Three Ways SAP S/4HANA Jump-Starts Procurement Transformation

While supply chains worldwide continue adjusting to the COVID-19 pandemic, procurement is also transforming – not just during this crisis, but for doing business in a very different world long after.

Chief among the must-haves is an integrated, cloud-based solution that offers easy, real-time access to spend data.

I saw how some organizations are taking procurement to the next level during a video session of the SAP Ariba Live 2020 virtual experience with Martin Jones, global lead for Solution Go-to-Market Procurement Transformation for SAP Ariba and SAP Fieldglass. After watching the session, I caught up with Jones to find out how customers are transforming procurement to increase productivity and cost savings.

“Working together with our customers, we realized that technical integration between SAP Ariba and other SAP applications wasn’t enough,” Jones said. “We developed the SAP Intelligent Enterprise Framework  to integrate data from business processes as well, providing companies with end-to-end visibility for a consistent user experience and more informed decision-making.”

Here is an overview of three options Jones showcased in his video.

Option One: Centralize for Speed

According to Jones, the beauty of SAP S/4HANA for central procurement is that it gives companies full transparency across all spend processes without requiring data harmonization or migration. He said this was an ideal option for customers that had multiple enterprise resource planning (ERP) instances of either SAP or non-SAP software and wanted to reduce complexity even as they embarked on integration projects. Equally important, customers can transform at their own pace.

“Customers appreciate the ability to start migrating to SAP S/4HANA in a low-risk, high-end manner,” Jones said. “They gain a centralized view across all functions in multiple back-end systems, including requisitioning, purchasing, sourcing, contracts, analytics, and invoice monitoring… and can take actions to transform and optimize activities without disruption.”

Option Two: Turn Paper into Touchless Processes

Companies with numerous paper-based processes are turning to SAP Ariba Commerce Automation, which natively integrates Ariba Network with SAP S/4HANA. By digitizing and sharing all procurement transactions in real time, customers can collaborate with suppliers faster, save time, and have more opportunities to take advantage of savings such as early payment discounts.

“All of the purchase order generation happens in the back end and is shared across Ariba Network in real time to the supplier, who can then respond with the order transformation, advanced ship notices, and electronic invoices,” Jones explained. “Companies can pre-validate invoices, get rid of non-compliant invoices, and send them back to the supplier to fix before they go into their own system. This boosts the opportunity for touchless processing up to 98 percent.”

Option Three: Personal Shopping Experience

Companies intent on making the indirect buying experience at work similar to how people shop in their personal lives are opting for the guided buying capability from SAP Ariba, which is integrated with SAP S/4HANA.

“People can quickly find the right supplier and catalog at the right price and get order confirmation,” Jones said. “CFOs like this because corporate governance is built in with accurate purchase orders, followed by invoices that are pre-validated against the network. With clean invoices generating greater discounts, some accounts payable teams are turning into profit centers.”

Regardless of which option a customer selects, they gain the benefits of native integration with SAP S/4HANA. Having a consistent user experience and integrating business processes gives procurement a valuable window into insights and actions that help support every organization’s financial well-being.


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