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Justin Ashlock
Notes on Usage
Table of Contents
Foreword
Preface
1 Introduction to Sourcing
and Procurement
1.1 Sourcing and Procurement: From
Basic to Strategic
1.1.1 Sourcing
1.1.2 Operational Procurement
1.2 Sourcing and Procurement from End
to End
1.2.1 Ideal Procurement
1.2.2 Source-to-Pay and Procure-to-Pay
1.2.3 Key Process Areas
1.3 Procurement with SAP S/4HANA
1.3.1 Multitenant Cloud versus Single-Tenant
Environment for ERP Systems
1.3.2 Strategic Sourcing
1.3.3 Procurement
1.3.4 Accounts Payable and Invoicing
1.3.5 SAP Fiori Roles and Applications
1.4 Summary
2 Implementation Options
2.1 Implementation Overview
2.1.1 Deployment Options
2.1.2 Cloud
2.1.3 On-Premise
2.1.4 New Implementation versus System
Conversion
2.2 On-Premise SAP S/4HANA
2.2.1 Complete Functional Scope
2.2.2 Installation
2.2.3 Activated Appliance
2.2.4 Information Technology Considerations
2.2.5 Integration Options
2.2.6 System Conversion to SAP S/4HANA
2.3 SAP S/4HANA Cloud
2.3.1 SAP Best Practices Scope
2.3.2 Information Technology Considerations
2.3.3 Standard Integration and Customization
2.4 SAP Ariba Central Procurement,
Private Cloud Edition
2.5 Quick Start Approaches and Materials
for SAP S/4HANA
2.5.1 Prebuilt Content and Templates
2.5.2 SAP Best Practices
2.5.3 Appliance Model and Enterprise
Management Layer
2.5.4 SAP Activate
2.6 Summary
3 Organizational Structure
3.1 SAP S/4HANA Enterprise
Management Organization Objects
3.2 SAP S/4HANA Sourcing and
Procurement–Specific Organization
Structure Objects
3.3 Company Code
3.4 Plants
3.5 Storage Locations and Warehouses
3.5.1 Storage Location
3.5.2 Warehouse Creation
3.6 Purchasing Organizations
3.7 Purchasing Group Creation
3.8 Summary
4 Master Data
4.1 Material Masters and Material Groups
4.1.1 Activating a Material Master Field
4.1.2 Creating a Material Master
4.1.3 Creating a Material Group
4.1.4 Lean Services
4.1.5 Configuring Lean Services: Product Services
Type (SERV)
4.1.6 Select Material Master Configuration Options
4.1.7 Material Master Field Character Expansion in
SAP S/4HANA
4.2 Batch Management and Serialization
4.2.1 Configuring Batch Numbers
4.2.2 Configuring Serial Numbers
4.3 SAP S/4HANA Business Partner Model
4.3.1 Suppliers as Business Partners
4.3.2 Loading Supplier Records in SAP S/4HANA
4.3.3 Setting Up the Supplier Master
4.3.4 Performing Customer/Vendor Integration
4.4 Summary
5 Operational Procurement
5.1 What Is Operational Procurement?
5.2 Self-Service Procurement
5.2.1 Creating a Requisition or Shopping Cart in
SAP S/4HANA
5.2.2 Carbon Footprint Tracking
5.2.3 Advanced Intercompany Sales
5.2.4 Confirmation and Return Delivery
5.2.5 Shopping Cart versus Requisition-to-Pay and
Migrating SAP SRM Shopping Carts
5.2.6 Workflow
5.2.7 Machine Learning–Based Purchasing
Functionality via SAP Business Technology Platform
5.3 Requirements Processing in SAP
S/4HANA Sourcing and Procurement
5.4 Purchase Order Processing
5.5 Service Purchasing and Service
Confirmation
5.6 Purchase Order Collaboration
5.7 Configuring Operational Procurement
5.7.1 Self-Service Procurement Requisitioning
5.7.2 Machine Learning–Based Procurement
Functionality
5.7.3 Requirements Processing
5.7.4 Purchase Order Processing
5.7.5 Purchase Order Collaboration
5.7.6 SAP SuccessFactors
5.8 Summary
9 Enterprise Contract
Management and Assembly
9.1 What Is Enterprise Contract
Management and Assembly?
9.2 SAP Fiori Apps for Enterprise Contract
Management Overview
9.2.1 Home Page and Enterprise Contract
Management Overview
9.2.2 Manage Contexts
9.2.3 Categories for Legal Content
9.2.4 Manage Legal Documents
9.2.5 Manage Legal Tasks
9.2.6 Request Legal Contract
9.2.7 Manage Legal Transactions
9.2.8 Manage Workflow Templates
9.3 Customizing Enterprise Contract
Management
9.3.1 Number Ranges
9.3.2 Reminder Types
9.3.3 Date Types
9.3.4 Internal Contacts
9.3.5 Entity Types
9.3.6 External Contacts
9.3.7 Technical Types for Linked Object Types
9.3.8 Linked Object Types
9.3.9 Content Types
9.3.10 Document Stamps
9.3.11 Profiles
9.3.12 Document Types
9.3.13 Background Job Definitions
9.4 Summary
10 External Sourcing
10.1 Sourcing Strategies
10.2 Request for Quotation
10.2.1 Sourcing with SAP Ariba Sourcing and SAP
Business Network
10.2.2 Sourcing with Standalone SAP S/4HANA
10.2.3 Quote Automation for Procurement
10.2.4 Request for Price
10.3 SAP Fiori Apps for External Sourcing
10.3.1 Manage Requests for Quotation
10.3.2 Create Request for Quotation via the
Process Purchase Requisitions App
10.3.3 Monitor Request for Quotation Items
10.3.4 Compare Supplier Quotations
10.3.5 Manage Supplier Quotations
10.3.6 Manage Workflows for RFQs
10.3.7 Manage Workflows for Supplier Quotation
10.3.8 My Inbox
10.3.9 Request for Quotation Types
10.4 Configuring Request for Quotation
10.4.1 Number Ranges
10.4.2 Document Types for RFQ
10.4.3 Document Types for Supplier Quotation
10.4.4 External Processing for Supplier Quotation
Process
10.4.5 Activate cXML Message Types
10.4.6 Credentials and Endpoints
10.4.7 Assign Network ID to Company Code
10.4.8 Schedule Job
10.4.9 Output Parameter Determination and Use
10.5 Configuring Flexible Workflow
10.5.1 Scenario Activation
10.5.2 Register Event for Subsequent Workflow
10.5.3 Maintain Task Names and Decision Options
10.5.4 Visualization of SAP Business Workflow
10.5.5 Scenario Definition
10.5.6 Maintain Attribute for Workflow Task
10.6 Integration with SAP Ariba
10.7 Summary
11 Product Sourcing
11.1 What Is Product Sourcing?
11.2 Product Sourcing
11.2.1 Sourcing Project
11.2.2 Quotation Evaluation
11.2.3 Award Decisions
11.3 Procurement Planning
11.3.1 Parts Import and Assignment to Projects
11.3.2 Milestones and Task Scheduling
11.3.3 Parts Bundling per Sourcing Needs
11.4 Product Sourcing with Enterprise
Contract Management
11.5 Product Sourcing and Commodity
Pricing Engine
11.6 Quotation Management and
Supplier Quotations
11.7 Mass Price Update
11.8 External Collaboration with
Suppliers
11.8.1 SAP Business Network and Product
Sourcing
11.8.2 Supplier Portal (Private Network)
11.9 Configuration Product Sourcing
11.10 Summary
13 Supplier Management
13.1 What Is Supplier Management?
13.1.1 Supplier Discovery, Qualification, and
Onboarding
13.1.2 Classification and Segmentation
13.1.3 Evaluation
13.2 Classification and Segmentation
13.2.1 Create a Purchasing Category
13.2.2 Managing a Purchasing Category
13.2.3 Translating a Purchasing Category
13.3 Supplier Evaluation
13.3.1 Supplier Evaluation Scorecard
13.3.2 Individual Supplier Evaluation
13.3.3 Supplier Evaluation by Time and Quality
13.3.4 Supplier Evaluation by Price
13.3.5 Supplier Evaluation by Questionnaire
13.3.6 Combined Scorecard
13.3.7 Operational Supplier Evaluation
13.4 Configuration
13.4.1 Supplier and Category Management
Configuration
13.4.2 Classification and Segmentation
13.4.3 Supplier Evaluation Configuration
13.5 Summary
14 Centralized Procurement
14.1 What Is Centralized Procurement?
14.2 Central Requisitioning
14.3 Central Purchasing
14.4 Central Sourcing
14.5 Central Purchase Contracts
14.6 Central Analytics
14.7 Integration with SAP Ariba and SAP
Business Network
14.8 Configuring SAP Ariba Central
Procurement, Private Cloud Edition
14.8.1 Prerequisites
14.8.2 Establishing Connectivity to ERP Systems
14.8.3 Validating Data and Identifying Gaps
14.8.4 Configuring SAP Ariba Central Procurement,
Private Cloud Edition Scenarios
14.8.5 Integrating SAP Ariba Buying for SAP
S/4HANA with Central Procurement
14.9 Summary
15 Sourcing and
Procurement Analytics
15.1 Spend Visibility
15.2 Contract Expiration
15.3 Sourcing
15.4 Supplier Performance
15.4.1 Purchasing Document Reports and
Embedded Analytics
15.4.2 Predictive Analytics
15.5 Reporting
15.6 Machine Learning and Artificial
Intelligence
15.7 SAP Ariba Category Management
15.8 Configuration
15.8.1 Creating a Key Performance Indicator
15.8.2 Configuring Real-Time Reporting/Queries
15.8.3 Exploring the Virtual Data Model and Core
Data Services in SAP S/4HANA
15.8.4 Integration of SAP S/4HANA with SAP
Analytics Tools
15.8.5 Integration with Cloud Applications
15.9 Summary
18 Conclusion
18.1 Future State of Procurement
Solutions
18.2 Future State of the Procurement
Supply Chain
The Author
Contributors
Index
Service Pages
Legal Notes
Foreword
As you read this book you will also notice that SAP is widely
adapting the SAP Ariba brand to represent everything
procurement. Our commitment to you is that the next-
generation solutions from SAP Ariba will ensure an “easier
than ever” experience and provide a single platform by
which all spend can be managed. The foreword to the
previous edition of this book highlighted how SAP Ariba
Central Procurement provided the foundation for this in an
enterprise-wide environment. Buying 360 capability in SAP
Ariba Buying will ensure that all personas in your
organization can meet the sophisticated demands of world
class organizations while enjoying the simplicity of one
centralized experience.
Implementing SAP Ariba, SAP Fieldglass, and SAP Business
Network also puts your organization in an excellent position
to leverage generative AI as a means of transformation. SAP
is all-in on generative AI, with over ten use cases for spend
management being delivered in 2024 and many more in
active research and development. Our research indicates
that, if responsibly designed and developed, generative AI
will unleash exponential efficiency gains for organizations.
Economists widely state that we have lived in a productivity
slump for nearly 20 years, and it is our belief that
innovations in artificial intelligence will reverse this trend.
SAP is rising to this challenge to deliver these outcomes
across our entire portfolio.
Target Audience
This book should be of interest for anyone working with SAP
S/4HANA Enterprise Management and SAP Ariba and/or SAP
Fieldglass, or anyone looking to roll out procurement
solutions in either an on-premise or a cloud environment.
Business users, procurement managers, and consultants are
the primary target audience of this type of book. This book
assumes a familiarity with and interest in procurement
solutions and terminology, as well as project management
and delivery topics around these solutions. Finally, critical
reasoning skills for understanding just where these solutions
will provide your organization the most value individually
and in concert will serve you in good stead in this journey.
Objective
This book’s focus is on implementing SAP S/4HANA Sourcing
and Procurement, in conjunction with key SAP cloud
solutions for procurement—principally, SAP Business
Network, SAP Ariba, and SAP Fieldglass. Together, SAP
S/4HANA, as well as the SAP Ariba solutions and SAP
Fieldglass, cover a vast area of collaboration and processes
between an organization and its suppliers. Although it’s not
possible to cover every permutation of configuration in
these solutions, this book will provide an in-depth look at
each of the SAP S/4HANA solution areas for procurement
and furnish system-specific guidelines, methodologies, and
functionality, as well as provide guidance for integrating SAP
S/4HANA with select SAP Ariba solutions.
Acknowledgments
Many colleagues and friends made significant contributions
to this third edition. In particular, I would like to thank our
editors, Emily Nicholls and Meagan White of SAP PRESS;
contributing authors Bob Gotschall, SAP Principal at Venetia
Partners and former long-time consultant at SAP, and
Salavat Petrov, Senior Consultant at SAP America; Salvatore
Lombardo, Chief Product Officer, SAP Ariba; and Baber
Farooq, Head of Market Strategy, SAP Ariba and SAP
Fieldglass. Finally, special thanks and love to my wonderful
wife and sons for supporting my writing sessions!
Justin Ashlock
Chicago, IL
December 2023
1 Introduction to Sourcing
and Procurement
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 service 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 operating costs. At
this level, fuel easily qualifies as a strategic sourcing area
for an airline.
*****
*****
*****
10.
Thora Thammersilla oli tällä kertaa ollut onni saada huone, josta
oli näköala nummelle.
Pieni kuisti hänellä myöskin oli, jonka sai pitää melkein yksin.
Noista kahdesta muusta huoneesta, joista myöskin oli ovi sinne, asui
toisessa eräs vuoteen omana oleva nainen ja toisessa ylioppilas
Adelsson, jota sanottiin Omar Pashan sijaiseksi. Häntä ei Thora
nähnyt useinkaan.
Omituista kuinka nopeasti aika kului! Viikon päivät oli hän jo ollut
täällä.
Tällä kertaa oli hän tullut tänne yksin ja melkein vastoin tahtoansa.
Hän jäi katsomaan hänen jälkeensä, kun Thamar rouva nyt asteli
niityille päin.
*****
Saisiko hän jutella hiukan hänen kanssaan? Miksi hän oli niin
vähän muun hienoston seurassa? Täällähän oli paljon hienoa väkeä,
sekä herroja että naisia, sanoi neiti Hennerud. Joku päivä sitten
olivat nuo molemmat tanskalaiset paronittaret tulleet ja saksalainen
kenraali ja vapaaherra, joilla oli norjalainen rouva ja joka pelkästä
hienoudesta tuli päivällispöytään varpaillaan tanssien… olisikohan
tuo ehkä jätteitä oleskelusta hovissa? — ehkäpä keisarillisissa
vierashuoneissa? Eikö ollut ihmeellistä kuinka vähällä hienoudella
monet noista hienoista ihmisistä katsoivat voivansa tulla toimeen?…
Väliin ne hänestä vain olivat iloiseen tapaan epäkohteliaita — ja
ylpeitä, samalla lailla kuin niiden palvelusväki…
Neiti Hemb tuli ylös lainaamaan kirjaa. Hän oli hyvin pahoilla
mielin.
Oli tunnettu asia, ettei hän koskaan tehnyt niin ahkeraan työtä ja
ollut niin herttainen seurustelussaan ihmisten kanssa, kuin juuri
tuollaisen vihanpurkauksen jälkeen.
Ja sen hän teki. Oli melkein kuin hän olisi pyrkinyt itse väistymään
syrjään, suodakseen tilaa toiselle.
Tämä nauroi.
Tiedettiin että Thamar rouva siihen oli syynä. Tuo kävi oikein
jännittäväksi. Alettiin sääliä tirehtööriä, joka oli näyttänyt niin
luottavaiselta ja tyytyväiseltä.
Nyt tutki hän itseltään, mistä se johtui. Sehän oli aivan turhaa
varovaisuutta. Eivätkö heidän tilinsä olleet suoritetut loppuun? Ja
eivätkö he pian olleet suoriutuneet elämästä?
*****
Kenraali seisoi lähellä. Hän oli kuin kasvanut kiinni siihen paikkaan
rouva Lissin takia.
Nuori rouva istui leikiskellen kiltin valkoisen kissanpojan kanssa,
jolla oli mustia pilkkuja otsassa, pienet mustat käpälät ja aivan
ruusunpunaiset korvat.
Hyviä kirjojako?
Liss rouva käännähti rouva Sahmin puoleen, jonka oli niin vaikea
tietää, mitä hänen pitäisi lukea. — Hyvä Jumala, sehän ei ole
lainkaan vaikeata. Kun sanomalehdet eivät hyväksy jotain kirjaa, niin
en ikinä koske siihen! — Ja rouva Liss kääntyi jälleen kenraalin
puoleen ja vakuutti ettei hänellä ollut aavistustakaan pohjoisesta ja
etelästä, hänellä ei ollut hitustakaan paikallisaistia, hän voi täälläkin
kuljeksia ja hakea, löytämättä edes omaan huoneeseensa.
Kenraalista se oli kerrassaan viehättävää. Niin, mutta ylioppilas
Adelsson oli ollut kyllin röyhkeä sanoaksensa, että asuntoonsahan
toki löysi jokainen hyönteinenkin. Hän tarkoitti siis, ettei hänellä ollut
senkään vertaa ymmärrystä kuin hyönteisellä! — — —
Neiti Hemb oli mennyt antamaan sille leipää, mutta kun ei voinut
päästä sen luokse, oli hän jonkinmoisen typerän hyväntahtoisuuden
valtaamana pistänyt avaimenreiän leipää täyteen. Tuntiessaan
hienon kahvileivän tuoksun oli Donna joutunut aivan suunniltaan.
11.
Hän meni alas. Piha oli tyhjä. Suuressa salissa oli ruvettu
karkeloimaan.
Mutta kun hän tuli nummelle, oli siellä niin omituisen hiljaista. Oli
kuin ei hän voisi tavata ketään. Kaikki olivat käyneet levolle.