Transform Procurement with the SAP S/4HANA Digital Core and SAP Ariba Solutions

PUBLIC
Martin Jones, SAP Ariba CoE, Digital Transformation Lead, Europe
June 2017
Transform Procurement with the
SAP S/4HANA Digital Core and
SAP Ariba Solutions

2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
 How and where do SAP Ariba solutions fit within SAP’s digital strategy for SAP S/4HANA?
– Native integration
– Scale of Ariba Network
– What about the suppliers?
 SAP solution and process recommendations for leveraging SAP S/4HANA and SAP Ariba solutions
– Digital transformation hybrid options
– Indirect and direct materials procurement
– Financial supply chain
 Future innovations
 Summary
 Q&A
Here’s what we’ll cover in this session

The SAP framework for digital business

© 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP Ariba solutions in the
context of the digital economy
Ariba Network
Fulfill SettleMarket
Buyer management
Procure SettleSource
Supplier management
Supply chain collaboration
Supplier chain for buyers
Supply chain for suppliers
Supply chain applications
SAP Ariba solutions in the
context of the digital economy
Supply chain opportunity with
SAP Ariba solutions
Supply chain in the network age increases visibility,
reduces risk, and accelerates your ability to respond to
market movements
BuyerSupplier

“SAP S/4HANA is the nucleus, the
digital hub of this amazing digital
company that helps other companies
achieve their dreams. And SAP Ariba
solutions are clearly the cloud and
business network solutions for
procurement for our company. Hard
stop.”
- Bill McDermott
SAP S/4HANA and SAP Ariba solutions: 1+1 = 3!

6PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ 107 = SAP ERP and SAP S/4HANA 53 = Other formats – Ariba Network sell side
5
29
Master
Account categories
Assets
Company codes
Cost centers
Cost center languages
ERP commodity codes
General ledger
Internal orders
Plant
Payment terms
Purchase groups
Tax codes
WBS elements
User data
User group mapping
Remittance locations
Supplier data
Supplier location
Contracts
FM derive
Material PO
Service PO
Change PO
Cancel PO
Close PO
Goods Receipt
Service Entry Sheet
Invoices (Ok-to-Pay)
Advance Payment requests
Advance Payments
Cancel Advance Payment
Requisition
Change Requisition
Budget Check
SES Response
Purchasing organization
Purchasing groups
Company code
Payment Terms
Supplier (inbound)
14
Master
Quote request
Quote message
Material master/plant
Manufacturer part number
Purchase info record
Material groups (product categories)
22
Transaction
Transaction
SAPAribaapplications
Supplier (outbound)
Plants
Incoterms
Bill of material
Material master
Company code internal order mapping
Company code WBS element mapping
Purchasing organization supplier combo
Account category field status
Plant to purchasing organization
Currency conversion rates
Fund management objects
Purchasing organizations
General ledger languages
Expense report
PO status
Change PO status
Receipt status
Invoice status
Remittances
Catalog
ProcurementSourcing
Sourcing Award to PO
Contract Workspace
Sourcing Award to Outline Agreement
70
AribaNetwork
28
Order
Change order
Cancel order
9
Sell side
Buy side
Order confirmation
Invoice
Shipment notification
Remittance advice
Delivery schedule (forecast)
Delivery schedule (JIT)
53
Sell side
90
810
820
824
830 (Forecast)
830 (Commit)
846
850
855
856
860
861
862
866
866 (MO/PO)
997
ORDERS
ORDCHG
ORDRSP
INVOIC
DESADV
CONTRL
RECADV
REMADV
INVRPT
DELFOR
DELJIT
APERAK
INVOIC
ProcessPurchaseOrder
AcknowledgePurchaseOrder
NotifyShipment
ProcessReceiveDelivery
NotifyPlanningSchedule
NotifyPlanningSchedule
NotifyInventoryConsumption
NotifyProductionOrder
NotifyInventoryBalance
ConfirmBOD
X12 v4010 EDIFACT D96A OAGiS v9.2
EDIFACT D01B
Order
ChangeOrder
OrderResponse
Invoice
InvoiceResponse
PiDX v1.61
Order
ChangeOrder
InvoiceResponse
GoodsReceiptNotice
ServiceEntrySheetResponse
OrderResponse
Invoice
AdvanceShipNotice
ServiceEntrySheet
RemittanceAdvice
xCBL v3.0
Standard PO
Subcontract PO
Consignment PO
Change PO
Cancel PO
Order enquiry request
Order confirmation
Inbound ship notice
Outbound ASN
Component consumption
Outbound payment remittance
Inbound remittance advice
Remittance cancellation
Inbound payment proposal
Outbound payment proposal
Scheduling agreement (incl. forecast/
delivery schedule and JIT)
Product replenishment
Transfer movement/product activity
Inbound receipt
Outbound receipt
Service entry sheet
Service entry status update
Invoice (incl. credit memo)
Invoice status
Carbon copy (CC) invoice
Quote request
Quote message
Payment instruction file
Standard integrations ‒ 160

The business network is the world’s largest business-to-business trading platform, used by more than 2 million companies, to transact over US$1 billion of
commerce annually. With many of their trading partners already using the service, companies around the world use Ariba Network to simplify inter-enterprise
commerce and enhance their results.
2,700,000
Companies
250+ M
Documents annually
(PO + invoices)
195+ M
Catalog items
1 minute
A company joins the
network
11+ M
Timesheets processed
annually
34+ M
leads sent annually
to sellers
$1,300 B
In annual commerce
1.4 M
Contingent workers job placements
annually
14 M
Users
EVERY
Ariba Network, the world’s largest business-to-business trading platform

Vision for SAP Ariba solutions
Mission
Connect the world and simplify global business commerce
Be the innovation leader for our customers to build, manage, and
deepen their B2B relationships in the digital economy
1. Be best-in-class cloud procurement solution
2. Grow network value for all participants
3. Introduce new business models
Run Simple
Strategy
Operating principle
#MAKEPROCUREMENTAWESOME
SAP ARIBA
SOLUTIONS TODAY
2020 ASPIRATION
5M
$5T
2.5K
partners
in commerce
companies on network
$1Tin commerce spend, more
than Alibaba and eBay
combined
Open
partner ecosystem
platform
2Mcompanies on network,
the largest digital
marketplace
Digitize commerce like never before
with SAP Ariba solutions

Suppliers are free to select their preferred buyer collaboration method.
It’s up to them.
Portal:
File upload and/or
PO flip
System-to-system
Interactive e-mail order
and invoices
Full transaction set
Ariba Network
portal customer
Full transaction set
minus adv supply chain
through e-mail/portal
Full transaction set,
EDI, cXML
Ariba Network
portal customer
FREE
SAP Ariba light
account
Supplier self-
enablement
SAP Ariba enablement
services
Maturity
Value

Ariba Network:
A typical supplier’s home page screen
Highlights:
Ariba Network
One place where
suppliers can:
 Efficiently respond
electronically to
customer orders for
direct and direct
materials
 Exchange and receive
e-invoices and payments

A mobile app for suppliers
Screen examples
Highlights:
Ariba Network
Mobile App
Dedicated mobile app
for suppliers enables
them to review and
approve new orders
from mobile devices.

Fast facts about SAP Ariba solutions:
supplier adoption and value is only
accelerating.

SAP Solution and Process Guidance
SAP S/4HANA and SAP Ariba Solutions

 Co-deploy SAP S/4HANA with SAP Ariba solutions to self-fund the investment in SAP S/4HANA
simultaneously
– Extend the digital capability in parallel and fast track your digital transformation in one hit
 For customers that have installed SAP S/4HANA, expand with SAP Ariba solutions and help fund the
investment in SAP S/4HANA
– Now extend the digital capability outside your organization to encompass your suppliers
 For a 2018 investment in SAP S/4HANA, select SAP Ariba solutions NOW to help self-fund the future
investment in SAP S/4HANA
– Start your digital transformation now and get connected fast – it’s the easy bit
What is the guidance for customers at different investment stages with
SAP S/4HANA?

SAP S/4HANA and SAP Ariba solutions: realize savings from year one with
self-funding!
Cost reduction
 Ability to negotiate better pricing based on advanced negotiation tools
and insights into consumption history
 Savings on ad hoc purchases through demand management and spot
quoting
 Market competition to drive price reduction in unit costs
4%-15% in average unit price reduction
Process efficiency
 Drive sourcing productivity through deep spend analytics and
immediate supplier discovery
 Reduce supply chain operation costs (for example, content
management, supply chain planning/execution and order processing)
 Reduce cycle times and increase AP productivity through invoice
process automation
40%-60% in operating cost reduction
Spend compliance
 Control maverick spending, risk, and fraud through use of contracted
suppliers and preferred specs with standard, repeatable buying
processes
 Ensure supplier compliance to preferred terms with reconciliation of
invoice, PO, receipt, and contract
€20M in contract leakage per €1 billion of spend
Cash management
 Avoid unintended cash flow drainage with a formalized payment terms
strategy
 Realize early payment discounts and/or margin sharing through
shorter invoice processing cycle times and greater percentageof spend
on discount or financing
 Capture rebates on high volume, low value spend through card
programs
€1M-2M in savings per €1 billion of spend
Best-in-class business outcomes: typical results in source-to-pay

Deloitte following its choice of SAP Ariba solutions as part of its program for
SAP S/4HANA
LINK: http://www.computerworlduk.com/applications/deloitte-upgrades-s-4hana-align-global-financial-processes-3655497/

Native integration
Cloud integration
SAP Ariba solutions and the SAP customer base
Common hybrid scenarios to considerAriba
Network
Cloud
solutions
On-premise
solutions
Hybrid procurement
with Ariba Network
SAP Ariba Spend Analysis
SAP Ariba Sourcing
SAP Ariba Contract Management
SAP Ariba Supplier Information and
Performance Management
SAP Ariba Guided Buying on SAP
S/4HANA – Q4
SAP S/4HANA
or SAP ERP
PO/invoice automation
Catalog content
Dynamic discounting
Full cloud procurement
with Ariba Network
SAP S/4HANA
or SAP ERP
Catalog content
Dynamic discounting
SAP Ariba Spend Analysis
SAP Ariba Sourcing
SAP Ariba Contract Management
SAP Ariba Supplier Information and
Performance Management
SAP Ariba Buying
On-premise procurement
with Ariba Network
SAP S/4HANA
or SAP ERP
SAP SRM
Catalog content
Dynamic discounting
buyer supplier

SAP Ariba Guided Buying
Screen example
Highlights:
Guided buying
capability
 Elegant and intuitive
user experience
 Natural, powerful
search experience
 Three-click and buy concept
 Enforced corporate policies
 Integration with SAP
Fieldglass and Concur
solutions

Procurement
with SAP Ariba
solutions and
SAP S/4HANA

Procurement
Indirect goods, MRO, and services
Value drivers
 Simplicity
 End user adoption
 Contract compliance
 Process efficiency
 Supplier compliance
Process flow requires project-based integration.
 One-stop shop for all
buying
 Consumer-grade user
experience
 Policy-driven compliance
 Workflow
 Supplier-managed content
with contracted terms
 Spot buy marketplace
 PO execution
 Inventory reservation
 Network-based POC, POA,
ASN, SES, smart invoice
 Payment status
 Goods receipt, invoice
receipt
 Invoice workflow
SAP Ariba Buying SAP Ariba Catalog Ariba NetworkSAP S/4HANA SAP S/4HANA
Guided buying Catalog
Purchase order or
reservation
Supplier collaboration
Goods receipt
Invoice receipt

Procurement – work order and project driven (PM/PS)
MRO and services
Value drivers
 Simplicity
 End user adoption
 Supplier compliance
SAP Ariba Catalog Ariba NetworkSAP S/4HANA SAP S/4HANASAP S/4HANA
 User is in work
order/project
 Component planning
 Materials and services
 Requisition or reservation
created
 OCI integration
 Supplier-managed content
with contracted terms
 Spot buy marketplace
 PO execution
 Inventory reservation
 Network-based POC, POA,
ASN, SES, smart invoice
 Payment status
 Goods receipt, invoice
receipt
Plant maintenance/
project system
Managed catalog
Purchase order or
reservation
Supplier collaboration
Goods receipt
Invoice receipt

Procurement
Plan-driven replenishment (MRO, direct)
Value drivers
 Plan-driven process automation
 Compliance
 MRP run – creates supply
plan
 Min and max replenishment
 MRP generates requisitions
 Creates schedule lines in
scheduling agreement
 Automated source of supply
determination
 Source lists and quota
arrangements
 Purchase order creation
 Price compliance to outline
agreements and PIRs
 Network-based collaboration
– POC, POA, ASN,
 Smart invoicing, invoice
status
Ariba NetworkSAP S/4HANASAP S/4HANASAP S/4HANASAP S/4HANA
MRP Requisition Source Determination Purchase Order
Supplier
Collaboration

Financial Supply Chain
with SAP Ariba Solutions
and SAP S/4HANA

Financial supply chain
Value drivers
 Cash flow improvement
 Increased discount capture
 DPO extension
 Invoice exception reduction
 Electronic invoicing
 Invoicing rules
 Invoice validation
 Invoice receipt
 Invoice Workflow
 Invoice status
 Dynamic discounting
 Supply chain finance
 Settlement with AP
 Remittance
Ariba Network SAP Ariba Payables SAP S/4HANASAP S/4HANA
Smart invoicing
Invoice receipt and
approval
Self-service,
discounting, SCF
Settlement
 Payment
SAP Ariba Payables
Payment
execution

Financial supply chain
Contract invoicing (services spend)
Value drivers
 Invoice exception reduction
 Rate card compliance
 Reduce overpayments
 Invoice against contract
 Invoice two-way match
 Rate sheet
 Invoice receipt
 Invoice status
 Dynamic discounting
 Supply chain finance
 Settlement with AP
 Remittance
Ariba Network SAP Ariba Payables SAP S/4HANASAP S/4HANA
Contract invoicing
Invoice receipt and
approval
Self-service,
discounting, SCF
Settlement
 Payment
SAP Ariba Payables
Payment
execution

Artificial intelligence
 Offerings proactively assist with business processes and decisions
Machine learning
 Offerings learn and act in context of customer’s business
Blockchain
 Innovation expansion with inclusion of trust protocol
Internet of Things
 Internet-aware devices and goods trigger processes and increase visibility
of business
Digital futures and continuous innovation with SAP Ariba solutions
Why it matters
 Continue to serve our market, expand into new markets, and keep customers and
prospects successful
 Expand customer value by bringing the future of digital commerce forward to today
 Enhance our portfolio and capability globally by embedding these technologies where
appropriate

 Ariba Network is a central pillar in SAP’s long-term digital strategy with SAP S/4HANA.
 SAP Ariba solutions are positioned as THE procurement cloud solutions for SAP.
 There is a migration pathway and timeline to suit any and all customers.
 Most customers need help in understanding the optimal blend of solutions for them.
 The pace of innovation is unparalleled in the history of SAP Ariba solutions, and it’s only going to accelerate.
 Customers can start their digital transformation journey with SAP Ariba solutions.
Summary

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Thank you.
Contact information:
Martin Jones
SAP Ariba CoE
Digital Transformation Lead, EMEA and MEE
martin.jones01@sap.com
+44 7771 375 473

Transform Procurement with the SAP S/4HANA Digital Core and SAP Ariba Solutions

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