The Benefits of Integrating SAP Ariba and Enterprise Asset Management
Enterprise Asset Management (EAM) and procurement do not exist in a vacuum—parts and tools procured are needed to support SAP Work Orders. However, procurement is often done in one system without any link to the EAM work order information. That’s where integration between SAP Ariba and SAP ECC or SAP S/4HANA can fill in the gaps and make life easier for the end user tasked with entering information and reporting on maintenance activities.
Luckily, there are over 200 standard integrations and more than 8000 integration points between SAP ERP systems and Ariba. These integrations can be implemented while maintaining all the benefits of the system tools implemented and gaining additional collaboration capabilities and efficiencies.
In fact, SAP’s Asset Intelligent Network—a fabulous tool for maintenance and EAM—already utilizes the Ariba Network. Ariba and EAM are already linked, and SAP provides the ability to further link them through system integration.
Life Without Ariba and EAM Integration
You may be an SAP EAM customer that is using Ariba, but not in conjunction with EAM processes. What are you missing? First, without the tools integrated, there are separate system accesses and processes. Even as procurement is serving EAM, the lack of aligned process may be slowing things down and creating inefficiency. That can lead to misrepresented, fragmented data and costs.
System users may also find confusion—not knowing which system to use for what purpose. That makes reporting and data entry difficult. Meanwhile, maintenance users are unable to see the status of all parts and services needed due to the information being in disparate systems.
All this leads to the assets suffering due to an inaccurate material and usage history. Overall, the lack of integration between supply chain and maintenance work leaves EAM a step behind.
Data Integration for EAM Success
What happens when Ariba and EAM are integrated? Key transaction data is provided to the SAP ECC or SAP S/4HANA core—information about requisitions, purchase orders, invoices, receipts, and the status of these transactional objects.
The EAM process beings with a work order in the ERP, and Ariba integration connects requisition or catalog requests to suppliers via the Ariba Network. Data on both materials and services procured through Ariba are reflected in the ERP system for accurate reporting.
Certain integrations also allow for acknowledgments, changes, cancelation of purchase orders, and goods receipt information in the SAP Ariba Buying and Invoicing tool to be reflected in ECC or S/4HANA.
With these standard integrations, visibility of the full cost and history associated with a work order or asset can be found in one place—that ensures more accurate material and usage history, and more reliable maintenance.
Considerations for Integrating Ariba and EAM
There are some important things to consider with an Ariba and SAP ERP integration. It is important to think about the impact on integration on the end user. Minimizing multiple systems for entry and reporting will not only improve their lives, but also lead to fewer errors and inefficiencies.
Before embarking on an integration journey, it is key to identify scenarios where data replication from Ariba to ERP is critical to the EAM process. With over 200 integrations, there are many to evaluate.
Even if you’ve already implemented SAP ECC or SAP S/4HANA and SAP Ariba, it isn’t too late to integrate, it’s not something only for new implementations. Consider a “Discovery” workshop to examine your SAP investments to find out where Ariba and EAM integration can provide value. There may be a huge opportunity for efficiency gains, and happier users.
The overall cost to perform maintenance work includes internal resources, external resources, stock materials/tools, and externally procured materials. This represents the total cost of maintaining assets. External resources or services represents a large percentage of maintenance cost.
In SAP Plant Maintenance, there are several different options in how to configure and procure Maintenance Services. The below presentation conducted during the 2016 Annual ASUG meeting in Orlando FL, touched upon some of the options available today.
It is often easy to directly focus on improving the use of the information system to support maintenance and MRO work processes, this can be a mistake. A study was conducted by Professor Brynjolfssonin the MIT Sloan School of Management where he looked at the impact on profitability as IT processes and supply chain business processes, such as maintenance, inventory management, and procurement were improved.
By focusing on the improvement of the maintenance and MRO business processes there was a 27% improvement in profitability. However, by focusing on just the improvement of the IT systems, as companies often do, there was not an improvement in profitability, in fact, there was a 7% reduction in profitability, certainly not the desired endstate. When a company focused on both improving the business processes and improving the IT systems there was a 75% improvement in profitability. It is for this reason that it’s recommended to focus on improvement on both maintenance and MRO work processes, as well as the use of the system.
The below presentation conducted during the 2016 Annual ASUG meeting in Orlando FL, touches upon the topic of “Impact to Supply Chain: Maintenance Planning / Scheduling Processes & Inputs.”