SAP Ariba Live online: Integrated, Intelligent ‘Services Procurement’

integration

First, I wanted to congratulate SAP and its "Intelligent Spend Management" team for making Wednesday’s online event happen so soon after its coronavirus-driven decision to cancel its annual event in Las Vegas.  It may not have been "live", but the professional and informative presentations and very usable infrastructure made up for this.

Now for my virtual conference report: I spent a good part of the morning “attending” virtual sessions (with my services procurement filters turned on, of course). I had expected to hear a more specific update on the SAP Fieldglass solution suite. However, solution migration and integration seemed to be the main themes of the day, as the SAP Intelligent Spend Management movement continues its process of integrating solutions, like SAP Ariba and SAP Fieldglass, within a single User Experience (UX), and enabled through CIG (Cloud Integration Gateway) on top of HANA (the underlying in-memory database).

It was not many years ago that a Vendor Management System (VMS) was a silo software application, plain and simple. But in the past several years, some procurement software providers have been working to make services procurement enablement a part of a broad, integrated, intelligent procurement/source-to-pay platform/suite (which is not easy if you want to track down to an individual contingent worker level). And that is what SAP is in the process of doing (for more information, see analyst Pierre Mitchell’s From ‘Ariba Live’ to SAP Ariba not-so-live: A dispatch in the coronavirus era and analyst Magnus Bergfors’ What’s going on at SAP Ariba (sorry, I mean SAP Intelligent Spend Group)?.

In any case, what is discussed below is caveated, since we only got to peer into several window panes of the service procurement capabilities in the context of the overall platform coming together. Accordingly, we hope we will have an opportunity to learn a great deal more in the coming month or two.

What I Learned From Conference Events

I managed to get some perspective into updates/developments related to services procurement and more specifically into SAP Fieldglass (as it gets further integrated with SAP Ariba and enabled by an increasingly SAP-centric underlying technology platform).

Session: ‘Why Services Is Unlike Other Spend Categories’

This session walked through a kind of demo of capabilities that addressed these common challenges for companies attempting to manage procurement of complex services:

  • Inconsistent supplier engagement
  • Disjointed purchasing operations
  • Non-compliant workforce controls

The session also brought in the results of a recent study done in partnership with Oxford Economics, called Services Procurement Insights. Some of the study’s findings indicated that other services procurement challenges faced by many organizations were used to zero in on other capabilities of the services procurement solution.

While this was an extremely informative session, we do look forward to deeper evaluations of SAP Fieldglass, especially as part of our Solution Map evaluation process.  SAP Fieldglass should clearly do well on a standalone basis, the real opportunity lies with it being tightly integrated into an integrated S2P suite that manages all spend seamlessly.  This leads to the next topic...

Session about Ongoing Development and Integration in 2020

I may have gained the most insight in a Cross-portfolio and Platform track session (Strategic Overview and Road Map, by Tobias Dosch, Head of Solution Management, SAP Ariba). The session covered broad themes of new platform and integration developments for 2020.

The overarching aim for 2020 is to continue to integrate across SAP ERP, SAP Ariba and SAP Fieldglass. That includes both goods and services procurement, where services procurement encompasses complex services, contingent workforce and more (as suggested below). Dosch also mentioned that product road maps were being consolidated in 2020 as part of a single comprehensive S2P solution.

One major theme was user-experience (UX): a new look and feel for SAP Ariba and SAP Fieldglass. UX included the obvious UI improvements, but also the “operational experience” for users (e.g., more integrated processes across various SAP solutions/capabilities — planning, sourcing, contacting, etc. — that enhance user task effectiveness and productivity). I’ll go into a bit more detail later, with a workflow that was demoed in another session.

Certainly, UX is generally dependent upon integration of solutions/capabilities. That means integration with a solution stack like SAP Ariba, which now houses much of the S2P functions (like supplier management, sourcing, etc.) for procurement of basic SOW-based services and the deeper SAP Fieldglass capabilities that can track down to individual contingent workers. It also means integration of solutions with cross-platform capabilities (such as a new search capability being introduced this year).

Some of the new integrations for SAP Ariba and SAP Fieldglass include contract management, service entry sheets and, at the back end of the S2P process, invoices. Also mentioned were work orders, service estimates and proof-of-service integration with the SAP Field Management solution.

Session: A Services Procurement Integration Use Case

Another session, which I found useful and informative, walked through a specific SOW services procurement use case and provided insight into how key integrations added value to the process and the different parties involved in it. The use case began with a requisitioning user at a pharma company raising a requisition for some lab equipment, which led to a suggestion to add calibration services that were typically paired with other purchases of the same lab materials. Pharma companies are particularly risk-conscious, so the use case provided a good opportunity for SAP to show off some its risk intelligence/management capabilities.

The use case begins with the requisitioning user at the lab. When the requisition for the lab materials is completed, guided buying offers the requisitioner suppliers that not only matched the requisition, but were evaluated under other criteria beyond price (for example, company values, etc.). It also suggests a supplier for calibration services. When the requisitioner selects a particular supplier he/she believes is suitable, the solution flags the supplier for additional risk management (because company risk policies were dynamically embedded in the solution/purchasing process and risk exposure was algorithmically identified).

At this point, the requisition becomes available to the sourcing manager in procurement with a continuation of the risk management process. The solution automatically suggests alternative suppliers that the sourcing manager can drill into and evaluate and that can be added to the sourcing RFP. The solution also suggests risk due-diligence steps and pushes elements such as specific RFP language, questionnaires, etc. The sourcing manager runs the sourcing event, and the solution assists him/her with the selection, including consideration of risk factors and additional due-diligence steps as needed.

Next comes contract development, with suggested templates that will include additional insurance requirement language that is used for riskier suppliers. An SOW is created from the contract document (and presumably the original requisition). And the project is ready for release to the requisitioner.

Up until the project release, all of the above described activities have been processed in SAP Ariba. And at that point, the requisitioning manager proceeds with the execution of the SOW/project within SAP Fieldglass.  Obviously there's more integration that has to take place behind the scenes to link the calibration services contract in Ariba (and other master data such as the supplier master) to the execution activities in Fieldglass, but this is the key to making the process actually a true end-to-end S2P process.

My Key Takeaways

My experience yesterday left me with two main takeaways.

First, SAP Intelligent Spend Management is “pouring it” ($$$) into integration. And procurement of complex services is one of the focal areas, though procurement of contingent workforce (temporary staffing and individual contractors) was pretty much absent from the product development and integration discussions.

The main thing I heard that was specific to SAP Fieldglass was regarding technology platform migration (that the solution was being migrated from its current multi-tenant architecture to run on HANA as a single tenant), with the expectation that this would lead to improved speed, performance, and analytics and intelligence.

In any case, progress is detectable in the procurement of complex services (particularly from planning and requisitioning through sourcing to the contracting and SOW creation and the relay to Fieldglass), but the key will be managing all services segments along with indirect spend and direct spend in an integrated process -- even though there are separate products and platforms sitting behind the scenes.

Integrated, intelligent services procurement is still very much a work in progress, but what I learned today suggests that the development and integration to enable S2P for complex services is definitely progressing. We hope to get further briefings on the services procurement and contingent workforce solutions in the near-term future.  Stay tuned for more coverage of this year's virtualized SAP Ariba Live conference tomorrow.

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Voices (2)

  1. Andrew Karpie:

    Thank you for noting, Franck. The correction has been made.

  2. Franck Dupas:

    Hello, just want to comment that the statement “SAP ERP (i.e., SAP S/4HANA)” is incorrect. Indeed, SAP ERP is the name of the ERP application which preceded SAP S/4HANA®. The two are not interchangeable.

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