S4 Hana Sourceing and Procurement

ERP and SAP Introduction:

The meaning of the acronym SAP is Systems Applications and Products in Data Processing.

SAP, by definition, is also name of the ERP (Enterprise Resource Planning) software as well the name
of the company.

SAP Software is a centralized enterprise management system, also known as Enterprise Resource
Planning. SAP Software was Founded in 1972 by Four IBM employs.

In a company, with a Centralized System of Information and Data Management

 Data is maintained at a central location and is shared with various Departments

 Departments have access to information or data from other Departments
 Increased Revenue and customer delight/satisfaction

SAP Software is a centralized enterprise management system, also known as Enterprise Resource
Planning.

The numbers shown in the figure illustrate that the world around us, instead of getting simpler, is
getting more complex.

This complexity is due to the following factors:

Exponential growth of digital information (social, mobile, big data)

Globalization and the spread of business networks
In the last few years, there have been significant advances in technology that application
developers can take advantage of to build smarter and more powerful applications.

Examples include the following:

Multi-core processors enabling parallelism of tasks means more throughput of data and
faster processing to give us real-time responses.

Big memory enables us to fit an entire organization's database in memory, which means we
lose the mechanical spinning disk and the latency it brings.

Advances in the design of the on-board cache means that data can pass between memory
and CPU cores rapidly. In the past, even with large memory, this was a bottleneck as the
hungry CPUs demanded more data and the journey from memory to CPU was not optimal.
Increasing your server landscape means you can slot more servers into your landscape to
add more processing power or memory to scale to any size.

Since the beginning of enterprise computing, SAP have been rebuilding the business
applications whenever major technology shifts have occurred.
Some key moments in application development history of SAP are as follows
SAP S/4 HANA and Key Features:
SAP S/4HANA is not a single product, but covers many applications. Customers can start
with the basic components and add to them later. S/4HANA Enterprise Management is a
great place to start. This is known as the "simplified core". It is helpful to think of S/4HANA
Enterprise Management as the replacement for SAP ERP. It offers support for all core
business processes, such as quotation to cash, procure to pay, and so on
SAP S/4HANA Lines of Business (LoB) solutions integrate with the core. There are options
that can be added at any time and that provide best-in-class lines of business solutions and
connections to SAP business networks. Customers choose the LoB solutions that suit their
businesses to extend the functionality of the core.
Key Aspects of SAP S/4HANA:

SAP S/4HANA is built on SAP HANA, so it inherits all the capabilities of this powerful in-
memory data management and application platform. This includes advanced text mining,
predictive analysis, simulations, and powerful real-time decision support, with access to any
type of data in real time.

SAP S/4HANA can be deployed on premise, in the cloud, or a combination of both, to

provide flexible consumption options to customers.

SAP S/4HANA features:

 Simplified data model
 New User experience
 Advanced Processing
 Choice of deployment
 Multitenancy

SAP started from scratch and rewrote the complete SAP Business Suite natively to run only
on SAP HANA. SAP S/4HANA is a brand new code-line, which works only on SAP HANA. SAP
was not restricted by the limitations of these databases, which meant code always had to be
built so it worked with many databases. This often meant developing over-complicated data
models. SAP was finally able to code freely with no compromises, in order to exploit 100%
of the power of SAP HANA.
Evolution of SAP S/4HANA:

SAP began by rewriting the Business Suite from scratch, and started with finance.
The rewritten application is called SAP S/4HANA Finance.
Using the tools, customers can convert their SAP ERP Finance application to S/4HANA
Finance and continue to use the existing ERP applications, such as sales, procurement, and
inventory management.
SAP S/4HANA Finance and existing ERP applications are fully integrated, so all financial
postings made from the existing ERP applications are immediately visible in S/4HANA
Finance.
Next, SAP rewrote the remaining ERP applications with new data models and application
code, so we now have a full SAP S/4HANA core.

SAP S/4HANA inherits the built-in capabilities of SAP HANA. This is evident throughout the
new SAP S/4HANA applications.

Key capabilities of S4 HANA:

1. Application services
2. Processing services
3. Integration services
4. Database services
Traditional approach to Data Model and Application code :

Traditional applications were built on a hierarchical data model. Detailed data was
summarized into higher-level layers of aggregates to help system performance.
The traditional data model is complex, and a complex data model causes the application
code to be complex. It has been found that up to 70% of application code is built specifically
for performance of an application and adds no value to the core business function.

Using the raw power of SAP HANA, we can aggregate on the fly in sub seconds from any
line item table. There is no need for prebuilt aggregates. SAP HANA can generate any view
of the data at runtime, all from the same source tables
Tables in SAP HANA are automatically compressed to enable you to store huge amounts of
data within very little space.
Further data footprint reductions are achieved because we removed huge numbers of tables
that are not needed, as well as unnecessary indexes.

SAP Fiori:

With SAP S/4HANA comes a brand new user experience. This is called SAP Fiori.
SAP Fiori is not a software product, but the name of a new design approach that was
created especially for SAP S/4HANA.
Key aspects of the design of SAP Fiori applications are as follows:
 They must run comfortably on any device, and present a modern consumer-grade
quality.
 They focus on specific job functions (as opposed to an overcomplicated screen filled
with functions for different users).
 They offer only the essential information that users need to get their jobs done with
no clutter.
 A task is completed with a few clicks and screen changes.
 Applications are intuitive to use, with little or no required training.
 They can include embedded analytics to support in-process decision making.
 The look-and-feel can be consistent across all applications.
SAP S/4HANA can be natively integrated with the existing SAP Cloud solutions, such as SAP
Ariba, Concur, SAP Hybris, SuccessFactors, SAP Cloud Analytics, and SAP Cloud for
Customer (C4C).

SAP S/4HANA Deployment options:

SAP S/4HANA is available as a traditional on-premise deployment, a cloud deployment, or a
combination of both. The cloud solutions can be either a public cloud option or a private
cloud option.
SAP S4HANA Cloud versions:

SAP S4HANA Release strategy:

SAP S/4HANA and SAP S/4HANA Cloud editions have a different release strategy:
 SAP S/4HANA - SAP ships one major release each year followed by 3 Feature Pack
Stacks (FPS) on a quarterly basis. FPS deliver additional innovations as well as fixing
issues.
 SAP S/4HANA Cloud - This moves at a faster pace and SAP ships a major release
each quarter. There are no FPS or SPS releases.
SAP User Experience:
The terms User Interface (UI) and User Experience (UX) stand for two different ways of
thinking.
UI, from a software perspective, describes the interface between the user and the device. It
aims at maximizing efficiency during use.
UX takes on the perspective of the end user and aims at motivation and emotion not only
during use but also before and after. UX tries to create a positive and motivating experience
for the user.

User Types:
Various user types can be found depending on the structure of the specialized area and the
IT department as well as the degree of digitization.
SAP Screen Structure:

The Internet Demonstration and Evaluation System (IDES) is a demo system developed and
used by SAP
 Business Partner Approach:
In SAP, master data is created centrally and is available to all applications and all authorized
users. Storing master data centrally means data records are always consistent, up to date,
and free of redundancy. Master data is organized into views that are assigned to
organizational units (for example, plant, organizational unit, and so on). The segmented
structure of master records makes it possible to flexibly depict the various organizational
structures of an operation.

In SAP ERP, Customer master data and vendor master data must be maintained separately.
This means that if a certain business partner acts as a customer in some processes and as a
vendor in other processes, master data for this business partner has to be maintained twice.
The target approach in SAP S/4HANA is the Business partner (BP) approach. By using this
approach, it is possible to certainly manage master data for customer and vendors.

Business partners can be categorized as a person, group, or organization (legal person or

part of a legal entity, for example, department).

Business Partner configuration:

Step1 - Define the business partner roles:

Cross Application Components → SAP Business Partner → Business Partner → Basic
Settings → Business Partner Roles

Step 2- Maintain groupings for business partners:

Cross Application Components --> SAP Business Partner --> --> Business Partner --> Basic
Settings --> Number Ranges and Grouping --> Define Groupings and Assign Number
Ranges
Step 3- Specify the SAP synchronization options:
IMG  Cross-Application Components  Master Data Synchronization  Synchronization
Control  Synchronization Control  Activate Synchronization Options

Step 4- Assign BP roles to the account group for the customer master record:
IMG  Cross-Application Components  Master Data Synchronization  Customer/Vendor
Integration  Business Partner Settings  Settings for Customer Integration  Define BP
Role for Direction Customer to BP
Step5 - Assign BP roles to the account group for the customer master record:
IMG  Cross-Application Components  Master Data Synchronization  Customer/Vendor
Integration  Business Partner Settings  Settings for Vendor Integration  Define BP Role
for Direction Vendor to BP

Step6 - Assign account groups for the Vendor master record to business partner
groupings

IMG  Cross-Application Components  Master Data Synchronization  Customer/Vendor

Integration  Business Partner Settings  Settings for Customer Integration  Assign Keys
 Define Number Assignment for Direction BP to Vendor
Step 7 - Define number ranges for business partners:
Cross Application Components --> SAP Business Partner --> --> Business Partner --> Basic
Settings --> Number Ranges and Grouping --> Define Number Ranges
Step 8- Configure Field attributes for BP role:
Cross Application Components --> SAP Business Partner --> --> Business Partner --> Basic
Settings --> Field Groupings --> Configure Field Attributes per BP Role
Purchase -to-Pay Processing:

The figure shows a typical procurement cycle, which is as follows:

1. Demand determination
Determine material requirements

2. Source determination
Identify sources of supply

3. Supplier selection
Compare quotations

4. Purchase order creation

Create purchase orders; purchase order adopts information from the requisition or the
quotation

5. Order monitoring
 Track orders; system provides up-to-date status of all purchase requisitions, quotations,
and purchase orders

6. Goods receipt
Confirm goods received

7. Invoice verification
Check and match invoice for processing

8. Payment processing
Process payment to the supplier

With SAP S/4HANA, procurement processes have not been reinvented, but new control
methods are offered by SAP Fiori apps.

SAP S/4HANA simplifies the source of the supply assignment, so less time is spent figuring
out which suppliers to use for orders.
Employees are given self-service requisition capabilities to create, manage, and track their
orders efficiently to allow the purchasing department to deal with more high-value strategic
buying decisions, rather than the day-to-day, low-value items needed by the business.
Buying has been simplified with one-stop purchase order processing, combining requisition
and shopping carts into a single business object.
There are up-to-date insights with real-time purchasing and inventory reporting, so we
always have accurate information to support decision making.
The end-to-end solution Operational Procurement consists of the following solution
capabilities:
 Self-Service Requisitioning
 Requirement Processing
 Purchase Order Processing
 Service Purchasing
 Purchase Order Collaboration
 Procurement Analytics

Inventory Management:

With SAP S/4HANA, we work in a real-time inventory management environment, where up-
to-date information is always available. With the power and speed of sap S/4HANA, you no
longer have to process inventory in large, aggregated batches, you can process much
smaller lot sizes on demand.
Inventory Management supports the identification, classification, valuation, and storage of
stock items across complex supply chain networks.

Invoice and Payable Management:

The end-to-end Invoice and Payables Management solution has the following solution
capabilities:
 Invoice processing
 Accounts payable
 Invoice collaboration
The differentiators are a new SAP Fiori app for invoice processing and the native standard
integration into the SAP Ariba Business Network for supplier invoice collaboration.

Fiori Apps :