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Increasing Visibility and Insights from MRP: An Expert Discussion

Ask the Experts Session

Manufacturing Resource Planning is the mission-critical backbone of most businesses, but over the years, these systems have been customized, integrated, and modified to the point that it becomes difficult to understand what exactly is going in within your core business processes. So when important business KPIs such as on-time delivery and inventory start to fall off, companies can no longer efficiently pinpoint the problems and take corrective action. In this Expert Q and A, SAPinsider sits down with thought leader, Bas Kamphuis, General Manager, Productivity at Magnitude Software to understand what companies can do to improve MRP visibility.

Bring your most pressing questions and learn:

• How factors such as system and master data hygiene impact MRP visibility within enterprise organization

• Effective steps you can take and solutions you can apply to gain greater insights into MRP processes

• How the recent economic disruption and the move to cloud has put an even greater emphasis on delivering instantaneous MRP insights

• How Magnitude works with organizations like Cargill to increase visibility into core MRP processing and how you can replicate their success

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SAPinsider Magazine | 2021 | Issue 1

On the Cover

As SAP has accelerated its cloud strategy and acquired and incorporated various new technologies over the years, integration has become a key focus for SAP moving into 2021. This edition of SAPinsider includes a special focus on the topic of integration. The cover story uncovers what is driving the increased focus on integration today in SAP customer landscapes, and looks at why a successful business case for integration hinges on a company’s ability to start viewing it as a strategic imperative at the heart of digital transformation, which will not just save costs but generate revenue. Additional stories on integration in this edition look at SAPinsider research on what SAP customers’ integration landscapes currently look like, and the differences between customers in North America and EMEA; how Endress+Hauser capitalized on SAP Integration Suite, SAP HANA, and SAP Integration Solution Advisory Methodology to achieve a data-driven, agile platform with up-to-date systems data and zero downtime; and lessons learned from energy company Eneco’s experiences as an early adopter of SAP Integration Suite, with insight from Cloud Integration Consultant Marco Verhoef.

Additional articles featured in this edition include:

  • How SAP’s Industry Cloud Is Changing the Way Companies Run and Support Their Core Business Processes
  • Moving Your Tax Engine to the Cloud: A Revenue Generating Opportunity?
  • Data Warehouse Overhaul Helps Helvetia Simplify Reporting and Analytics
  • IT Operation Transformations Do Not Have to Be Complicated, and They Will Save You Money
  • Extend Your Core Business Applications and Drive Your Business Forward with SAP Extension Suite

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An Executive View on SAP’s RISE Announcement

SAP Unveils New Transformation-as-a-Service Offering — Reaction and Insights from the CIO Community

By Rizal Ahmed, Chief Content Officer, SAPinsider

Navigating the Digital Transformation Dilemma

In an unprecedented approach to a major announcement, SAP CEO Christian Klein led a virtual event to unveil a new integrated offering called “RISE with SAP” aimed at facilitating companies’ digital transformation initiatives. The event featured comments from other key tech leaders such as Satya Nadella, CEO of Microsoft, and Roland Busch, Deputy CEO of Siemens AG.

The event opened with a video and commentary from Klein painting the backdrop of a challenging, constantly changing business climate that has elevated the priority around digital transformation. “Digital transformation is at the top of the list because disruptions are increasing in frequency and magnitude,” says Klein.

Klein acknowledged the challenges of getting true transformation projects off the ground. Top among the hurdles he described is creating and communicating tangible benefits as well as developing concrete steps to move forward. One of the objectives of RISE is to help provide results-based motivation and a roadmap for SAP projects. “The key challenge for many enterprises is how to holistically transform when they are still successful in the market,” describes Klein. Those are the specific problems that RISE with SAP is intended to solve.

Key Elements of the RISE Offering

Klein describes RISE with SAP as Business Transformation-as-a-Service. Plainly put, it is a single integrated, analysis solution and service offering under one contract that will support SAP customers’ end-to-end transformation project. RISE with SAP is organized into three key elements.

Redesigning business processes: This component draws on SAP’s vast experience and business process data across most major industries. Business processes and transactions represent the backbone of SAP’s history and strength. SAP will leverage this data and insight to help companies build best practices and leading-edge processes. SAP also announced the intent to acquire process mining vendor Signavio to help support process analysis in the process redesign stage of the project.

Enabling technical migration: This stage involves the migration to the digital core; essentially SAP S/4HANA, and limiting customer reliance on custom code. This was a major theme during today’s discussion as excessive customization has been seen as a hindrance to business agility. Simplifying integration and interfaces are also core objectives. SAP will help organizations migrate to a single semantic data layer and start to standardize around SAP Fiori as the de facto user interface. Not surprisingly, the cloud is seen as the ultimate destination for housing the digital core, and SAP will provide more automated migration tools to help customers get to the cloud more efficiently.

Building an intelligent enterprise: SAP has been talking about this concept for years. At the foundation of this element is SAP Business Technology Platform (SAP BTP), which resembles (for those of you who have been in the industry for years) the old SAP NetWeaver platform. SAP BTP is more modern, but many of the perceived benefits are the same — such as tighter integration through centralized access to more than 2,200 application programming interfaces (APIs) as well as common data models to facilitate data sharing and management. Klein specified that customers could expect up to a 20% reduction in total cost of ownership from making these changes.

Klein also talked about more embedded artificial intelligence, robotic process automation, and advanced analytics. Access to thousands of business partners through SAP Ariba and other business network solutions is also a major part of this offering.

CIO Reaction: Love the Vision, but Want to Explore Practical Impact

To further understand the customer perspective on the RISE with SAP announcement, SAPinsider interviewed four executives from its SAP executive forum community. Those individuals included Nik Giannakakis, Group CIO of Hellas Motor Oil; Robin Mager, Vice President, SAP S/4HANA, of Schaeffler; Nuno Miller CIO and CTO of Sonae Fashion; and Christian Niederhagemann, CIO of GEA Group.

All the executives are at various stages of their own transformation projects, so it was interesting to see their reactions and questions based on where they were with their initiatives. Those further along with their projects did not see as much of a need for RISE with SAP as those who were just getting started. ­“We started our  transformation project a few years ago and are already down a path similar to what Christian described,” says Niederhagemann. “We run all these initiatives on Microsoft Azure, we run all our process management on Signavio, and we are working with one of SAP’s major partners Accenture. It’s a great offering, but a similar approach to what we did, so we will continue down our path until 2025. There may be an opportunity to apply RISE with SAP to some other processes, but we have our roadmap set and done.”

Overall, the executive panel was very enthused about certain elements of the RISE with SAP announcement including the drive toward simplicity and integration. “From a high-level view, it’s the dream of a CIO,” says Giannakakis. “You work with a single partner that offers end-to end services. It is a one-stop shop for leveraging the strong elements of data layer, the intelligent enterprise. For me, it’s the answer to all of my questions, but also I have to really understand how this will work.”

The executive group also welcomes the more tangible benefits-oriented approach that RISE with SAP seems to embrace. “When you talk to the SAP and partner consultants, there seems to be a disconnect describing the business process capabilities from SAP — where they have struggled to answer the questions of quantifiable value,” says Mager. “If RISE with SAP truly addresses this challenge, I am happy to learn more.”

However, like all discerning decision makers, they are trying to balance their enthusiasm with the practical reality of instituting significant change for tangible gain. “I would describe the announcement as interesting, powerful, and challenging,” summarizes Nunez. “The idea is very powerful. It matches a lot of what Sonae Fashion has been doing over the last three years regarding transformation and the move to an intelligent enterprise. It’s powerful because it is very aligned to business needs for industries across the globe. And it’s challenging because it’s difficult to institute massive change across people, processes, and technology and rethink how your business operates.”

As they would with any new offering, our executives questioned the true readiness of the solution to support all types of customers. Mager says, “It sounds interesting, but is it usable for customers with a highly integrated and customized landscape, and does it address customers who are using SAP applications across the value chain? Klein talked about one business model. We see gaps in some of the core solutions. We are working closely with SAP to close those gaps, but we need to understand this impact fully.”

What Does This Mean for Decision Makers in the SAPinsider community?

Whether you are optimistic or skeptical about the business transformation-as-a-service, here are some simple actions you can take to further consider this announcement and what it means to you:

  • Get informed on RISE with SAP. Whatever your initial reaction, RISE with SAP is a significant offering that needs to be carefully considered. There is no risk in informing yourself. Talk to your SAP representative and seek out more articles and information from SAP, SAPinsider, your key partners, and other important resources. Get your questions answered and demo capabilities. We’ll be covering this solution closely and will continue to share resources and other information that can help you make an informed decision.
  • Consider the solutions you have already invested in: Many of the benefits described during the announcement seemed to be integrated into existing SAP solutions whether they are part of SAP BTP, SAP S/4HANA, or SAP’s software-as-a-service portfolio. Also, with the impending acquisition of Signavio, it’s unclear whether you can plug in other process mining solutions. That’s why it’s important look at your existing solution portfolio and technology stack and ask your SAP reps how these solutions might be incorporated into RISE with SAP.
  • Seek out what your peers are thinking and doing: When we asked our executive interviewees how they will consider RISE with SAP, they talked about their intention to not only engage SAP and SAP partners but also their peers to learn from their perspective and questions. SAPinsider will be conducting its first Executive Forum on Innovation in March, which RISE with SAP will be a key topic. Make sure you attend this and other key events that can help broaden your knowledge.
  • Beware that RISE with SAP won’t solve your organizational challenges: One of our insightful CIOs pointed out that an integrated offering won’t solve your digital transformation troubles if your business and IT organizations aren’t properly aligned to evaluate RISE with SAP and then apply it to the project. Having strong communication between the groups, as well as a strategy and mindset that supports innovation and a deep understanding of how technology enables transformation, is key to making any solution work.

 

 

 



Support Regulatory Compliance Across Your SAP Landscape with SAP Data Privacy Integration

 

by Prem Roshan Madhusudhan Nair and Sharath Jois, Product Owners, Data Privacy Services, SAP

 

Digital data has continued to grow in volume over the years as organizations work toward modernizing their operations to take advantage of the various efficiency and innovation benefits of digital technologies. Of course, digitization and innovation bring new considerations as well. While companies are gaining access to more data than ever before — especially data about their customers — they are also facing new types of threats as hackers seek access to this valuable data, and new security requirements for landscapes that include the cloud. And with the COVID-19 pandemic driving a rapid increase in digital business as well as individuals’ online activity, the protection of data — in particular, the protection of personal data — is front and center.

While it is important for businesses to ensure data privacy to gain the trust of both customers and business partners, the protection of this data is critical for adhering to the regulations that countries are introducing at a growing rate, with more data privacy bills introduced in 2020 compared to 2019. These regulations — such as the EU’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and the Cybersecurity Law of the People’s Republic of China — are designed to protect citizens by ensuring that their data is stored, processed, and deleted in a transparent and legally compliant manner.

To comply with these types of regulations, businesses need to make sure that the applications they use to process personal data provide the required privacy protections. SAP offers SAP Data Privacy Integration for this purpose. This article explains how SAP Data Privacy Integration supports data privacy compliance in SAP customer landscapes. It first explains important data privacy concepts, and then walks through the data privacy and integration features the service provides to support compliance across multiple applications throughout the enterprise.

 

Key Data Privacy Concepts

Before diving into how SAP Data Privacy Integration can help organizations fulfill their data privacy obligations, it will help to understand some key data privacy concepts, such as what is considered personal data, the roles involved in the processing of personal data, when businesses can process personal data, and the rights of data subjects when it comes to their personal data. Note that while each specific regulation has its own terminology for data privacy concepts, the following sections follow the terminology established by GDPR, which SAP uses in most data privacy discussions.

 

What Is Personal Data?

Personal data is any information — such as address, telephone number, and IP addresses — that can be used to directly or indirectly identify a living person (see Figure 1).

 

Figure 1 — Personal data is any information — such as address, telephone number, and IP addresses — that can be used to directly or indirectly identify a living person

Figure 1 — Personal data is any information — such as address, telephone number, and IP addresses — that can be used to directly or indirectly identify a living person

 

Attributes that can be used for direct identification — that is, information that can be used alone to identify someone — include:

  • Name
  • Address
  • Telephone number
  • Email address

Information that can be used for indirect identification — that is, information that can be used to identify someone only in combination with other information — includes:

  • IP address
  • MAC address
  • License plate number
  • Insurance number

 

What Roles Are Involved in Processing Personal Data?

It is also important to understand the three key roles that are involved in the processing of personal data:

  • The data subject is the user or person whose personal data is being stored or processed. An example is an employee of an organization.
  • The data controller is a person or legal entity responsible for the lawful processing of personal data for the data subject. An example is an employer that signs a contract with an employee to process personal data.
  • The data processor is a person or legal entity that processes personal data on behalf of and in accordance with the instructions of a data controller. An example is a cloud-based human resources application provider that processes the personal data of a data subject according to the instructions of an employer.

 

When Can Personal Data Be Processed?

Organizations must have a valid business purpose or legal basis for processing someone’s personal data. A valid business purpose is defined as:

  • Execution of a contract
  • Freely given consent
  • Fulfillment of a legal obligation
  • Vital interests of a data subject
  • Overriding legitimate interest

More information on valid reasons for processing personal data can be found in Article 6 of the GDPR.

 

What Are the Rights of Data Subjects?

Data privacy regulations across the globe provide basic rights for data subjects when it comes to how data controllers and data processors handle their data. These rights include:

  • Right to information: The data subject has the right to know if any personal data is being processed by the data controller, including the purposes for which that data is being processed and the categories of the data being processed (contact information or payment information, for example). A copy of the personal data must also be provided to the data subject upon request.
  • Right to be forgotten: The data subject must have an option to trigger the deletion of personal data when the data controller no longer needs it to fulfill the business purpose for which the data was collected. The data should be marked for deletion upon the withdrawal of the data subject’s consent or any other legal basis for the processing of that data.
  • Right to export data: The data subject can request an export of the personal data processed by a data controller in a machine-readable format to enable easy movement of the data from one controller to another — to switch service providers, for example — as required by Article 20 of the GDPR.

 

A Cloud Service for Data Privacy Across End-to-End Processes

To comply with data privacy regulations, the applications an organization uses to process personal data must have the capabilities necessary to support the rights of the data subject. In smaller, simpler landscapes, where a business process or use case is performed within a single application (where all sales functions are managed by one sales solution, for example), simple data deletion and reporting capabilities can provide this compliance. In larger enterprise business landscapes, where complex business processes are performed by multiple applications running on different technology stacks, adhering to data privacy requirements becomes increasingly complex.

For example, in SAP landscapes, the total workforce management or hire-to-retire business process begins with employee onboarding in an SAP SuccessFactors system, for instance, and the distribution of the employee master data to multiple systems, such as SAP S/4HANA and SAP Concur. In these types of scenarios, as part of fulfilling an employee contract, the data subject — in this case, the employee — may use a front-end system to provide personal data that is then transferred or replicated across the different systems in the landscape. The business context or reason for processing the data can then get lost in downstream systems, which can make it difficult to identify the business purpose for processing the data and report or delete it at the end of its purpose.

SAP Data Privacy Integration is a service available on SAP Business Technology Platform (SAP BTP) that provides capabilities for managing the privacy of personal data in end-to-end business processes, including those enabled by SAP’s Intelligent Suite or any other applications that integrate with the service. Its features can help organizations fulfill data privacy requests and adhere to data privacy regulations, and include centralized configuration and management of business purposes, information reporting and retrieval, and data deletion functionality. We’ll look at each of these areas in turn next.

 

Business Purpose Management

To support end-to-end data privacy, SAP Data Privacy Integration provides functionality for the centralized configuration and management of the business purpose for data. The defined business purpose brings together the legal basis for processing the personal data of the data subject, the data controller responsible for processing that personal data, the business processes that can be executed using that personal data, and the categories of the personal data that can be processed based on this purpose.

When a data subject is part of a business process in which personal data is collected for a purpose, SAP Data Privacy Integration can use application programming interfaces (APIs) to create a central instance of the business purpose for that data. Any applications across the landscape that store that data can reference that central instance of the business purpose.

Figure 2 shows an example scenario. As you can see, in a typical sales scenario, there can be multiple IT systems processing customer data. There could be a marketing system using the customer’s personal data for promotional purposes as well as an ERP and commerce solution for stock-keeping and billing purposes, which would also process the customer’s personal data. In this type of scenario, the contract signing during customer onboarding can be used as the event for creating a purpose record for the customer. This central purpose record is then referenced by the different applications in the landscape to process the customer’s personal data.

 

Figure 2 — Purpose-based processing of personal data in an example end-to-end business process

Figure 2 — Purpose-based processing of personal data in an example end-to-end business process

 

With a central instance of the business purpose within SAP Data Privacy Integration, it becomes easy to discover personal data stored across the different applications in the landscape, and when the purpose is no longer relevant, such as when a contract has expired or consent is no longer relevant, it becomes easier to trigger the retention or deletion of the data as necessary.

 

Information Reporting and Retrieval

Information reporting and retrieval, which addresses the data subject’s right to information and right to export data, is one of the most common data privacy requests (Figure 3). In this case, data subjects request information about their personal data stored in the organization’s systems. This request is usually made to determine if any data is being processed by the data controller without the knowledge of the data subject or is being processed beyond the defined business purpose.

 

Figure 3 — Information reporting and retrieval is one of the most common data privacy requests

Figure 3 — Information reporting and retrieval is one of the most common data privacy requests

 

In addition, data subjects can request changes or corrections to any of their personal data that is stored by the organization, such as a change of address, and can request that their data be exported in a machine-readable format so that it can be easily imported into a new target landscape. For example, the data subject may want to transfer the data to another vendor or service provider, or from one hyperscaler to another.

SAP Data Privacy Integration also enables customer service representatives to perform these tasks on their own, without the need to involve IT. Using the provided features, they can discover the personal data of a data subject, trigger the export of that data, and send that data to the data subject as an email message or as a file (a PDF, JSON, or XML file, for example).

 

Data Deletion

Along with ensuring that personal data is processed only for a valid purpose and that only the data agreed upon by the data subject is processed, it is crucial to ensure that personal data is removed from the system when there is no longer a business need for it. This is also referred to as the right to be forgotten or the right to delete personal data from the system.

It is important to keep in mind that although data subjects have the right to delete personal data, enterprise systems require that data for a certain period of time to ensure that business needs can be met, such as order delivery or audit requirements. This means that data cannot necessarily be deleted immediately upon request. What is required for compliance is that the data be deleted when there is no longer a business need to process the data.

Within SAP Data Privacy Integration, this compliance can be realized by configuring deletion periods for the required data set. These deletion periods are defined as the residence period and the retention period (see Figure 4).

 

Figure 4 — SAP Data Privacy Integration helps meet data deletion requirements with configurable deletion periods

Figure 4 — SAP Data Privacy Integration helps meet data deletion requirements with configurable deletion periods

 

The residence period is the period of time after the end of the business purpose, when there is no need to store contact details for marketing purposes, for instance. During this period, the data can be anonymized or stored in secondary persistence in the system, rather than in primary persistence, to ensure that it is no longer processed (to receive marketing emails, for example). The data then remains in an inactive state to fulfill audit requirements, for instance, during what is called the retention period. At the end of the retention period, the data can be permanently deleted from the system (see Figure 5).

 

Figure 5 — SAP Data Privacy Integration provides features for defining the life cycle of personal data in the system

Figure 5 — SAP Data Privacy Integration provides features for defining the life cycle of personal data in the system

 

SAP Data Privacy Integration provides features for configuring rules for these periods of time and orchestrates the deletion of data by performing an end-of-purpose check for the data across the different applications integrated with the service. When the end-of-residence or end-of-retention period is reached, the service provides the necessary trigger to block or delete the personal data.

 

Integrating Applications with SAP Data Privacy Integration

A license to SAP Data Privacy Integration can be purchased as part of an SAP customer’s Cloud Platform Enterprise Agreement or via SAP Store, after which the service can integrate with applications. Figure 6 provides a high-level overview of the steps required to integrate applications with SAP Data Privacy Integration.

 

Figure 6 — A high-level overview of the steps required to integrate applications with SAP Data Privacy Integration

Figure 6 — A high-level overview of the steps required to integrate applications with SAP Data Privacy Integration

 

Once the service is added to the customer’s global account, an instance of the service must be created that includes the configuration required to integrate with applications containing personal data. The configuration specifies the data objects and entities that contain personal data as well as the interfaces through which data can be accessed to realize the data privacy use cases. More in-depth information about these steps is available in the online SAP Help Portal.
Let’s take a closer look at the interfaces and runtimes that support the integration between the service and business applications.

 

Supported Interfaces

SAP Data Privacy Integration does not store or persist any personal data processed by a business application. The service can report, manage business purposes, or delete personal data by interacting with an application using well-defined interface technologies, such as the Representational State Transfer (REST) and Open Data (OData) protocols, to read data for reporting purposes and trigger deletion of data. Annotations in the data model of business applications identify the business objects and entities that are relevant to data privacy or contain personal data.

Annotations in the data model also help categorize the personal data in an application, such as contact data, address data, and payment details. In addition, annotations can be used to differentiate personal data from sensitive data, which is anonymized for all scenarios except when the data is provided directly to the data subject.

More information on the interfaces supported by SAP Data Privacy Integration can be found at SAP API Business Hub.

 

Supported Runtimes

SAP Data Privacy Integration is available as a service for applications that process personal data and can integrate with SAP BTP technologies. To integrate an application with SAP Data Privacy Integration, an instance of the service must be created within the runtime environment of the business application — the runtime environment is Cloud Foundry in the example shown in Figure 7. The instance is created using a service broker based on the Open Service Broker API (OSBAPI) specification.

 

Figure 7 — To integrate an application with SAP Data Privacy Integration, an instance of the service must be created within the runtime environment of the business application

Figure 7 — To integrate an application with SAP Data Privacy Integration, an instance of the service must be created within the runtime environment of the business application

 

The service broker is registered with the service manager component of SAP BTP, which allows the service to be instantiated from any landscape that provides a service catalog based on the service manager implementation. These landscapes include the Cloud Foundry and Kubernetes (Kyma) runtimes provided by SAP, and can be extended to any landscape that can create a service instance using the service manager client.

Details on how applications in different runtimes can integrate with SAP Data Privacy Integration are available in SAP Help Portal.

 

Conclusion

SAP Data Privacy Integration became generally available in Q3 2020. SAP customers and partners that build applications on SAP BTP using either Cloud Foundry or Kyma as their runtime can consume SAP Data Privacy Integration as part of their Cloud Platform Enterprise Agreement or by purchasing the license from SAP Store. The service is also available for partner testing scenarios in the SAP PartnerEdge portal through the partner test, demo, and development license.

SAP customers and partners that build applications on SAP BTP can look to SAP Data Privacy Integration as a starting point for fulfilling the requirements of data privacy regulations. With SAP Data Privacy Integration providing data privacy features, organizations can focus on using their business applications to power their digital transformation journey.

 


Learn More

SAP Discovery Center

SAP Help Portal

Data Privacy Integration overview video


 

Prem Roshan Madhusudhan Nair

Prem Roshan Madhusudhan Nair (prem.roshan.madhusudhan.nair@sap.com) has over 10 years of experience in SAP technologies. He has worked as a consultant for financial services solutions on the SAP NetWeaver platform, followed by developing business services on SAP Business Technology Platform. In his current role as a Product Owner for Data Privacy Services at SAP, he has worked on the development of requirements for data privacy use cases and data privacy solutions.

Sharath Jois

Sharath Jois (sharath.jois@sap.com) has over 10 years of experience in building and operating data privacy and data management tools on a wide range of platforms, including SAP NetWeaver ABAP, SAP Business Technology Platform, Cloud Foundry, and Kubernetes. As a Product Owner for Data Privacy Services at SAP, he has had the opportunity to drive the end-to-end life cycle of product development, from gathering requirements from customers, backlog ranking, and overseeing the end-to-end development cycle to commercializing, delivering, and marketing the product.



Extend Your Core Business Applications and Drive Your Business Forward with SAP Extension Suite

 

by Martin Grasshoff, Lead Product Manager for SAP Extension Suite, SAP

 

SAP customers are no strangers to customizing their SAP applications to add unique, differentiating capabilities to off-the-shelf software that enable them to run innovative processes and meet their unique business needs. The ability to significantly tailor SAP solutions to address different requirements has long been a valued characteristic of SAP software.

As customer landscapes move toward modern technologies and the cloud, and the pace of business requires a real-time response, maintaining customizations of applications can become an increasingly complex task. Emerging technologies need to be adopted, changing business needs must be addressed rapidly, and new regulations keep up the pressure on development teams.

To enable its customers to address their business requirements in a modern, maintainable way, SAP offers SAP Extension Suite. This article introduces developers, projects managers, and architects to SAP Extension Suite. It explains the basic concepts around extending SAP applications and the capabilities of SAP Extension Suite. It then looks at an example of what it looks like to use SAP Extension Suite, based on a real customer solution in productive use, and provides an overview of the steps involved.

 

A Modern Approach to Extending SAP Applications

There are three main types of extensibility when it comes to customizing SAP applications: classic extensibility, which is the traditional approach, and in-app extensibility and side-by-side extensibility, which are newer approaches (more on in-app and side-by-side extensibility, and when to use which, is available in Custom Extensions in SAP S/4HANA Implementations: A Practical Guide for Senior IT Leadership):

  • Classic extensibility refers to the well-known traditional method used to extend applications based on SAP ERP Central Component (SAP ECC), such as SAP Business Suite applications. This approach involves the use of standard SAP customization and extension technologies such as ABAP, Web Dynpro, and SAP GUI. It is tightly coupled with SAP-delivered code and the customizations reside on the SAP application server in the Z-namespace used for custom development.
  • In-app extensibility is a concept that was introduced with SAP S/4HANA. It provides a framework for building SAP Fiori-based customizations within the SAP S/4HANA system itself. It is best suited for extensions that are intended for SAP S/4HANA users and that work with SAP S/4HANA data and processes only.
  • Side-by-side extensibility enables truly decoupled extensions, where enhancements are developed on a separate platform, such as SAP Business Technology Platform (SAP BTP), and integrated into the application, instead of developing them directly within the original business system itself. This not only minimizes upgrade efforts, but also opens up SAP systems to technologies such as JavaScript, artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), and many innovations, while at the same time allowing ABAP developers to experience an agile cloud development environment.

Side-by-side extensibility is a modern approach to extending SAP applications that enables innovation and simplification and is supported by SAP BTP through SAP Extension Suite. The technologies, services, and best practices that comprise SAP Extension Suite can be categorized into three main areas (see Figure 1):

  • Digital experience: Tools in this area help organizations build and run a consistent and engaging user experience through mobile apps, conversational bots, and SAP Fiori-based web applications. These tools can be used not only by developers, but also by end users to create business content, collaborate, and consume information. SAP Work Zone, SAP Launchpad, and SAP Conversational AI are good examples.
  • Digital process automation: Tools in this area help automate, enhance, and adapt business processes beyond what is possible with standard solutions. These tools are designed for process owners, and some very convenient low-code tools enable the use and customization of process templates to adhere to local compliance rules or build new processes from scratch. For instance, SAP Workflow Management and the live process content packages fall into this category.
  • Development efficiency: Tools in this area help developers and other users rapidly build extensions by providing software development kits (SDKs) and recommended application architectures that can streamline their daily tasks. Low-code, graphical development tools such as SAP Business Application Studio enable business users to work collaboratively with developers on data, processes, and the user experience, and increase development efficiency. SAP Cloud Application Programming Model, SAP Business Application Studio, and SAP BTP, ABAP environment fulfill the developer’s needs.

 

Figure 1 — SAP Extension Suite comprises digital experience, development efficiency, and digital process automation tools and services that simplify the development of application extensions

Figure 1 — SAP Extension Suite comprises digital experience, development efficiency, and digital process automation tools and services that simplify the development of application extensions

 

SAP BTP enables the extension of both SAP and non-SAP systems, regardless of whether they are on premise or in the cloud, through a combination of SAP Extension Suite and SAP Integration Suite (see Figure 2). While SAP Integration Suite covers the functionality required to connect to systems and ensure that the right data is in the right system at the right time, SAP Extension Suite provides the technologies, tools, and services required to put this data into action. SAP Extension Suite relies heavily on the capabilities of SAP Integration Suite since most extension scenarios are based on the need to adapt existing data and processes to new business needs. In a case where business requirements have no existing system to connect to, SAP Extension Suite can be used to build new, innovative solutions from scratch.

 

Figure 2 — SAP Extension Suite in the context of SAP Business Technology Platform

Figure 2 — SAP Extension Suite in the context of SAP Business Technology Platform

 

SAP Extension Suite in Action

Let’s now take a look at SAP Extension Suite in action. We’ll use an example that is based on a real customer’s existing, productive extension developed using the tools, services, and best practices provided by SAP Extension Suite. This customer is in the professional services industry and wants to provide a consistent and engaging user experience to consultants and project managers across different back-end systems when entering data into and approving timesheets. In addition to providing a better user experience, the customer wants to be able to aggregate project-related data from multiple existing business solutions — SAP SuccessFactors solutions, SAP S/4HANA Cloud, and two third-party systems — to enable consultants to use one system instead of multiple systems and provide a single view of data for project managers.

The extension (see Figure 3) involved building two timesheet extension applications (one for recording data entry by consultants and one for approval by managers) on SAP BTP that integrate the data from the SAP SuccessFactors, SAP S/4HANA Cloud, and third-party solutions, as well as adding SAP Analytics Cloud to enable a consolidated view of better-quality data across four previously disparate solutions. SAP Integration Suite provides connectivity and data replication capabilities along with the SAP Enterprise Messaging service to propagate business events through the systems and SAP HANA Cloud for transactional data storage and consumption via SAP Analytics Cloud.

 

Figure 3 — An example multi-channel extension built using SAP Extension Suite supported by SAP Integration Suite

Figure 3 — An example multi-channel extension built using SAP Extension Suite supported by SAP Integration Suite

 

SAP Extension Suite provides the functionality for implementing the custom business logic for the extension via a custom-developed extension endpoint using SAP Cloud Application Programming Model, which enables rapid development and ties together all the necessary pieces. In addition to the business logic, SAP Extension Suite technologies provide a new, customized, and highly optimized user experience based on SAP Fiori elements that serves as a web channel to the solution for consultants. The analytics reporting dashboard based on SAP Analytics Cloud provides another dedicated channel to the solution for managers. This makes the overall solution a multi-channel extension.

So, what were the steps involved in building this extension? The tasks can be broken into four steps:

  1. Connect.
  2. Build an endpoint.
  3. Add channels.
  4. Deploy and operate.

We’ll cover these steps at a high level in the following sections. Detailed information is available in a free online openSAP introductory course on SAP Extension Suite.

 

Step 1: Connect

Once you have identified the business use case for the extension you want to build on SAP BTP, use SAP Integration Suite features to ensure the extension has access to existing business data and processes.

To enable this access, you can search for and use an application programming interface (API) at SAP API Business Hub. You could also use Cloud Connector to connect to an existing on-premise SAP S/4HANA system or to replicate the data to SAP BTP for consumption by your extension. SAP Enterprise Messaging, which was the approach used in the example scenario, is a useful option as it includes many predefined events that can be exposed to SAP BTP for consumption by extensions.

In summary, you can connect via API or you can consume events emitted by an existing back-end solution. In some cases — where a real-time response is needed, for example — you may want to use both in the same extension.

 

Step 2: Build an Endpoint

Once the connection is configured, use SAP Extension Suite tools to create a dedicated endpoint — again using an API and/or events, as described in Step 1, that are designed for and to be used solely by the extension. The main reason for a dedicated endpoint rather than reusing an existing API, for example, is to ensure a decoupled solution that has its own life cycle and does not clutter the core of your business system.

The dedicated endpoint is built with custom code, by using either SAP Cloud Application Programming Model (for JavaScript and Java development), which was the model used in the example, or SAP BTP, ABAP environment, which provides the ABAP RESTful programming model. These development models help developers concentrate more on the business implementation task and less on the software architecture and other non-functional requirements.

 

Step 3: Add Channels

Next, use SAP Extension Suite tools to add user interface channels to the extension. This step depends on the channels you want to expose to your end users. For instance, adding a mobile channel would require SAP Mobile Services while adding a web channel would involve developing SAP Fiori elements or
an SAPUI5 application. In any case, most channel development is performed in SAP Business Application Studio.

Adding channels means that you need to decide which digital touchpoints the extension should expose to the end user. It is important to choose the right user interface technology for the right channel and to keep in mind the specific use case per channel. For example, if you want to enable a chatbot for the extension, the use case would probably not include mass transaction handling or advanced drill-down analytics. Chatbot features, such as those provided by SAP Conversational AI, are well suited for small lookups, but for more comprehensive analytical use cases, such as the one in the example scenario, an SAP Analytics Cloud dashboard — provided via a traditional SAP Fiori application, as in the example, or a mobile application, for instance — is a better choice.

Since the user interface is decoupled from the endpoint via APIs, it is easy to add multiple channels to your extensions to meet different user needs, as in the example scenario, and provide the best possible user experience. The decoupling of the user experience also enables you to change your user experience strategy without affecting the core system as you gain a better understanding of the usage of the extension.

 

Step 4: Deploy and Operate

The last step includes the deployment and the ongoing operation of the extension. Automation is key to these tasks as you continue to build more extensions over time. Deployment can and should be automated with industry standard best practices. SAP Extension Suite offers predefined templates for creating automated build pipelines and provides automation to make transport management for different system landscapes much easier.

Deployment targets are also an important consideration. While SAP BTP supports various application runtimes to execute custom business logic — including the Cloud Foundry runtime, serverless runtime, and the Kyma runtime — the unique advantage of SAP BTP is the ABAP runtime, which allows developers to carry over their existing ABAP skillsets and SAP process knowledge to an agile cloud environment. Runtimes are not the only deployment targets, however. The user interface must also be deployed and, depending on the channel, there are multiple options at hand. For instance, you could deploy an SAP Fiori application to the new, centralized SAP Launchpad to enable access via an SAP Fiori launchpad, or you could deploy it to SAP Work Zone to enable users to customize their user experience.

The operational aspect of running extensions is also covered by the tools and services of SAP Extension Suite. With SAP Application Logging service for SAP BTP, you have full control over your application logs and can analyze them with an easy-to-use web-based user interface. SAP Application Logging service for SAP BTP is based on Kibana and offers state-of-the-art log file analysis capabilities. Another important operational feature is the ability to react quickly to runtime issues and minimize the time required to solve them. Here, SAP Alert Notification service for SAP BTP comes into play. SAP Alert Notification service for SAP BTP allows you to post or receive events from your  application or predefined platform events and forward them to different consumption channels, such as email or messaging or using automated event notifications. SAP Alert Notification service for  SAP BTP also provides filtering for events and settings thresholds.

 

Summary

SAP Extension Suite provides a strategic approach for extending business solutions — whether SAP, non-SAP, cloud, or on premise — beyond what is provided with the core system to drive digitalization forward. With its multi-cloud strategy, you get the best technologies from SAP and underlying hyperscalers, along with a development environment and tools that enable ABAP developers to work on cloud solutions with access to new and open technology while also allowing non-SAP developers to contribute to SAP-related projects. Digital experience and digital process automation tools also enable you to support the channel that best meets user needs.

SAP offers various resources to help you learn more about using the technologies, tools, and services in SAP Extension Suite, including an introductory openSAP course, which is a good place to start. This course, which is free of charge, provides an overview of SAP Extension Suite capabilities. Developers can then dive into the various technologies using the tutorials in the SAP Developer Center site, while project managers and architects can find blueprints of end-to-end projects for different use cases in the SAP Discovery Center site. All learners can find guidance, as well as a certification path for becoming a certified Development Associate for Enterprise Extensions in the learning journeys available in SAP Help Portal.

A free 12-month trial is available for SAP BTP, which includes all the services of SAP Integration Suite and SAP Extension Suite, both of which have been recognized as leaders in their respective Gartner magic quadrants. No need to wait to boost your digitalization journey — you can start today.

 

Martin Grasshoff

Martin Grasshoff (martin.grasshoff@sap.com) was a trainer for database systems and other Sybase products following an extensive background in software development. After SAP’s acquisition of Sybase, he joined the Product Management team for Mobile Platform. For the past year, he has been Lead Product Manager for SAP Extension Suite.



Video Q&A : Wolfgang Epting shares strategic insights on Data Management best practices

by Kumar Singh, Research Director, Data & Analytics, Supply Chain Management, SAPinsider

 

The fact that data, if leveraged strategically, can create game changing capabilities for organizations, can not be disputed. However, a key crucial step that is often the most challenging and in my opinion, most critical, is data mangement – the process of collecting, normalizing, storing and securing the data.

In this latest video in our expert contribution series, we had the privilege to have Wolfang Epting with us. Wolfgang is the Chief Solutions Advisor with SAP’s Data Management Center of Excellence (CoE). In this video, Wolfgang shares his insights on :

  • Why is Data Management becoming more and more critical and becoming a strategic aspect ?
  • What are some of the best practices to improve data quality and integrity ?
  • What are some of the key challenges organizations run into when implementing best in class data management capabilities ?

 

Kumar Singh, Research Director, Data & Analytics, Supply Chain Management, SAPinsider, can be reached at kumar.singh@wispubs.com



Build an Agile Data Platform with SAP Data Warehouse Cloud

Understanding the Solution's Role in SAP's Data Warehouse Portfolio, Its Usage Scenarios, and Its Benefits

 

by Ingo Hilgefort, Global Product Evangelist, SAP Data Warehouse Cloud

 

In a rapidly changing business landscape, the ability to adapt by making fast, well-informed decisions is critical. Data is the foundation for the reporting and analytics that are required to support decisions throughout an organization, and businesses need a way to enable access to this data from a variety of heterogeneous locations across their landscapes. This is where data warehouses come in, by serving as a central location of consolidated data.
To help support its customers in this area, SAP provides a portfolio of data warehousing solutions that includes SAP BW/4HANA, SAP HANA for SQL data warehousing, and the latest addition, SAP Data Warehouse Cloud. This most recent addition has many SAP customers — which often already have a data warehouse solution in place — wondering how the new solution fits into their overall SAP landscape. This article walks through some of the most common usage scenarios for SAP Data Warehouse Cloud and outlines the benefits it can provide.

Before diving into the usage scenarios, it will be helpful to clarify the role of SAP Data Warehouse Cloud in SAP’s data warehouse portfolio, and how it works with the other solutions in the portfolio.

 

Understanding the Role of SAP Data Warehouse Cloud

SAP Data Warehouse Cloud is SAP’s data warehouse offering for the public cloud. It can be used as a standalone data warehouse, and it can also be used as a complementary solution for SAP’s any-premise (on-premise and private cloud) data warehouse solutions, SAP BW/4HANA and SAP HANA for SQL data warehousing (see Figure 1).

 

Figure 1 — SAP Data Warehouse Cloud can be used either standalone in the public cloud or as a complementary solution for SAP’s data warehouse portfolio in a hybrid scenario

Figure 1 — SAP Data Warehouse Cloud can be used either standalone in the public cloud or as a complementary solution for SAP’s data warehouse portfolio in a hybrid scenario

 

It is important to understand that SAP Data Warehouse Cloud is not intended to replace existing SAP BW/4HANA or SAP HANA for SQL data warehousing implementations. Instead, it’s intended to complement those solutions via a hybrid approach to enable SAP customers to leverage their already-existing assets and to empower business users with a more flexible and agile environment.

 

Common Usage Scenarios for SAP Data Warehouse Cloud

There are four common scenarios for using SAP Data Warehouse Cloud:

  1. Enabling self-services for data modeling and analytics
  2. Combining data from disparate sources
  3. Establishing a central semantic layer
  4. Modernizing your data warehouse

Keep in mind that these scenarios are not mutually exclusive — they are scenarios in which organizations can use SAP Data Warehouse Cloud, and more than one of these scenarios likely applies to any business.

 

Scenario 1: Enabling Self-Services for Data Modeling and Analytics

The concept of self-service analytics has been around for quite some time, and organizations continue to try and leverage these capabilities in an increasing number of ways to empower their business users.

So what does “self-service” mean in this context? Let’s look at analytics. From a high-level perspective, for most customers, self-service analytics refers to a scenario where business users are provided with an environment in which they can fulfill most of their requirements themselves, without having to rely on the IT department or a power user to create the analytics for them.

Now let’s take this concept into the data warehousing world. Let’s say that a business user needs information that is partly in the corporate data warehouse — SAP BW/4HANA, for instance — while other parts are stored in local spreadsheets. In this case, the business user typically sends the spreadsheets to the IT team, and the IT team creates a data structure for the information and then uploads the information and combines it with the corporate data warehouse model. What if instead business users could do this themselves, with the ability to enrich data with additional information without creating data models from scratch?

This is where the “spaces” concept from SAP Data Warehouse Cloud comes in (see Figure 2).

 

Figure 2 — SAP Data Warehouse Cloud includes a “spaces” concept that empowers users to access and enhance information

Figure 2 — SAP Data Warehouse Cloud includes a “spaces” concept that empowers users to access and enhance information

 

Spaces in SAP Data Warehouse Cloud allow the IT team to create a dedicated area in which business users can access — in a trusted and governed way — the corporate data warehouse, and bring in additional information from spreadsheets, for instance. Using the visual modeling capabilities in SAP Data Warehouse Cloud, business users can enrich the already-existing data with the added information and then use the newly combined data in SAP Analytics Cloud, without having to rely on the IT team.

In this way, SAP Data Warehouse Cloud — and its spaces concept, in particular — empowers business users and increases the accessibility of relevant information for informed decision making. In addition, it enables IT staff to focus on more critical tasks and continuous improvements.

 

Scenario 2: Combining Data from Disparate Sources

Nearly every SAP customer has faced the challenge of integrating disparate data sources to avoid “data silos,” and doing so with centralized governance and security to ensure that the integrated information is trustworthy. Those that have a central enterprise data warehouse tend to solve this problem by combining all the information as part of their data warehouse strategy. But what if a more agile and flexible approach is required — one that can quickly react to changes in the data landscape and provide business users with the up-to-date information they need for analytics and decision making?

SAP Data Warehouse Cloud offers unique capabilities that can help meet this need. It provides not only the functionality required to load information from a large variety of SAP and non-SAP data sources, but also the option to enable access to those disparate data sources and use the solution’s visual modeling capabilities to federate those sources — whether the data is acquired via replication or virtually accessed from the sources. SAP Data Warehouse Cloud allows organizations to connect to the data in various sources, without necessarily duplicating the information from the source in SAP Data Warehouse Cloud, and map that together to provide a consistent view.

With the capabilities provided by SAP Data Warehouse Cloud — to virtually access disparate data sources, integrate the information into data models and analytics, and then later decide whether to keep using virtual (remote) access or instead replicate the information into SAP Data Warehouse Cloud — organizations can quickly onboard additional data sources and integrate them into their existing data models (see Figure 3). The ability to simply switch between virtual access or a replicated data approach is unique to SAP Data Warehouse Cloud, and allows SAP customers to quickly get started and later decide on the data materialization, without affecting the data model or analytics.

 

Figure 3 — SAP Data Warehouse Cloud enables organizations to quickly onboard data sources without affecting the data model or analytics

Figure 3 — SAP Data Warehouse Cloud enables organizations to quickly onboard data sources without affecting the data model or analytics

 

Scenario 3: Establishing a Central Semantic Layer

The capability described in the previous usage scenario — the ability to combine different data sources and essentially create a “single version of the truth” — is a valuable one. Now imagine adding the ability to create a more business-driven layer on top of that combined data that uses business-friendly terms, hides joining logic, and prepares a set of calculations, all decoupled from the physical data model so the elements are reusable across data sources. This “semantic layer” concept will be familiar to customers using SAP BusinessObjects solutions, and it has now been introduced into SAP Data Warehouse Cloud.

Known as the “business layer” in SAP Data Warehouse Cloud, it provides separation between the physical data model and the semantic model. This allows business users to follow a top-down modeling approach by enabling them to create an abstraction layer from the underlying data model without having to worry about the physical data model. This approach not only allows business users to leverage a more business-oriented abstraction layer, but also encourages strong collaboration between the IT team and business users as well as a common understanding of the data model and the business-oriented view.

The new business layer in SAP Data Warehouse Cloud hides the complexity of data models and combining data and provides a central location for business semantics and key performance indicator (KPI) definitions. This helps avoid redundant and potentially conflicting definitions, and it ensures a common set of definitions for analytics workflows.

 

Scenario 4: Modernizing Your Data Warehouse

Many SAP customers are currently using SAP BW/4HANA or SAP HANA for SQL data warehousing and seeking ways to modernize their environment to become more agile and flexible. SAP Data Warehouse Cloud complements these offerings to meet these needs via hybrid integration, which allows organizations to reuse their existing on-premise assets while taking advantage of the cloud-based capabilities of SAP Data Warehouse Cloud.

The SAP Data Warehouse Cloud capabilities discussed in the previously outlined scenarios — self-service analytics, combining and onboarding data from a variety of sources, and establishing a central semantic layer — are all part of creating a modernized data warehouse. The ability to reuse assets from an existing on-premise data warehouse as part of this effort enables SAP customers to decide for themselves on the speed of their journey into the cloud.

The integration of SAP Data Warehouse Cloud with SAP BW/4HANA and SAP HANA for SQL data warehousing enables access to all of the capabilities described in the usage scenarios and allows organizations to leverage their existing data warehouses while using SAP Data Warehouse Cloud to provide more agility and flexibility. This approach empowers business users with more self-service analytics and modeling capabilities, creating an environment that allows a rapid reaction to changes and an accelerated time-to-value for information.

 

Summary

As demonstrated by the four usage scenarios discussed in this article, SAP Data Warehouse Cloud provides SAP customers with several options for creating an agile data platform. Use SAP Data Warehouse Cloud to begin your organization’s cloud journey and to foster a collaborative approach for your overall data strategy that leverages the knowledge of both IT and business users.

 


Learn More

SAP Data Warehouse Cloud overview

SAP Data Warehouse Cloud onboarding guide

Hybrid integration with SAP BW/4HANA and SAP Data Warehouse Cloud

Hybrid integration with SAP BW and SAP Data Warehouse Cloud

SAP Data Warehouse Cloud customer stories


 

MEET THE EXPERTS

Ingo Hilgefort
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Ingo Hilgefort started his career in 1999 with Seagate Software/Crystal Decisions as a trainer and consultant. He moved to Walldorf for Crystal Decisions at the end of 2000, and worked with the SAP NetWeaver BW development team integrating Crystal Reports with SAP NetWeaver BW. He then relocated to Vancouver in 2004, and worked as a product manager/program manager (in engineering) on the integration of BusinessObjects products with SAP products. Ingo's focus is now on the integration of the SAP BusinessObjects BI suite with  SAP landscapes, such as SAP BW and SAP BW on SAP HANA, focusing on end-to-end integration scenarios. In addition to his experience as a product manager and in his engineering roles, Ingo has been involved in architecting and delivering deployments of SAP BusinessObjects software in combination with SAP software for a number of global customers, and has been recognized by the SAP Community as an SAP Mentor for SAP BusinessObjects- and SAP integration-related topics. Currently, Ingo is the Vice President of Product Management and Product Strategy at Visual BI Solutions, working on extensions to SAP’s product offering such as SAP BusinessObjects Design Studio and SAP Lumira. You may follow him on Twitter at @ihilgefort.



Top Strategies for Building Successful Subscription Models with SAP

With many of the world’s most successful companies being based on subscription models, these strategies can provide powerful resources for growing your customer engagement. Discover best practices and your steps to success as SAP Expert Allen Roholt answers your questions:

  • How can building a subscription model on SAP help engage your customers and prospects?
  • What steps would be best to maximize customer engagement on SAP?
  • How can you optimize the customer experience?
  • How can you leverage SAP Customer Data Cloud, CX Suites and BRIM?
  • How can these strategies help organizations in a COVID-19 world?



Leveraging Machine Learning (ML) in Spend Analysis solutions

by Kumar Singh, Research Director, Automation & Analytics, SAPinsider

 

Machine Learning (ML) based algorithms are slowly percolating into a wide variety of supply chain solutions and spend analysis solutions are no exception. In this article, I share few ways Machine Learning (ML) algorithms are already being used or can be used in spend analysis context. Note that these suggestions are focused only on spend analysis and not on the end to end procurement process or the entire spend management process. There are many more applications of ML in strategic sourcing domain (an example being algorithm driven sourcing).

Data cleaning: Unsupervised Machine Learning (ML) algorithms can be used to clean bad data. An example is vendor name and product description rationalization. This is a very significant application in my opinion since the world of analytics is pivoted on Garbage-In-Garbage-out (GIGO). Improving data quality enhances every other application area listed here. While I have mentioned only a couple attributes here (vendor name and product description), if you have work on spend analytics projects, you know that there are several attributes/fields that can leverage this ML enabled rationalization.

Data categorizaton : AI algorithms can help categorize, clean and classify the data automatically. A Supervised Machine Learning (ML) classification algorithm can automatically categorize transactions into spend categories, even if user does not enter the correct category or enters a wrong category. While this is just one example, multiple types of classifications can be done on transaction data.

Anomaly detection: “Fat finger” errors are common when data is manually entered in spend systems. ML enabled anomaly detection works at two levels. First level is when the user is entering the information. The ML algorithm, based on other features of the transaction, like vendor, material ID, material type, material description, supplier, quantity etc. can flag any “fat finger” errors, since it would know from its “training” that the spend amount should be within a certain range.  The second level is where the user still decides to go ahead and enter the amount, the algorithm will flag it as an anomaly and will trigger a notification to the concerned person.

Audits: Audits tie closely with analmoly detection as well as contract management. A contract management module with “digitalize” all key quantitative aspects of a contract which a Machine Learning algorithm should have access to. As an example, consider a situation where you have a multi-tiered volume discounts with a supplier  but the total spend amount that was paid does not align with the that agreement. Organizations with smart spend audit capabilities can save millions in spend.

Supplier categorization and performance management: Both supervised and unsupervised approaches can be leveraged in my opinion. You can use an unsupervised algorithm to help you create your supplier groups the first time and understand how those groups are being created (what features are driving which clusters). Supervised learning algorithms can be a great way to automate supplier classification and performance management. A trained supervised ML algorithm will categorize suppliers based on certain criteria and can also assign performance levels to them.

KPIs and Benchmarking: A smart tool, that has accesse to publicly available external benchmarked data, can perform both internal and external benchmarking. Internally, it will not just calculate KPIs but should perform augmented analytics, by presenting to the user the factors that impacted the numbers being calculated. External benchmarking is not just about comparing KPIs with other best in class companies but can also help evaluate spend sanity. An example is where the algorithm the price of a commodity on a transaction with publicly available commodity indexes.

What does this mean for SAPinsiders ?

  • If you already have SAP Ariba, some of these aspects like ML enabled data enrichment, contract intelligence and invoice reconciliation are already available to you. SAP has a robust roadmap for Ariba that intends to transform it into a truly intelligent spend management tool.
  • There are many third party spend management tools and platforms as well that have ML based capabilities embedded in them and can integrate efficiently with SAP data. Selecting the right one depends on many factors though which are outside the scope of this article.
  • To build additional cvustomized ML calabilities within your SAP Ariba environment, you can leverage SAP Leonardo. Leonardo has the ccapability to utilize SAP Ariba’s Open Application Programming Interfaces (APIs) to retrieve data from SAP Ariba instance(s), providing you the ability to leverage that data for your custom algorithm.

 

Kumar Singh, Research Director, Automation & Analytics, SAPinsider, can be reached at kumar.singh@wispubs.com