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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
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

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

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

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
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
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

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

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
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
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
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

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
Harmonized master data requirements: none
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
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

SAP S/4HANA Digital Core 11
SAP S/4HANA for central procurement
E-Bite available on 10/23/2018

Thank you.
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Procurement Innovation – SAP Ariba and S/4HANA in a Nutshell
Unit 4: SAP Ariba Innovations for Direct Spend
SAP Ariba Innovations for Direct Spend
SAP Ariba Solutions for Direct Spend
ERP & PLANNING
CONTRACT INTEGRATION
PLANNING
SOURCE COLLABORATION
Product
We have significantly lifecycle
sourcing
Collaborative
planning
EXECUTION
invested in direct materials PLANNING
End-to-end Collaborative
COLLABORATION
process supply chain

source-to-settle processes management
SAP Ariba
execution
Solutions for
Advanced Direct Spend
negotiation Network
& supplier intelligence
selection
MANUFACTURE
DESIGN Multi-level Supplier
BOMs sourcing onboarding
&
costing

MANAGE
Sourcing for direct materials

SAP Ariba Strategic Sourcing Suite fostering product sourcing
SAP Ariba Supplier

SAP Ariba Sourcing SAP Ariba Contracts Lifecycle and Performance
A new layer of innovations to support direct materials sourcing

Product
Multilevel
lifecycle Supplier Service Volume and
Product bill of Product Advanced Pricing
manage- perf. item price
sourcing materials costing optimization conditions
ment (PLM) automation hierarchy forecasting
(BOM)
integration
Supplier qualification and segmentation
User experience + SAP Cloud Platform + integration of SAP ERP and non-SAP

Product sourcing
Product Sourcing Definition

▪ Product sourcing supports collaborative product costing with the supplier during the product design phase by
exposing the bill of material to the supplier
Benefits
Product Extension
▪ Improved collaboration during the
new version /
Introduction &
Development
product design phase between Spend
Maturity
upgrade
Product
Growth
engineering, sourcing, and supplier
Product Lifecycle
▪ Increased speed to get products to
market quicker
Product Sourcing Product Sourcing
▪ Greater visibility of cost impact linked
to design decisions
▪ Enhanced compliance regarding Product Design Product Update
PLM & BoM
PLM & BoM
target costs control
Time
Time of Product Launch

Up-front cost avoidance vs. cost reduction
100%
80% of costs have been

80% determined by the time
Lifetime Product Cost
Cumulative Percentage
design is complete1
60% Committed Costs 1 Ability to Impact Cost 2
Poor collaboration between
engineering, procurement,
and suppliers locks
40%
companies into specific
cost courses of action
20%
75% more costs for
0%
engineering changes made
Concept Design Testing Process Planning Production after release to production3
Architecture
Phase of Product Life It becomes increasingly
more expensive to make
changes later on in the
1 Dr. Anderson, Design for Manufacturability & Concurrent Engineering, 2004 lifecycle process
2 Illustrative
3 IndustryWeek, If Your Company Does Product Cost Reductions, It’s Already Too Late 2013 “If your company does
product cost reductions,
it’s already too late”3 6
Product sourcing flow chart
Ariba Network Supplier

“Supplier” response
Part Sourcing
SAP Ariba Sourcing Part
360-degree RFx price
“Sourcing manager” worklist
view acceptance
Configuration data
Master data
SAP Ariba Sourcing Pin Assign
BoM
“BoM manager” BOM part owner
Purchase
SAP ERP/SAP S/4HANA BoM info
record
SAP PLM BoM
© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC Legend: Potential starting points of the process are indicated with the following symbol: 7
Product sourcing – Multilevel material hierarchies (BOM)
Product Capabilities
▪ SAP ERP integration
▪ BOM tagging
▪ BOM rollup
▪ Additional BOM costs
▪ Multilevel hierarchy
Key Benefits
▪ Automate end-to-end
processes
▪ Eliminate data re-entry
▪ Real-time pricing visibility
▪ Easier reporting and filtering

Product sourcing – Simplified quoting process
▪ Simplified quoting process
▪ Integrated to supplier management
▪ Support for validity periods

Product sourcing – Complex pricing
▪ Price by time (monthly, quarterly)
▪ Integrated with SAP ERP
Key Benefits
▪ Automate end-to-end processes
▪ Eliminate data re-entry

Product sourcing – Material / Parts 360
▪ Material name and description
▪ Price history and trends
calculated based on past
sourcing awards
▪ Ownership view
▪ Sourcing activity

Product sourcing planned innovations

Planned
SAP Ariba Innovations for Direct Spend Innovations
Innovation highlights 2018
Highlights
▪ Clean sheet management
▪ Enhanced material 360
▪ BOM versioning and comparison
▪ Push BOM volumes into PS

SAP Ariba Supply Chain Collaboration

Brings real-time visibility and efficiency for manufacturing supply chains
Any Back End Any Channel
Your trading partners PORTAL
Raw material suppliers EDIFACT
X12
S/4HANA/
Component suppliers
ERP OAGIS
Your company
Subassembly suppliers GUSI
SAP IBP buyer supplier
EANCOM
Oracle
Contract manufacturers
Infor PIDX
PeopleSoft One Common Platform xCBL

3PL/Distribution centers
DEdwards cXML
Lawson
Email

Business process coverage
PLAN BUY & MAKE INVOICE & PAYMENT
▪ Forecast collaboration ▪ PO collaboration (all PO types) ▪ Self-billing/ ERS invoicing

▪ Supplier-managed inventory ▪ Vendor consignment ▪ Vendor invoice processing
▪ External manufacturing visibility ▪ Scheduling agreement releases ▪ Return order collaboration
▪ Subcontract/Contract
▪ Manufacturing with multi-tier
orders
▪ Quality notifications
▪ Quality inspections
▪ Quality reviews

Forecast collaboration and inventory visibility
Buyer Supplier/Contract Manufacturer

SAP IBP Unconstrained Forecast Review, adjust, publish commitment
SAP IBP Constrained Forecast Receive constrained forecast
Publish Constrained Forecast
SAP IBP: Analyze Buyer’s and

Supplier’s Inventory buyer supplier
SAP IBP: Adjust Planning Publish stock on hand
Capabilities Benefits
▪ Collaboration on forecasting processes with option integration ▪ Aligns supply and demand planning over multiple time
to SAP Integrated Business Planning (IBP) horizons
▪ Collaboration on constrained and unconstrained forecast ▪ Enables buyers and suppliers to identify potential
▪ Collaborative exchange of stock on hand from supplier’s side shortages or overages and address them
▪ Feed up-to-date information in IBP planning cycle ▪ Accurate material planning
▪ Excel download for suppliers ▪ Reduced supply chain costs avoiding costly fire-fighting

Forecast visibility for suppliers
▪ Provides time series view of forecast for suppliers

▪ Flexible UI supports
 Search filtering
 Configurable views
 Flexible time bucket views
 Showing related firm orders
 Excel download and upload

Supplier-managed inventory process

SMI demand, inventory, min/max Planned shipments
Updated schedule lines Advanced ship notice (ASN)
Goods receipt notice (POD)
Self-billing/ERS invoice (option A)

buyer supplier
Payment Invoice (option B)
▪ End-to-end process support supplier managed inventory- ▪ Reduced inventories
VMI by suppliers ▪ Improved order fill rates in
▪ Support of push-based replenishment based on min/max demand-driven supply chains
(projected inventory proposals)
▪ Ability to create planned shipments by suppliers

Supplier-managed inventory process – Detailed planning view

Scheduling agreement release process

Schedule agreement release (FRC/JIT) Planned shipments
Goods receipt notice Advanced ship notice (ASN)
Self-billing/ERS invoice (option A)

buyer supplier
Payment Invoice (option B)
▪ Extends rolling delivery schedules to suppliers ▪ Improved visibility into availability of supply
▪ Indicates the degree to which the lines of schedule ▪ Greater transparency for suppliers into longer-term
are binding and near-term demands of their customers
▪ Flexible invoicing options, including self-billing and
supplier-generated invoicing

Scheduling agreement release process

Planned innovations

Innovation highlights 2018
Highlights
▪ Handling units & packaging
▪ Supply chain monitor/intelligence (ML)
▪ Logistics shipment collaboration
▪ Continuous improvements
(order, forecast, SMI, quality)

Five things to take home
1 SAP Ariba supports sourcing and supply chain collaboration

for direct materials
2 The SAP Ariba solutions are tightly integrated with SAP ERP and SAP S/4HANA
3 The SAP Ariba solutions improve efficiency and accuracy of manufacturing/

supply chain processes beyond the four walls of the company
4 Leveraging the SAP Ariba cloud applications reduces TCO

by replacing in-house apps and support
5 SAP Ariba solutions deliver rapid innovations

Thank you.
open@sap.com
Follow all of SAP

warranty.
Unit 5: Setting Up SAP Ariba and SAP S/4HANA
Connectivity
Setting Up SAP Ariba and SAP S/4HANA Connectivity
Cloud integration for SAP Ariba
BUYERS SUPPLIERS
Add-ons EDIFACT
X12
SAP S/4HANA OAGIS

On-Premise
GUSI
EANCOM
SAP ERP Enabled by PIDX

SAP Cloud Platform
Integration cXML

SAP Ariba integration for SAP ERP or SAP S/4HANA
▪ Available to all SAP Ariba

customers at no extra charge
▪ No impact on SAP ERP user Pre-built content
licenses (i.e. indirect usage) ▪ Based on SAP standards (IDoc / SOAP)
▪ No additional software licences ▪ Wizard-driven configuration
(i.e. middleware or iPaaS) ▪ Certified and tested against every SAP ERP and SAP S/4HANA On-Premise version
▪ Supports SAP ERP and ▪ Built on SAP technology (SAP Cloud Platform)
SAP S/4HANA On-Premise Extensibility
▪ Access via SAP Ariba ▪ Standard mappings can be extended to accommodate customers specific
solutions (no additional login requirements
required) ▪ BAdIs provided to extend the SAP interfaces
▪ Provides out-of-the-box ▪ Supports value mappings / look-up table functionality
integration for over 100 Test Central
interfaces covering the full ▪ Pre-built test routines allow for automated test cases against all interfaces
source-to-settle process ▪ Customers can add their own specific test routines
(not only P2P) Monitoring
▪ Secured using SAP Cloud ▪ Standard transaction monitoring provided within CIG
Platform Connectivity ▪ Coming soon: SAP SolMon monitoring integration and external monitoring API
▪ Supports mediation with a Automated Upgrades
customer’s existing ▪ As with SAP Ariba Procurement solutions, Cloud Integration Gateway is a fully
middleware / iPaaS managed platform, and includes upgrades as part of the standard SAP Ariba
subscription 3
Buy side SAP Ariba Cloud Integration Gateway (CIG): architecture
https Customer Environment SAP Cloud Environment
SAP Ariba Cloud

Integration Gateway Portal
UI SAP Ariba
▪ Configuration Wizard source-to-settle
▪ Mapping Repository solutions
https ▪ Test Central
▪ Monitoring
CIG Add-On for ERP https
CIG Add-On for S/4HANA
Cloud CPI
Connector SSL Tunnel (Cloud Platform Integration)
▪ Messaging
▪ Mapping
▪ Transformation
buyer supplier
SAP Ariba Cloud Integration
ERP Gateway enabled by
S/4HANA On-Premise
SAP Cloud Platform Integration

Demo of SAP Ariba Cloud Integration Gateway portal and add-on

Troubleshooting and monitoring – SAP Ariba Cloud Integration Gateway
• IDOC messages related errors; example

transactional data is sent from backend
system to CIG
• Use WE02 or WE05 (iDoc monitor)
• Proxy messages related errors; example

web services related messages
• Use SOAMANAGER or SRTUTIL
• Within CIG with transaction tracker

• Trasaction tracker in CIG Portal

Migration
Migration Strategies
▪ Migrate all the transactions
▪ Migrate designated transactions
▪ Co-deployment with existing integration
Migration Steps
▪ Pre-migration
▪ Migration
▪ Post migration

Summary and more information – Important takeaways
1
Recap and Buy
2
CIG Architecture on
3
Overview on CIG
4
CIG Demo
5
Troubleshooting &
6
Migration Options
Side CIG Buy Side Add-On Monitoring
https://help.sap.com/viewer/p/SAP%20Ariba%20Cloud
%20Integration%20Gateway

Recap – SAP Ariba Cloud Integration Gateway

Thank you.
open@sap.com
Follow all of SAP

warranty.
Unit 6: Best-in-Class Transformation Examples
Best-In-Class Transformation Examples
Example 1: Procurement Transformation as Part of a Broad Digital Initiative
Transformation Roadmap Value Delivered
~€50

Example 2: Procurement Transformation starting with SAP Ariba Sourcing and SAP Ariba Contracts
Best Practices Value Delivered
▪ From the first day using integrated templates in the

procurement system during the implementation
▪ Driving standardized best-in-class procurement

processes right from the go-live
▪ Well-organized Guided Buying shopping experience

helped to bring the end-user quickly into the system, driving
adoption and significantly minimizing maverick buying

Example 3: Procurement Transformation with Guided Buying from SAP Ariba Solutions Initiative
Transformation Roadmap Value Delivered

Example 4: Procurement Transformation starting with Ariba Network
Best Practices Value Delivered
▪ Inform your suppliers early on in the process to make the

transition into the Ariba Network as easy and fast as possible
▪ Classify suppliers and start the onboarding with “A Suppliers”

that generate large numbers of documents to free up resources
soon
▪ Introduce “light enablement” to smaller low-volume

suppliers to give them a cost-efficient way to drive their business

Summary and Recommendations
▪ Change Management is essential
▪ Do Transformation Discovery Workshops
▪ Run Value Assessments

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Unit 3: Connecting Multiple Back Ends into One

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

Benefits and Purpose

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

SAP SRM SAP S/4HANA for Central Procurement

Current Scenario Target Scenario

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

Classification and Supplier

Collaborative Sourcing and Contract Operational

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

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

Employee Employee & Central Purchaser Local Purchaser

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

SAP S/4HANA 1709+

SAP S/4HANA On-Premise

Central Purchase Contract Central Contract Distribution Central Contract Monitoring

Central Purchaser Central Purchaser Central Purchaser

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 7

Central Purchase Contract Central Contract Distribution Central Contract Monitoring

SAP S/4HANA 1709+

SAP S/4HANA On-Premise

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

Central Purchaser Central Purchaser Central Purchaser

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

SAP S/4HANA 1709+

SAP S/4HANA On-Premise

SAP Ariba Contracts §

SAP Ariba Cloud

SAP Ariba Supplier

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

E-Bite available on 10/23/2018

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 12

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

process supply chain

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 2

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 3

SAP Ariba Supplier

A new layer of innovations to support direct materials sourcing

Supplier qualification and segmentation

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 4

Product Sourcing Definition

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 5

80% of costs have been

Ariba Network Supplier

SAP PLM BoM

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 8

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 9

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 10

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 11

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 12

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 13

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 14

Any Back End Any Channel

Your trading partners PORTAL

Raw material suppliers EDIFACT

PeopleSoft One Common Platform xCBL

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 15

PLAN BUY & MAKE INVOICE & PAYMENT

▪ Forecast collaboration ▪ PO collaboration (all PO types) ▪ Self-billing/ ERS invoicing

© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 16

Buyer Supplier/Contract Manufacturer

SAP IBP Constrained Forecast Receive constrained forecast

Publish Constrained Forecast

SAP IBP: Analyze Buyer’s and