SAP S/4HANA is an enormously powerful enterprise resourcing planning (ERP) system. Used by over 17,000 businesses, it manages a comprehensive range of business processes, including for many Fortune 100 enterprises.
But, as powerful as SAP S/4HANA undoubtedly is, it doesn’t offer the best digital experience for managing day-to-day business processes. Nor does it connect well to other platforms, including other ERPs.
In fact, SAP S/4HANA’s inability to digitally connect people and systems can make procurement modernisation difficult. Businesses that rely on SAP S/4HANA are in a challenging position. Migrating from SAP S/4HANA would be expensive and disruptive, but procurement modernization and digitization are strategically and financially advantageous.
Vroozi’s SAP S/4HANA procurement integration, built on the SAP Business Technology Platform (SAP BTP), offers a solution. By integrating Vroozi with SAP S/4HANA, you get the best of both worlds: streamlined procure-to-pay and extensive procurement automation with all procurement data and processes automatically streamed to SAP S/4HANA.
In this article, we explore:
- The challenges of using SAP S/4HANA to manage procurement.
- What a SAP S/4HANA procure-to-pay process should look like.
- How Vroozi uses SAP BTP to modernize SAP S/4HANA procurement.
SAP S/4HANA Procurement: Strengths and Challenges
For many businesses, SAP S/4HANA is indispensable. It is the software on which their critical operations depend, from asset management and human resources to manufacturing and inventory management.
But it is not well-suited to be the employee-facing component of a modern procurement system. It’s challenging to use well, discouraging for unfamiliar employees, and offers an end user experience designed for SAP experts, not procurement professionals and other stakeholders.
The primary limitations of managing procurement with SAP S/4HANA include:
- Complexity and usability: SAP S/4HANA’s user experience is not intuitive, and there’s a steep learning curve for anyone unfamiliar with its conventions and capabilities.
- Customization and flexibility: While SAP S/4HANA can be customized, doing so is expensive and time consuming. Configuring it to specific business requirements needs deep system knowledge.
- Training and support: Procurement teams and others involved in procurement require extensive training and support, and many businesses struggle to provide adequate training resources.
- Data management and quality: Effective procurement and spend management rely on accurate data. However, many businesses struggle to get sufficient data volume and data quality in SAP S/4HANA. Data entry errors, duplication, and other quality issues can lead to poor decision-making and inefficiencies.
- Mobile and remote access: Despite improvements to its mobile user experience, SAP S/4HANA still offers limited access and functionality across different devices.
What is Procure-to-Pay for SAP S/4HANA?
If SAP S/4HANA itself isn’t the ideal procurement solution for 2024, what does a better solution look like? Modern procurement solutions have three fundamental goals:
- Automate manual procurement processes where possible.
- Integrate procurement systems to facilitate data sharing and avoid data silos.
- Provide a pleasant and intuitive user experience.
A procure-to-pay solution achieves these goals across the entire procurement cycle, from shopping to ordering to paying invoices. Let’s look at the main components that make up a procure-to-pay system, and explore how Vroozi integrates with SAP S/4HANA via SAP BTP to bring these capabilities to SAP S/4HANA users.
Digital Marketplace and eProcurement
A digital marketplace simplifies procurement by offering a user-friendly, consumer-like shopping experience. It seamlessly integrates punch-out catalogs (vendor ecommerce stores) and static catalogs so users can access up-to-date product, pricing, and availability information straight from the suppliers. Procurement marketplaces combine the ease of consumer shopping with the controls necessary for enterprise procurement, enabling informed purchasing within organization guidelines.
Purchase Requisition and Purchase Order Automation
In a procure-to-pay system, automating both purchase requisitions and purchase orders is integral to enhancing procurement efficiency.
Purchase requisition automation creates purchase requisitions for goods or services from carts generated by the digital marketplace. The system automatically generates a requisition and routes it to the individual responsible for approval. It also runs requisitions through company controls for spend categorization, accounting coding, and budget compliance.
Once the requisition is approved, purchase order automation takes over. It converts approved requisitions into purchase orders, includes all necessary details, such as product specifications, quantities, and negotiated prices, and sends them to the supplier.
Invoice Automation
Invoice automation in the procure-to-pay process significantly enhances efficiency and accuracy. It encompasses several functionalities:
- Automatic invoice capture streamlines invoice data entry, using optical character recognition (OCR) and cognitive technologies to automatically extract data, reducing the need for manual data entry and minimizing errors.
- Automatic invoice coding ensures invoices are coded with the correct accounts, categories, cost centers, and other financial dimensions. It ensures consistency in financial reporting and simplifies the reconciliation process.
- Two and three-way matching checks that invoice details accord with purchase orders (two-way) and receiving reports (three-way) to verify billed products or services have been received and are accurately charged.
- Straight-through processing allows invoices that meet pre-set criteria to be processed and paid without manual intervention, significantly speeding up the payment cycle.
- Streamlined approvals automatically routing invoice approvals to the appropriate approvers based on pre-defined rules.
How Does SAP Procure-to-Pay Work?
SAP S/4HANA lacks the streamlined user experience of a modern procure-to-pay platform, but streamlined procurement can be achieved with Vroozi’s SAP S/4HANA integration. There are three main components:
- Vroozi provides the procure-to-pay SaaS.
- SAP S/4HANA is the ERP.
- SAP BTP is the Platform-as-a-Service that ties it all together.
Let’s look at these components in more detail.
SAP S/4HANA
SAP S/4HANA is an enterprise resource planning suite based on the HANA database. It provides real-time data processing and analytics across various business operations. Consolidating procurement data in SAP S/4HANA gives businesses centralized visibility into spending, supply chain risk, and supplier performance.
The ERP’s advanced analytics tools facilitate planning, forecasting, supplier performance analysis, cost optimization, and many other functions that help companies optimize procurement and spending.
However, as we’ve already discussed, to take full advantage of SAP S/4HANA’s procurement capabilities, businesses must be able to supply it with accurate, timely, and comprehensive procurement data. Plus, it is challenging for procurement teams and other employees to work directly with SAP S/4HANA without extensive training.
SAP Business Technology Platform (SAP BTP)
SAP BTP is a Platform-as-a-Service that allows users to develop, run, and manage applications, automation systems, and integrations without managing the underlying cloud infrastructure. It includes tools and solutions based around four pillars: database and data management, analytics, intelligent technologies (such as machine learning and intelligent process automation), and application development and integration.
It’s the last of these that concerns us here. SAP BTP includes the SAP Integration Suite, which simplifies the integration of SAP and non-SAP software, including integrations between third-party procurement software like Vroozi and SAP S/4HANA. The Integration Suite is a toolkit for enterprise application integration that offers process integration, API management, and open connectors.
Let’s say we wanted to send a supplier invoice from Vroozi to SAP S/4HANA to be paid. One way of doing it is to leverage SAP S/4HANA’s Supplier Invoice endpoint. We use SAP BTP to host an API gateway that receives data from Vroozi and sends it to SAP S/4HANA via the API endpoint.
For our SAP S/4HANA procure-to-pay integration, we leverage SAP BTP’s infrastructure, security, and authentication solutions to build a reliable, fast, and secure API gateway that allows us to transfer purchase orders, invoices, and a comprehensive range of procurement d through SAP BTP to SAP S/4HANA at speed and scale.
Vroozi Procure-to-Pay for SAP S/4HANA
Because we can send procurement data and documents to SAP S/4HANA, users can fully utilize Vroozi’s ability to modernize, streamline, and accelerate procurement processes. At the same time, procurement data is made available to SAP S/4HANA for processing, analysis, and consolidation with data from other business functions.
Enhancing Procurement Efficiency with Vroozi and SAP S/4HANA
We’ve talked about how we empower SAP S/4HANA users with streamlined procurement, so let’s close this article by talking about the why. What should SAP S/4HANA users expect when they integrate Vroozi with their ERP?
Improved procurement data accuracy
Vroozi ensures that all data sent to SAP S/4HANA is correctly formatted, comprehensive, and, most important of all, accurate. Capabilities such as purchase order automation and automatic invoice capture are significantly more accurate than manual data entry, especially manual data entry into SAP S/4HANA by non-expert users.
Improved procurement data availability
By centralizing and managing more of the organization’s spend through Vroozi, a greater volume of procurement data is captured and spend visibility is improved. Comprehensive data collection ensures a complete picture of spending habits, preferences, and patterns is available for analysis in SAP S/4HANA. Additionally, the system helps maintain tighter control over expenditures by reducing rogue spending and off-contract purchases.
Accelerated procurement cycles
Vroozi helps organizations reliant on SAP S/4HANA to expedite their procurement processes. Automated procurement workflows reduce the time needed for requisition, approval, purchasing, and invoice processing. Users benefit from quicker turnaround times so they can respond with agility to market changes and internal demands.
More efficient use of employee time
Procurement automation frees your procurement team, accounts payable team, and department managers from time-consuming manual tasks related to order processing, order and invoice approvals, invoice matching, and more. Reduced administrative overhead allows them to focus on strategic, value-added activities. Plus, they’ll spend less time rectifying disruption caused by manual data entry and procurement delays.
Enhanced user experience
Vroozi provides a simple and intuitive web and mobile interface for managing purchasing and approvals. Users access approved suppliers via a marketplace that provides a one-stop shop for comparing products, prices, and suppliers. Employees can initiate, review, and approve purchases and payments on any device.
Learn more about the benefits of Procure-to-Pay with Vroozi.
Vroozi and SAP S/4HANA: Pioneering the Next Generation of Procurement
With our SAP procurement integration, you can fully leverage SAP S/4HANA—and SAP ECC and SAP SRM—alongside Vroozi’s modern, streamlined, and cost-efficient procure-to-pay system, which includes:
- Procure-to-Pay automation
- eProcurement and integrated supplier catalogs
- Purchase order automation
- Invoice automation
- Digital payments
To see Vroozi in action, experience a live version of the app or request a personalized walkthrough from one of our team members.
