Gain more control and better user experience with the latest release of SAP Central Procurement: enhancements in requisitioning, purchasing, contract management, sourcing, and purchasing analytics are improving procurement operations and reducing supply chain risks.
As 2022 draws to a close, the year looks much like 2021, with supply chain disruptions still plaguing consumers and companies, costs continuing to rise, and the added threat of recession.
What SAP has heard from customers both last year and this year is that to address these ongoing challenges, they want to digitalize their business to have more visibility, more control, and a better user experience. Simplifying procurement is central to their improvement plans.
Industry research supports these personal anecdotes. In an Economist Impact report commissioned by SAP, “Chain reactions: building value in procurement through digitalization,” C-level executives talked candidly about their procurement goals and challenges.
The new features introduced in SAP Central Procurement, private cloud edition, both address respondent challenges and support their goals. Here’s how I see the data lining up with new features.
SAP S/4HANA is no longer a prerequisite for SAP Central Procurement.
Large enterprises often have dozens to hundreds of enterprise resource planning (ERP) systems. These systems are not connected, which creates difficult to access, siloed data. Moving these disparate systems to SAP Central Procurement had required SAP S/4HANA or RISE with SAP, but that is no longer the case. SAP ECC customers and others can gain access to SAP Central Procurement, private cloud edition, without first starting an SAP S/4HANA implementation.
The flexibility offered by the private cloud edition of SAP Central Procurement can help organizations reduce the complexity of multiple back-end systems and move toward digitalization while keeping an eye on their budget. It also enables them to continue using familiar systems without facing the disruption of migrating to a new technology.
Mass changes are possible for price conditions and custom fields in central contracts.
Large organizations can have as many as 3,000 line items that are distributed across back-end ERPs. The new feature means a user can add and update mass changes to price conditions using Microsoft Excel at item level and hierarchy level and distribute the changes across multiple backend ERPs.
This type of improved management is among the top focus areas for delivering increased value in procurement, based on survey findings. The list of focus areas includes cost savings, risk reduction, inventory management, and category management implementation/improvement. Category management also emerged as the second biggest driver of digital transformation. With every new release of SAP Central Procurement, we aim to add features that make it easier for procurement managers and their teams to do their jobs.
Integration with SAP Ariba simplifies RFP process allows quick ad hoc buying.
Within SAP Central Procurement, private cloud edition, central sourcing is now integrated with SAP Ariba solutions. Having quick access to this global business network means improved supplier discovery, faster price updates, and a simpler process for ad hoc buys. Procurement managers can bundle various demands into their requests for proposal (RFPs), source across multiple back ends, negotiate better pricing on purchase contracts, and requisition price updates through the SAP Business Network Discovery.
The full integration addresses Economist Impact survey respondents’ concerns about budget constraints. The research also points out that supply chain visibility has not improved during the past two years. In 2018, 65% of procurement professionals said they lacked visibility into their supply chain and the numbers have only worsened, with 90% of organizations rating their supply chain visibility as moderate to very low. Integration to SAP Ariba improves visibility and offers benefits across both purchasing and selling.
Customers and industry analysts are giving these three new features lots of positive feedback, but they are not the only improvements in this recent release. Find out more about the private cloud edition of SAP Central Procurement here.
Features to Look Forward to in Future Releases
SAP strives to be transparent about features that are in the pipeline. For 2023, we are excited to talk about two new features on the road map. The first is the addition of artificial intelligence (AI), machine learning, and automation, which are among the biggest innovations being added to platforms to improve management, reduce errors, and increase productivity.
In the first quarter, our engineers plan to add a feature for intelligent recommendations that will support source to order across disconnected ERPs. This new feature will be especially valuable for companies that have different material classifications for the same product. When procuring raw materials, for example, the material group (classification) may be hardware in one system and connector in another system. In an upcoming release, AI will look at data across different ERP systems and intelligently recommend the more accurate material group. Hardware, from the previous example, would be changed to connector. These types of intelligent recommendations will be made across the disconnected ERPs. Overall, embedding AI and machine learning in the platform will open up more opportunities for automation improvements.
Unified key mapping is another improvement we look forward to releasing. This feature eases procurement management by enabling integration with third parties in heterogenous landscapes and in those that do not use SAP solutions for ERP.
Altogether, the new features in the current release and the planned features for upcoming releases are exciting achievements for SAP. More importantly, our customers are on the winning side as they gain the visibility they need, improve user experience, and move further in their journey of digital transformation.
Salvatore Lombardo is senior vice president, chief product officer, and head of Engineering for SAP Procurement.