How to create a connected enterprise with the integrative capabilities of SAP S/4HANA

BrandPost By Kalisa Irving
May 30, 2017
IT Leadership

By connecting the source-to-settle process in procurement to their ERP solution, companies can run smoother than ever before.rn

What comes to mind when you hear the word choreography? Probably not an IT system. But that’s an oversight because for example, the source-to-settle process is highly dependent on a precise arrangement of movements. More importantly, your company stands to profit from a well-choreographed solution.

Enabling automatic processes

Consider the source-to-settle process as a series of rehearsed handoffs. For procurement to run smoothly, people, data and decisions must be in sync – with each other and with your back office.

Why is this so vital? Because at multiple critical points of the procurement process, data and information must be shared with your enterprise resource planning (ERP) system. When these points are connected – a possibility with deep, native integration between the right procurement solution and enterprise resource planning (ERP) – the process and sharing of data continues automatically.

Case in point: SAP Ariba 

SAP Ariba is a well-choreographed IT solution for managing the source-to-settle process, which offers the breadth, depth and reach today’s businesses require. Though SAP Ariba is very powerful on its own, when combined with SAP S/4HANA a business can benefit from magnified effects. It allows your enterprise to run smoothly without interruptions, opening up a world of new benefits. Let’s look at four in detail.

1) Keep businesses moving without interruptions – thanks to fluid collaboration inside and outside your company

Imagine a manufacturing plant’s production is at risk, due to a missing strategic piece of equipment, which delays the maintenance. The system cascades the changes to affected schedules, automatically informing all parties to ensure no additional delays occur. Suppliers are alerted and real-time collaboration on order, delivery and service-schedule changes prevent you from wasting time and incurring incremental costs. 

2) Cut out errors and delays in inventory, spending, budget and forecasting data

When a design engineer edits a product prototype, relevant information—drawings, material masters, bills of materials, tooling—is sent to the procurement department, who re-negotiate in real-time with suppliers.

Suppliers respond with new prices—or innovative solutions. It’s a win-win-win situation: procurement keeps costs down, designers get the latest innovations, and consumers get their product on time.

3) Spot opportunities and risks and take instant, in-the-moment action 

A retailer’s promotion is greatly exceeding expectations. The system recognises this and alerts purchases about the risk in the supply chain, allowing them to proactively plan and react. Thus, they can rapidly accommodate the low inventory at distribution centers and keep stores fully stocked for the growing demand. 

4) Unite the procure-to-pay process with real-time analytical horsepower

Another example on how integrating SAP Ariba with SAP S/4HANA can provide an in-the-moment experience, is the ability to leverage live data from every element of the procure-to-pay process. By using the solutions real-time analytical and machine learning capabilities and feeding them with instant, accurate information about the entire source-to-settle-process, the system can automatically look for possible correlations with buyers, inspection agents, time of day, weather, etc. In case of unpredictable quality from a supplier of key raw material for example, machine learning thus can help to identify a potential gap in production, so employees can proactively resolve the issue.

Well-choreographed ERP integrated with a procurement solution, like the above example, can clearly lead to transformative change – whether it’s rethinking how you manage inventory or how you put your capital to work.

Get your free copy of SAP’s “Thinking Beyond the Four Walls” and find more examples on how integrating SAP’s LoB solutions with SAP S/4HANA provides live experiences.      

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Further reading

Next generation ERP: SAP S/4HANA as digital core of the enterprise