The business benefits and savings to be gained from Procurement initiatives are significant. SAP Fiori has provided organizations with the catalyst for digital transformation, however according to CIO Review, “the best thing about workflow solutions is once you successfully implement a single business process workflow, then the process of realization for additional workflows – regardless of line of business or function area – becomes easily repeatable.”
A significant driver of procurement demand are CAPEX initiatives, and organizations are looking to procurement processes to deliver greater ROI. Three recent implementations by IQX Business Solutions provide examples of how clients utilized workflow driven Fiori Apps from the IQX Procurement Suite to unlock rapid benefits and savings to their business.
- Increasing spend under management – In order to control spend under management and to adhere to corporate policy, a large mining company aimed to improve procurement with the IQX Purchase Requisition Fiori App. This enabled employees to raise and approve ALL requisitions according to policy and make it easy to procure off contracts and catalogues. By removing the SAP Tcode ME23N and replacing with Fiori, this ensured all requisitions were created and approved in Fiori. The result was they obtained 100% compliance to policy and a reduction in discretionary spend of nearly 10%.
- Reduce Non PO spend and Mobilize Approvals – By reducing spend without a PO, increasing purchase order compliance and mobilizing decision making, a leading agribusiness delivered significant ROI to the business. A highly tailored IQX Purchase Requisition Fiori App combined with IQX OneList for mobilized approvals delivered a 75% improvement in approval times and a 65% reduction in invoices without purchase orders.
- Process Alignment and Compliance – A large manufacturing company wanted to align procurement processes across three disparate business units into a single seamless process. A selection of Fiori Apps from the IQX Procurement Suite were introduced as the new unifying process resulting in 95% user adoption with minimal training. Spend against contracts was increased by 25%.
Highly tailored, workflow enabled Fiori Apps deliver the procurement objectives of:
- Increasing spend against contracts while reducing discretionary spend;
- Increasing compliance with procurement policy; and
- Accelerating the cycle time with mobilized approval decisions.
The IQX Procurement Suite consists of process-enabled ready to run Fiori Apps that leverage standard SAP data and align the SAP business rules and policy for fast, accurate and compliant execution. Capital expenditure projects, for example, are efficiently converted into SAP purchasing execution by quickly onboarding Supplier master data, setting up material master data and raising and approving requisitions. The IQX Partner Portals ensure supplier self-service and supplier engagement, while the receipting, invoicing and payment processes are all efficiently executed to avoid delays and costs.
IQX Fiori Apps are deployed ready to run, tailored to clients’ unique needs and configured for workflow. Pre-integrated External Supplier Engagement portals extend collaboration and self-service out to the supply chain.
Here we explore in more detail 5 procurement digital transformation opportunities that provide good starting points for organizations looking to deliver a ROI on their Procurement Processes:
1. Procure against contracts, to Corporate Policy and reduce Non-PO Spend
Too often the procurement effort to negotiate and set up contracts and quality suppliers is frustrating when the business process is ineffective. Clunky hard to use screens or standalone procurement portals with integration issues result in uncontrolled spend as the business users bypass the system. By digitally transforming Purchase Requisitions companies can expect to:
- Make it easy for user to follow policy by embedding the rules into the App
- Provide a deep and easy to use search page to find suppliers
- Proactively propose contracts and pre-fill information off the contract
- Propose catalogues for punch-out ordering
- Quickly request and approve PR’s linked deeply into SAP demand sources Capex Projects and Work Orders
- Reduce spend and save up to 5% in procurement costs
- Improve policy compliance – 100% is achievable
- Reduce discretionary spend by up to 10%
- Issue and re-stock internal consumption from stores for PPE and Production Consumables.
2. Intelligent Receipting of goods and services
Early and accurate receipting (GR and SES) will enable organizations to improve supplier relationships, assist with payments to terms and save costs and time in the business and AP.
- Provide supplier templates to capture bulk details of services for upload, cost assignment and service entry acceptance in a workflow driven process
- Propose receipting quantities based on open quantities
- Reduce Supplier wait times for payment authorization
- Reduce the risk of payment for non-delivery of good or services or for faulty and damaged goods.
3. Invoice Management Fiori Apps
Invoice Management is notoriously manually intensive which is time-consuming and error prone. The benefits of AP Automation are well known, but often the solutions are external to SAP, expensive and have integration issues. Using an API enabled SAP Fiori workflow solution businesses can have the dual benefits of AP automation with all the business rules, logic, workflow, and postings in SAP. This Fiori solution provides many business benefits to consider:
- Process optimization, saving Accounts Payable time and business users time
- Improved supplier relationships with prompt payments and rapid invoice variance resolution
- Process insight showing the status of all invoices, process metrics and bottlenecks
- Direct linking to invoice on hold issues like receipting and PO changes
- Compliance to DOA for all approvals
- Mobilization of approvals for improved cycle times
4. Vendor Supplier Portal – internal/external
Empowering Vendors with digital information and access to self-service functionality reduces queries and improves the supplier engagement and supply chain quality. Vendor compliance related activity is easy to execute and maintain. Through the digital transformation of Vendor Management organizations can expect to achieve the following:
- Increase engagement via communications and collaboration with Vendor and Supplier Networks
- Provide information for self-service and improved supply chain execution
- Rapid assessment and onboarding of new suppliers
- Maintain, change, extend and block suppliers
- Provision suppliers with access to PO and invoicing data
- Ensure supplies conform to company policy requirements with respect to anti-slavery provisions, knowledge of your counter party and currency of mandated certifications and insurances
5. Material Master – Single and Bulk
Business have struggled to maintain quality material master data due to the complexity of the SAP Material Master record and the expertise now required to maintain different aspects or views of the data. A workflow driven, collaborative and controlled process of requesting, refining and approving the data radically improves the speed and quality of this important information. Using SAP Fiori to digitalize this process will provide the following benefits:
- Search and embedded duplication checking will reduce duplicating master records
- Automation of the data set proposed based on the SAP business rules and data model improves the quality of the data
- Powerful workflow targeting views by data owners allows expert focus on all aspects of the master data prior to create or change
- Configurable solution based on material types and plants providing instant flexibility
- Deep SAP integration to automate the data creation and additionally create related data like Source of Supply, PIR’s and addition to BOMS.
- Bulk request, processing and approval, transforms speed and data quality
The advantages of digital procurement are significant. From reduced costs and improved approval processes, to strengthened supplier and vendor relationships not to mention more robust monitoring, audit and reporting. Digitally transforming your procurement processes a project at a time will not only deliver immediate, tangible results, your team will become your ambassadors to improve each process across the procurement function. According to PWC “digital procurement implementation nowadays is a must-have rather than a nice-to-have.”