Working with Sourcing and Contract Management

After completing this lesson, you will be able to work with sourcing and contract management .

Sourcing and Contract Management

Paige Discusses Sourcing and Contract Management

See what Paige has to say about the possibilities for Sourcing and Contract Management in SAP S/4HANA:

Purchase Contract Management

The following are features of Purchase Contract Management in SAP S/4HANA:

• Dynamic and flexible search and filtering across entire contract work-lists.
• Monitor contracts in contract work-lists and access additional information about status, approval, and validity instantly. The list offers graphical elements to visualize, for example, contract consumption.
• Direct navigation to contract and supplier object pages.
• Insight to action capabilities: The SAP Fiori app shows a list of purchasing contracts, which offer a quick Edit functionality. An application example of this editing functionality would be to extend the validity of a certain purchasing contract. It is no longer necessary to open the complete contract document for simple changes to a contract.
• Business card information of the supplier.

• Contract templates
• Draft concept
• Contract clause library
• Versioning
• Microsoft Word integration

For operational contract management, the SAP Fiori app Manage Purchase Contracts (Version 2) is provided. For central procurement, the SAP Fiori app Manage Central Purchase Contracts is available.

In the SAP ERP system, users can use transaction codes such as ME3M to generate a list of purchasing contracts. In SAP S/4HANA, the mentioned SAP Fiori apps provide the users with more information with fewer clicks, allowing the user to monitor contracts in contract work lists and receive instant information about consumption, status, and validity of the purchasing contracts.

When monitoring purchasing contracts, both low usage and high usage cases need to be monitored to either renew a contract or phase out the contract. With the SAP Fiori app Manage Purchase Contracts (Version 2), users can immediately see contracts with a high contract consumption and also with a critical status. In addition to the smart filter bar for flexible search, this app also provides a quick action to renew (change validity end or target value) a contract directly. Navigation to other object pages, such as a supplier or a specific contract, is also supported.

Other Useful Apps and KPIs for Working with Purchasing Contracts

Other useful apps for working with purchasing contracts are:

• Unused Contracts: This KPI displays the number of contracts not used over the previous year to date.
• Contract Expiry: This KPI helps a customer to identify purchasing contracts that expire within a certain time frame. It is also possible to use the app to find the number of expiring contracts, the target amount, and the released amount of the expiring contracts.
• Contract Leakage: This KPI helps a customer to identify the spend of purchase orders that do not have a contract reference, although an existing contract could have been used.
• Value Contract Consumption: This KPI displays the consumption percentage of value contracts from the previous year to date. Using this KPI, it is possible to find the target and released amount of certain contracts.
• Quantity Contract Consumption: This KPI displays the consumption percentage of quantity contracts from the previous year to date. Using this KPI, it is possible to find the target and released quantity of certain contracts.

The consumption calculation is based on the value, not on the quantity.