Supplier Management. This is due to the improved transparency and the capacity to launch strategic procurement initiatives from a centralized digital procurement command center.
2ME — Central contracts represent international, long-term deals established between a company and a supplier, aiming to secure optimal prices and terms by consolidating the buying power of various branches. These agreements are often brokered by the main purchasing department, typically situated at the corporate headquarters, to enhance global operational efficiency and cost savings while ensuring adherence to regulatory standards across all branches.
Once formulated at the central office, these contracts can be apportioned to individual branches, enabling them to create localized agreements or define scheduling terms. This process allows branches to proceed with their procurement operations smoothly, utilizing the agreements specific to their locale. The central office retains oversight, monitoring the usage of these contracts across all branches and handling the renewal of any that are nearing expiration.
2XT — Central Purchasing streamlines access and enhances the visibility of procurement operations across various sectors, ensuring robust integration within the system’s infrastructure. It interfaces with the customer’s ERP systems, facilitating the exchange of key purchasing documents, including purchase requisitions and orders, across interconnected systems. This system provides a cohesive approval process, a unified portal, comprehensive output management, detailed analytics, and centralized management of product category responsibilities.
This feature consolidates various procurement functions onto a single platform, allowing procurement specialists to manage requisitions and orders across different backend systems efficiently. But it’s not just operational procurement that benefits from this centralized approach; strategic procurement activities, such as Supplier Management, also gain from the clear visibility and centralized control, enabling the launch and management of strategic initiatives from a central digital procurement command center.
3ZF — Central Sourcing delivers a unified platform that enhances access and oversight of the sourcing process across various industries, with comprehensive integration into the existing system landscape. It connects with the customer’s ERP systems, allowing for the seamless transfer of purchasing-related documents such as purchase requisitions, purchase orders, and contracts within the connected systems.
Within this framework, procurement specialists have the ability to centrally manage purchase requisitions across multiple ERP systems, facilitating the identification of the best sources of supply. They can generate a single request for quotation (RFQ) that consolidates multiple requisitions from disparate ERP systems. This centralization streamlines the maintenance and assessment of supplier quotations and permits the awarding of RFQs. Subsequent processes, such as the creation of a central contract or purchase order within the relevant ERP system, are managed from this central hub.
Moreover, strategic procurement operations, including Supplier Management, are enhanced by the clear visibility and control afforded by the central digital procurement control center. This allows for the initiation and management of strategic procurement activities from a single, centralized location.
3EN — Guided buying within SAP Ariba Buying enhances the purchasing process, making it intuitive, intelligent, and streamlined, thereby boosting engagement for users managing expenditures. It establishes a unified platform where purchasers can access a comprehensive range of goods and services. This feature also empowers procurement teams and business unit leaders to define and enforce procurement policies, providing guidance in instances of policy discrepancies.
The Central Procurement functionality provides a uniform requisition process applicable to various industries, integrating seamlessly into the customer’s operational framework. This system links the guided buying features of SAP Ariba Buying with the customer’s ERP or SAP S/4HANA systems, facilitating the exchange of business documents and ensuring comprehensive business workflows within finance and logistics on the integrated systems. The integration also ensures that requisitions can be transferred and updated between systems, along with the relevant master data.
4QN — The SAP S/4HANA Hub system provides customers with a centralized RFQ (Request for Quotation) process that is deeply integrated into their operational landscape. It establishes a connection between SAP Ariba Sourcing and the customer’s SAP ERP or SAP S/4HANA system, whether on-premise or in the cloud.
Customers can consolidate or aggregate purchase requisitions from multiple connected backend systems using the SAP S/4HANA Hub system. This enables the creation of a single central RFQ, facilitating the opportunity to obtain better pricing through scale.
SAP Ariba Sourcing offers an array of intuitive RFX tools, which include requests for information, requests for proposals, and reverse auctions. It also provides connections to an extensive network of over two million companies, enabling quick and efficient supplier discovery, alongside automated and customizable negotiation processes.
After the awarding process in SAP Ariba Sourcing is complete, the supplier contract established in the SAP S/4HANA Hub system triggers the creation of purchase orders or contracts in the corresponding connected backend systems.
4B0 — In this feature, customers have the ability to integrate both value and quantity contracts, which are formal agreements for a business to purchase specified amounts of products within a set timeframe. Within SAP Ariba Contracts, customers have the capability to negotiate prices for products and streamlined services for procurement, and to establish legally enforceable agreements with suppliers. The details of these pricing agreements are transferred from SAP Ariba Contracts to the operational system, enabling procurement professionals to apply these negotiated prices when purchasing goods or services as needed.
Central procurement provides a unified contract management process applicable across various industries, deeply integrated into the customer’s operational environment. It links SAP Ariba Contracts with the customer’s ERP or SAP S/4HANA systems, facilitating the exchange of business documents. This ensures comprehensive business processes in finance and logistics are maintained across the interconnected systems.
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