A quick overview of S/4 HANA
SAP has been evolving fast on the digital wagon with a vision to make the business around the globe run better, faster and in-line with the latest trends in global tech. They have now come up with the all new ERP business suite, with a simplified version that runs on most advanced in-memory SAP platform called SAP HANA in order to improve overall system performance. This gives it not only robustness but also the speed much needed for the fast-paced and ever-changing business environment of today. This next generation business suite is named SAP S/4 HANA and helps run businesses simple in this digital world.
Here is a graphical glance of SAP S/4HANA’s journey so far:
SAP S/4HANA Journey
S/4 HANA business suite comes with SAP Fiori as front-end which offers most personalized and world class user experience as compared to the traditional GUI based user interface. This can be run on any device and provides easy access to system enabling the business user to execute business functions on the fly from home, office, travel alike. Essentially location and device are not the limiting factors any more so the users are always connected with their data, transactions and most importantly customer.
As Industry leaders are moving from traditional ERP models to S/4 HANA EBz Suite, there is a huge demand in market for consultants to upskill themselves with S/4 data model and the simplifications that SAP provides with S/4 HANA business suite. This blog is an attempt to bring together the simplification models in SAP’s Procurement Process. It should help the consultants as well as the business users both to understand and equip themselves with background knowledge and current understanding of these simplification models.
Simplifications for Procurement in S/4
Here is a detailed list of Procurement Simplifications as of system version 1909. For every simplification category, I have provided a background for a better understanding of the topic followed by what has been changed with S/4 Hana. I hope bringing this data together with a background and current details will help you in your knowledge journey on Procurement on SAP S/4 Hana.
| Simplification List Category | Brief background on the Topic | What is changed in S/4 HANA |
| S4TWL – MM-PUR WebDynpro Applications | WebDynpro for ABAP is standard SAP UI technology provided with SAP R/3 to design and develop web applications in ABAP environment. It comes with run time environment and a graphical development environment with web dynpro tools integrated with ABAP workbench. Certain such applications that were available in traditional ERP are not made available with S/4 HANA. | These applications are enhanced with better UI interface provided with SAP Fiori UI5 technology that provides greater benefits both in terms of user experience and seamless integration with improved system performance. Ex: Purchase Requisition Processing is replaced with ME51N or corresponding Fiori App |
| S4TWL – Classic MM-PUR GUI Transactions replacement | Classic SAP ERP Materials Management specific transactions used to execute business functions like Purchase Order, Purchase Requisition, Supplier Invoice were replaced with enhanced versions in SAP R/3. With SAP S/4 HANA, these transactions that are redundant functions are removed. | We will continue to use enhanced versions of these transactions in S/4 HANA that were made available with SAP R/3. Ex: Transactions like ME21, ME22, ME23, ME24, ME25, ME27, ME28, ME51, ME52, ME53, ME54, ME59, MR01, MR1M will not be available. Corresponding new transactions (ME21N/ME59N/ME51N etc.,) will be used along with designated Fiori applications. |
| S4TWL – Dedicated SAP Supplier Lifecycle Management (SAP SLC) business processes | SAP SLC is SAP provided standard system for Master data maintenance that gets initial vendor master data loaded from SAP ERP/SRM/Supplier registration platforms. This applicable provides a platform for both buying side and selling side to perform various activities relevant to each side and manage data. Ex: Sell Side Activities: · Supplier Registration · Qualifying as a supplier · Maintain Supplier Data etc., Buy Side Activities: · Prepare questionnaires for supplier evaluation · Work with supplier registrations · Manage supplier profiles (create/promote/evaluate) etc., Some of these functions are removed with S/4 HANA implementation. | Strategic decision made by SAP to eventually let businesses consolidate all these functions of SAP SLC into S/4 HANA core named as Supplier and Category Management along with Ariba solutions. Currently, following processes are supported with limitations in S/4 HANA: · Supplier evaluation · Category Management · Activity Management (Internal) Following processes that were part of SAP SLC are completely removed from S/4 HANA: · All Sell Side processes (Supplier registration/supplier data maintenance) · Buy Side processes (Supplier Hierarchies, Supplier Classification, Supplier Qualification, Certificate Management, External Tasks in Activity Management and Area of validity in supplier evaluation) SAP also provides an option to use stand alone SAP SLC system to leverage full scope of SLC but it needs to be integrated with MDG-S for master data integration. |
| S4TWL – Foreign Trade within SAP S/4HANA Procurement | Traditional SAP ERP R/3 had inbuilt Foreign trade services integrated with MM and SD modules to work with International trade transactions. Alternatively, User had an option either to use Foreign trade services in SAP R/3 or SAP GTS (Global Trade Services) which is an external service that needs to be installed separately. | With S/4 HANA, Foreign trade service from MM will not be available except for selected functions. Certain functions like INTRASTAT, Legal Control, Commodity code classification will be provided with SAP S/4 HANA for International trade within S/4 HANA. SAP GTS will be used for implementing Trade Services. Import and export management specific functions will be available with SAP GTS. |
| S4TWL – RFQ Simplified Transaction | RFQ (Request for Quotation) is created to invite suppliers for submission of quotation indicating pricing terms and conditions. In Traditional SAP R/3, Supplier field was made mandatory while creating RFQ which only allowed one supplier to submit quotation for one RFQ. It is only allowed to enter one supplier quote per one RFQ in system. This does not fit into different sourcing Integration scenarios like Ariba Sourcing, Ariba Spot Quote. | With S/4 HANA implementation, this behavior of system is upgraded to allow creation of RFQ without supplier included that in turn allow sending of RFQ to external sourcing platforms via Fiori app. This also allows to receive multiple supplier quotes. Following transactions will eventually be removed from S/4 HANA specific to RFQ: ME41, ME42, ME43, ME44, ME45, ME47, ME48, ME49, ME4B, ME4C, ME4L, ME4M, ME4N, ME4S. |
| S4TWL – Co-Deployment of SAP SRM | SAP SRM could be deployed as an AddOn application with traditional SAP ERP. This installation structure had some issues that are addressed with S/4 HANA: · Complex data structure · Supported with traditional GUI based interface and WebDynpro applications · Master Data replication needed between SAP SRM and SAP ERP core. | With S/4 HANA, self service procurement capabilities are re-implemented within core system without the need for separate AddOn application. Functional scope that is currently available might not be in line with SRM functionality but the plan is to eventually bring it on par with SRM by continuous improvement of S/4 HANA capabilities. With Self Service Requisitioning function in S/4 HANA, · Data structures are simplified (PR will be used directly instead of Shopping cart) · Seamless UI integration based on Fiori UX technology with process integration. · No Master Data Replication needed. |
| S4TWL – Vendor evaluation based on LIS | Vendor evaluation component in traditional ERP supports optimization of procurement processes for procuring materials or services from different vendors. It is integrated with MM Purchasing component in SAP ERP. Information required to evaluate vendor was taken from PO (Delivery Date, Price and Qty), Quality Management component (Results of Quality Insp and audit checks) and LIS (Logistics Information System). LIS data is stored in Info structure S013. | With S/4 HANA, Supplier evaluation component provides real time access to scores calculated based on Procurement business documents like PO, GR and IR. This removes overhead involved in dealing with table and structure aggregates to get required data. Along with real time access to data, S/4 HANA also provides much better analytical visual options with smart business technology and CDS views. New Supplier evaluation component calculates scores based on delivery time, delivery qty and price accuracy. Supplier evaluation – Determine overall score for supplier based on weighted average of single scores for Qty var, Price var and time var. · Supplier evaluation by time – Check average delivery time of PO from suppliers · Supplier evaluation by price – Check score based on price variance between ordered and invoiced items. · Supplier evaluation by Qty – Check score based on qty variance between ordered and delivered qty. |
| S4TWL – MDM Catalog | Traditional SAP ERP provided SAP SRM MDM Catalog for catalog search to add items in shopping carts. | With S/4 HANA, these MDM catalogs will not be made available. It is replaced by Catalog search function in S/4 HANA Self Service Procurement component. If needed, available SAP SRM MDM Catalog can be integrated with S/4 HANA as a punch out catalog using OCI (Open Catalog Interface). SAP also recommends using Catalog solution provided by SAP Ariba APC for comprehensive e-catalog solution. |
| S4TWL – Pricing Data Model Simplification | Structural Data Model changes in Pricing and Condition related functions as compared to SAP R/3. | Table KONV is replaced with new table PRCD_ELEMENTS. Fields STUFE and WEGXX are removed in KONV and are not part of new table PRCD_ELEMENTS. Extension to several field lengths. |
| S4TWL – Output Management Adoption in Purchase Order | Traditional ERP including SAP R/3 provides NAST function for Output management. It had complex procedure to configure condition records as below: Condition Tables->Access Sequence->Condition Type->Output Type->Condition Record. | In addition to the traditional way of working with Output management process, S/4 HANA provides new solution based on BRF+ framework that can be used for all Output management activities. This new solution comes with cloud capabilities such as extensibility enablement, multi tenancy enablement and modification free configuration. User can still continue to use NAST in S/4 and can decide which solution to use and configure accordingly for new documents created in S/4. New solution only supports channels like PRINT, EMAIL, XML (for Ariba Integration), IDOC (for On Premise Edition) for output. Other channels are not supported by default. |
I hope this was of benefit to you. Please do not forget to leave your feedback in the comments section below.
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