SAP Community - SAP Ariba Buying and Invoicing

SAP ISBN Customer Success Day in Johannesburg

2023-09-14T23:42:29+02:00

Hello everyone and welcome to my blog!

My name is Martin Beganyi, Solution Value Advisory Director in EMEA/MEE. This is my 3^rd blog and this time it is not about Sourcing, but about a business conference.

Recently I had the pleasure of attending and presenting at the SAP Customer Success Day in Johannesburg on Aug 31^st, in the amazing South Africa.

While I was there, I was contemplating my next blog, and I wanted to focus on how to keep customers informed, network and make connections while living in a dynamic world.

One of the best and most effective ways is by attending an SAP Customer Success Day which is aimed at existing customers, driving adoption, procurement best practices, and accelerating value from their SAP investment.

The Customer Success Day was kicked-off by Christian Turk, SAP Head of ISBN Solution Area EMEA South, where he stressed the importance of close relationships between SAP and its customers, in-fact, SAP considers its customers as partners, and this really was the core message.

Christian stated that “Since several years SAP has repositioning Customer Success at the core of everything, we do in the field i.e., Sales and Post Sales teams. Engaging directly with our community of customers and getting this community engaged in sharing and learning from each other on how to make their transformation journey successful. Getting the engagement of the community is a blessing for us and will help us to serve you better.”

After the session by Christian, I had the pleasure to present the SAP Procurement North Star, which is our strategy for our procurement solutions. I deep-dived into a few areas for example, SAP Guided Sourcing and SAP Guided Buying with a real focus on what to expect in coming months – If you are interested in this here is the link to the SAP Road Map Explorer: SAP Road Map Explorer

Shortly after a break, several customers presented their success stories to help newer customers learn and avoid common mistakes, but also learn and adopt tactics that can accelerate value – All were great however, I though the following one was the most impactful.

Sasol, who is local to the area, shared how their supplier collaboration on the SAP Business Network yielded amazing results related to ‘Payments on-time’ and an amazingly high ROI achievement – I must say, this story resonated with all attendees.

I also had the pleasure with Lincy Elizabeth from SAP Product Management to introduce a totally new solution, which will be officially unveiled at SAP Spend Connect Live – Let us just say it will revolutionize how category plans are formulated.

Freshly released in August, it was unavoidable to talk about it. In my view, this solution is THE innovation of the year in Procurement space. It is based on BTP with native integration to SAP Ariba Sourcing – truly amazing!

Charmel Bence, Head of ISBN Customer Success Partners - Africa & MENA closed the session, and I would personally like to thank Charmel, Christian and their respective team members, as well as our customers that made this an amazing success.

What to know more?

Value Paper: Lead with SAP Ariba Category Management

SAP Ariba Category Management L1 Deck

You can also join our upcoming LinkedIn Live with Deloitte and Spend Matters on Sept 13^th

The Importance of Category Management in Procurement

SAP Spend Connect Live, is coming on October 9-11^th in Vienna - Scan to register.

Thank you and good luck.

Martin

The Procurement Monthly - September 2023

2023-09-25T04:30:57+02:00

Each month ill be reviewing research papers, articles and white papers written about procurement and external workforce, summarising them and identifying key takeaways. All opinions are my own!

Deloitte Supply Chain Trust

Organisations are looking for ways to increase trust in the supply chain as a way to manage the volatile environments they are trying to navigate. This article (and survey) looks at the areas that organisations are struggling with, and how they are trying to manage the situation.

For leaders of large, complex supply chain networks, the seismic challenges from the COVID-19 pandemic may have eased, but for many, significant challenges remain. Having worked so hard to weather the storms of this decade, an important question remains: How do you continue to earn or rebuild stakeholders’ trust in your supply chain in this uncertain environment? The report points to several critical factors, including investing in technology to better forecast demand and drive visibility, and aligning with customer and employee values.

While bottlenecks may have improved, continuous supply chain volatility is expected. When Deloitte surveyed more than 1,000 executives from large global organizations operating complex supply chains, they found supply chain disruptions are ubiquitous, as 77% acknowledged experiencing an adverse supply chain event in the last 12 months. Further, almost half of global supply chain executives (44%) expect more shocks in the coming 24 months. And this likely understates the true risk. The primary challenges that executives are planning for in the next 12 months include price volatility, inflation, resource shortages (labour and materials), and geopolitical instability.

Notably, these findings are relatively consistent for organizations operating supply chains across the North American, European, and Asia Pacific regions. While companies in Europe, Middle East, and Africa (EMEA) are more likely to cite geopolitical instability as a top challenge, price volatility and inflation are top concerns across global regions.

Generating trust in the supply chain has been identified by many studies (including one from the University of Tennessee as being critical to managing volatility in supply chains.

The study then performs a series of analysis to identify improving trust with improving relationships and performance and suggest that “an intentional focus on trust can help supply chain leaders better understand stakeholders’ needs and prepare their organizations to develop and implement the initiatives that will generate the greatest impact and value over time.”

Art of Procurement – Operating models and Spend Visibility

Operating models

This whitepaper followed an AoP live event and gives a good summary of the different ypes of operating models, and how they can drive changes needed for any transformation. The paper covers the three most popular (Centralised, decentralised and centre led) and gives good summaries of each together with pros and cons. The paper states that “Choosing the right operating model for the business is a nuanced and strategic decision that should consider multiple factors, goals, challenges, and even the company’s culture”.

The paper then goes onto discuss a procurement Centre of Excellence (CoE), something that I think is becoming more prevalent especially as technology is allowing procurement activity to be done close to the point of need but as the paper states can fit within any of the main operating models. The CoE will drive market intelligence, category management and process improvement, as well as taking a holistic view of the data and helping to inform overarching strategy.

Spend Visibility

A busy month for the AoP team (!) as 2 other papers both around spend visibility/analysis were published. Spend analysis you may recall was the primary driver of digitisation in procurement as identified by Economist Impact study, so the topic is very relevant.

He first paper looks at the importance of spend visibility and analysis and the criticality of aligning to corporate vision. He second paper looks at complex spend categories, offers some suggestions for how to segment and therefore identify complexity.

Besides the information in both the case studies are where some great ideas live, from waste management, packaging, food production, media and creative, highly regulated and manufacturing environments.

Last month I reviewed a report by Procurious where one line stood out that nearly 80% of procurement stakeholders did not trust the data. These reports make similar points, that unless the data can be trusted procurement won’t make the business alignment it seeks.

Gartner Hype Cycle – Procurement & Sourcing

The hype cycle, which is available to download from a number of different vendors, was released recently, and its interesting to note the changes from 2022 -to 2023.

Unsurprisingly, Generative AI makes an appearance at the early stage with an expected time to mature of 2-5 years, and conversational AI rises the innovation trigger stage to the “peak of inflated expectations)

As you’d expect, Predictive analytics, and supplier sustainability solutions have moved further up past the innovation trigger to the top of inflated expectations (in fact conversational AQI and supplier sustainability are starting down that slope, so expect expectations to be tempered somewhat.

Becoming more mature now, moves external workforce, AP invoice management and RPA suggesting that expectations are being met, and they are being more adopted. Leaving the hype cycle are freelancer management, (potentially being included now in the HR hype cycle and smart contracts, as Gartner stated that interest from procurement organisations was limited.

Procurement Leaders – Purpose Driven Procurement

This paper looks primarily at the issues surrounding whether procurement can focus on broader objectives other than cost management.

“I might be able to get away with not having made advancements in sustainability, but I cannot afford to miss my cost savings targets. It comes down to what we can get away with and what we are held accountable for it”

CPO, pharmaceutical company

Whilst clearly procurements agenda and workload is broader, many of the objectives and measures are still primarily linked to cost management. This was also identified in the Economist Impact survey where cost management was the overwhelming main value area of procurement (more so for rest of business than CPO).

The opening identifies that 70% of procurement leaders thought their biggest impact was on cost savings over the last 3 years, where sustainability is at 23%, and 93% stated that delivering cost savings, and 82% identified cost avoidance as having metrics attached to them. What is more promising is that Improving sustainability was third with 73% stating that metrics were attached to that objective.

The risk here is that as disruption and inflation begin to ease, however, CPOs find themselves at an inflection point. Does the function return quietly to the back office? A Gartner poll suggests that may be the view of leaders in other parts of the business as the perceptions of supply chain teams as a strategically important function peaked at 56% in 2020 but have since dropped to 47% – lower than where it was in 2019 (49%).

Forrester Procurement Survey

This study was commissioned by Ivalua and covers 470 procurement responses; however, some are at lower levels that CPO/level 1.

An interesting read from Forrester on behalf of Ivalua, This study explores how the procurement function can become more agile and help organizations adapt to any changes in the market or business environment with some interesting takeaways:

Procurement has competing priorities that create challenges. To ensure supply continuity, 76% of respondents compromised on supplier due diligence and 73% compromised on other objectives. Which may help explain that according to the report procurement is looking to technology to look at supplier risk and performance management solutions to help manage that issue.

It was great to read that Seventy-eight percent collaborated more with suppliers today than three years ago and 50% increased collaboration/info sharing with suppliers. As per the Deloitte report reviewed earlier, and the university of Tennessee report this drive for collaboration, and recognition of becoming a customer of choice is crucial for buying teams to manage the volatility that many experience.

As per the Economist impact report, Supplier visibility was identified as a key goal and 69% of respondents identified that they will increase this. It was also interesting to see that csash flow management (as also identified in a Mckinsey CFO survey later) was also a topic of interest for organisations, which I think gives procurement an opportunity to align with treasury.

Risk was a key area looked at in this report and nearly half od respondents stated that they had diversified their supplier base to minimise disruption (although the over 3/4 that compromised on due diligence is a concern)

Data was identified as a barrier for many, with having access to ad consolidating identified as a primary challenge for many to solve to increase their effectiveness.

McKinsey – AI Study & CFO survey

McKinsey produced 2 interesting studies this month, the first on Generative Ai is very interesting as a background to the larger use cases. According to the survey, whilst marketing and sales were the functions largely using AI, Supply chain and procurement has some use cases as well, in fact respondents identified reducing costs in core business as a core activity of generative AI. Y far the biggest expectations from organisations, was the impact from AI on workforce size. 43% of respondents to a 1600+ survey suggested that upto 20% of workforce would need to be reskilled over the next 3 years. Within procurement & supply chain, 45% of respondents expected the workforce to decrease in size over the next 3 years due to AI.

The second study was a CFO survey. This study identified that economic volatility, inflation and weakening demand were the biggest risks to their company’s growth, (noticeably rising interest rates decreased in importance) and that raising prices and reducing exposure to fixed costs were primary strategies of organisations. I did note however working capital being identified as a third strategy, and this was also mentioned in earlier reports.

GEP Supply Chain Volatility

With all the talk about volatility there was an interesting article in supply management about the status of supply chains. Global excess supply chain capacity has grown as low demand conditions, driven by economic turmoil, have left suppliers without orders and warehouses without stock.

During the pandemic and the resultant scarcity crises, safety stockpiles of goods were built up, these have now fallen below the long-run average last month, while reports of item scarcity are now in line with historically normal levels according to the GEP volatility index. The index fell to -0.50 in July, from -0.26 in June, indicating an “accelerated rise in excess capacity”.

Excess capacity in supply chains is at high levels compared to recent years, so both the article and various reports all suggest now is a good time to be renegotiating!

Ecovadis – Readiness for new regs

This was a supply management/Ecovadis study that looked at how ready organisations were for the current and upcoming legislation.

When it comes to preparedness, participants were asked to share how ready their organisations were to address new or proposed regulation that most affects them. Less than a quarter were confident that they were equipped, around half were partly, and the over 20% were fully ready.

It was interesting that organisations from different regions were anticipating the impact of regulations not from within their home country, so the impact of these regulations are having far reaching consequences.

“While sustainability risk management is not new, the survey results show that today’s challenges require a new response.”

Reasons for the lack of preparedness include resources, data, awareness and engagement with suppliers, and internal stakeholders. There are some good examples of how organisations are preparing, including mapping stakeholders, jointly building business cases and then a constancy of communication.

Many companies have incorporated ESG criteria into their procurement processes, covering human rights, decarbonisation, and ethics nd many are also planning to invest in technology around due diligence, and risk mapping.

Interos – Invisible threats

This is a survey of 750 supply chain leaders from the US and Europe. There’s so many interesting parts to this report, but let’s look at the key findings, that on average organisations suffer 4 disruptions per year, that’s up from 3 last year but what’s interesting to me is that the report states that organisations only assess just over half their critical suppliers for risk, and that over 90% wouldn’t be aware of the disruption in all/any of their tiers of the supply chain within 48 hours.

Which brings us to Supply Chain Visibility, which has been mentioned several times already in this blog. It has improved since last year’s report, but still not where you’d want it to be,27% have good visibility into tier 3 now especially when you see where the origins of disruptions emerge which is tier 3 and beyond.

The good news is that most companies know they aren’t there yet, and that 75% state that especially with all the emerging regs that we just discussed they can’t comply without data, analytics and risk management software.

“At a global level we haven’t done a good job managing risk. We assumed everything would work flawlessly. And now we know it doesn’t.”

These risks cost organisations losses ranging from $43 million to $47 million in each of six distinct risk categories:

Financial, including supplier health and insolvency

Catastrophic, including extreme weather, natural disasters and factory fires

Geopolitical, including wars, terrorist attacks and global trade disputes

Cyber, including data breaches, ransomware demands and attacks on critical physical and digital infrastructure

ESG, including environmental factors such as carbon emissions and pollution, plus social factors such as forced and child labour

Restrictions, including sanctions and export controls imposed on named entities, individuals, and technologies

Overall this report (like last years) is an informative read covering

The report also looks at the top risks, that procurement leaders are concerned about, which is similar to the list form Deloitte earlier (Supply, inflation etc) but also identifies cyber risks in the top 3. Similar to the Ecovadis, it identifies that legislation will have a material impact for organisations and are a top risk (i.e. being compliant to legislation) and like Ecovadis report also states that legislation is helpful for CPO to improve TPRM capabilities.

The Economist – Building Bridges. Supplier management

This reports builds from the Economist survey earlier this year of 500 C suite leaders, taking a look at the how companies are managing their suppliers amid the backdrop of recent global challenges and economic uncertainty. Whilst the respondents recognise the role procurement plays, the survey also turned up that nearly 40% identified that there was room for improvement in the way that supplier relationships and performance is managed.

The paper identifies that limited visibility into the supply chain will hamper organisations as they seek to build relationships, and that technology has a real role to play in helping. It’s a balanced paper, written using the data from the survey and some key subject matter experts and practitioners.

Please reach out if you wanted more information, or ill be interested to hear your views on any of these papers!

Procurement of Services in SAP Ariba

2023-09-26T23:48:20+02:00

Introduction

Service Procurement is the process of buying services from other Companies / Suppliers. These services can be specialized skills missing with your organization or to supplement your own staff for additional demand. In today’s globalized world and emerging skills, the percentage of service procurement has been rising consistently.

SAP supports the process in its different solutions like ERP (S/4HANA or S/4HANA Cloud), SAP Fieldglass & SAP Ariba. Fieldglass offers extensive details and can be considered by companies having significant proportion of services procurement or ones who offer Services to others.

SAP Ariba also supports service procurement extensively and there are various ways to manage the process depending on the use case at hand. Ariba’s collaboration with SAP Business Network (earlier Ariba Network) helps managing the overall process for both Buyer & Supplier efficiently. It can also be integrated with ERP or Fieldglass to supplement the specific cases.

While supporting the SAP Ariba solutions, it was realized that a short comprehensive document providing overview of different Service Procurement options & related resources could be very helpful. It would assist in the selection of appropriate option while designing the overall procurement process or extending existing one as per current need. This blogpost is an attempt to cater to this need.

Service Procurement in SAP Ariba

SAP Ariba supports the complete service procurement cycle with Ariba Buying & Business Network. For integrated systems, process can run in ERP (Service PO, SES Approval, etc) & Business Network (Suppliers creating SES, Invoice, etc). We can manage the Service Procurement process in SAP Ariba with any of these ways or combination of the ways.

Standard Purchase Order

Purchase Order with Service Entry Sheets

Release Contracts / BPOs

No-Release Contracts / BPOs

Non-PO Invoices

You can refer to article Services Spend Capabilities for more details on this.

Standard Purchase Order

In case of Standard POs, the process followed is more like material procurement. For complex services, you can choose PO with Service Entry Sheet (SES).

Purchase Order with Service Entry Sheets

SES are used for procurement of complex services. Here, you can manage Services in Parent-Child hierarchy (planned services) and Suppliers can create SES against the Child lines. You can also allow Supplier to enter Child lines (Service or Material) on his own during SES creation (unplanned services). You need to enable Supplier punch-in for this.

To enable Service Procurement in Ariba, we need these 2 Parameters enabled:

Application.Procure.EnableServiceItemFieldInRequisition

Application.Procure.EnableItemCategoryOnRequisitionLine (for SAP-variant realms)

Additionally, for SES to work, we need to ensure that the parameter Application.Procure.EnableSimpleServices is set to No, as simple services procurement does not permit creating SES. You can refer this article for more details on this.

How do I enable service entry sheets?

SES can be created by Supplier by default. For Buyer to be able to create SES on behalf of Supplier, we need to enable Feature 'CreateServiceSheet'. Also, the User must belong to the groups, Service Sheet Entry User & Service Sheet Editor.

By default, Ariba does not add child lines cost to Parent line. We can enable Parameter Application.Procure.AddChildItemAmountToParentServiceItem if we need the amount value for child items to add to the amount value for the parent service item.

SES Approval can be configured in P2P (Ariba Buying) or can be sent to ERP for approval.

You can manage the Service Procurement in a different way by enabling Feature ‘Item Category Mapping ServiceLine’. This feature helps to enable Item Category on non-catalog Requisition line Item. This feature is optional, and you can still run the process in standard Ariba way without enabling this feature.

Release Contracts / Release BPOs & No-Release Contracts / No-Release BPOs

Ariba Contracts can also be used for Service procurement. Both Release-based & No-release Contracts can be used for their own advantages. The quantities and amounts for the parent and the child items are accumulated against their respective contracts.

You can make use of Release Contracts in case of planned services typically needed over a year with fixed pricing.

Blanket Purchase Order (BPO) can be used for ad-hoc service requests where overall cost is negotiated upfront and flexibility over the Price & Quantity of each request is needed. In Ariba, you create a BPO as an attribute of a Contract. BPOs can be release order or no-release order type contracts. Defining a contract as a BPO contract provides additional benefits compared to a non-BPO contract.

A No-release order Contract provides additional pricing terms for fixed and recurring fee items and for costs and expenses. Contract terms are applied during invoicing when users create an invoice against the contract and, depending on your enabled features, during receiving. Evaluated Receipt Settlement (ERS) is supported in this case.

You can refer section 'Managing Contract Compliance' in SAP Help for more details. For difference between a BPO Contract & a non-BPO Contract, refer this link.

Non-PO Invoices

Non-PO Invoices can be posted for miscellaneous services performed and there is no need to follow the complete procurement process for them. Paper Invoices from Supplier can be reference against which Buyer or Supplier (if allowed by business rules) can enter it in P2P or Network respectively. Please refer below links for more details on this.

SINV-5995: Simple non-PO invoice creation in guided buying

Configuring Simple, Non-PO, Guided Buying Invoice Creation

Integrating non-PO (FI) invoices

Invoicing in SAP Ariba

2023-10-23T13:51:27+02:00

Introduction

In simple terms, an Invoice or a Bill is a document which records a transaction between a Buyer & a Seller. It can be in a paper or digital form. From seller perspective, it is a Sales Invoice whereas it is a Purchase Invoice for the Buyer. Once both sides agree to the terms within, it assumes the character of a legal agreement. Invoice lists the Products delivered to &/or Services performed for the Customer, agreed prices, taxes involved, transport costs if any, total amount due & the payment terms. It forms a critical element of internal accounting & auditing.

SAP supports Invoicing in its Procurement & Sales solutions. SAP Ariba also offers a wide range of options to carry out Invoicing and associated controls in different solutions. With SAP Business Network, it is easy for Supplier to collaborate with Buyer on Invoice posting and follow-up actions & Payment.

Invoice offering from Ariba is quite large. Having all the relevant information at one place with brief details would be very helpful from design & learning perspective. This Blog Post attempts to achieve the same.

Ariba Invoicing

Among over 20 SAP Ariba solutions, following solutions support Invoicing:

SAP Ariba Buying and Invoicing (& SAP Ariba Contract Invoicing)
SAP Ariba Invoice Management
SAP Business Network Commerce Automation
SAP Business Network Supply Chain Collaboration
SAP Business Network Supplier Portal

For more details on these, kindly refer Solutions Description Guide.

Types of Invoices in SAP Ariba

At broader level, there are 4 Types of Invoices in SAP Ariba:

Purchase Order-Based Invoices
Non-PO Invoices
Contract-Based Invoices
Service Sheet-Based Invoices

For details, refer 'Types of Invoices'.

Types of Invoices

PO-Based Invoices are created against one or more POs. Typically, a Supplier would create an Invoice via SAP Business Network by flipping a PO. Buyer can also create an Invoice referring the paper copy of Supplier Invoice in SAP Ariba Buying & Invoicing (B&I). The taxes, discounts & surcharges in PO are not applied to Invoice by default. You need to apply them manually. You can configure the system to have them defaulted from PO. Post submission, Invoice can undergo approval based on the configuration. Kindly note that whenever a Supplier posts an Invoice in SAP Business Network, a copy of this Invoice can also be seen in corresponding PO in SAP Ariba Buying & Invoicing (B&I) for all Invoice types.

Non-PO Invoices are Invoices that are not associated with a PO. They are typically posted for miscellaneous services performed. Supplier can submit it via SAP Business Network or Buyer can create it manually referring the paper copy in Ariba Buying & Invoicing. Non-PO Invoice can also be subjected to approval. Accounting information in B&I Invoice populates based on the requester's default. The requester (On Behalf Of) is derived from the 'Sold To Email address' that the Supplier enters while creating the non-PO Invoice. Refer this link for details. For more details on the topic, kindly refer my Blog Post on 'Procurement of Services in SAP Ariba' (section - Non-PO Invoices).

Contract-Based Invoices are unique to Ariba in comparison to SAP ERP. An Invoice can directly be posted against one or more Contracts having contract pricing terms. Buyer can post an Invoice referring the paper Invoice in Ariba Buying & Invoicing. A Supplier can post such Invoices only if site is enabled for Collaborative Invoicing. Supplier can then punch into B&I from Business Network to create entire Invoice or add Contract/Catalog items to an existing Invoice created otherwise. Configuration can be done to allow Suppliers to add accounting information and even change unit prices not matching Contract Terms. Kindly refer below links for more details on Contract Invoicing.

Service Sheet-Based Invoices are posted against Service Sheets of a Service PO. It can be posted by Buyer in B&I or by a Supplier in Business Network. This Invoice carry accounting information from corresponding Service Sheets. Configuration can be done to have default accounting information for such Invoices. Kindly refer this link for understanding the way Ariba system arrives at default values of line item accounting fields for all types of Invoices, Credit memos & Invoice Reconciliation documents.

PO-Based Invoicing Without creating Service Sheets – It is another way of Invoicing Service POs is by creating Invoice directly against a PO (bypassing Service Sheet process) as in case of material PO. You can configure Ariba system to allow posting of Invoice and have Service Sheet generated automatically by flipping the Invoice. Invoice moves to next stage only this auto-generated Service Sheet is approved. It is recommended to have an agreed process with Supplier before following this method. For more details on this, kindly refer my Blog Post on 'Procurement of Services in SAP Ariba' (section - Automatic Service Entry Sheet).

High Level Invoice Process

A typical Invoice follows the steps as:
Creation > Approval > Reconciliation (Exception Handling & Approval) > Payment

High Level Invoice Process

Creation
Buyer can create an Invoice by using the Dashboard option of Create > Invoice. He/she gets 3 options next to select the Invoice type - Non PO, PO-Based & Contract-Based. For Invoice against Service Sheet, PO-Based option needs to be selected and then Service Order and relevant Service Sheets need to be selected. Button 'Invoice' is also available inside the Service Sheet. For more details, refer Entering an Invoice.

Supplier can opt to create Invoice by following the PO and using 'Create Invoice' button. For more details from Supplier perspective, refer Creating and Managing Invoices, Credit Memos, and Debit Memos & SAP Business Network Guide to Invoicing.

Approval
An Invoice created by Buyer can be subjected to approval. In such case, the Invoice can proceed further for reconciliation only after the approval. By default, the Invoice created by Supplier through Business Network is not subjected to approval and status is directly set to 'Approved'. However, you can configure the Invoice to undergo approval. For more details on approval, refer Default Approval Processes for Invoicing & Approval Flows.

Reconciliation
Process of Invoice Reconciliation helps in identifying and managing discrepancies between Invoice and related PO, Contract or Receipts so that Invoice can move forward for payment. Unlike ERP, IR in Ariba is a separate approvable document other than Invoice. It is automatically created once an Invoice is approved. All exception rules are applied to IR and not Invoice. The IR document is thus a record of the reconciliation process. Reconciliation can be done with a combination of automatic and manual processing. If configured, Ariba offers a messaging feature to initiate conversations from an Invoice & IR document to interact with Suppliers on SAP Business Network & other users within organization for faster settlement of exceptions. Post exception handling, an IR can also be subjected to approval.

Please note that the Ariba Invoicing solution creates 3 approvable documents when an Invoice is loaded or manually entered: Invoice document, Invoice Reconciliation (IR) document & Payment Request document

Payment
After the Invoice is reconciled, the payment is scheduled through the payment request in Ariba. Kindly note that Ariba system sends the payment related information to connected ERP system and expects back the remittance information from ERP post payment processing. You can view and manage payment request and payment transaction documents & also create Advanced Payments against POs in SAP Ariba. For more details, kindly refer Invoicing and Payment Process Guide & Managing Payment Documents.

Invoice Status
At high level, an Invoice follows the status as: Submitted > Reconciling > Reconciled > Paying
For more details on Status, refer Invoice and Invoice Reconciliation Status Flow

Credit & Debit Memos

An Invoice represents the amount owed by Buyer to Supplier. Credit memos reduce the amount owed under the terms of an earlier Invoice. In other words, Credit memo represents the amount owed by Supplier to Buyer. This could be due to returned items or error in pricing or some discount provided later. Debit memo, like an Invoice, increases the amount owed by Buyer to Supplier. This could be to cover the additional cost/charges in addition to original Invoice.

SAP Ariba solutions support header & line-level Credit memos and line-level Debit memos. For more details, refer Credit Memos and Debit Memos.

Invoice Entry Methods

Invoice can be created in SAP Ariba in various ways. Below figure shows the prominent ways of entering an Invoice.

Invoice Entry in SAP Ariba

Invoice Entry by Supplier
1. Manual

As seen before, a Supplier can flip a PO or punch into Buyer's B&I side to create an Invoice.

2. CSV Upload

This option enables a Supplier to load a large number of Invoices using 1 consolidated CSV file (Comma Separated Value). It can save significant time and efforts for Supplier.

To enable CSV Invoicing, we need to work with the SAP Business Network CSV Customization Team to create a CSV Invoice template. Once done, Buyer Business Network Administrator can create Supplier Group, select the CSV Invoice Template and add Suppliers who would use the Template. Supplier now gets the option of 'Invoice CSV'. Following it, he/she can download Invoice CSV Template. Template can then be used to load Invoices in bulk.

Please note that SAP Business Network applies all buyer-specific Invoice rules (default transaction rules, country-based rules, and supplier group rules) in the same way that they are applied to manual Invoices, regardless of how they are submitted to Business Network. Kindly refer these links for more details.

3. PDF Invoicing

PDF Invoicing feature provides enables a Supplier to create digital Invoice in SAP Business Network by simply sending the PDF copy of the Invoice to a particular Email ID or by uploading the PDF in Business Network Supplier portal. Business Network converts the PDF to cXML Invoice while still applying the rules set by Buyer.
A third-party service provider, CloudTrade, enables this process. PDF Invoicing is free to use for Buyers & Suppliers. Both Enterprise & Standard Suppliers can use PDF Invoices. This feature is appropriate for Suppliers with volume of 100-500 Invoices/Year for the Ariba Buyers. For higher volumes, it is better to submit Invoices electronically from their external system via cXML or EDI.

Solution currently supports 7 languages (English, German, Dutch, Italian, Spanish, French & Swedish) & 29 Countries (Supplier address must be in any of these Countries). Refer Supported Countries/Regions and Languages for PDF Invoices for more details.
Once enabled for a Buyer, the PDF Invoice option will be automatically available for all of their Suppliers (within supported Countries) via a self-service onboarding process under the Business Network. This onboarding process involves mapping PDF Invoice examples into the required cXML format. Supplier need to work with CloudTrade to have this mapping done. Please refer these links for more details.

4. Connected Supplier's ERP

For higher volume of transactions between a Supplier & a Buyer, having the Supplier ERP integrated to Business Network can help with seamless automatic flow of transactions. For more details, refer below links.

Invoice Entry by Buyer
5. Manual PO Flip

As seen before, Buyer can also create an Invoice manually referring the paper copy.

6. cXML Upload

Buyers can leverage this method to import Invoices generated by 3rd party solutions directly into B&I or Ariba Invoice Management without going through Business Network. An HTTP API lets buyers post cXML Invoices to their Ariba site. Kindly refer these links for more details.

7. ERS

Evaluated Receipt Settlement (ERS) or Self Billing is an agreement between a Buyer & Suppler to conduct business without Invoices. It is based on mutual trust in case of recurring similar transactions. Here, the supplier ships goods based upon an Advance Shipping Notice (ASN), or provides a service based upon a Service Entry Sheet (SES), and the purchaser, upon receipt, confirms the existence of a corresponding purchase order or contract, verifies the identity & quantity of the goods, and pays the Supplier.

If feature is enabled, you can set the ERS indicator for Supplier. You then get the option of setting it in Requisition. You need to set it again in Requisition. Setting it in Requisition gives you choice of setting it only for few rather than for all items created for Supplier.

You can use ERS with Service items as well. It needs separate enablement. ERS for Service items can be done in 2 ways - with Contract line marked for ERS and PO line marked for ERS. Please refer below links for more details.

One can also consider the option of using ERS with No-release order Contract. One can configure the 'Fixed and Recurring Fees' details to specify the date at which items are delivered and the frequency at which services are rendered. In my opinion, this is like Ariba's substitute to ERP Invoicing Plan.

With Ariba, you have additional option. If you need a separate PO generated each time the payment is due, you can consider option of automatically creating release orders for Fixed and Recurring Fees pricing terms on a release-required Contract. Kindly review below links for further information.

8. Connected Buyer's ERP

An invoice created in Buyer's ERP is loaded into SAP Ariba Invoice Management through SAP Business Network. SAP Ariba Invoice Management is a separate solution for managing all Invoices at one place. It could be more suitable for Customer not already using Ariba B&I. It has all the features of B&I Invoicing, provides user interface to Buyer & Supplier for entering Invoices. Additionally, it can also process Invoices created in connected Buyer ERP system. With host of features, it helps with efficient Invoice reconciliation & payment process. For more details, kindly refer these links.

9 & 10. Invoice Conversion Services (SAP ICS & Open ICS)

SAP Ariba Invoice Conversion Services (ICS) solutions facilitate conversion of paper invoices to an electronic format with the help of a service provider. Service provider receives Invoices on behalf of the Buyer & converts them to an electronic format for posting to Business Network.

There are 2 types of ICS solutions: SAP Ariba ICS & SAP Ariba Open ICS.

With SAP Ariba ICS, SAP Ariba selects and manages the service provider. Service providers are already set to create cXML invoices for Business Network.

With SAP Ariba Open ICS, the buyer selects and manages the service provider. SAP Ariba helps to get the service provider set to work with Business Network. For more details, refer SAP Business Network Guide to Invoice Conversion.

The Procurement Monthly - November 2023

2023-11-24T02:28:10+01:00

Each month i'll review the procurement research reports, articles, and webinars and summarise here

Supply Chains for Mid-Market – IDC

In this IDC brief (sponsored by open text) the paper uses data from its supply chain survey earlier in the year and focusses on mid-market responses (being defined as under $1billion). The paper looks to the differences between large enterprises and Mid-market companies identifying that they are held to the same business process standards by their customers as large enterprises, but they lack broad resources.

In the near term, efficiency, and resiliency (both visibility and agility to see it and respond) are top two priorities, as both are ways to ensure margin improvements and more reliable operations. IT modernization is on the radar as an important driver of performance but takes a back seat for now.

Responding more quickly to supply disruptions or changes remains top of mind in the shadow of recent global supply chain disruptions. Notably, collaboration is a bigger priority for larger mid-market organizations.

In the medium term, efficiency remains a top priority as mid-market companies see margin erosion and input cost pressure continuing. IT modernization increases in importance to drive better business performance, while operationalizing sustainability joins the list of top priorities.

Whilst over the next decade, almost 40% of mid-market companies view labor availability as a persistent problem, the top priority for these companies in 2023-25 is to reduce cost/eliminate waste to mitigate the effects of persistent inflation.

Attempting to predict major disruptions, the black swan events, if you will, have proven to be an almost complete waste of time for us. What we need is the visibility and integrated systems to be able to respond more quickly than our competitors.

Risk and speed of response are big issues for all but are more keenly felt in mid-market. Supply diversification is a strategy that many are following, but according to the paper, that brings more suppliers, more documents, more exchanged information, and therefore more things which can go wrong.

AQPC Benchmarks & Procurement is changing.

In the first report from AQPC they have published their benchmarks for procurement FTE to perform procurement activities. Where they exist, I’ve put the SAP Benchmarks in.

MEASURE	Metric	SAP
Number of FTEs that perform the process group “Procure materials and services” per $1 billion revenue	36	29
Number of FTEs that perform the process “Develop sourcing strategies” per $1 billion revenue	4.1	11
Number of FTEs that perform the process “Order materials and services” per $1 billion revenue	18.8	10.6
Number of FTEs that perform the process “Manage suppliers” per $1 billion revenue	5.5	NA

An interesting piece here, in the previously covered Hackett world class digital procurement report, it mentions that there is a reduction in total procurement FTE the more digitally enabled functions were, but more strategic procurement people within this.

The second report covers how procurement has been changing over the last few years with over 71% of respondents, (from 1,181) stating they have seen significant transformation of their processes and systems. The report states that Procurement’s strategic objectives have been shifting in line with broader changes in the business environment. In the past, cost reduction and maintaining or improving margin would have been the two most important objectives for procurement. However, the study found that avoiding supply disruption is now the most common strategic objective, followed by reducing procurement costs (there’s about a 2% differential) with increased emphasis on sustainability and improving supplier relationships (though there is a clear distance between the top 2 and next few)

Within supplier relationships, the key areas identified were supplier’s ability to deliver (25 percent of respondents), supplier capabilities (22 percent), and sustainability (16 percent)

The report concludes that whilst cost is always important, the ability to collaborate with suppliers, and better measure and manage suppliers to both avoid disruption and improve relationships are becoming more critical.

World Commerce & Contracting - Implementation

This report looks back at the impacts of contract management technology, some of the pitfalls of implementations (and indeed technology) and suggests some actions for organisations to take. The report makes the point that here is so little usable data associated with the contracting process. In a typical midsize organization, contract-related data sits in 24 different systems,3 spread across multiple business functions. Often, even today, there is no single repository where contracts are stored. Therefore, data analysis, to the extent it occurs, is largely manual and reactive.

“The risk landscape has changed dramatically over the last decade, especially since the COVID-19 pandemic. All these aspects – digitalization; innovation of new products and services; technology; market competition; environmental, social, and governance (ESG); geopolitical conflicts; and more – not only represent new risks but also require a completely new perspective and, therefore, a change of mind in our approach.”

The report then goes on to identify the benefits, and good practices for implementation of contract lifecycle management technology. The secret is to understand the foundations for success and select a system that is adaptable, easy to use and supports a wider set of use cases, allowing a reduction in the overall number of systems deployed.

Deloitte Reshoring

This month’s read of the month!

Lots has been written about reshoring since the start of the pandemic, and generally it has taken longer for organisations to achieve this than was first thought. Lots of reasons as to why, but this paper goes into the decision-making process. This is going to become more important, as the wave of “friend shoring” may well increase over the next few years if the current geopolitical issues continue.

According to the report,. In a Deloitte database3 review of 98 major reshoring events over the past four years, 19% of companies involved in reshoring events used some form of an M&A transaction, including joint ventures or partnership, to execute in the new supply chain strategy.

Before tackling the analysis of total costs involved in a reshoring decision, it’s important to consider the full range of factors that may come into play. The drivers of supply chain disruptions seem to fall into three broad groups: quantitative, qualitative, and risk-related.

Quantitative drivers include labour costs; transportation costs; lead time; working capital requirements; taxes and duties; and defect rates.

Qualitative drivers include intellectual property management; environmental, social and governance (ESG) improvement; cross-functional complexity; and brand reputation.

Risks can include regulatory changes; geopolitical developments; natural disasters; and financial and economic volatility. These are issues mostly out of a company’s control and difficult to quantify.

Whilst this paper looks in depth at 4 categories (of which they identified in 3 of them the factors around the decision to reshore or not, have made reshoring more attractive) the factors identified, and calculations made can be applied to any category.

The report identifies the following questions of consideration in making decisions around reshoring.

How long and complex is my global supply chain (geographically and logistically)?

What competitive advantages or disadvantages does my supply chain confer in the marketplace?

How does the total cost of goods sold change by shrinking the supply chain closer to the end consumer?

How is my supply chain a result of price elasticity, and how does customer price elasticity impact decisions?

What are the risks to my supply chain, and how can I control or mitigate them?

Is there unpredictability in my supply chain that could affect business continuity?

What’s the impact of regulations or the potential arc of future regulations (e.g., EU’s Carbon Border Adjustment Mechanism [CBAM], Corporate Sustainability Reporting Directive [CSRD])?

CEO Briefing

2 recent CEO briefings, one on AI stated that the majority of CEOs polled (53 percent) said they are now finding business uses in the new capabilities of generative AI—a whopping 130 percent increase from those who were considering using AI just eight months prior. considering using AI just eight months prior.

CEOs in industries like advertising, marketing, media and PR, tech and professional services all have the highest rates of positive responses when asked if they are finding business use out of generative AI.

In the other briefing, Chief Executive’s October CEO Confidence Index finds CEOs outlook for 2024 at lowest level in a year, with 87 percent of the 240 chiefs polled saying they expect business conditions to either remain flat (29 percent) or turn negative (58 percent). The growing probability of a recession, many said, will lead to further increases in unemployment, sticky inflation, and a prolonged high-rate environment.

Thomson Reuters – Global Trade

Similar to the above, the Reuters report stated that an environment of almost constant disruption continues to hinder global-trade efforts, and these disruptions come from familiar sources — inflation, rising costs, supply chain shortages, international conflicts, regulatory changes, transportation troubles, and compliance challenges.

Not surprisingly, these sources of disruption and uncertainty also comprise the global trade profession’s top strategic priorities over the next 12 months.

Some key points from this study stated that:

46% of companies say they are impacted by retaliatory tariffs between the United States and China

28% of companies say they are affected by Russian sanctions — down from 39% in 2022.

88% of businesses collect information for ESG purposes from their suppliers at least once a year.

The decision to collect ESG data is driven by three main factors:
- i) to comply with local laws.
- ii) to support the company’s or owner’s values and ethics; and
- iii) to mitigate reputational risk.

More than two-thirds of businesses take ESG considerations into account in their decision to use a supplier.

62% of survey respondents rated “supply chain security and data protection” as their top technology priority, up from 54% in 2022.

Ardent Partners – State of Payables 2023

In addition to the state of procurement report, Ardent also delivers a state of e payables report aimed at AP. I think we forget sometimes, the second P in P2P is all about payments, so this is critical for procurement leaders, not just because an increasing amount (see the previous AQPC report last month) of AP and procurement, are now reporting through the same lines, if not to the same person.

In fact, an early part of this report calls that out in terms of strategic priorities. Efficient collaboration between finance and procurement is key to optimising spend management and supplier relationships. 50% of Ap teams leverage data and intelligence to improve collaboration.

Some other key takeaways, a focus on eliminating paper invoicing and enabling more suppliers to submit invoices electronically, driving greater automation and reducing processing costs. Hurdles include payments taking too long, and a high percentage (47%) of exceptions. Clearly these two are linked with each other. Late supplier payments (as a result of the above 2) are the consequence and also does not help in improving supplier relationships which was called out earlier, as a key part of collaboration between AP and procurement.

Whilst adoption rates haven’t improved much since last years report, the section on adoption is interesting for a couple of reasons.

The inclusion of travel and expense management solution for the first time, and

Network more adopted than portals!

University of Mannheim – State of procurement profession

In this annual survey of around 400 procurement professionals, some interesting points emerge.

Cost & uncertainty are the two top priorities of procurement. Cost is more dominant, and procurement are focussing more on cost (than top management) in their evaluation criteria. This also shows up in procurement involvement in top level discussion, when cost, delivery and quality are the points procurement is involved, when talk turns to innovation, flexibility and (worryingly though this is consistent with many reports) sustainability, procurement are involved less.

Strategies are evolving, with localisation of supply increasing, as well as more dual/multi sourcing outcomes becoming the norm. A focus on driving better relationships as well as increasing inventory to combat the uncertainty are also being implemented.

The Cost-Plus World of supply chains

If I could have 2 reads of the month, then this would be the other one!

This report derives form a survey of 400 executives earlier this year and is written by Economist Impact (sponsored by GEP)

Fifty-nine per cent of survey respondents believe that they will have to make changes to their supply chain to manage challenges in the coming year.

Some of the changes include adopting technology to increase supply chain visibility (63%), followed closely by digitally transforming supply chains (57%).

As stated by a couple of other reports, the biggest impact on supply chains is geopolitical events, (ahead of trade protectionism)

Responses highlight the importance executives are placing on inventories in 2023, with 68% stating increasing inventories are a moderate or high priority, and 55% stating decreasing inventories as a low priority. Yet, although inventories can decrease certain risks, they require more capital investment. Sixty-eight per cent of respondents confirm there are additional costs associated with increasing inventories. This shows that executives are focused on factors beyond cost.

Managing cost is critical to offset, these actions, and benchmarking pricing, supplier consolidation (though in the risk mitigation, it talks about increasing number of suppliers, so this is a category v category approach). External supply chain financing, is another way to offset cost, identified by 34% of respondents as a top 3 approach.

Substitutability is another supply chain strategy being adopted by businesses to weather short-term disruptions. Eighty-four per cent of respondents rated substitutability of moderate to high importance in managing procurement and supply chains disruptions in 2023. By employing input substitution, certain firms will be able to minimise inventory holdings whilst preserving output levels, as versatile inputs can be utilised across different products.

As always reach out to discuss more, copies of the reports mentioned are linked above,

Enhancing Field Configuration UI: A Chrome Extension for Field Searching

2023-12-08T22:28:08+01:00

Introduction:

As an SAP Ariba technical lead specializing in Buying and Invoicing, I encountered a recurring challenge: the cumbersome task of manually searching through field labels, leading to inefficiency and time consumption. Fueled by the need for a more streamlined solution, I developed a Chrome extension to simplify field searches, saving time and enhancing accuracy in the SAP Ariba SM environment.

Problem Facing:

When customizing Ariba Sourcing or Buying and Invoicing, identifying the right field is crucial. However, the current design relies on a time-consuming manual process of scrolling and checking individual field names.

Tool Introduction:

Chrome extension [Search Field Configuration] - an automatic Chrome extension solution for swiftly locating the right field in the Field Configuration UI by simply inputting relevant keywords.

Installation Guide:

Download link: Download from here

Download the extension and unzip the file to your local PC:

Launch the Chrome browser on your computer.

In the top-right corner, click on "More" (represented by three dots), then navigate to "Extensions."

Click on "Load unpacked" and choose the local folder where you unzipped the extension files.

How to Use:

Step 1:Access the Desired Service Manager and Navigate to Field Configuration

Begin by navigating to a specific service manager, searching within a particular realm, and accessing the site. From there, click on the link "Field Configuration" under the Menu Customization Manager. Open the class you wish to search for fields. Refer to the image below:

Step 2: Load the Extension and Refresh the opened Service Manager UI

Once the extension is loaded, refresh the opened Service Manager UI.

Step 3: Access the Extension in Chrome

On the upper right of the Chrome browser, click below the highlighted mark:

Step 4: Open the Search Field Configuration Extension

Click the button and select the installed extension - "Search Field Configuration" and the below pop-up will show on the UI.

Step 5:Refresh Page and Input Search Keys

Click the "Refresh Page" button(The search button becomes clickable only after this), then enter the search keys.

Step 6:Initiate Search and Confirm

Click search and click ok after this pop-up shows.

Step 7:Wait for Results

Wait for the tool to find the right label, and a pop-up will appear below.

Step 8:Decide Next Steps

As per the message, you can click ok to carry on the search by clicking ok, or you can copy the field name, click cancel, and search it on the page as below. (Ctrl + F, paste and search) The field is highlighted with green color.

Step 9: Handle No Results

In case no fields are found, an alert message will appear. Click "OK" to close it.

By following these steps, you'll efficiently navigate and utilize the Search Field Configuration extension to streamline your field searches.

Additional Tips:

If the tool pop-up appears, and you wish to discontinue the search, simply press the "ESC" key to cancel it.

Supported Solutions:

SAP Ariba Sourcing

SAP Ariba Buying and Invoicing

The Procurement Monthly - December 2023

2023-12-19T21:29:27+01:00

Each month i review all the procurement research reports and articles and summarise the best of them, drawing out the key points.

World Commerce & Contracting – CCM Benchmarking

In this report, (756 responses) sponsored by Icertis, World CC looks at the differences that’s happened over contract management over the last couple of years and there are some interesting takeaways.

Increase in both Agile (25% and relational (14%) contract types. Reflecting the changing shape of the world economy

On average contract data sits in 24 different systems in typical organisations, which will present a “challenge” to ensure that you have a complete picture.

The top 5 most measured areas are:
1. Cost reduction achieved (rather than just identified)
2. Compliance to contract
3. Cycle times
4. Contribution to revenue
5. Customer (external) satisfaction

Post signature monitoring of compliance to terms is the top area of interest (also grown by 15%) in technology (mirrors earlier Economist Impact report), followed by obligation extraction.

Contract repository is the top deployed technology at 62% of respondents.

Visibility into (76%) and finding contracts and data (70%) are the top drivers of new technology.

An interesting nougat that appeared was linked to the spread of contract management being no longer siloed in procurement (if in fact it ever really was). The survey tells us that on average 29% of the workforce is in some way involved in the contracting process.

MIT State of Supply Chain Sustainability

The fourth instalment (2300 responses) shows that commitment to supply chain sustainability appears to be resilient to certain types of crises, but vulnerable to others. Large-scale network disruptions, like those precipitated by the Covid-19 crisis and Russia’s invasion of Ukraine in 2022 are shown to result in increased commitment to supply chain sustainability among many firms. On the other hand, in 2023 many firms’ sustainability efforts appear to have been especially sensitive to this year’s negative economic forecasts.

The gap is narrowing between the goals that are being set, and the investment needed to achieve those goals (though investment is not at the level where the set goals will be achieved). What is interesting is that each year there is a differing priority of importance. Diversity for example appears to be in ascendancy over the last few years whereas circularity has stayed stagnant.

When looking at the current actual practices, Supplier codes of conduct (80%) supplier audits, supply chain mapping and company codes of conduct lead the way and the report calls these table stakes for global sustainability programs.

This year’s report had a section devoted to Net Zero goals and almost half of the respondents who had net-zero goals report that their firm will not begin measuring or reducing Scope 3 emissions for five years or more. At the same time, roughly half of responses show net-zero deadlines of 2040 or earlier. Scope 3 reporting appears to be especially vexing, and how to collect reliable data across firm boundaries is still tricky.

Gartner Incentives Suppliers for Sustainability

On the subject of sustainability, Gartner released a paper looking at the actions that can be taken to incentivise suppliers to achieve sustainability goals, and at the top of the list (linking nicely to the world cc and MIT reports are to include sustainability goals in contracts, and to ensure those goals are measured in performance scorecards.

The list is largely as you’d expect, (linking business to performance etc, but an area I thought was very low was the access to better payment terms for improved sustainability performance (65). Not clear if this is linked to organisations ability to offer those terms, but it does seem like an opportunity missed.

In a nod to the MIT Study earlier, only 16% of organizations are actively reducing Scope 3 greenhouse gas (GHG) emissions, and another 27% state that conflicting priorities hinder suppliers from prioritizing efforts to reduce their emissions.

CIPS Professional Challenges

A couple of interesting articles from the revamped CIPS communication platform this month. First Dr John Glen discusses the forces shaping procurement and supply in 2024, including:

Geopolitical Flashpoints (Mid East, Taiwan, Russia/Ukraine

Supply Chain Changes – Logistics falling, reshoring increasing.

Inflation & Interest rates

Slow growth

In the second article, a survey of the CIPS member base identified the challenges keeping procurement up at night. Apart from the above there was also

Sustainability

Workload

SRM & Contract Management

Procurement Leaders Compass 2024

My read of the month for this month.

This report looks ahead to the challenges and opportunities procurement could encounter not just next year, but over the next five years and beyond. It’s a little bit of a future focussed report that poses several what if questions…

What if Gen AI becomes as used as spreadsheets are – Report suggests that Gen AI market value could be $36Bn by 2028 and that market intelligence is recognised as having the biggest impact from AI

What if regulators clamp down on AI – See the recent issues surrounding open AI!

What if globalisation goes in reverse (ie will reshoring/nearshoring/regionalisation continue the current trends). Global trade has basically plateaued (and in fact shown a decline) since 2008. The biggest barrier to the reshaping of supply chains is cost (45%) but as other reports have noted (Deloitte reshoring article last month) these cost prohibitors are shrinking to almost nothing.

What if Economic turbulence erodes enthusiasm for ESG – As discussed in the MIT report earlier, the one area that did slow down the ESG impetus was the Economic realities of 2023.

All in all, a great report one that asks some great questions, and gets you thinking about future strategies and the impacts on procurement.

State of Flux Annual Survey 2023

This is the 14^th iteration of the Supplier Relationship Management (SRM) study, and it paints an interesting picture. The report starts of by stating that many organisations haven’t progressed in the maturity of their SRM programs (if in fact they have them) which is an issue as according to the report 50% of their workforce isn’t employed by them, but by their suppliers.

There’s lots of good case studies and thought leadership in the report, and for those wanting to know more the first half of the paper is dedicated to those studies and thought leadership.

“Feedback received during and immediately after the COVID-19 pandemic revealed that many organisations who believed they were a customer of choice found out they were mistaken.”

The second half looks at the actual data from the study, segmented into the 6 pillars of SRM. Headline stats include:

Value: 87% believe improved risk management is a key deliverable from SRM programs with 75% reporting measurable (non-financial) benefits. 42% have seen measurable financial benefits of cost reduction programs through SRM.

Engagement¨55% of organisations gather supplier feedback by ad hoc conversations.

Governance: 22% of companies use 3^rd party supplier due diligence services. 89% segment their suppliers on business criticality.

People: 69% of leaders have a dedicated supplier management role and 83% of leaders have developed specific competencies for supplier management. 52% identified that SRM sits in centralised procurement functions.

Technology: 80% of leaders have dedicated contract management system. 76% identified improved supplier performance as a benefit from using technology with 62% identify the centralise supplier information as a key problem they are looking for technology to solve.

Collaboration: 92% of leaders use 360 collaboration assessments, and 72% of leaders report improved levels of trust from collaborative relationships.

SSON Accounts Payable

This report which echoes in many stats the findings from the ardent partners state of AP report from last month, in detailing the opportunity for greater efficiency from AP. The lens is slightly different with a shared services context but shares a similar output that the automation and maturity within many could be improved.

59% do not have a designated owner for end to end P2P

78% identified increased speed of processing and cycle time reduction as a top benefit of automation and 56% cited exception handling as the biggest barrier from AP delivering on their brief. (This was also identified as the activity that will be prioritising in terms of automation next).

Suppliers identified PDF as preferred method of invoice submission (though how automated this allows the process to be is interesting and the report makes the point that this will be due to the low levels of automation.

40% identified E invoicing as a technology planned to be implemented in the next 2 years, with budget (56% and competing priorities (54%) being the biggest barrier.

Amazon State of Procurement 2024

A pretty comprehensive study. Pulling out some interesting stats:

95% stated that their org has to outsource procurement activities to third parties. With 72% stating that strategic activities are the ones they outsource

53% state their procurement budgets will increase in 2024.

Top internal challenge is complexity in process/systems and external is costs.

86% cite retaining and developing talent is a top priority with 84% stating attracting new talent.

36% want to invest in tools or tech to increase efficiency.

Beroe – Digital Procurement Survey

Beroe conducted a survey on the digital procurement landscape within its community of members.

53% identified that the demand for cost reduction and greater efficiency is the main driver of innovation in procurement, with technology being 2^nd at 22%, which is supported by recent technological innovations in the procurement sector are perceived to have most significantly improved the efficiency of processes, as reported by 44% of respondents.

28% expressing concerns about the integration of new technologies with existing systems and training and change management pose challenges for 24% of respondents, highlighting the importance of addressing the human factor in technology adoption.

The survey reveals diverse interests within the procurement community regarding the exploration of new digital solutions., AI-enabled Market/Supplier/Commodity Intelligence, Supplier Relationship Management (SRM), and Spend Analysis each garnered the interest of 10% of respondents. AI-driven insights and data-driven decision-making are evidently key areas of focus.

Additionally, Tendering/RFP and Contracting attract 9% and 7%, respectively, showcasing the importance placed on optimizing procurement processes.

PWC CEO Survey

In this the 26^th (wow!) annual global CEO Survey, over 4000 respondents identified some top areas for organisations to consider.

Surprising no one, Inflation and macro uncertainty is the biggest threat over next 12 months but recedes over next 5 years (40/31 to 29/28)

Cost cutting is the order of the day with 52% stating cutting operating costs, but only 16% stating reducing workforce.

48% identified increasing investments in cyber security and 46% identified adjusting supply chains (reshoring/nearshoring) in response to global conflicts.

76% investing in automation of processes and systems, 69% deploying cloud and AI and other advanced tech.

As always reach out to discuss more, links to the reports are included and always happy to hear your thoughts!

The Future of Buying: SAP Ariba Buying (Buying 360)

2023-12-29T11:04:31+01:00

The Future of Buying: SAP Ariba Buying (Buying 360)

These days, business buyers need to think very differently about how they buy, who they buy from, and the impact of their buying decisions. But there are other factors at work, requiring a more elevated buying experience.

Imagine a procurement tool, that understands your preferences and role within the company, offering a personalized, predictive, and sustainable buying experience. SAP Ariba Buying is such a procurement tool. Once you're logged in, your purchases and orders are seamlessly arranged based on your previous transactions and tailored to your preferences. It's not just about what you need; it's about what you need before you even realize it.

Elevating the Guided Buying Experience for Today

The guided buying capability in SAP Ariba solutions remains the platinum standard for purchases of goods and services. The Buying 360 capability is the latest step in this evolution.

Built on SAP Business Technology Platform (SAP BTP), Buying 360 ensures seamless integration within the SAP solutions. This robust integration enhances the procurement process, making it more targeted, strategic, and efficient.

Buyers are directed to goods and services, based on their role and the organization’s procurement and sustainability policies. This helps to make procurement more targeted and strategic. Additionally, integration between further SAP Ariba solutions and SAP S/4HANA enables a seamless fulfilment experience by converting purchasing requests into purchase orders and then tracking the fulfilment process.

A More Flexible, Personalized Buying Experience

The buying 360 capability is built using SAP Business Technology Platform (SAP BTP) services, to make it highly flexible.

The new capabilities leverage artificial intelligence (AI), intelligent recommendations, and machine learning. This creates a holistic view of what the buyer is purchasing and how the purchase stacks up against their organization’s environmental, social, and governance (ESG) goals.

With the buying 360 capability, SAP Ariba Buying and SAP S/4HANA Cloud, public edition can deliver a buying experience, that is personalized for individuals and their roles. As soon as the user logs on, they are greeted with a clean and friendly user interface. They are directed to goods and services, based on their role and their organization’s procurement and sustainability policies.

Predictive Recommendations

Leveraging AI and machine learning, the buying 360 capability offers intelligent recommendations, to help users make informed decisions for their role. The user interface is designed, that these recommendations are displayed, at the right time and the right place. For example in catalogs, in contracts, in the marketplace, or even as a spot quote, using automation to reduce the manual work required of buyers. We add more and more functionality, that will help buyers to make purchases, that comply with the procurement and sustainability policies of their business.

Here are some of the predictive capabilities:

“Recommended for You”: Guided buying is extremely helpful for buyers, who know what they’re looking for. But sometimes they need more information. The buying 360 capability understands the user’s role and the roles of their peers, and it uses AI and algorithms, to determine what people in similar roles, have ordered to make recommendations.

“Intelligent Search”: The buyer types a search term and our Intelligent Search 3.0 sorts, through connected marketplaces and supplier catalogs, the best options. This helps provide relevant entries, that have been sorted and personalized to their role.

“Also Bought Together”: After the buyer selects the item they want, the system displays other items their colleagues purchased with that item. These are chosen based on previous shopping carts with the help of a powerful machine learning algorithm.

Environmentally Aware Buying Decisions

As the needs and priorities of business evolve, so will the guided buying capability. Today, organizations are being challenged to balance cost savings, against the environmental impact of their purchasing decisions. To help them, we are designing enhancements for future releases to provide sustainability information, including carbon footprint, packaging footprint, and energy consumption.

The Future of Buying

While the buying of yesterday was just about price and policy, future purchasing also needs to be personalized to the user, predictive to reduce manual effort and done with an eye on sustainability.

The buying 360 capability represents the next wave in the evolution of guided buying services from SAP. As we roll out these new capabilities, we will continue to focus on the individual and their buying needs, the organization and its objectives, and the ESG aspirations of both with a holistic, 360-degree view of the purchasing process.

Release Navigator for Spend Management and Business Network, 2402 Edition

2024-02-01T22:30:00.100000+01:00

The Readiness@Scale team is thrilled to announce that the 2402 updates to the release navigator for Spend Management and Business Network will be automatically deployed with the first release of the year on February 16, 2024. This update will feature the latest content and incorporate enhanced user-experience (UX) elements based on your valuable recommendations!

2024 Innovation & Content Upgrade Plan

In order to reduce any inconvenience to your experience, from 2402 onwards, the release navigator for Spend Management and Business Network will incorporate new UX innovations annually, in August, coinciding with the release of content, rather than on a quarterly basis. Explore the plans for innovation and content upgrades in 2024 here.

Release Event	Date
2402 Content Update	February 16, 2024
2405 Content Update	May 17, 2024
2408 UX Upgrade & Content Update	August 16th, 2024
2411 Content Update	November 15, 2024

Disclaimer: These dates are for informational purposes only and may change. The Readiness@Scale team has the final decision over any UX modifications.

Just a reminder, there are NO TASKS you need to perform for these upgrades to the release navigator; everything is automated. For more detailed information on system upgrade dates, refer to the Release Schedule tile. (see Figure 1: My Home).

New & Updated UX Elements

The Readiness@Scale team has invested significant effort in harmonizing the overall user experience across each release navigator. The team has concentrated on establishing a more cohesive experience, beginning with a modernized approach to the My Home page. Pages & Spaces have been reintroduced, providing a dedicated space for accessing crucial release content and information:

Pages & Navigation: Access any product page for easier navigation.
Welcome: Important messages from the Readiness@Scale team will be found within this tile.
Release Calendar: Stay informed on the latest release dates that may impact your systems.
Product Release Resources: Utilize these release resources to maximize time-efficiency during the release.
Additional Resources: Check out some additional resources SAP provides to use your software to its full potential.
About the Release Navigator: Enable yourself on the latest updates, leave feedback, and utilize other Release Navigators for SAP Business Technology Platform, SAP Customer Experience, and SAP S/4HANA Public Edition by Enterprise Support.

Figure 1: My Home

New Access Points

Support.SAP.com

The release navigator for Spend Management and Business Network is now only two-clicks away from Support.SAP.com!

Go to the new Release Ready page.
Click on the Spend Management and Business Network link.

SAP Activate

The purpose of the Roadmap Viewer is to provide access to the SAP Activate methodology implementation roadmaps. Implementation roadmaps offer a comprehensive view of your project teams' associated activities, deliverables, and tasks with accompanying accelerator assets in document and hyperlink format.

Go to SAP Activate Roadmap Viewer and click on the Explore All Roadmaps button
Select one of the following Roadmaps:

Cloud Specific Methodology:

SAP Activate Methodology for SAP Ariba and SAP Fieldglass

Release and Update Cycles for SAP Ariba
Evaluate New Functionality
Under Accelerators: SAP ISBN – Release Navigator for Spend Management and Business Network

SAP Enterprise Support Value Map

The release navigator for Spend Management and Business Network will be also accessible through the SAP Enterprise Support value map for Spend Management and Business Network.

Value maps provide self-paced learnings, expert-led live sessions, collaborative forums, and access to SAP experts; all included as part of your SAP Cloud Solution subscription.

3 Easy Steps:

Complete a one-time sign-up for SAP Learning Hub, edition for SAP Enterprise Support which is required
Access value maps
Open the value map for Spend Management and Business Network

Got a question about the value maps, or content therein? Leverage the “ask questions” feature in the value map or contact us at sapesvaluemaps@sap.com.

Making Your Impact

At SAP, we value your opinions and suggestions very highly. You can submit release topics that you would like to be covered using our Topic Request & Feedback Survey tile found on the My Home page under the About the Release Navigator section.

This survey is an excellent opportunity for you to tell us how the release navigator for Spend Management and Business Network has worked for you and how we can make your release experience better. We also encourage you to share your feedback, thoughts, or questions in the comment section below.

Staying Connected

Follow the Intelligent Spend Management and Readiness@Scale community tags, and Ryan Russman to stay up to date with the latest blog posts.

Creating test data for ECC backend purchasing documents

2024-02-06T09:41:51.155000+01:00

External purchasing documents (from Ariba or SRM systems) can create or change ECC documents by remote function call (RFC). Purchase Orders or Requisitions can be transferred by RFC-call via BAPI functions. Sometimes to clarify the root cause of a problem or a backend error, we need to catch the test data in the interface (BAPI) between Ariba/SRM and MM. The interface can be for example :

BAPI_PO_CREATE1, ARBCIG_BAPI_PO_CREATE1
BAPI_PO_CHANGE, ARBCIG_BAPI_PO_CHANGE
BAPI_PO_GETDETAIL

User settings:

On Ariba/SRM side, you need to check the user which is used to connect to the back-end system (RFC-User). To check it please use transaction code SM59 -> Double click in the connection (Example: S71CLNT300) and check the name of the user
On the ECC back-end side, check in the transaction SU01 whether this RFC-user has the parameter FBGENDAT = X, if not, please add the parameter "FBGENDAT":
After this you can create test data for the specific user according to note 539978

FBGENDAT

The FBGENDAT report can be executed in order to activate the Test data generation for a specific BAPI:

In the transaction SE38 -> FBGENDAT -> Execute: enter the BAPI you are looking for, like BAPI_PO_CREATE1
Choose Mode B ("Write test data and continue normally"), activate this entry (should be deactivated after test data have been executed)
Go back to Ariba/SRM, start the problematic process again. In SRM you can also re-transfer the PO > new PO or an existent PO using the Function BBP_PD_PO_TRANSFER_EXEC
Then deactivate the above setting in the SE38 -> FBGENDAT (ECC side)
Go back to your back-end system: transaction SE37 -> BAPI_PO_CREATE1 or BAPI_PO_CHANGE -> Execute, then press "Test Data" button to check the created record

IMPORTANT

We generally DO NOT generate test data using the option 'A' in productive environments
Option 'A' could be also problematic in productive systems, as whenever the BAPI_PO_CREATE1 is excuted a dump is generated
However, in order to debug the PO creation correctly (in quality or development systems), the support prefers to receive the test data written in option 'A' (with option 'B' an example PO is already created)
Please remove the user setting and delete the entries in report FBGENDAT when the test is finished

Preferred & Qualified suppliers - A simpler and compliant way for buying/sourcing non-catalog item

2024-02-15T08:19:59.236000+01:00

Imagine this scene :

You were recently promoted as the manager of a site office, and this year is the 10th anniversary of the site office's becoming operational. You'll need to arrange an event and invite the company MD. You need a professional event management company to manage the 10th-anniversary event. However, since you have never put on such an event, you are unaware of any trusted event management organiser in that region. Also, you don't want just to select any random organiser as the stakes are high here.

We all have been in a similar situation where we want to buy an item or a service but are not sure of the trusted vendor who has the right experience and can deliver with quality. This is where the concept of preferred suppliers comes in. We will try to understand this business case with the help of the 5 Ws and H Framework.

I have kept this discussion at a high level without going deep into the configuration details. You may already have SAP Ariba Buying solution but have yet to leverage the Preferred & Qualified suppliers functionality, or you may be thinking of having such a solution for the users in your organisation.

WHAT is?

SAP Ariba Guided Buying (GB)

GB provides a simplified user interface that allows users to search and request goods and services.
Guided buying policies ensure consistent compliance for all purchases.

Non-catalog items

If you cannot find the items in the catalog, you can create non-catalog items by describing what you need. Non-Catalog Requisition is also sometimes known as Ad Hoc Request.

Qualified Supplier

Qualifications vet the supplier's suitability to provide specific commodities for specific regions.
Questionnaires in supplier qualification projects are targeted at specific commodities and regions. The suppliers are vetted for compliance with your organisation's IT security, ESG, Payment Terms, Delivery Terms and other essential compliance requirements.
The qualification assessment can be done outside SAP Ariba or using Supplier qualification projects in the SAP Ariba Supplier Lifecycle and Performance (SLP) solution.

Preferred Supplier

Preferred supplier management vets suppliers' suitability for a preferred status for specific commodities for specific regions.
Suppliers must be qualified for a combination of commodities and regions before they can be preferred.
While qualification ensures that the supplier is qualified for the business, the preferred level for a supplier tells which supplier is more preferred for the commodity/region combination, depending on experience.
Preference selection is usually based on the Buyer organisation's criteria, such as on-time delivery, quality delivery, local sourcing, willingness to collaborate, willingness to negotiate, etc.
If the buyer organisation has SAP Ariba's SLP solution, the suppliers can be preferred using the preferred supplier management project; otherwise, this assessment exercise is done outside of Ariba.

WHY must we recommend Qualified & Preferred Suppliers to casual users?

Drive spending to preferred suppliers rather than allowing users to buy from any supplier.
Improve the user's buying experience with supplier recommendations, freeing them to search for trusted suppliers.
Request quotes from the qualified/preferred suppliers for the tactical sourcing.
Better negotiation capabilities with suppliers based on volumes.

WHO need these recommendations?

The casual users, who make infrequent purchases or the functional buyers, who purchase goods and services for their departments, are unaware of the compliant and vetted vendors for most categories and regions.
GB provides quick access to preferred suppliers while incorporating guardrails so users follow your procurement policies without having to know them in advance.

HOW to enable Qualified & Preferred Suppliers in Ariba GB?

You must have SAP Ariba Buying license.
You must have already imported your vendor data in Ariba Buying using
1. Import Supplier Data (Consolidated File),
2. Import Supplier Location Data (Consolidated File)
3. Import Purchase Organization to Supplier Mapping task.
Import Supplier Users - Configure supplier users who will participate in the tactical sourcing events your casual users can easily create.
Export your supplier data by running the Export Supplier Data (Consolidated File) task. You can use this file as a reference when building your qualified and preferred supplier files.
Import Preferred Supplier Level -
1. Indicates the degree to which your organisation prefers one supplier over another for categories (commodity codes) and regions (user ship-to countries).
2. Examples of preferred supplier levels include number ranges (1-5) or text labels (High, Medium, Low). Suppliers with a level of 0, or no level, aren't considered preferred.
Import qualified and preferred supplier data in Guided Buying
Import Supplier qualification data -
1. Supplier qualification data is used to designate the suppliers qualified for specific categories (commodity codes) and regions (3-letter country codes).
2. Suppliers must be qualified to be suggested when users create non-catalog requests.
3. The vendor IDs in the file must match the partitioned supplier UniqueName in SAP Ariba Buying.
4. Customers with SAP Ariba SLP solution can maintain supplier qualifications using projects with questionnaires and workflows; otherwise, the qualification data can be uploaded directly in Ariba GB.
5. Since commodities and regions are hierarchical in Ariba when a supplier is qualified for a commodity or region combination, they're also automatically eligible for the lower levels of those hierarchy branches.
Import Preferred Supplier list data -
1. Prerequisite - To recommend suppliers to users, mark a supplier as qualified for a category and region before keeping them as preferred for that category and region.
2. The preferred category statuses can be set using preferred supplier management projects for the customer having SAP Ariba SLP solution; otherwise, the preferred data can be uploaded directly to Ariba GB.
Ship-To Address Mapping with Supplier Region Data
1. Guided buying uses the standard 2-character ISO country codes in ship-to addresses, but suppliers are preferred or qualified based on region code master data on your site.
2. Mapping between these codes allows guided buying searches to locate the correct preferred and qualified suppliers.
3. To make this mapping - Import Country Code to Sourcing Region Code Mapping data importCountryToSourcingRegionMapping

HOW ? to Configure Supplier Selection Policies (optional)

Buyer organisations can configure supplier selection policies to narrow the pool of preferred suppliers available to select users based on selected supplier-level criteria.
Example - For a non-catalog request for a Market research category above $100,000, users can choose only suppliers with a preferred supplier level of 2 (Medium) or 3 (High). Suppliers with a select supplier level of 1 (Low) are excluded from the supplier chooser because of the high transaction value. Please take a look at the table below for the policy example.

Supplier Select Policy

Bonus tip - Buyer organisations can configure a list of commodity codes that users can select when they create non-catalog requests. A filtered list makes it easier for users to know what categories are available while allowing your organisation to control the available commodities for these requests.

WHEN and WHERE is the action?

Action starts when the User login to the Ariba GB home page and creates an ad hoc request

The user's ship-to country (defaulted from the user profile) is evaluated against the qualified/preferred supplier's region.
The ad hoc request's commodity is checked against the qualified/preferred supplier's commodity.

Any supplier qualified or preferred for the user's region (or parent regions) and the requested commodity code (or parent commodity code) is displayed to the user without having to search. Please take a look at the screenshot below.
The user just needs to click one of the recommended preferred suppliers. The ad hoc request is auto-populated with other details such as addresses, accounting, etc., leaving the user to fill in the minimal information such as Title, quantity, price and need-by-date.

Adhoc request showing preferred suppliers based on the categogy choosen by the user

Watch-outs

The erpVendorID in qualified/preferred files must match the partitioned supplier's UniqueName.
You need to mark a supplier as qualified for a category and region before marking them as preferred for that category and region.
Suppliers with a level of 0, or no level, aren't considered preferred.
The SM-20598 feature should be enabled to view the Import Country Code to Sourcing Region Code Mapping data import task to define mappings between the 2-character ISO country codes used in guided buying and the region code master data used for preferred and qualified suppliers.
The qualified/preferred file can contain a maximum of 1,000 suppliers per commodity/region combination.

Conclusion

With the qualified/preferred supplier functionality in Ariba GB, you can confidently order your required goods and services from a trusted partner without taking the pain of market research, which your vendor management team has already handled.

Reference sources -

Guided Buying Admin guide

Video - Setting Up Qualified and Preferred Suppliers in Guided Buying

Things I think are cool in the SAP Ariba 2402 Release

2024-02-29T04:31:16.850000+01:00

Here are some of the over 70 features from the 2402 release (February 2024) for SAP Ariba and the SAP Business Network that I think are especially cool. Please comment on any you think should be on the list.

Accelerating Enterprise Category Strategy Development with Generative AI-Enhanced Content Recommendations [CAT-4777] – Pro Tip: Don’t tell your boss that you are enabling this feature. That way as you start leveraging the AI capabilities and including all the cool competitive data and visualizations you can take complete credit for your category management superpowers. That and who doesn’t want to talk Porter’s Five Forces at your next party. Legendary.
New Supplier Profile Summary [NGSM-2959] – The new summary screen is built on SAP BTP, which you may or may not care about. What you do care about is that moving forward this technology is the same for all SAP products which means you get a consistent look & feel across the SAP portfolio translating to less training and faster adoption by your users. On top of that, on this new summary page there is a new link showing off operational procurement data directly from S/4. This new profile will continue to add new features and transition from the existing capabilities over the next few releases to be that single pane of glass for all the activities and data for that supplier and as you would expect is popping up directly in other modules.
Automated User Experience Survey in Guided Buying [GB-24766] – I will admit that this one is cool but caused me to pause. The idea that the business user masses can provide a direct feedback link to the product team is incredible and has a huge potential to streamline product updates. I am balancing that optimism with a sincere wonder of how many of the dissatisfied users will be commenting on their dissatisfaction with company policies and approval requirements. (Spoiler Alert: We can’t fix that.)
Allow Suppliers to Add Carbon Emission Data Related to the Network Catalog Products [BNCAT-2027] -- This feature is for suppliers doing the right thing and helping them to be more competitive for it. What is not to like?
Ability to Create SAP Business Network Discovery Postings for Guided Sourcing [SS-46843] – As a buyer, it is always resource intensive to find suppliers to compete as we tend to pick the usual suspects especially in familiar categories. This feature for Guided Sourcing customers allows to quickly find and ingest new suppliers into your events saving a bunch of time.

After all that you may also be wondering about the picture. Okay, I accept that I am shamelessly cheating with this picture to maybe get a little attention for the blog. It is a pic of my 13 year old daughter and while at the grocery store picking up things for her favorite dinner I got her a stuffed koala bear and a can of bubble tea in advance of an evening together where I was hoping to spend good "Koala-Tea" time (say it out loud). Why is it posted here? Because these blog posts suggest you add a picture and I spent WAY too much time agonizing over our image library on search terms of "feature" or "release" or "software" or "procurement" when I really should have been upstairs with my family.

Have a great day. Thanks for reading, and I hope you get to spend some koala-tea time with your family.

Optimizing Tactical Sourcing: Maximizing Benefits from this Guided Buying Channel

2024-03-12T14:54:32.008000+01:00

Spend Target

Tactical Sourcing, together with Service Purchase Order, is the most appropriate buying channel for specialized spend, in between core and tail spend. It helps users by expediting requests for detailed pricing for specific purchases. This is always executed within the company's policy, and if the need arises, with procurement team support.

Figure 1 – Specialized Spend definition.

For a brief overview and demonstration of Tactical Sourcing, we recommend watching Tactical Sourcing in the SAP Ariba guided buying capability (youtube.com).

Procurement Scenarios

Each request's content and corresponding policies decide the level of procurement team involvement. We have grouped this into four diverse scenarios:

Self Service: Casual users interact directly with suppliers via an RFQ (Request for Quote) under policy guidelines within Guided Buying.
Low Touch: Casual users submit an RFQ in Guided Buying. This RFQ is reviewed by the procurement team in Guided Sourcing and, if necessary, adjusted before being published for suppliers.
High Touch: The RFQ is not only reviewed before publishing but also awarded in Guided Sourcing. This must occur before the requester can convert the Award to a Requisition in Guided Buying.
Sourcing Request: Here, no RFQ event is directly created, but a Sourcing Request is submitted for procurement team to review and decide following actions.

Figure 2 – Tactical Sourcing scenarios based on procurement involvement

To better understand the Self-Service Scenario, do watch our SAP Ariba Guided Buying Tactical Sourcing End to End Walkthrough (youtube.com) demo.

Process Components

The key elements of this process are:

RFQ Form: Designed in Guided Buying UI, defining the structure and item types of the request. Published as a tile in Guided Buying for specific category and, if required, location or job function.
Policies: Created in MS Excel and with two types:
- Supplier and Touch policy (mandatory): This policy defines the conditions to allow end users to collaborate with preferred and qualified suppliers, the RFQ type and when and how sourcing department should be involved.
- Supplier Selection policy (optional): This policy narrows the pool of suppliers available for selection in forms.
RFQ Template: Built in SAP Ariba Sourcing, defining the RFQ event properties. Which template applies to each event is determined from the Supplier and Touch policy. Guided Sourcing templates are supported and recommended.

For an in-depth look at these scenarios, process components, and steps to configure them, refer to our complete Value Accelerator: SAP Ariba Tactical Sourcing.

Recent Enhancements

From November 2020 a new RFQ form is available, and many customers are yet to discover. This new RFQ form is a prerequisite for all Tactical Sourcing enhancements delivered since its release. Here are some key features:

Multi-line items RFQs support.
Direct API communication: Facilitates smooth data exchange between Guided Buying and SAP Ariba Sourcing.
Enhanced Supplier and Touch policies: Provides additional fields for more detailed "Accept Quote" phase validations.
Improved Quotes Visibility:
- Supplier Participation Details: Access to suppliers' contact information, participation status, and reasons for decline.
- Bid Comparison Overview: Provides a high-level snapshot.
- Detailed Bid Comparisons: Detailed item-level comparison with additional filters.
Refined Quotes functionalities: Additional features include options for -
- Alternative bidding.
- Supplier-added items.
- Buyer added items (applicable to Low and High Touch only).
Awarding enhancements: To further streamline processes, we have added -
- A clear, designated section for awarded quotes to aid transparency.
- Support for awarding a single event to multiple suppliers (High Touch only).
- The choice to select the award content that converts into a Requisition (High Touch only).
Additional Guided Buying RFQ form actions: These include –
- Save draft.
- Edit.
- Cancel.
- Duplicate.
- Team RFQ

Please note, these enhancements are currently unavailable for the Sourcing Request scenario.

For future enhancements, stay tuned to our SAP Road Map Explorer.

For more details about last enhancements, feel free to check our blog post Guided Buying Tactical Sourcing Innovations Update - SAP Community.

Summary of Configuration

Below is a concise overview of the primary configuration steps to activate the new RFQ (Request for Quote) form. Please, always refer to the latest version of the Guided Buying Administration | SAP Help Portal for the most precise and up-to-date details.

Enable new API communication parameters:
- PARAM_ENABLE_ ENHANCED_RFQ_INTEGRATION and PARAM_ENABLE_EDIT_RFQ in Guided Buying Parameters | SAP Help Portal
Design the forms components:
- Existing RFQ forms might be reused, creating copies, and splitting content into the different available components.
- Designing RFQ Form Components | SAP Help Portal
Add a “Request Form New” tile to Guided Buying using form components created in previous step:
- Adding RFQ Tiles | SAP Help Portal
- Types of Forms in Guided Buying | SAP Help Portal
- This tile type is required for all Tactical Sourcing enhancements, do not use the old “Request Form” tile.
  
  Figure 3 – “Request Form New” tile type as seen when managing Landing Pages via UI.
Adjust Supplier Touch policies to the new RFQ options:
- Configuring Policies for Multi-Line RFQ Forms | SAP Help Portal
Review required terms for new API communication, and optionally (SAP Ariba Sourcing license is required), create custom Guided Buying Quote templates to modify standard event settings.
- Adding Terms Required for API Communication | SAP Help Portal
- Sourcing and Event Templates in Guided Buying | SAP Help Portal

We Value Your Insight!

Throughout this blog, I sought to outline the business need, process flow, necessary components, the most recent enhancements, as well as the essential steps needed to effectively enable Tactical Sourcing in Guided Buying.

My sincere hope is that this information equips you with a deeper understanding, whether you are looking to implement or upscale your Tactical Sourcing buying channel.

We would appreciate it if you could share your experiences with Tactical Sourcing in the comments section below. Your insights and perspectives are invaluable to us as we strive to improve and evolve.

Looking forward to hearing from you!

SAP Ariba Integration scenarios with SAP S/4HANA Public Cloud system

2024-04-10T16:45:32.818000+02:00

Introduction

SAP Ariba solutions extend the core operational processes, providing full source-to-settle functionality with both S/4HANA Private cloud and S/4HANA Public cloud systems.

In this blog, we will see the Ariba technical scenarios which can integrate into S/4HANA Public cloud. Considering the restriction of leveraging the Ariba standard integration method, we will also see what integration method can be used to connect Ariba and S/4HANA Public cloud system.

S/4 HANA public cloud integration with SAP Ariba includes guided buying, collaborative sourcing, and networked-based, end-to-end supplier collaboration to deliver a new and simplified user experience and a seamlessly integrated working model with suppliers using SAP Business Network.

We can extend the core capabilities of SAP S/4HANA Cloud with SAP Ariba solutions in a single-instance deployment. This enables you to receive business documents from SAP Ariba solutions in SAP S/4HANA Cloud and to execute end-to-end processes. Ariba FPC can not be integrated with S/4HANA public cloud.

Available Integration scenarios between Ariba and S/4HANA Public cloud system:

Below mentioned technical scenarios can be integrated from Ariba to S/4 HANA using SOAP APIs using Managed Gateways Passthrough integration. Integration method for below scenarios is different than integrating on-prem S/4 system, So no managed gateway add-on required to connect these systems

Sl #	Technical scenario number	SAP Ariba Technical Scenarios name	S/4HANA Public cloud Integration
1		Supplier Management (SLP) – Bi-directional sync	yes
2	4BL	Sourcing with SAP Ariba Sourcing	yes
3	4AZ	Contract Management with SAP Ariba Contracts	yes
4	2NV	Guided Buying Capability with SAP Ariba Buying	yes
5	42K	Source-to-pay with SAP Business Network (Commerce Automation)	yes

SAP S/4HANA public Cloud in connection with SAP Ariba applications allows you to largely benefit in streamlining your procurement processes:

1. Integrating Supplier Data from SAP S/4HANA Cloud with SAP Ariba Solutions Using SAP Master Data Integration

We can use SAP Master Data Integration (MDI) to replicate supplier data from SAP S/4HANA Cloud to SAP Ariba solutions.

SAP MDI replicates supplier data to SAP Ariba applications through SAP Integration Suite, managed gateway for spend management and SAP Business Network. The following diagram illustrates this process:

Supplier data integration using SAP MDI supports the following Source to Pay business processes for the SAP S/4HANA Cloud integration solutions:

SAP Documentation link: About Supplier Data Integration with SAP S/4HANA Cloud Using SAP Master Data Integration | SAP Help Portal

3087667 - Connecting from SAP S/4HANA Cloud to SAP Master Data Integration service - SAP for Me

Reference link for Bi-directional update:

SM-31650: Support for Bidirectional Integration of Supplier Data with SAP S/4HANA Cloud Using SAP Master Data Integration (MDI) | SAP Help Portal

2. Sourcing with SAP Ariba Sourcing

Sourcing with SAP Ariba Sourcing (4BL) enables to identify sources of supply for purchase requisitions in SAP S/4HANA public Cloud, using the community of suppliers in SAP Business Network and the SAP Ariba Sourcing solution. Note that this scenario is the successor of Sourcing with SAP Ariba Sourcing (1A0).

You can find more information about feature overview in the below SAP help documentation link: Sourcing with SAP Ariba Sourcing (4BL) | SAP Help Portal

3. Contract Management with SAP Ariba Contracts

Contract Management with SAP Ariba Contracts" (scope item 4AZ) enables you to perform strategic sourcing activities and to integrate prices from SAP Ariba Contracts into operational systems, that is, SAP S/4HANA Cloud.

You can find more information about feature overview in the below SAP help documentation link: Contract Management with SAP Ariba Contracts (4AZ) | SAP Help Portal

4. Guided Buying Capability with SAP Ariba Buying

The guided buying capabilities of SAP Ariba are designed for employees who order goods using a self-service. Guided Buying Capability with SAP Ariba Buying allows procurement organizations to scale self-service procurement across spend categories while enforcing compliance.

Note: Procure to pay with SAP Ariba Buying & Invoicing with S/4 HANA integration scenario is deprecated

For more detail about 2NV can be referred in the below link: Guided Buying Capability with SAP Ariba Buying (2NV) | SAP Help Portal

5. Automation of Source-to-Pay with SAP Business Network (42K)

The scope item Automation of Source-to-Pay with SAP Business Network (42K) enables you to seamlessly connect from SAP S/4HANA Cloud to your suppliers in SAP Business Network. You can send them requests for quotations, asking for price and quantity information as well as for shipping costs. You can also send electronic purchase orders and goods receipts to your suppliers using SAP Business Network, and you can receive electronic order confirmations for materials, advanced shipping notifications, and invoices in SAP S/4HANA Cloud from your suppliers. You can also send payment advices in electronic form to your suppliers in SAP Business Network. All data is routed through SAP Integration Suite, managed gateway for spend management and SAP Business Network.

SAP Documentation link : Automation of Source-to-Pay with SAP Business Network (42K) | SAP Help Portal

Hope this blog help you to understand in the possible scenarios can be integrated between Ariba and SAP S/4HANA public cloud.

SAP Ariba Procure to Order 2405 Release Key Innovations

2024-04-25T06:28:07.597000+02:00

Hello SAP Ariba community and welcome to our 2405 key innovation blog for procure to order.

Focusing on the 'Procure to Order' area. Our team has been hard at work to deliver these key features that streamline procurement processes, providing a seamless, efficient, and effective user experience for buyer and supplier

SAP Ariba Buying, guided buying capability - Addition of Contract Numbers in RFQs

When suppliers that have purchasing contracts respond to RFQs, they often need to know the contract numbers to provide accurate quotes.

With this enhancement in Guided Buying, commodity level contract number can now be included when RFQs are created.

This means valid contract numbers for preferred and qualified suppliers in RFQs will be visible to both buyer and supplier. This feature not only elevates the precision of quotes but also optimizes time and effort for all stakeholders in the RFQ process.

Contract number on RFQ

SAP Ariba Buying, guided buying capability - Improved visibility in Delegated Purchase Requisitions

We've heard your feedback around visibility and ease of access to approved requisitions within the delegation process. Previously it was difficult for delegators to find requisitions they had delegated and that had been approved in their absence.

Now, both the delegator and delegatee can find approved requisitions in 'Recent approvals' and information about the delegator and delegatee is available on the approval flow.

This feature enhances transparency, speeds up your procurement process, and ensures smoother collaboration.

Recent approvals selection

SAP Ariba Buying - Display the Total Amount and Taxes for Requisitions in the Requester's or the Preparer’s Currency

This new addition allows you to choose whether you want to view the total amount and taxes of a purchase requisition in the requester's currency or the preparer's currency. This feature applies when a preparer creates a purchase requisition on behalf of a requester in the SAP Ariba Buying or the SAP Ariba Buying and Invoicing solutions and the local currency of the preparer differs from that of the requester.

This should help provide a more personalized experience, catering to specific requirements and making cross-border transactions easier to manage.

SAP Ariba Buying, guided buying capability - Default Header-Level Costs to Requesters’ or Preparers’ Currency

Building on the theme of delegation flexibility for Preparers and Requestors

This feature in Guided Buying allows you to determine which user's currency is used for header-level costs on purchase requisitions. If the requester and preparer used different currencies, header-level costs displayed two different currencies. Now, on-behalf-of requisitions can default to the preparer's or requester's currency.

This will ensures consistency and avoid any confusion that may arise from displaying two different currencies.

Header level costs on purchase requisition

SAP Ariba Buying, guided buying capability - Ability to copy Non-PO Invoices (Guided Invoicing Capability)

Last but not least, we've introduced the ability to copy Non-PO Invoices created in Guided Buying. This feature allows users to quickly create new invoices using the same information as an existing invoice such as line items, tax, header and custom fields and making the necessary updates for the new invoice. This in turn minimizes manual entry, reduces errors, and accelerates the invoice creation process, ultimately leading to improved productivity.

Copy Non-PO Invoices in Guided Buying

We're confident that these enhancements will provide significant business value and improve your overall SAP Ariba experience. Stay tuned for more exciting updates!

Register for the Early Release Series for 2405 release
Feature related materials SAP Ariba Connect - Release Readiness (Customers except CIM)
Readiness Community page (For CIM customers)
SAP Community for Intelligent Spend Management page
SAP Help Portal pages - Procurement and Network
What’s New

Please check out the other blogs, and subscribe to the authors for latest updates aswell as the following resources on our YouTube channels:

SAP Products and Services YouTube channel - https://www.youtube.com/playlist?list=PLWV533hWWvDk7zRbhOsWQkF5BGWokhHYH
"Spend Management and Business Network" playlist - https://youtube.com/playlist?list=PLWV533hWWvDk7zRbhOsWQkF5BGWokhHYH&si=zTlYobcledkWNQ2M

SAP Ariba 2405 Release Key Innovations Preview

2024-04-25T06:39:44.708000+02:00

Hello SAP Ariba community!

We're excited to share with you the new features of our SAP Ariba 2405 release. This release brings a host of enhancements designed to improve your procurement processes, and give you more control and insights into your operations. Let's take a closer look!

Two-Level Cost Structure Components in SAP Ariba Category Management

Our new two-level cost structure component feature offers a granular perspective on cost distribution and cost drivers related to your category. As a category manager, you can now define the cost structure for your category using first-level (parent) and second-level (child) cost structure components. This feature allows category management administrators to create these two-level cost structure components, further enriching your strategic planning in SAP Ariba Category Management.

Support for Two-Level Cost Structure Components in SAP Ariba Category Management

This feature means more in-depth insights and better control over cost structures, ultimately leading to smarter, data-driven decisions. Look out for our detailed SAP Ariba Source to Contract 2405 Key Innovations blog for more on this.

New Endpoint in Supplier Data API with Pagination to Extract Inactive Suppliers

Our 2405 release introduces a new endpoint in the Supplier Data API with Pagination. This feature allows you to retrieve data of all the inactive suppliers in your site, providing you with valuable insights and ensuring you have all the necessary information at your fingertips. Take a look at the SAP Ariba Supplier Management 2405 release key innovations preview for a closer look at this feature.

Copy Non-PO Invoices in Guided Buying

We're making it easier for you to create new invoices with our new copy non-PO invoices feature in guided buying. This feature allows users to quickly create new invoices using information from an existing invoice, improving efficiency and reducing the time spent on repetitive tasks. More details on this feature can be found in our SAP Ariba Procure to Order 2405 Release Key Innovations blog.

SAP Ariba Sourcing Integration with SAP Sustainability Footprint Management

In our ongoing commitment to sustainability, we're pleased to announce that SAP Ariba Sourcing now integrates with SAP Sustainability Footprint Management. This feature enables buyers to collect carbon footprint data from supplier responses and send that data to SAP Sustainability Footprint Management. This ensures supplier responses are accurate, consistent, and compliant with the relevant industry standards and environmental regulations.

Retrieving the Last Modified Timestamp for Sourcing Events by Using the Operational Reporting API for Strategic Sourcing

Our new feature provides you with the ability to retrieve the last modified timestamp for sourcing events using the Operational Reporting API for Strategic Sourcing. This feature ensures makes it easier to implement extensibility with more reliable straightforward identification of changes.

We're confident these new features will help elevate your procurement processes and strengthen your strategic standing in the evolving business environment. Keep an eye out for our upcoming blogs for a more detailed look at these new features:

Register for the Early Release Series for 2405 release
Resources:
- Feature related materials

Want to see more? Take a look at our SAP Products and Services YouTube channel and our Spend Management and Business Network playlist.

We're thrilled about these new features and we hope you find them as beneficial as we do. Stay tuned and subscribe for more updates!

Are you ready for Scope 3 reporting? Procurement in an ESG regulated world

2024-04-29T10:54:05.915000+02:00

Previously thought to be a voluntary responsibility, companies operating across the European Union (EU), Australia, Singapore and listed companies on China's three major stock exchanges are no longer immune to averting Scope 3 reporting obligations.

The EU's Corporate Sustainability Reporting Directive (CSRD) since January 2023, and Australia's phased implementation of mandatory Scope 3 emissions reporting starting from the 1st of July 2024 - is expected to challenge many existing procurement professions both directly and indirectly worldwide. CSRD is estimated to impact approximately 50,000 European companies.

When we talk about procurement as a service and operating function, preconceptions are evoked about the role of supply chain management purely being about spend control, supply chain resiliency, cost minimisation and compliance.

Indeed, procurement plays a significant role in asserting compliance and cost control. But what would this look like in an environmentally regulated landscape? One where environmentalism is no longer voluntary, but compulsory?

With the rollout of CSRD in the EU, environmental, social and governance (ESG) principles are no longer about branding a company's tolerance and support for sustainability to appease stakeholders.

We're now entering an era of sustainable procurement compliance which is profoundly challenging our conventional presumptions on the role of procurement beyond simply purchasing.

Procurement leaders are starting to find that spend control and sustainable procurement compliance are mutually inclusive and supportive of one another.

Picture this, you are currently running a sourcing event and your objective is to minimise procured costs. By using an EcoVadis carbon scorecard, you can select suppliers with verified credentials with a low emissions footprint, and therefore, potentially reduce your Scope 3 procured carbon tax.

Carbon taxes will force finance, auditing and procurement professions to work together to tackle spend on emissions. Demonstrating decarbonisation starts at the supplier selection level and can only be done using accurate, auditable carbon values and calculations. An invoice with a carbon value, can be a good starting point for documenting these emissions. Scope 3 emissions calculators will become a critical part of the procurement ESG toolkit to help users approximate the emissions intensity of that item. In most cases, actual carbon emissions are always preferred over estimated ones because let's face it...who wants to overpay their carbon taxes!

However, collecting and reporting Scope 3 emissions is a significant challenge. Deloitte cites that the poor holistic integration of emissions collection technologies throughout a business's ecosystem, lack of tools especially from small to medium businesses to report Scope 3 emissions, poor supplier engagement, poor data quality and reliability, and rapidly evolving regulatory standards - all discourage many business leaders from investing in Scope 3 collection and reporting solutions...or even championing the cause at all.

This was exemplified greatly in the SEC's recent policy backflip (March 2024) to make Scope 3 reporting voluntary. But bear in mind, that many of these SEC-listed, large companies will more than likely, still have to report their Scope 3 emissions if they have a major presence in the state of California (SB-253 Climate Corporate Data Accountability Act) or the EU.

The Boston Consulting Group survey found that companies using automated digital emissions solutions were 2.5 times more likely to report their emissions comprehensively. Technology, therefore, is a huge enabler of sustainability compliance.

Despite policy setbacks from the SEC, non-EU companies with a significant EU presence (activities greater than €150 million revenue turnover) are expected to report their Scope 3 emissions to the authorities. Most large US companies with a presence in the state of California are already mandated to report Scope 3 emissions. The Biden Administration is currently proposing to enforce mandatory Scope 3 emissions reporting for its major federal contractors (annual contract values of >$US50 million).

With supply chains contributing up to 88% of a company's emissions and 11.4 times that of Scope 1 and 2 primary emissions, it is no wonder that Scope 3 emissions reporting has garnered huge attention among regulators and environmental groups.

Fortunately, at SAP Ariba we are making strides and efforts to ensure that our customers remain compliant to Scope 3 reporting obligations and other ESG regulations. For example, enabling supplier Scope 3 carbon submissions and third-party sustainability certifications.

Are you ready for Scope 3 reporting? Procurement in an ESG regulated world

2024-04-30T10:17:42.115000+02:00

We're now entering an era of sustainable procurement compliance which is profoundly challenging our conventional presumptions on the role of procurement beyond simply purchasing.

Procurement leaders are starting to find that spend control and sustainable procurement compliance are mutually inclusive and supportive of one another.

Picture this, you are currently running a sourcing event and your objective is to minimise procured costs. By using DitchCarbon carbon risk ratings, you can select suppliers with a low emissions footprint, and therefore, potentially reduce your Scope 3 procured carbon tax.

Integration of Item Level Withholding Taxes of Ariba Invoice with SAP S4 HANA

2024-05-07T09:27:08.297000+02:00

Integration of Item Level Withholding Taxes of Ariba Invoice with SAP S4 HANA

When working on integration of Ariba B&I with SAP S4 HANA, in many of the cases customer and consultants face challenges when integrating withholding taxes with SAP. Ariba supports withholding taxes at header as well as at item level in Invoices, whereas SAP ERP design is such that it supports withholding taxes at Invoice Header only.

It is interesting to check why customers insists on having withholding taxes at item level in Ariba, there are many reasons to it, but main reason according to me is, if WHT is at line level, customers can leverage upon TaxCodeLookup.csv to automatically determine the applicable withholding taxes. Also, another reason is, it enables adding the withholding tax only to the specific goods or services that are subjected to withholding taxes there by avoiding any need to calculate base and tax amount manually unlike header level.

CIG supports integration of withholding taxes out of the box if added at header level. Withholding taxes added at line-item level requires custom mapping in CIG and enhancement in SAP ERP to accommodate the additional WHT data sent by CIG. In this blog we'll discuss the custom approach of integrating line level withholding taxes from Ariba to header level at SAP.

Overview of the solution:

Solution involves custom mapping in CIG to transform item level withholding tax information received from Ariba to header level withholding tax information to be sent to SAP ERP.

First and foremost, step in performing any custom mapping is to understand and analyze, pre-processing and processed payloads of different use cases. Once payloads are analyzed identify source and target conditions to ensure the mapping works for all the possible or required scenarios. After finalizing the design perform the custom mapping in CIG and test the mapping, after successful testing deploy it for all the required system IDs, this completes the mapping part from CIG.

Next step is to Implement an enhancement in SAP ERP to update Invoice Amount, WHT Data in case of repeating combinations and to delete blank lines.

With these steps we can achieve seamless integration of systems with transformation of line level withholding taxes from source structure to header level in target structure.

Detailed Solution:

Step 1: Creating Mapping in CIG.

Withholding Tax Data will be available in path mentioned below (Source Structure)

PaymentExportRequest -> Payment_PaymentTaxExport_Item -> item -> InvoiceReconciliation -> TaxDistributionVector -> item

Withholding Tax Data must be mapped to the path mentioned below (Target Structure)

ARBCIG_BAPI_INVOICE_CREATE -> WITHTAXDATA -> item.

Before mapping any fields, create a duplicate node for item available in WITHTAXDATA.

Creating Duplicate Node for Item

Once created it should be visible as shown below. Perform all the mapping in item #2.

Duplicate Item Node in structure

First map the withholding tax type.

TaxType is available in PaymentExportRequest -> Payment_PaymentTaxExport_Item -> item -> InvoiceReconciliation -> TaxDistributionVector -> item -> TaxType -> UniqueName field. Draw a line connecting UniqueName with WI_TAX_TYPE as shown below.

Tax Type Mapping

Now add a position variable on repeating nodes and define source conditions to ensure the mapping works only if data is relevant for WHT. I have used debit credit indicator and negative tax amount as source conditions. Incase if additional taxes with negative tax amount other than WHT exists, source condition needs to be updated accordingly.

Conditions on Tax Type Mapping

Similarly perform mapping for Tax Code, Base Amount and Tax Amount.

Mapping Tax Code, Base Amount and Tax Amount

Make sure to add format number function to restrict the length of decimal places to 4 when mapping taxable amount and tax amount, reason being, Ariba supports up to 5 decimal places in these fields, whereas SAP ERP supports only 4. Hence format number function is required in mapping to avoid serialization error in SAP.

Ariba Field Specification

SAP Fields Specification

Add a constant to SPLIT_KEY = “000001”. Specifying the source condition same as other mappings to ensure, constant value is passed only if applicable.

For repeating node, “For Each” functionality can be used.

Save the mapping and test it.

Test Result Screen for Mapping

This completes the mapping from CIG Side.

Step 2: Implementing an enhancement in SAP.

It is important to know why an enhancement is required in SAP!

Whenever withholding taxes are added in Ariba, Ariba subtracts withholding tax amount from gross amount of the invoice, whereas in SAP Total invoice amount should consider withholding tax amount as well, which will later be posted to separate GL mapped to WHT. When withholding taxes are added at header level in Ariba, standard mapping adds Invoice Amount and WHT Amount and passes the gross amount to SAP.

Standard Mapping Details for Gross Amount

In case, where WHT are added at line level, IsHeaderLevelLine won’t be equal to “TRUE” hence WHT is not added to Gross Amount. This requires XSLT mapping, to avoid XSLT mapping, alternative option is to perform enhancement in SAP.

Also, the blank lines are created in structure WITHTAX data where our preconditions are not met for mapping, hence enhancement is required to delete the lines from “BAPIWITHTAXDATA where WI_TAX_CODE is initial”.

It is possible that Invoice with multiple lines may have same tax type and code on more than one line, so enhancement is required to sum up Taxable Amount and Tax Amount to keep only 1 line for each tax code and tax type, deleting duplicate lines from invoice to any avoid error related to duplicate entries for same tax type.

The enhancement can be added in BAdI “ARBCIG_INVCREATE” in method “IF_ARBCIG_EX_INVOICE_CREATE~INVOICE_CREATE”, for PO Based Invoices. For FI Invoices, enhancement can be added in BAdI “BADI MRM_WT_SPLIT_UPDATE” or in include “ZXACCU15” as applicable.

This completes the enhancement in SAP side which will allow us to post PO and Non-PO Invoices in SAP with Integration of Withholding Taxes from Item Level (Ariba) to Header Level (SAP).

Example:

Ariba Invoice Non-PO Invoice

Snapshot of Ariba Invoice with WHT at line level

Non-PO Invoice posted in SAP through CIG.

Snapshot from SAP showing Accounting Entries generated

Based on the discussion from the previous sections of the blog, we can conclude below points,

SAP Ariba supports Withholding Taxes at Header Level as well as at Item Level.
CIG Supports Integration of Header Level Withholding Taxes out of the box, where as Item Level Withholding Taxes through Custom Mapping.
Custom Mapping can be added as per the requirement, specifying vide range of source and target conditions as required/ applicable.
Enhancement in SAP is must to update the data to make it free from errors, and to ensure successful posting of Invoice in SAP.

Creating a Digital Thread: Streamlining Price Compliance with SAP Ariba

2024-05-07T09:27:30.807000+02:00

Price compliance is a key priority for procurement organizations. SAP Ariba Procurement offers features to ensure organizations make purchases at negotiated prices and terms. Integration between sourcing, contracts, purchase orders, and invoices is essential for adhering to negotiated prices throughout the procurement process. This blog explores how SAP Ariba products start that digital thread that creates a strong linkage for price compliance.

In our previous blog, we discussed sourcing principles for creating a fair and equitable marketplace. We recommend creating events with line items to begin price compliance. While it may seem easier to send suppliers RFPs via Excel or Outlook, line items in Sourcing offer more than you might realize.

Integration of line item details can occur at various stages post-award, directly from Sourcing to your ERP, from your Contract to ERP, from Contract to Ariba Catalog, or from Contract to Invoice. Integration depends on the integrations you enable and the buy channel that supports the goods or services requested.

SAP Ariba products integrate as a suite from S2P, and have seamless integrates to support buying from within your SAP ERP systems and the SAP Business Network, offering several benefits:

Consistency and accuracy across procurement processes.
Reduced manual effort and minimized errors.
Efficient tracking and monitoring of price compliance metrics.
Enhanced visibility into procurement spend and contract utilization.

To optimize price compliance, organizations should:

Analyze historic spend data for opportunities in buy channel efficacy.
Understand robust data integration between SAP Ariba products and SAP ERP systems.
Conduct regular audits and reconciliation of line items across procurement documents.
Provide training and guidance for procurement teams on maintaining price compliance for various buy channels.

Now that you have your Line Items ready to Award in Guided Sourcing, let’s review the various options for compliance:

Line Items in Sourcing: In SAP Ariba Guided Sourcing, line items capture detailed information about products/services, quantities, and negotiated prices. Integration with SAP ERP updates Purchase Info Records, automatically populating purchase orders and reducing errors. Next, let’s review how Ariba Contract Compliance can ensure compliance.

Transferring Price Compliance From Contracts: SAP Ariba Contracts integrates with SAP ERP to transfer price information from sourcing events to contract documents. Contract Line Items Document (CLID) aligns with sourcing line items, ensuring consistent pricing and terms, streamlining contract creation in SAP ERP.

If you would like to purchase from SAP Ariba, the Contract Terms document can create a Catalog Item for users to create POs from. Let’s review some options for Contract Compliance through Ariba Catalogs or Invoices:

Contract Terms: Integration with Purchase Orders: After a supplier is chosen in SAP Ariba Guided Sourcing, line item details go to the Contract Workspace for operationalization. Users can create an operational Contract Terms document to ensure price compliance in purchase orders. This can create a catalog item in Ariba to create a PO that complies with the terms of the contract!

For other types of contracts, it may make more sense to simply allow suppliers to submit an invoice against the contract terms. Let’s talk about Invoice against contract next.

Contract Terms: Ensuring Compliance in Invoices: Contracts can be created to ensure compliance with recurring spend without a PO. Invoices reconcile line items against the Contract Terms, detecting discrepancies and enforcing adherence to negotiated prices. This works well with services that need to happen and the time for creation and approval of a PO is not possible. These Contract Terms can allow the supplier to invoice against the contract without a PO.

SAP Ariba Suite Integration with or without ERP integration can transfer agreed upon pricing and terms from Sourcing to Contracts to Buying to Invoicing and ensure procurement objectives are achieved. SAP Ariba products offer the tools and features needed to build a solid base for price compliance, promoting accuracy, efficiency, and transparency across the procurement process.

For further discussion on enhancing your price compliance using these integration methods, please reach out to your CSP, who will connect you with the appropriate SAP resource.

SAP Community - SAP Ariba Buying and Invoicing

SAP ISBN Customer Success Day in Johannesburg

The Procurement Monthly - September 2023

Deloitte Supply Chain Trust

Art of Procurement – Operating models and Spend Visibility

Gartner Hype Cycle – Procurement & Sourcing

Procurement Leaders – Purpose Driven Procurement

Forrester Procurement Survey

McKinsey – AI Study & CFO survey

GEP Supply Chain Volatility

Ecovadis – Readiness for new regs

Interos – Invisible threats

The Economist – Building Bridges. Supplier management

Procurement of Services in SAP Ariba

Introduction

Service Procurement in SAP Ariba

Standard Purchase Order

Purchase Order with Service Entry Sheets

Release Contracts / Release BPOs & No-Release Contracts / No-Release BPOs

Non-PO Invoices

Other Service Procurement related Topics

1. Simplified Procurement of Services (Simple Services)

2. Lean Services Procurement

3. Automatic Service Entry Sheet

4. Service Entry Sheet Import / Export

5. Further Process Control with Parameters / Default Configuration Rules / Features

Additional Features for consideration

Invoicing in SAP Ariba

Introduction

Ariba Invoicing

Types of Invoices in SAP Ariba

High Level Invoice Process

Credit & Debit Memos

Invoice Entry Methods

Other Related Topics

The Procurement Monthly - November 2023

Supply Chains for Mid-Market – IDC

AQPC Benchmarks & Procurement is changing.

World Commerce & Contracting - Implementation

Deloitte Reshoring

CEO Briefing

Thomson Reuters – Global Trade

Ardent Partners – State of Payables 2023

University of Mannheim – State of procurement profession

The Cost-Plus World of supply chains

Enhancing Field Configuration UI: A Chrome Extension for Field Searching

Introduction:

Problem Facing:

Tool Introduction:

Installation Guide:

How to Use:

Additional Tips:

Supported Solutions:

The Procurement Monthly - December 2023

World Commerce & Contracting – CCM Benchmarking

MIT State of Supply Chain Sustainability

Gartner Incentives Suppliers for Sustainability

CIPS Professional Challenges

Procurement Leaders Compass 2024

State of Flux Annual Survey 2023

SSON Accounts Payable

Amazon State of Procurement 2024

Beroe – Digital Procurement Survey

PWC CEO Survey

The Future of Buying: SAP Ariba Buying (Buying 360)

The Future of Buying: SAP Ariba Buying (Buying 360)

Elevating the Guided Buying Experience for Today

A More Flexible, Personalized Buying Experience

Predictive Recommendations

Environmentally Aware Buying Decisions

The Future of Buying

Release Navigator for Spend Management and Business Network, 2402 Edition

Creating test data for ECC backend purchasing documents

User settings:

FBGENDAT

IMPORTANT

Related Content

Related SAP Notes/KBAs

Preferred & Qualified suppliers - A simpler and compliant way for buying/sourcing non-catalog item

Video - Setting Up Qualified and Preferred Suppliers in Guided Buying