Are you considering cloud options or even looking at expanding your e-procurement tools and trying to sort through the cloud jargon? Are you unsure of the change management impacts with cloud solutions? This session will focus on how to take a holistic view of your existing procurement systems and understand the value and challenges of transitioning to the Cloud. We will explain the key considerations and challenges by module that companies encounter when transitioning to the Cloud. Overall, this session will be a great opportunity to learn about migrating to the cloud and how you can evaluate and optimize this transition while setting the right solution architecture for your company.
2. Page 2
Evaluating the business and change management
implications of a cloud transition
Are you considering cloud options or even looking at expanding your e-procurement tools and trying to
sort through the cloud jargon? Are you unsure of the change management impacts with cloud solutions?
This session will focus on how to take a holistic view of your existing procurement systems and
understand the value and challenges of transitioning to the cloud. We will explain the key considerations
and challenges by module that companies encounter when transitioning to the cloud. Overall, this
session will be a great opportunity to learn about migrating to the cloud and how you can evaluate and
optimize this transition while setting the right solution architecture for your company.
3. Page 3
Contents
► Procurement in the cloud: why
► Procurement in the cloud: what
► Procurement in the cloud: how
► Open forum
4. Page 4
Undergo an evolution to a continuous/
quantitative function integral to sourcing/
supplier management decisions
-Transition away from qualitative approaches
focused on disruption
Transition from transactional procurement
in a linear environment to procurement in
a circular economy
Redefine go-to-market and sourcing
strategies on a global scale
-Changing traditional supply/demand trends
and new emerging markets trends will lead to
refreshed strategies
Be centralized hubs for all corporate
functions (i.e., commercial, financial and
supply chain)
- For supplier/supply market information
flowing into the enterprise and demand
/product data flowing out to collaboration
partners
Increasingly integrate with Finance
functions and invest in developing
financial skillsets
Be primary channels for driving
innovation ideas to/from a global supply
base
Be increasingly collaborative, offering
various external collaboration models
with suppliers
-Transition away from the traditional “buy and
audit” models that typically define
outsourcing and management contracts
Operate in a social media-driven
environment and become increasingly
visible due to rapid adoption of social
technologies
-Focus on information transparency will
increase scrutiny on procurement
organizations
Exist in a new working environment,
with refreshed social skillsets, global
mindsets and analytic technologies
Stay abreast with advanced data mining and
statistical analysis technologies and
techniques
- These skills will be integral in dynamic sectors
such as consumer, high-tech, automotive etc.
Key market trends are influencing three- to five-year
procurement agendas. By 2025, leading procurement
organizations will …
5. Page 5
Most leading procurement organizations
three- to five-year agendas include:
Getting the global
operating model right
Upgrading tools/technology to
support the operating model
Doing something with all the data —
sprint to “prescriptive analytics”
Improving supply chain-base
resiliency and reliability
6. Page 6
Contract
management.
system
A/P system
Supplier
Many companies are planning to upgrade their e-procurement
systems to support upgraded operating models and take advantage
of improvements (cloud-based apps, mobile approvals, etc.)
Customer
portal
Category
mgmt.
Supplier
portal
Invoice
processing
and payment
Customer
Source to
contract
Supplier
diversity and
relationship
mgmt.
Operational buying
Supplier website
eRequisition
ERP
Managed service provider
Category specific solution
Purchase card
Travel and expense
Recurring payment
Sourcing enablement Purchase-to-pay process enablement Supplier mgmt. enablement
Customer portal
Procurement
operatingmodel
Technology
footprint
Spend analysis
tool and reporting
Requisition/PO/
catalogs
Supplier
portal/network
SRM tool
Procure-to-pay process
OK to
pay
MatchingInvoiceReceiptPOApproval
Budget
validation
Validation
Contract
compliance
CatalogRequisition
0 2 3 4 5 6 7 8 9 101
7. Page 7
SAP’s footprint has evolved. Most future e-procurement footprints
will have a combination of installed and cloud-based functionality
SAP has evolved from SAP SRM on-premise to options between SAP SRM and Ariba P2P
(cloud) with the future bringing tighter integration with best-of-breed on-premise or cloud
applications with SAP S/4 Hana as the backbone.
For indirect material buying channels, Ariba P2P will be more predominant for cloud-based
customers while SAP ECC will continue to be the preferred channel for direct materials.
On-premise solutions Cloud-based solutions
Spend analysis SAP Spend Performance Management Ariba Spend Visibility on Hana
Sourcing
SAP Sourcing and SAP Supplier Relationship
Management
Ariba Sourcing and Ariba Discovery
Contract management SAP Contract Lifecycle Management and SAP SRM Ariba Contract Management
Operational
procurement
SAP ERP-MM and SAP SRM; SAP
Commodity Procurement
Ariba Procure-to-Pay, Fieldglass and Procurement
Content
Invoice management SAP Invoice Management by Open Text
Ariba Invoice Management, Payment Management
and Discount Management
Supplier information
and performance
management
SAP Supplier Lifecycle Management Ariba Supplier Information and Performance Management
Supplier collaboration Ariba network
Mobile procurement SAP unwired platform
Source: SAP
8. Page 8
► Procurement in the cloud: why
► Procurement in the cloud: what
► Procurement in the cloud: how
► Open forum
Contents
9. Page 9
► Full conversion to on-
demand/cloud-based
solutions for all modules,
possibility to add additional
modules for enhanced
capabilities
► Significant benefit from one,
integrated system for data
and user perspectives
Cloud/on-demand
► Evaluation of on-premise vs. cloud-based solutions typically boils down to customizations, innovation/
updates and TCO.
► On-premise solutions provide total control and customizations, but at a cost
► Cloud solutions provide a faster time to value, lower TCO, quicker ROI and reduced risk
► Hybrid solutions can provide functional benefits of both on-premise and cloud-based solutions by
module, but will require integrations for seamless end-to-end processing
High-level evaluation considerations
► Stay with on-premise (CD/
install behind the firewall)
► Maintain the current state;
no need for training, data
conversion or process
changes
On-premise/install
► Hybrid solution — Deploy
cloud/on-demand solutions
for certain modules where it
makes sense; keeping on-
premise modules as needed
► Take advantage of each
module being best in class
Hybrid solution
What are the options for existing Ariba
on-premise customers?
10. Page 10
Cloud-based solutions require a fit-to-standard approach that
maximizes system value and minimizes implementation time, but
brings its own set of challenges
Challenges
► Processes and data may vary significantly
from the current state
► Limited customization and enhancement
► Process integration to in-house
applications limited without customization
► Subject to maintenance windows
► Multiple ERP integrations add complexity
► Technical support required for master and
transactional data maintenance
► Increased data security complexity
► Managing provider communications with
the company’s suppliers
System Leading practices Speed Value
Cloud applications are
designed for no/limited
customization
Mature systems based
on time-tested leading
practice processes
Faster implementation
time and testing cycles
Maximize system
utilization and value
11. Page 11
Ariba supplier network
Supplier info and
performance
management
Spend visibility Sourcing
Invoice
automation
P2P/P2O/
PO Automation
Contracts
Existing on-premise customers can transition to cloud-based
solutions and take advantage of the cloud benefits and
enhancements
Identify strategic
opportunities
(spend and performance)
Source
and
negotiate
Contract Procure
Invoice
and pay
Supplier
network
Cloud enhancements (vs. on-premise solutions)
► Enhanced user interface for both buyers and
sellers
► Enhanced search*
► Mobile application*
► Improved collaboration
► Collaborative requisitioning
► Supplier self-service profile management
► Collaborative sourcing (Ariba Discovery and
Spot Quote)
► Integration of Ariba P2P, Fieldglass, Concur
and success factors
► Ariba pay functionality
ModulesLifecycle
* Planned enhancements for On-Demand 14s1 release
► Spend visibility and
reporting powered by
SAP HANA*
► Enhanced e-auction
capabilities
► Custom offline supplier
response sheets
► Sourcing event pre-
requisites
► Improved search
functionality
► Sourcing request forms*
► Enriched site
communications
► E-signature enhancements
for contracts
► API for integration of
supplier master data
integration with Ariba SIPM*
12. Page 12
► Procurement in the cloud: why
► Procurement in the cloud: what
► Procurement in the cloud: how
► Open forum
Contents
13. Page 13
► Data review and analysis (master,
transaction and project data)
► Historical data archiving strategy
► Data mapping and quality assurance
checks
► Process assessment, tasks and
templates
► Review customizations and extensions
► Transition strategy and approach
► Change impact and readiness
assessment
► Communications
► Training/re-training
Understand
process
constraints or
limitations
Analyze current data
Engage key stakeholders
Identify historical data
archive/ reporting
strategy
Identify process
improvements
Train and transfer knowledge
Transitions include three key areas: data conversion, process
transition, and change management and communications
Change management
and communications
Data conversion
Process transition
Communicate changes and
program updates
Determine data
conversion scope
Set transition rollout
strategy
14. Page 14
Data conversion area Success factorsKey considerations
► Extraction data into standard templates required
to load into the cloud environment
► Regulatory reporting requirements of data
► Creation of data mapping rules to convert from
non-standard to standard data sets
► Conversion of customized workflows to pre-
defined data templates required for migration
► Clear requirements around data audit trails
based on legal or regulatory needs
► Archiving/reporting for non-converted data
► Early involvement of data
conversion team in
requirements gathering and
design process
► Rationalize the need for
historical data carry
forward, based on true
requirements
► Early identification of
customizations and efforts
to minimize their
requirements for migration
► Finding alternative ways to
meet custom data retrieval
needs other than
conversion to a cloud
environment
Custom data fields and
non-standard validation
rules
Approval workflows and
audit trail history
► Determine need for creation of forms in the
cloud, consider effort and time to migrate
► Extraction of custom form data using templates
► Archival of notifications in a retrievable storage
media unless a legal requirement for migration
Custom forms and
notifications data
► Security design should include mapping to
cloud’s standard roles or combination of roles to
meet the same requirements
Custom user roles
Data conversion is a critical factor in on-premise to cloud
transitions; migrating the data elements to a more standard cloud
environment can be challenging
Typical on-premise solutions have a number of customizations and extensions; as a result,
migrating the corresponding data elements can be highly challenging.
15. Page 15
Projects and budgets
► Define asset categories based on
purchasing type. Query POD data
► Define project and allocate budgets (funds)
► Define project flex master fields and link to
chart of accounts
► Imports budget adjustment data to Ariba
P2P from ERP
► Update budget line status (open/close/
fiscal year/accounting period)
► Make ERP edits to increase/decrease fund
availability
User data
► Group assignment
► Management level
► Supervisor hierarchy
► Accounting information
► Bill to, ship to and email
► Organization, currency, locale
► Automate feed from ERP via batch import
Example: data conversion considerations
for POs
Purchase order
► Extract open POs
► Consider query optimization to avoid
data truncation
► Massage files for required import
► Export PO for validation
► Reference legacy PO information to
enable trace
► Maintain record of POD – POA order
data
► Validate PO total based on open PO
calculation
Approval rules
► Configure approval rules
► Create custom fields to accommodate
additional guidelines
► Reference appropriate system groups basis
node conditions
► Enable replication from parent to child [LP]
► Identify category and special approval rules
► Disable rule check for imported POs
Groups
► Translate roles, groups and permissions
into appropriate groups in Ariba On-
Demand
► Parent/child group mapping
► Responsible user assignments
► Purchasing unit tagging
► Manual file load
Chart of accounts
► POD/POA mapper
► GL period open
► COA mapper program
► Synchronizing data with On-Demand P2P
(automate feed)
► Define flex master data
► Define relation entry
► Define valid accounting combinations in
ERP
Supplier
► Mapping of fields from legacy systems to
POA ERP systems
► Unassigned invoice queue management
► Supplier exception handling
► Supplier remittance and pay terms set-up
► Link payment method
► Supplier user definition
► Synchronize vendor data across parent
and child realms
► Segment EDI vs. online vs. paper vs.
CXML supplier base
Invoice
► Synchronize P2P and ASN for routing
► Consider third-party tools such as ICS to
reduce in-house invoice processing cost
► Define exception types and thresholds
► Map AP groups for exception handling
► Reconcile invoice vs. PO data
► Enable accrual based on business need
► Implement queue management and
centralize exception handling
PCards
► Define company's list of valid Pcards and
tie to appropriate cost center(s)
► Define linkage from buyers ERP to bank
account (for charges import)
► Centralize exception handling and
implement queue management [LP]
► Define exception types for reconciliation
► Set parameters on Ariba Network to disable
invoicing against PCARD Orders
POD = Point of Departure system(s)
POA = Point of Arrival (ERP) system(s)
ICS = Invoice Conversion Services
[LP] = Leading Practice
16. Page 16
Looking deeper into process transition
considerations by module
► Analyze current
state fields for
quality and usage to
improve reporting
► Adopt advanced
features such as
eAuctions
► Utilize advanced
event scoring
optimization
► Utilize the
integration between
Sourcing and Ariba
Network Discovery
► Review customizations and extensions, identify constraints and limitations
► Now is the time to retrain and standardize through focus on process training
► Enhance current processes using industry-leading practices and new capabilities — improve and expand
► Determine exactly what process templates, project tasks and forms can be exported/imported (vs. recreating)
► Analyze current
state fields for
quality and usage
(enforce
standardization)
► Integrate with Ariba
Sourcing
► Utilize Contract
Authoring and
develop a clause
library
► Expand with a
cloud-based
eSignature tool
► Integrate with
Contracts to driving
pricing compliance
► Review approval
rules and
specialized
workflows
► Determine need for
creation of forms
► Enable more
complex categories
of spend
► Evaluate current
Commodity Code
Taxonomy (move to
UNSPSC?)
► Review spend
reports and queries
► Determine need for
customized/
extended reports
Supplier info and
perf mgt (SIPM)
Spend visibility Sourcing
Procure-to-Pay
(P2P)
Contracts
Modules
All modules
► Integrate Ariba SIM
with your ERP to
improve master data
quality and
governance
► Rationalize supplier
master data and
improve processes
to eliminate supplier
duplicates
► Align the supplier
onboarding process
with Ariba Sourcing
and Contracts
17. Page 17
Example: process fit/gap analysis for client
transition from on-premise to the cloud
Functional area Detail On-premise buyer (P2P) – current state On-demand P2P — future state
Catalog Custom catalog hierarchy Catalog hierarchy can be changed by customers Catalog hierarchy can be changed by Ariba
support
Catalog Administration ABA catalog manager UI Catalog administration has been opened up to
customers through self admin feature. Can load
and manage own catalogs
Approval workflow Advanced workflow capability Customizable for all requirements Configurable for most all requirements.
Custom roles and
permissions
Custom permissions, roles,
groups, mapping between the
users --> roles --> permissions
Available. Admin UI/ customization Out of box contains leading practice permissions,
roles and groups. Only child groups and
unmapped custom groups are possible as an
addable.
Receiving Amount-based receiving Limitations Available with out of the box roles
Invoice entry Create invoice Invoice e-form Invoice entry UI (PO flip or form for non-PO)
Invoice
reconciliation
Invoice exception Create custom invoice exceptions. Require code
customization.
OOTB invoice exception set with limited custom
configurable Invoice exceptions. Customer admin
UI for managing
E-forms Ability to create customer specific
e-forms
Create custom e-forms based upon individual
customer requirements
Available; limited customization requires
standardization
Email notification Rich HTML email HTML email Available. Some configuration of messages
Reports Operational reports with real-time
data
Buyer reports Not available. Reporting is delivered on the
analysis engine. (More robust, not real-time)
Custom fields Custom fields based on customer's
business process
Extrinsics can be programmatically created Flex fields. Addable item.
Potential gap Benefit
18. Page 18
Business
engagement
Business
readiness
Business
adoption
► Strategy/change vision
► Stakeholder engagement
► Communications
► Change impact
assessment
► Roles and responsibilities
Engage with the
business early/often
Support leaders with
centrally coordinated
communications and
integration tools
Balance technology
and business
readiness
Align focus and effort
between business
readiness and system
readiness activities
Make the
transformation
operational
Identify ways to sustain
and measure the
change as part of
normal operations
Change management emphasis should be placed on process
changes and closing the gap between future requirements and
standardized cloud processes
► Change management is critical for success and focuses on business engagement, readiness
and adoption
► Training
► Knowledge transfer
► Sustainability
19. Page 19
A primary driver of project failure is
inadequate or poor change management
Stand up and planning
Execution
Sustainment
► Lack of leadership
alignment
► Unclear vision for
transformation
► Lack of engagement and
alignment from execution
resources
► Minimal buy-in for program
business case and activities
► Inadequate training on the
new processes
► No buy-in from the business
► Lack of collaboration with suppliers
to perform new process
► Inadequate process and policy
governance
► Lack of post-go-live support model
► Lack of business
readiness
► Poor or limited
communications
► No success metrics
or KPIs
► Minimal
accountability across
levels
Time
Typical implementation challenges:
► Minimal return on investment
► Unrealized program benefits (e.g., savings,
efficiency)
Implementation risks and negative results:
► Lack of adoption and accountability
► Unclear roles and responsibilities
20. Page 20
Challenges
The move to standardized
processes may be difficult for
employees to comprehend and
present significant challenges for
adoption and advocacy.
Approach
► Deliver communications that
promote a shared vision and
create a compelling case for the
move to leading practice
► Engage stakeholders through
events that drive ownership of the
changes with a focus on potential
late adopters
How can organizations be more successful at mitigating
the specific challenges of cloud implementations?
Behaviors must be oriented to fit the new, standardized processes
Engagement and
communications
Readiness and
training
Adoption and
sustainability
Challenges
Equip employees and vendors with
the right skills to operate in the new
system and perform the new
processes.
Approach
► Use tailored training to build
capabilities required to adopt the
new processes
► Empower and educate
procurement employees to take
on any new responsibilities and
field vendor queries
Challenges
Make sure the business is ready to
accept the move to standardized
processes and is focused on the
overall sustainability of the changes
for employees and vendors.
Approach
► Use surveys and focus groups to
continually monitor whether the
business has accepted and
adopted the changes
► Provide an ongoing support
mechanism for vendors
21. Page 21
Objectives
Build project plan and
document charter
Gather requirements and
design solution
Develop/load master
data; configure Ariba
Conduct testing
activities
Conduct training and
prepare for Go-Live
Go-Live and on-going
monitoring
Key deployment activities (customer/EY)
► Develop project
scope
► Develop project
plan with Ariba
► Identify and
allocate project
resources
► Develop project
charter
► Conduct functional
design/visioning
workshops
► Define initial design and
blueprint for process,
approvals, users, etc.
► Conduct kick-off (with
Ariba)
► Build master data file
extracts and uploads
► Configure Ariba P2P and
Network
► Extract and Load Master
Data to P2P
► Setup catalogs (see
enablement)
► Document the functional
and technical design
► Perform System and
Integration testing
► Perform User
Acceptance testing
► Revise design/
configuration (as
needed)
► Obtain testing
sign-off
► Develop Cut-over
plan
► Conduct user
training
► Prepare and load
master data to
PROD site
► Integrate to PROD
► Test PROD site and
integration
► Perform supplier
communications (as
applicable)
► Go-live and
transition
► Monitor P2P
usage
► Review
performance and
compliance
► Drive continuous
improvement
Key conversion and transition activities (customer/EY)
► Identify transition
and data
conversion scope
► Perform data analysis
► Conduct process
assessment
► Develop conversion
process
► Develop conversion ETL
► Create prioritized
improvement list
► Develop cut-over plan
and RACI
► Perform data and
process tests
► Conduct training/
re-training
► Convert and
transform data
► Load historical data
► Transition
Key deliverables
► Project plan
► Project charter
► Transition scope
► Functional design
documents
► Data and process
assessments
► Functional specification
documents (technical)
► Enablement workbook
and templates
► Test scripts
► Cut-over plan
► Final business case
► Training materials
► Communications
(across all activities)
► PROD smoke test
► Issue tracking log
► Enhancement log
Our recommendation is to conduct the data conversion and
process transition along with your cloud deployment
Plan project and
document charter
Design/gather
requirements
Test/validate
Build/configure
and prep
transition
Go-live/
sustain
1 2 3 4 6
Train/cut-over
5
22. Page 22
► Procurement in the cloud: why
► Procurement in the cloud: what
► Procurement in the cloud: how
► Open forum
Contents
23. Page 23
Conclusion and open discussion
► A review of the current challenges and direction in the
marketplace:
► Companies and the industry in general are moving toward
cloud-based solutions
► A closer look at cloud features and value
► Faster implementation time increasing speed-to-value
► Cloud innovation and enhancements
► An examination of considerations for transitioning to the
cloud and a leading practice approach to make it happen
► Data conversion
► Process transition
► Change management and communications
Legacy SAP customers have two primary e-procurement tracks: on-premise or cloud-based solutions with the clear direction being toward the cloud
For an indirect material buying channel, SAP Supplier Relationship Management (SRM) will be used for on-premise customers and the Ariba P2P suite for cloud-based customers (however, the industry is moving toward cloud-based). For direct material buying — not paying, ERP-based solutions (e.g., SAP ECC) will continue to be the preferred channel.
Benefits:
Rapid deployments
Ability to easily scale solutions
Frequent new features and updates
Conforms to common process
No /limited internal IT hardware and support
Additional Benefits:
Robust supplier networks
Catalog content hosting
Limited technical support required
Software maintenance included
More predictable costs
Typically a superior user interface (internal and supplier)
Provider support to increase supplier adoption and drive savings opportunities such as payment discounts
Additional Challenges:
Interface(s) required to send and receive data – integration toolkit (ITK) or Web Services
Subject to maintenance windows
Managing provider communications with the company’s suppliers
Integrating internal and provider end-user support (Tier 1, Tier 2, etc.)
Almost all data needs to be analyzed, categorized for scope and rollout timing; unfortunately, many are manual conversions
Review all statuses and determine the following:
Which transaction/project statuses to include:
Active Projects / Contracts
Draft Projects / Contracts
In Process / Published
On Hold / Pending
Inactive / Completed / Canceled
Expired / Archived / Closed
Date (of creation or last edit)
Conversion recommendations and options:
Convert before, at, or post- go-live
Archive (for reporting and audit history)
Delete / Not needed
Cloud technologies rely on leading practice, non-customizable systems which require additional focus regarding overall change readiness and adoption
A primary driver of project failure is unmitigated organizational risk across the transformation lifecycle