The move to S/4HANA is getting closer for many medium-sized SAP customers. However, the time pressure imposed by SAP on the transition of systems to S/4HANA plays only a subordinate role. Instead, the added value of a conversion to S/4HANA and ERP modernization is becoming more important: 88 percent of companies expect higher data quality as a result of the introduction of S/4HANA, according to the current Lünendonk Study 2021 conducted in the German-speaking region. How can procurement around Complex Services under S/4HANA in particular meet this expectation? In a webinar, we will show you how to put an end to workarounds.
Expectations regarding SAP S/4HANA as Digital Core
The Corona crisis has made many companies aware of their own weaknesses regarding digitization and digital business models. When it comes to linking business processes with each other in order to achieve a higher level of digitization and automation and to develop data-based business models, rather poor data quality has so far prevented significant progress in digitization – especially in the use of artificial intelligence and robotic process automation (RPA), according to the current Lünendonk Study 2021. 100 IT managers in companies from the German-speaking region were interviewed.
Among the main reasons for an ERP change, 38 percent cited changing business requirements that need to be mapped in the ERP, as well as the modernization of the IT landscape due to high complexity and outdated technologies. It is therefore only logical that 88 percent of surveyed IT decision-makers expect a much better data quality as a result of a move to S/4HANA – this focus has also increased significantly compared to the first edition of this study in 2019: Three years ago, only 54 percent of the surveyed companies considered this to be (very) important.
So the awareness has increased – the challenges are the same: In order to achieve improvements at data level, all information stored in ERP systems must be in line with each other in terms of up-to-dateness, uniqueness and consistency. The prerequisites for this are integration capability and openness to interfaces. “According to SAP, it is precisely the ability to integrate with other systems and the ability to create end-to-end processes that are actually central added values of S/4HANA – in contrast to this, however, SAP customers have often been skeptical in recent years, but this now seems to be changing” (Lünendonk Study 2021, p. 15).
These are the overarching goals so far. However, if we look at the requirements that are specific to procurement – in particular complex services – a switch to S/4HANA alone does not improve the technical or process-related prerequisites for more data quality. Why is that?
Data quality in the procurement process of complex services
In the SAP context, complex services are services based on multi-level service specifications – and thus the counterpart to the “lean services” offered and propagated by SAP, which are comparable to single-level material lists. This structural difference has far-reaching consequences for the process chain of procurement of all service types based on these structured service specifications. First and foremost, construction services, which are firmly linked to the GAEB industry standard, but which SAP does not support.
This gap, which we highlighted in a previous blog post on SAP S/4HANA and service procurement, is something that even SAP Ariba solutions such as Ariba Sourcing and Ariba Network, which are intended to complement the sourcing and procurement realm in S/4HANA, ultimately cannot close. There are three main reasons for that:
Access via Fiori Apps to multi-level service specifications (item type “Service”) is not possible.
The new material type “SERV” is to be used only as a single-level list in “Lean Service Procurement” and is not suitable for services.
Ariba Sourcing and Ariba Network do not support GAEB-based specifications.
As a result, manual workarounds via Excel and Outlook continue to be used in the tendering and processing of construction and services – and this thwarts the aspiration to completeness, up-to-dateness, and consistency of the data stored in SAP. In conclusion, in the context of purchasing complex services under S/4HANA with a Fiori interface, the goal of expanding SAP as a digital core cannot be achieved that way.
Webinar Tip: Put an end to workarounds when using S/4HANA for Complex Services
By means of integrated GAEB-based structures and a connected supplier network dedicated to the product groups of services, the FUTURA Cloud supports companies with the tendering and processing of complex services as well, and all that via one single interface.
”Making complicated things simple and simple things exciting”
Editor, marketing specialist and responsible for external communications at Futura Solutions since 2017. Her key interests on the blog: Interviews and articles with a somewhat broader view of markets and customers.
The fact that not every GUI transaction is transferred to a Fiori app with the switch to S/4HANA, is not only due to the new Fiori design principles. It is also the result of strategic limits deliberately set by SAP, which are sold as an advantage for SAP customers. Customers who focus on services in purchasing and procurement are particularly affected.
S stands for "Simple", a simplification of the entire data architecture. While this offers faster access times and improved usability with the Fiori interface, it also implies restrictions due to the simplification. We shed light on what consequences the SAP S/4HANA strategy will have on the processing of construction and services.