Going Digital with SAP S/4HANA Sourcing and Procurement and SAP Ariba Solutions – Manage All Spend with This Compelling Pairing

Martin Jones, SAP Ariba (SAP), Digital Transformation, EMEA & MEE / June 15, 2016
Going Digital with SAP S/4HANA and SAP Ariba Solutions
for Procurement – Manage All Spend with This Compelling
Pairing
Public

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Important information
This information reflects the status of SAP Ariba solution planning as of June 2016. All such
information is the confidential information (per the contract between our companies), and must not
be further disclosed, as stated in the confidentiality clause of that contract. This presentation
contains only intended guidance and is not binding upon SAP or Ariba to any particular course of
business, product strategy, and/or development. Its content is subject to change without notice.
SAP and Ariba assume no responsibility for errors or omissions in this document. SAP and Ariba
shall have no liability for damages of any kind including without limitation direct, special, indirect,
or consequential damages that may result from the use of these materials.

What we’ll cover in this session….
1. What does “going digital” mean and what’s driving this?
2. How does SAP S/4HANA combine with SAP Ariba solutions to manage all your spend categories?
3. Which SAP Ariba solution bundles are most relevant to complement SAP S/4HANA?
4. What does this mean for the key stakeholder functions?
5. What does all this mean for suppliers and how do we engage them quickly?
6. Q&A

The world has now become more digital and networked
Last 2 years
90%
Of the world’s data has
been generated1
Last 2 years
40%
Growth in adoption of
business networks2
1 ScienceDaily, May 22, 2013.
2 Technology Adoption Report on Business Networks, Ardent Partners, 2014.
3 Internet of Things (IoT) 2013 to 2020 Market Forecast: Billions of Things, Trillions of Dollars, IDC, 2013.
4 Statista, 2014.
212 billion
End of 2020
“Things” will be connected3
By 2020
9 billion
Mobile users in the world4
In 2014
51%
Of workloads processed
in the cloud5
5 Cisco Global Cloud Index: Forecast and Methodology for
2013–2018, Cisco Systems Inc., November 11, 2014.

Making sense of digital transformation…
“It is not the strongest of the species that survives, nor the
most intelligent that survives. It is the one that is the most
adaptable to change” Charles Darwin
“In today’s era of volatility, there is no other way but to re-
invent. The only sustainable advantage you can have over
others is agility, that’s it. Because nothing else is
sustainable, everything else you create, somebody else
will replicate.” Jeff Bezos, Amazon Founder
“At least 40% of all businesses will die in the
next 10 years if they don’t figure out how to
change their entire company to accommodate
new technologies” John Chambers, Chairman, Cisco
“The key to digital transformation is
re-envisioning and driving change in
how the company operates”. Cap Gemini

Some examples of how companies have reacted…or not…

How is the Procurement function reacting out there…?
7
Deloitte CPO Survey 2016

Some summary lessons we’re seeing so far…
• Doing nothing is not an option…the pace of change will only accelerate
• Starting on a digital transformation pathway begins with re-imagining business process
• Changing at your organisation’s chosen pace is usually better than being forced
• But taking your customers and suppliers with you is also critical…
• Retaining existing core businesses is ok…as long as your changing aspects of model
• Cannibalising core business is also ok…as long as you grow via new innovations

• What does “going digital” mean and what’s driving this?
• How does SAP S/4HANA combine with SAP Ariba solutions to manage all your spend categories?
• Which SAP Ariba solution bundles are most relevant to complement SAP S/4HANA?
• What does this mean for the key stakeholder functions?
• What does all this mean for suppliers and how do we engage them quickly?
• Q&A

Security
SAP HANA Platform
Digital Core
Suppliers
& networks
Customer
experience
Workforce
engagement
loT
& big data
SAP Portfolio for the Digital Enterprise
The SAP Ariba Solution is THE key enabler of the SAP Digital Business Framework for supplier collaboration

SAP S/4HANA + SAP Ariba solutions completing digital process
with trading partners
65% of best-in-class companies have the capability
to effectively collaborate with their network of
suppliers versus only 21% of laggards.
B2B Integration and Collaboration: Strategies for Building a ROI Business Case,
Aberdeen Group.
Increase in earnings per share
1 EPS assumption is considering only benefits, no cost
$1.4 dollar¹
Completing the digital process with
trading partners and suppliers
 The entire value chain is digitized, digital
core processes choreographed out to
trading partners
 Digital core alone digitizes only half
the process – collaborating (networked)
across trading partner process completes
the digital cycle
 Enterprises across industries can begin
the journey to full digital economy by
starting with SAP Ariba solutions to fund
broader transformation
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

Native integration
Cloud integration
SAP Ariba solutions and the SAP customer base
Common hybrid scenarios to considerAriba
Network
Cloud
solutions
On-premise
solutions
Hybrid procurement
with Ariba Network
Ariba Spend Visibility
Ariba Sourcing
Ariba Contract Management
Ariba Supplier Information and
Performance Management
SAP S/4HANA
or SAP ECC
PO/invoice automation
Catalog content
Dynamic discounting
Collaborative supply chain
Full cloud procurement
with Ariba Network
SAP S/4HANA
or SAP ECC
Catalog content
Dynamic discounting
Ariba Spend Visibility
Ariba Sourcing
Ariba Contract Management
Ariba Supplier Information and
Performance Management
Ariba Procure-to-Pay
On-premise procurement
with Ariba Network
SAP S/4HANA
or SAP ECC
SAP SRM
Catalog content
Dynamic discounting

Lets go to the whiteboard briefly to explain further….

14© 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP S/4 Enterprise Mgmt.

• What does “going digital” mean and what’s driving this?
• How does SAP S/4HANA combine with SAP Ariba solutions to manage all your spend categories?
• Which SAP Ariba solution bundles are most relevant to complement SAP S/4HANA?
• What does this mean for the key stakeholder functions?
• What does all this mean for suppliers and how do we engage them quickly?
• Q&A

Which SAP Ariba solution bundles should we prioritize with SAP
S/4HANA…?
SAP Ariba solution bundles with fastest time to value for
SAP S/4HANA and ECC customers…
 Collaborative commerce – indirect spend, spot buy and catalog capability,
and transactional functionality
 Collaborative finance – PO and invoice plus full document cycle
collaboration straight out of SAP S/4HANA
 Collaborative supply chain – combined with SAP S/4HANA for tighter live
supplier collaboration
 Direct sourcing professional – optimized sourcing for direct materials
Why these bundles?
 They extend the digital capability of SAP S/4HANA outside the organization
 The digital core based on SAP S/4HANA doesn’t have a network – it can’t
reach outside…
 So SAP S/4HANA needs the network to collaborate from the digital core
 The bundles are quick to deploy (just 3–4months), so ROI and payback is
also rapid…
 Which is why this can help self-fund investment in SAP S/4HANA in the
same year
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

Solution Package: SAP S/4HANA + SAP Ariba Collaborative Finance
Customer challenges
• Manual paper-based invoice processing
• Long invoice processing cycle times
• Overpayments due to error-prone matching
• Non-standardized payment terms
• Lost early-pay discounts
• Poor working capital & DPO management
Customer value proposition
• Real-time business-to-business collaboration
• Automation of electronic Invoicing and Procurement processes
• Up to 98% touchless electronic invoices (lower error rates, lower manual process costs)
• Quick ROI via efficiency gains in Accounts Payables
• Faster period end close due to automated reconciliations
• Improved liquidity planning and positive effect on Working Capital
• Access to additional services like Supply Chain Financing or Dynamic Discounting
Scope of solution
• Standard Integration from S/4HANA to the Ariba Network
built into S/4HANA so no requirement for middleware or add on.
• PO automation including order confirmation, order
creation/change and advanced ship notices
• Invoice automation to match invoices with POs and provide
invoice status updates
• Maximize early pay discounts with Dynamic Discounting
capabilities in Discount Pro
• Electronic payments to suppliers with Ariba Pay
• Instant Insight in one central finance platform
• Optimized Procurement and Finance processes beyond company
boundaries
75%Reduction in A/P
Processing Cost
€2-3M
Discount savings
per €1B
addressable spend
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

SAP S/4HANA + Ariba Collaborative Commerce
Jump start optimisation of catalog, services, long tail, non-sourced spend
Customer challenges
 Manual PO communication methods
 Poor visibility to supplier ability to meet demand
 Limited usage of order acknowledgment or ASN
 Contract compliance/leakage issues
 Limited supplier catalog usage
 Manual paper-based invoice processing
 Long invoice-processing cycle times
Scope of solution
 Standard integration from SAP S/4HANA to the Ariba
Network built into SAP S/4HANA, so no requirement for
middleware or add-on
 PO automation including order confirmation, order
creation/change, and advanced ship notices
 Invoice automation to match invoices with POs and
provide invoice status updates
 Consumer-like shopping experience along with
catalog management tools and services to increase
spend
 Catalogs with millions of SKUs enabled over the Ariba
Network in 120+ countries and 70+ currencies
 Procurement of any type of service including temp
labor, consulting/SOW, print, facilities, and more along
with non-PO purchases for total spend management
 Big Data search and analysis features
 Decrease procurement costs by automating delivery of purchase orders and validation of supplier invoices. Integrated into core
processes in SAP S/4HANA, the solution enforces compliant purchasing, enables vendor consolidation, decreases the time to
process and pay invoices, provides visibility into the expected receipt of materials, and enables customers to take advantage of
contracted discounts.
 Use SAP-provided preconfiguration as templates to jump-start your innovation journey to optimize procurement and enterprise
resource processes. Use best practices supported by SAP to accelerate your implementation of the foundation of SAP S/4HANA,
procurement operations with SAP Ariba solutions, integration, and data migration. Use templates to standardize where you can,
and differentiate where you need to. Gain access to the largest supplier community with the Ariba Network. Utilize cloud
procurement applications for innovation and MRO spend.
Overpayment reduction
per billion in spend
$3M
Increase in contract
compliance
60%
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

Solution Bundle: SAP S/4HANA + Ariba Collaborative Sourcing
Automate sourcing, contract and supplier management
• Increase spend under management
• Achieve sustainable sourcing savings year on year
• Get actionable insights into savings opportunities and potential
• Streamline finding new, qualified suppliers
• Improve supplier onboarding experience and manage supplier
performance
• Improve contract adherence and plug compliance leakages
Scope of solution
• Spend analytics, supplier discovery, tactical sourcing, strategic
sourcing, supplier onboarding, supplier performance
management, contract management
• Collaborative Sourcing includes
- Ariba Sourcing Professional
- Contract Management Professional
- Ariba Discovery (Supplier Identification and Qualification)
- Supplier Information and Performance Management
- Savings & Pipeline Tracking
- Optional: spend visibility
Customer challenges
• Poor visibility to enterprise spend
• Inefficient & manual sourcing processes
• Inability to track sourcing pipeline & savings
• Lack of governance & control of contract
process
• Manual supplier on-boarding process
• Difficult to monitor supplier performance &
manage supply risk
4-15%
Reduction in unit
price for strategically
sourced spend
>5M
Users of Ariba
Sourcing – World’s
most adopted
sourcing application
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

6. Q&A

Which customer stakeholders are interested in this and why…?
What’s in it for finance and treasury?
 The network is pure digital – there is no paper – so it operates in real time and is fast and accurate
 If paper invoices are still the norm, then the buyer is not using the full run live capability of SAP S/4HANA for paying suppliers
 Intelligence on the network allows only clean/validated data to arrive in SAP S/4HANA Finance – fewer exceptions to manage
 This means invoices are processed and approved within hours with no human intervention
 AP can become a profit center; suppliers can get paid faster, all running live
 AP can reduce costs by 70% and capture discounts quickly, up to €2 million per €1 billion of spend
 Treasury can run predictive analytics in SAP S/4HANA to assess the impact of early payments on cash flow and then act
 Deployment and enablement is fast, so savings in year 1 can help fund the investment in SAP S/4HANA right away
How about procurement?
 The combo of SAP S/4HANA and the Ariba Network means procurement can now manage ALL spend digitally
 Unsourced/low-value goods, catalogs, services, MRO, and even direct material straight out of SAP S/4HANA can be managed
 With the Ariba Network, procurement can run all this buying collaboration digitally with all suppliers globally
 With the Ariba Network, buyers can collaborate with their largest and smallest suppliers all in one place
 Procurement can choose to leverage additional apps in the cloud, or in SAP S/4HANA, or as a hybrid

Which customer stakeholders are interested in this and why…?
What about supply chain?
 For complex and extended supply chain collaboration, SAP S/4HANA and the Ariba Network enables real-time live collaboration with suppliers
 Direct material sourcing on the network is available and is seamlessly integrated with SAP S/4HANA
 Direct material forecasts and sales orders can be shared digitally with suppliers straight from SAP S/4HANA
 Disruption with suppliers’ ability to fulfil is monitored and instantly captured via SAP Ariba solutions for supplier risk
 This means any issues are spotted early, and planners can recut demand forecasts and alternative supply sources live in SAP S/4HANA…
 Thus de-risking the supply chain
What about IT?
 In terms of connectivity, integration between SAP S/4HANA and the Ariba Network is native – all digital, all the same language
 This means IT benefits from rapid deployment – get connected in 2 weeks!
 For IT, not only does SAP S/4HANA run live and retain the gold standard of one version of the truth globally…
 IT can now also opt to run in the cloud, on premise, or in a hybrid scenario
 Customers can select which procurement apps they run/retain on premise and which they run in the cloud

We’re on a digital transformation pathway now but what if…..
1. My organisation has already invested in SAP S/4HANA…?
2. My organisation is in the process of an SAP S/4HANA buying cycle to potentially conclude in
2016?
3. My organisation is likely to invest in SAP S/4HANA but not until 2017/18?
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

SAP Ariba product innovations
Renewed investment and commitment from the SAP managing board
Total user
experience
Guided
buying
Collaborative
supply chain
Supplier risk
management
AribaPay
and Ariba
Spot Buy

6. Q&A

What does all this mean for your suppliers…?
Ariba Light Enablement
• Send and receive PO & Invoices and
status
• No Change Management
• No Portals to Manage
• Free
Ariba Discovery
• Set up company profile
• Find new business and be
included in sourcing events
• Sales and Marketing
opportunities
• Fees may apply
Ariba Network
• Integrate to allow for no-touch
processes
• Receive Payments and
Discounts
• Increased collaboration and
supply chain transparency
• Fees may apply
Sellers find new business leads on the Ariba Network & Ariba Discovery
Sellers decide to use other Ariba Value Added Services on the Ariba Network
Sellers can receive a PO and send an Invoice for free (Ariba Light Enablement)
More Sellers joined in Q4 2015 than any other quarter in our history

National Grid Video
https://youtu.be/PGR8CRhkV0E

Questions & Answers….
Martin Jones, SAP Ariba Digital Transformation Lead, EMEA & MEE
martin.jones01@sap.com
+44 7771 375 473
Sourcing
Procurement
Supply chain
Payables
Networked
Digital Core

Please complete session survey
Locate Session Click Surveys Button Select Breakout Survey Rate Session

Going Digital with SAP S/4HANA Sourcing and Procurement and SAP Ariba Solutions – Manage All Spend with This Compelling Pairing

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (19)

Ähnlich wie Going Digital with SAP S/4HANA Sourcing and Procurement and SAP Ariba Solutions – Manage All Spend with This Compelling Pairing

Ähnlich wie Going Digital with SAP S/4HANA Sourcing and Procurement and SAP Ariba Solutions – Manage All Spend with This Compelling Pairing (20)

Mehr von SAP Ariba

Mehr von SAP Ariba (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Going Digital with SAP S/4HANA Sourcing and Procurement and SAP Ariba Solutions – Manage All Spend with This Compelling Pairing