As a part of the SAP S/4HANA Regional Implementation Group with a focus on procurement, I have been supporting customers on their journey to SAP S/4HANA. In this blog I would like to give you an overview of the different deployment options of SAP S/4HANA for central procurement. In further blog posts, we will then dig deeper into the paradigm and functionality of the central procurement solution.
SAP S/4HANA for central procurement is a solution which connects to SAP ERP or SAP S/4HANA (Cloud or On Premise) and in the future also to third part, non-SAP systemsBasically, the goal is to have one central system, which connects to several backend systems throughout the system landscape.
Central Procurement acts as a Procurement Hub, pushing documents to their respective backend systems for further processing, as well as pulling updates from the ERP environments for central analysis.
The main scenarios supported are central requisitioning, central contract management, and central purchasing.
Taking a look at the What’s new Viewer on the SAP help portal, it is easy to see, that in the area of central procurement a good amount of progress has been made with the SAP S/4HANA 1909 release.
As you may know, the recent solution SAP SRM – Supplier relationship management will remain in mainstream maintenance until the end of December 2027. (for further information on this please read note 1648480)
While one important value proposition of SAP SRM being its ability to act as a central procurement instance for multiple SAP ERP backends, it is also facing its challenges
In contrast to SRM where the business logic was coded into the hub system and master data was replicated from the backend systems into the central SRM system, the approach with central procurement is to decouple from the master data and let the business logic reside in the backend systems.
Let us see how S/4HANA for Central Procurement can be deployed.
There are three possible scenarios to consider:
Central procurement can either be enabled on an existing SAP S/4HANA or SAP S/4HANA Cloud system, or deployed as new, dedicated SAP S/4HANA system. Also it is possible to activate the Central Procurement functionality in a separate client within your landscape.
While in Note https://launchpad.support.sap.com/#/notes/2573672
You can find the information how to enable the Central procurement and installing the Integration Component to enable SAP S/4HANA for Central Procurement in an SAP S/4HANA 1709,1809 or 1909 release, you may also want to check the note https://launchpad.support.sap.com/#/notes/2649491 to find these information for your current cloud release of SAP S/4HANA Cloud
For the on-premise installation, SAP S/4HANA 1809 is recommended as the minimum release level. As advantage of using an existing SAP S/4HANA installation the reduced cost of ownership can be clearly stated as benefit, since no additional system needs to be set up. However, it is also possible to run the Central Procurement instance as a separate client.
From a functional standpoint, all deployment options support the following, also described in this blog:
- central requisitioning,
- central contract management, and
- central purchasing
Which option to choose depends on the intended use and the system landscape in which the Central Procurement is supposed to serve as a hub system.
While the SAP S/4HANA Cloud for central procurement provides an easy and fast deployment and quarterly innovation cycles, the on-premise deployment usually provides a higher degree of customer-specific adoption and enhancement options. So, if you will stick to using best practices approach, a cloud deployment would be an easy start.
Minimizing Total Cost of Ownership – Deployment alongside with Central Finance
Central Procurement and Central Finance can be deployed on the same instance of SAP S/4HANA for central finance. A joint deployment might ease any future integration between the two. We will keep you updated in this regard in further blog posts.
Release notes and further information
For further and updated information please refer to the respective release notes:
https://launchpad.support.sap.com/#/notes/2649491 (SAP S/4HANA Cloud for central procurement)
https://launchpad.support.sap.com/#/notes/2817365 (SAP S/4HANA for central procurement 1909)
Please read this note completely BEFORE activating any SAP S/4HANA for central procurement functionality and before installing any Integration Addon in your backend systems.
An Overview of SAP S/4HANA for Central Procurement can be downloaded here:
Brought to you by the S/4HANA RIG
SAP S/4HANA Procurement – Considerations for customers with SAP SRM