Purchasing in SAP

These slides come from a Concept Workshop presented in April 1998.

Why Do I Need to Know This?

Before a department can requisition in SAP, the department’s unique "SAP infrastructure" must be built.
To design a structure that best meets your business needs, you need to understand how SAP behaves and the decisions your department needs to make.

Requisitioning Timeline

Key Requisitioning Decisions

Who will requisition?
What groups of accounts will they be authorized to spend on?
Which SAP approval/routing option will your department use?
Who will be approvers (and in what order)?
Will your department use "fund availability checking"? (requires department to create a "Department Budget Plan" against which fund availability is calculated)

Who Will Help Departments With This?

School coordinators: focal point for departments

meet with departments individually to explain concepts, overall process
provide step-by-step instructions, answer questions, coordinate resources

School coordinators will draw on resources in Management Reporting, CAO, Information Systems, Purchasing, etc.

What Does SAP Requisitioning Look Like?

	Paper Requisition	EREQ Requisition	SAP Requisition
Ability to create a requisition	Std req book Dept-designed requisitions	EREQ account Signature authorization on file Training	Dept "infrastructure" built in SAP Kerberos ID/SAP account SAP Profile w/ create req. authorization Training
Ability to approve a requisition	Signature auth. in VAPS	EREQ profile based on signature auth. file	Approver auth. in SAP profile
Routing for approval	Hand carry	Electronic routing	Electronic routing per predefined criteria selected from SAP options
Ability to create "DAPO" for <$2500?	No	Yes	Alternatives currently being evaluated

Other Comparisons

	Paper Requisition	EREQ Requisition	SAP Requisition
Create commitment?	Not until PO issued	Not until PO issued	Created as soon as requisition is saved
Accepted by Internal Providers?	Yes	Yes, for selected internal providers	Phased rollout to internal providers planned
Check available funds before creating requisition?	No	No	Yes, if SAP departmental budget and funds checking options implemented by department
Visibility of transaction in SAP	When PO issued, it is visible via SAPweb (or SAP) lookup	When PO issued, it is visible via SAPweb (or SAP) lookup	Both SAP requisitions and PO's are visible in SAP.

Advantages of SAP Requisitioning:

Purchasing system is integrated with financial systems

Immediate commitments
Single logon
Accessibility of real-time information

Electronic audit trail

Electronic routing and approval
Requisitions can't get lost in mail or on someone's desk

Ability to check funds availability before issuing requisition
Ability to take advantage of new financial architecture

Existing systems "maxed out"

When all departments use SAP directly, one-to-one mapping can be broken

Department Approval & Routing Options

Recommended options developed by authorizations focus group

Choice of 4 approval/routing options ("release strategies" in SAP)

Up to 2 levels of approval

Approval can be based on dollar amount and/or item being purchased

Approval & Routing Options ("Release Strategies")

1	No approvals required	If you are authorized to create a requisition, it will be sent directly to Purchasing without review.
2	Two approvals required for all requisitions	Any requisition, regardless of dollar amount, has to have two levels of approval before going to Purchasing.
3	Approval determined by dollar amount -- Option A	< $500 - no approval required $500 - 2499 -- Level 1 approval > $2500 -- Level 2 approval
4	Approval determined by dollar amount -- Option B	< $2500 -- Level 1 approval > $2500 -- Level 2 approval

Approval & Routing Options - Requisition Flow

Approval Option 1:

Approval Option 2:

Approval Option 3:

Approval Option 4:

Automatic Routing of Requisitions to Other MIT Offices

Routing requisitions by commodity classification ("Material Group")

Radioactives to RPO
Network equipment/computer consulting to VP/IS
Sensitive Items to CAO

Key SAP Concept: Line-item Orientation

Requisitions are line-item oriented:

Each line item must be approved ("released") individually
Approval options ("release strategies") operate by line item
Funds availability checking is by line item
Etc.

SAPweb - Simplified Requisitioning Interface

SAPweb currently used for looking up PO's/payments ("Miniweb")
With requisitioning rollout, you will be able to look up and create requisitions via SAPweb ("Maxiweb")
Pilot departments do not yet have Maxiweb.
Some functions cannot be done via SAP web:

Approving a requisition
Modifying a requisition

Future of Current Systems

Paper requisitions

Much reduced volume

EREQ

Will be discontinued when all departments have SAP requisitioning

Signature Authorization File

Will be replaced by "Roles Database"
General authorization management tool for SAP and other MIT systems
Currently being pilot tested

Other Purchasing Methods

VIP Card - available now

Purchases up to $500
Charges "parked" daily into SAP - departments have 21 days to re-assign charges
Department "credit card verifier" can reassign charges in SAP

NECX/ECAT - in development

Use NECX "shopping basket" to create a SAP requisition
Uses SAPweb "create requisition" feature

Next Steps

Spring/summer

Learn SAP terms (workshops, documentation, classes)
Ensure that all potential SAP users in your area have Kerberos ID's
Training for ECAT, Credit Card, SAP Journal Vouchers, SAP Budgets, Manual Reservations, EIS
Work with School Coordinators on your department's SAP infrastructure

Fall

Training for requisitioning
Go live!

Appendix: SAP Requisitioning Terminology

Workflow	SAP's routing mechanism. Workflow routes requisitions for approval, sends approved requisitions to Purchasing, and returns a rejected requisition to the originator.
Release Strategy	A set of business rules used to evaluate a requisition line item to determine the types of approvals needed before it can be released to Purchasing. Release strategies "tell" workflow where to send a requisition. E.g., whether it requires approval or should be sent directly to Purchasing.
Level 1 and Level 2 Approver	A requisition can have up to two levels of approval (Level 1 being the lower). SAP users can be authorized as Level 1 or Level 2 approvers. Requisitions requiring approval are routed to the appropriate level of approver.
Release a requisition	In SAP, you approve a requisition by releasing it.
Material Group	Commodity classification of item being purchased, similar to object code. Material groups will be used for routing requisitions for radioactives, sensitive items, etc.

Purchasing in SAP

These slides come from a Concept Workshop presented in April 1998.

Why Do I Need to Know This?

Requisitioning Timeline

Key Requisitioning Decisions

Who Will Help Departments With This?

What Does SAP Requisitioning Look Like?

Other Comparisons

Advantages of SAP Requisitioning:

Department Approval & Routing Options

Approval & Routing Options ("Release Strategies")

Approval & Routing Options - Requisition Flow

Approval Option 1:

Approval Option 2:

Approval Option 3:

Approval Option 4:

Automatic Routing of Requisitions to Other MIT Offices

Key SAP Concept: Line-item Orientation

SAPweb - Simplified Requisitioning Interface

Future of Current Systems

Other Purchasing Methods

Next Steps

Spring/summer

Fall

Appendix: SAP Requisitioning Terminology

Edited on April 13, 1998 by Robert Murray