Limitations And Opportunities Of Service Purchasing In SAP
Blog Logistics

Limitations And Opportunities Of Service Purchasing In SAP

In procurement, service purchasing is often seen as the most demanding discipline. However, the SAP standard is not sufficient for seamless digitization of cooperation with suppliers. Whether utilities, industrial parks or financial institutions: In most industries, significantly more services are purchased than materials.

As a result, SAP user companies are also faced with the difficult task of processing complex service bundles with low market and expenditure transparency and a low degree of standardization. This combination makes the operational purchasing processes extremely complex and requires close integration between customers and suppliers: from the creation of service specifications based on ERP service and material masters, to requesting and submitting quotations, to ordering and recording services.

These requirements are exacerbated even more by the fact that the provision of services in many projects – for example in the construction sector – extends over longer periods of time. Since suppliers are then often paid at monthly intervals based on performance (partial measurements), their current progress on the project must be documented with a high degree of precision.

Requirements can not be met in SAP

Unfortunately, the SAP standard cannot meet the high integration requirements for service purchasing. To enable suppliers to connect seamlessly with their customers’ ERP systems, they absolutely need EDI software (Electronic Data Interchange). EDI enables the exchange of electronic documents in a standardized format and thus helps in the implementation of end-to-end digitization.

For larger service providers, the associated costs are quite acceptable, and the degree of electronic transfer procedures is high correspondingly. The situation is different for smaller providers that employ only a few people. Since these vendors do not usually have EDI, all purchasing documents must at best be sent by e-mail during service processing and entered and processed manually in their own ERP systems. Not only do these tasks take a lot of time,  they also often lead to deteriorating the quality of the data, which in turn leads to higher error rates.

Lack of support for national standards

Customers repeatedly also told me that another shortcoming of the SAP standard from a user perspective is the lack of support for national standards. In Germany for instance, the GAEB format, which standardizes the exchange of construction information, is affected in particular.

Web-based collaboration platforms

Web-based collaboration platforms that ensure end-to-end digitization of procurement processes can offer a way out. Suppliers only have to register on these platforms to be able to communicate automatically with their customers. Furthermore, the integration of, for instance, GAEB interfaces ensures that the applications involved in the construction projects can correctly transfer and process the transmitted data.

In short: collaboration platforms reduce time and costs, increase transparency and help clients to meet the requirements of relevant compliance regulations, for example because the supplier services provided can be monitored in every project phase.

Web-based collaboration platforms are integrated as add-ons into the client’s SAP system environment. One example is the Bits Supplier Collaboration Suite (SCS), which supports the digitization of all operational purchasing processes.

Since buyers have direct access to ERP service and material masters, there is no need to replicate sensitive purchasing data in the cloud and the associated data protection requirements are taken into account. Thanks to its simple and intuitive user interfaces, the 2Bits Supplier Collaboration Suite enjoys high acceptance among users and offers access to new digital technologies.

Suppliers can use mobile devices to record services directly on site and thus document their performance progress automatically. If GPS coordinates are also used, serial numbers can be used to determine which materials were used in a project, where and at what time, a plus in case of change requests and complaints.

E-3 Magazin (German) May 2018

About the author

Mike Ruebsamen, 2bits

Mike Ruebsamen is founder and CEO of SAP consultancy and Silver Partner 2bits.

Add Comment

Click here to post a comment

Sign up for e3zine´s biweekly newsbites

Please do not use administrative mail adresses like "noreply@..", "admin@.." or similar as these may get blocked for security reasons.

We use rapidmail for dispatching our newsletter. By signing up, you agree that the data you have entered will be transmitted to rapidmail. Please take note of their terms and conditions and privacy policy.termsandconditions.

Our Authors