Unit 3: Connecting Multiple Back Ends into One

Procurement Hub
Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA for central procurement: strategy and objectives

Enable a central location (typically headquarters) within a company to define

and implement procurement strategies and leverage spend for the company.
Large companies prefer the headquarters to take care of strategic and
subsidiaries to take care of operational purchasing.

Benefits and Purpose

▪ Brings efficiency and effectiveness into contracting and purchasing
▪ Ensures major bulk discounts because of volume purchases and economies of scale
▪ Enables a centralized sourcing, contracting, and procurement process while executing regionally
▪ Provides a simple, easy, and cost-effective solution to maintain the integration architecture in an
SAP-dominated environment – the ideal solution when it comes to multi-SAP ERP architectures
▪ SAP S/4HANA for central procurement will support SRM-using customers by providing the correct
transformation solution to replace SAP SRM connected to multiple back-end ERPs

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Connecting Multiple Back Ends into One Procurement Hub
From SAP SRM to SAP S/4HANA for central procurement
SAP Ariba

Guided Buying

SAP SRM SAP S/4HANA for Central Procurement

SAP ERP SAP ERP SAP ERP S/4HANA SAP ERP SAP ERP SAP ERP

Current Scenario Target Scenario

▪ Supports multi-SAP-back-end installations
▪ Is the procurement backbone of every large SAP installed
base customer
▪ End of maintenance for SAP SRM in 2025
▪ SAP S/4HANA system acts as central system
▪ Supports central requisitioning, central purchase contracts, and
central purchasing
▪ Distribution to local operational back-end systems like SAP
S/4HANA and SAP ERP (starting from SAP ERP 6.06)

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Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA – LoB sourcing and procurement

Central Purchase
Central Central
Central Procurement Requisitioning
Contract
Purchasing
Central Analytics
Processing

Real-Time
Procurement Analytics Reporting and Spend Visibility
Monitoring

Classification and Supplier

Supplier Management Segmentation Evaluation

Collaborative Sourcing and Contract Operational

Contract
Source
Assignment
Management Management

Service
Purchase Order Purchase Order Requirements Self-Service
Operational Purchasing Collaboration Processing Processing Requisitioning
Purchasing and
Entry

Invoice Invoice
Invoice and Payables Management Accounts Payable
Processing Collaboration

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Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central requisitioning – Main value drivers and technical setup (1)

Guided Buying Request Central Self-Service Requisition Back-End Purchase Requisition

Employee Employee & Central Purchaser Local Purchaser

• Consumer-grade user experience • Graphical back-end document flow • Leading system of records
• Multiple procurement channels • Self-service goods confirmation • Guided Buying integration via hub
• Compliance via business policies • Central monitoring of requisitions • Potential corrections to requisitions
• Automatic status updates from S/4 • Optional workflow integration • Notifications to Guided Buying *

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC * future planning 5
Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central requisitioning – Main value drivers and technical setup (2)

Guided Buying Request Central Self-Service Requisition Back-End Purchase Requisition

SAP S/4HANA 1709+

incl. HUBS4IC

SAP S/4HANA On-Premise

OData SOA replication of requisitions

Guided Buying with SAP S/4HANA for Central ERP EHP06+ SAP S/4HANA Cloud
SAP Ariba Buying Procurement incl. HUBERPI SAP S/4HANA 1802+
no add-on needed
(Cloud or On-Premise) ERP Back End
Harmonized master data requirements: material groups, purchasing groups
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Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central purchase contracts – Main value drivers and technical setup (1)

Central Purchase Contract Central Contract Distribution Central Contract Monitoring

Central Purchaser Central Purchaser Central Purchaser

• Negotiation of central contract • Header and item-level distribution • Monitoring of back-end call-offs
• Central contract approval / output • Back-end purchase contracts • Search by local contract numbers
• Integration of replicated SoS • Back-end scheduling agreements • Central contract consumption KPI
• Direct F4 material search help • Master data mapping via BAdI • Release documentation overview

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Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central purchase contracts – Main value drivers and technical setup (2)

Central Purchase Contract Central Contract Distribution Central Contract Monitoring

SAP S/4HANA 1709+

incl. HUBS4IC

SAP S/4HANA On-Premise

SOA replication of local contracts
OData-based pull of contract call-offs
SAP S/4HANA for Central ERP EHP06+ SAP S/4HANA Cloud
Procurement incl. HUBERPI SAP S/4HANA 1802+
no add-on needed
(Cloud or On-Premise) ERP Back End
Harmonized master data requirements: suppliers, conditions, pricing schema, incoterms,
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC payment terms, unit of measures, currencies, and tax codes * future planning 8
Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central purchasing – Main value drivers and technical setup

Manage Requisitions Centrally Sources of Supply Assignment Seamless Back-End Navigation

Central Purchaser Central Purchaser Central Purchaser

• Central display of all requisitions • Real-time display of back-end SoS • Group requisitions into back-end PO
• Full requisition object page visibility • Selection of source of supply • Create purch orders in Held status
• System-wide labeling of org data • Blocking of back-end requisitions • Navigation into back-end document
• Use of responsibility management • Initiate sourcing events in Ariba * • Quick editing of PO fields * in hub

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC * future planning 9
Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA central purchasing – Main value drivers and technical setup

Manage Requisitions Centrally Sources of Supply Assignment Seamless Back-End Navigation

SAP S/4HANA 1709+

incl. HUBS4IC

SAP S/4HANA On-Premise

OData calls for SoS assignment
Intent-based UI navigation to Web GUI
SAP S/4HANA for Central ERP EHP06+ SAP S/4HANA Cloud
Procurement incl. HUBERPI SAP S/4HANA 1802+
no add-on needed
(Cloud or On-Premise) ERP Back End
Harmonized master data requirements: none
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC * future planning 10
Connecting Multiple Back Ends into One Procurement Hub
Procurement reference IT landscape for SAP S/4HANA and SAP Ariba

SAP Ariba Buying SAP Analytics SAP Ariba Catalog SAP Ariba Supply
SAP Ariba Sourcing with guided buying Cloud SAP Ariba Spot Buy Catalog Chain Collaboration

SAP Ariba Contracts §

SAP Ariba Cloud

SAP Ariba Supplier Integration Gateway
Lifecycle and SUPPLIERS
Performance

SAP Ariba Supplier

Risk Ariba Network
SAP S/4HANA
Enterprise Management
SAP Master Data
FINANCIAL INSTITUTIONS
Governance, SAP S/4HANA for
Supplier (optional) Central Procurement
Dynamic
Discounting
Planned integration scenarios Supply Chain
• SAP Ariba Sourcing Finance
• SAP Ariba Contract Management SAP LOGISTIC SERVICE PROVIDERS
SAP ERP SAP ERP
• SAP Analytics Cloud S/4HANA

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SAP S/4HANA Digital Core 11
Connecting Multiple Back Ends into One Procurement Hub
SAP S/4HANA for central procurement

E-Bite available on 10/23/2018

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