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MIT Integrates eBusiness with SAPMIT Integrates eBusiness with SAP

Presented by: Thomas Hoole, Michael McNamara and Lorraine Rappaport

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Massachusetts Institute of Technology

MIT General InformationMIT General Information

•• 10,000 students 8,200 faculty/staff10,000 students 8,200 faculty/staff•• 15,000 Cost Objects15,000 Cost Objects•• $350$350--400 million spend/year400 million spend/year•• 85,000 purchase orders/year85,000 purchase orders/year•• 20,000+ vendors on file20,000+ vendors on file•• Reengineering 1995Reengineering 1995

–– Partnerships July 1996Partnerships July 1996–– Implemented SAP September 1996Implemented SAP September 1996–– Procurement StrategyProcurement Strategy

The MIT Procurement StrategyThe MIT Procurement Strategy

Internal Providers&

Preferred Partners

Other

External VendorP-Card

FIRST CHOICE

SECOND CHOICE

SAP or SAPWebRequisitions

THIRD CHOICE

LAST RESORT

SAP Options

Why eCommerce at MITWhy eCommerce at MIT

•• MIT web oriented MIT web oriented

•• Allows for local placement of ordersAllows for local placement of orders

•• Reduce/eliminate trainingReduce/eliminate training

•• Tool to help achieve Procurement Tool to help achieve Procurement StrategyStrategy

•• Allows purchasing personnel to Allows purchasing personnel to concentrate on value added servicesconcentrate on value added services

MIT EMIT E--Commerce ToolsCommerce Tools

•• PP--Card Card –– receives electronic files and receives electronic files and uses SAP workflow for approvalsuses SAP workflow for approvals

•• SAPweb SAPweb –– MIT developed web MIT developed web requisitioning frontrequisitioning front--end to SAPend to SAP

•• ECAT ECAT -- electronic catalog ordering and electronic catalog ordering and payment systempayment system

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•• Daily transaction and monthly billing files Daily transaction and monthly billing files sent via FTP into drop boxsent via FTP into drop box

•• MIT designed ABAP program used to MIT designed ABAP program used to upload into SAP as Parked Documentsupload into SAP as Parked Documents

•• Workflow used to route to ApproverWorkflow used to route to Approver

•• Allows reallocation of Cost Object and Allows reallocation of Cost Object and G/L AccountsG/L Accounts

MIT PMIT P--Card Process FlowCard Process Flow

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9,3�'RFXPHQW�2YHUYLHZ�6FUHHQ�6KRW9,3�'RFXPHQW�2YHUYLHZ�6FUHHQ�6KRWCan Post here by clicking Document>Post or Reallocate by clicking on Fast Entry Screen

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Modify G/L Account

Or Cost Object

Split Dollar Amount up to 999 times

SAPWeb RequisitioningSAPWeb Requisitioning

•• MIT developed web front end MIT developed web front end •• SAP Gui not requiredSAP Gui not required•• Digital Certificate authenticationDigital Certificate authentication•• Easy to useEasy to use•• FunctionalityFunctionality

–– Create requisitionCreate requisition–– Display requisitionDisplay requisition–– Display Purchase OrderDisplay Purchase Order–– Find a requisitionFind a requisition

SAPWeb Create Screen ShotSAPWeb Create Screen Shot

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MIT ECATMIT ECAT

•• First vendor live February 1999First vendor live February 1999

•• Currently four vendors operationalCurrently four vendors operational–– NECX (Computer products)NECX (Computer products)

–– BOC GasesBOC Gases

–– Office DepotOffice Depot

–– VWR ScientificVWR Scientific

ECAT Design/Strategy ECAT Design/Strategy

•• Preferred vendor relationshipsPreferred vendor relationships

•• Vendor capabilities Vendor capabilities –– OBI, EDIOBI, EDI

•• Vendor managed product catalogsVendor managed product catalogs

•• Authentication Authentication –– digital certificatesdigital certificates

•• Integration with SAP for requisitioning, Integration with SAP for requisitioning, authorizations, approvals, payment authorizations, approvals, payment processing, reporting, etc. processing, reporting, etc.

ECAT DesignECAT DesignSAP

RequisitionSAPWeb

Requisition Authorizations

ApprovalsUser's Desktop Purch. Order A/P Payment

line item detail for

order processing

(OBI 850 order request) PO sent via Invoice sent via paper (for now)MIT EDI over the Internet EDI over the Internet

Vendor authentication 850 transaction 810 transaction

via x.509

certificates

Vendor Shopping Vendor Vendor VendorCatalog Basket (optional Order A/R A/R

for recon- System System Funds Receiptciliation

only) shipment

order is shipped

directly to customer

Advantages of the ModelAdvantages of the Model

•• Fully integrated with SAPFully integrated with SAP

•• Modular designModular design

•• Familiar look and feel for usersFamiliar look and feel for users

•• Takes full advantage of vendors’ valueTakes full advantage of vendors’ value--added services (e.g. MSDS sheets)added services (e.g. MSDS sheets)

•• Allows procurement staff to focus on Allows procurement staff to focus on vendor relationship managementvendor relationship management

Disadvantages of the ModelDisadvantages of the Model

•• Multiple vendor sites Multiple vendor sites -- different different capabilities, different navigationcapabilities, different navigation

•• Many components to maintainMany components to maintain

•• Not scalable to all vendorsNot scalable to all vendors

•• Batch processes within SAP and at Batch processes within SAP and at vendor sites mean that orders are not vendor sites mean that orders are not quite real timequite real time

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Issues to ConsiderIssues to Consider

•• Can SAP solutions be utilized? e.g. B2B, ITS, Can SAP solutions be utilized? e.g. B2B, ITS, mySAP.commySAP.com

•• Individual vendor relationships vs. catalog Individual vendor relationships vs. catalog aggregatorsaggregators

•• Many vendors don’t understand university Many vendors don’t understand university environmentenvironment

•• What standard(s) will prevail? e.g. EDI vs. What standard(s) will prevail? e.g. EDI vs. XML vs. OBIXML vs. OBI

•• What should be the role of internal providers What should be the role of internal providers in strategyin strategy

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%UHDNGRZQ%UHDNGRZQF ebruary 2000 P erc en tage B reakdow n

6%13%

15%

23%

42%

P aper

P artne r F la t F ile

EC A T

V IP C ard

S A P /S A P W eb

F our Y ear P urchasing A c tivity

0%

10%

20%

30%

40%

50%

60%

70%

1997 1998 1999 2000

E C A T

D A P O

SA P /S A PW E BP A P E R

F la t F i le

P -C ard

Paper

DAPO

P-Card

SAP

ECAT

Flat File

Additional ResourcesAdditional Resources

•• http://web.mit.edu/purchasing/http://web.mit.edu/purchasing/

•• http://web.mit.edu/sapweb/http://web.mit.edu/sapweb/

•• http://web.mit.edu/ecat/http://web.mit.edu/ecat/

•• [email protected]@mit.edu

