Vendor Management Business Blueprint V0.

Business Blueprint
Vendor Management

Product Owner: Pam Brown and Trevor Field

Author: Avinash Pansare and Girish S
Issue Date: 30 January 2016
Status: Final
Version V0.4

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 Vendor Management Business Blueprint V0.4

Document Reviewers
Name Role Date

Enzen

Vaideshwar Sekar R4 Work stream Lead

Sayed Mohammed Solution Delivery Manager

Vikesh Sachdeva Programme Solution Architect

Amit Patil R4 Solution Architect

KPMG

Sandeep Vekaria Business Advisor

UKPN

Name Role Date

Nirmal Kotecha Director CPP

Jon Allan R4 Release Lead

Roger Waring Head of Procurement

Pam Brown R4 Procurement work stream lead

Trevor Field R4 Accounts Payable lead

Version History
Version Date Name Comment

V0.1 16.02.2016 Girish S Initial draft

V0.2 18.02.2016 Avinash Pansare Internal review

V0.3 22.02.2016 Girish S Updated for review points

V0.4 24.02.2016 Avinash Pansare Updated for review points

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Table of Contents

1. Introduction:................................................................................................................................................................... 4
2 High Level Business Process Overview............................................................................................................................... 5
3 .Functional Solution......................................................................................................................................................... 6
3.1.1 High Risk Supplier Registration Process........................................................................................................................ 7
3.1.2 Business Process –Low Risk Supplier Registration Process........................................................................................... 10
3.1.3 Vendor change request process initiated by the Supplier............................................................................................ 14
3.1.4 Vendor change request process initiated by the Business............................................................................................ 17
4 Technical /Development Related Items (RICEFW)............................................................................................................. 20
4.1 Technical developments................................................................................................................................... 20
4.2 Interfaces....................................................................................................................................................... 21
4.3 Forms............................................................................................................................................................. 21
4.4 Workflow....................................................................................................................................................... 21
5 Authorization................................................................................................................................................................. 23
6Organizational Change Related Items (To be filled by Business)..........................................................................................24
6.1 End User Training Considerations...................................................................................................................... 24
6.2 Change Impact Summary................................................................................................................................. 24
7. Assumptions................................................................................................................................................................. 25
8. Glossary....................................................................................................................................................................... 27

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1. Introduction:

UK Power Networks requires a Vendor Management process to be delivered by the Business Transformation Programme
to ensure that UKPN has a single auditable process for the management of vendor master data used specifically in the
Purchase Order creation process.

At UKPN the vendor management process is required to ensure a systematic and efficient supplier registration which
maintains an audit trail of creation and changes applied to the vendor master record.

Analysis is undertaken for the purposes of optimising delivered performance and minimising a number of risks to UK Power
Networks, including business continuity, and financial risk. In this context, vendor management is focussed on vendor
reputation to support the Procurement process as well as the payment data relating to banking details.

Vendor Management is undertaken following registration of the vendor, and is supported by Procurement Team Category
Specialists and by the Accounts Payable team from a payment processing perspective.

The processes throughout this document define the methods of recording and managing the vendors’ data and
registration, to the required UKPN standards.

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2 High Level Business Process Overview

Level 1Business Process

Process: Vendor Management
Description:

The purpose of vendor management is to ensure that vendor master data (Registration, Maintenance) and
obligations to UKPN, and its vendors, are clearly visible to the right people in the organisation and that they
are executed upon.
This process is utilised on an ongoing basis throughout the duration of the vendor master creation process to
identify and monitor the timely completion of all new vendor master creation and changes in vendor master
requested based on approval. In addition, this process illustrates the formal communication between the
parties involved.
It is important to note that the execution of these vendor obligations may be the responsibility of the supplier,
UKPN or both parties.
The primary objectives of vendor management are to:
Govern the vendor master creation process
- Govern the supplier relationship, including subsequent management of the vendor master data
- Effectively manage the impacts of risk, and compliance on the vendor master record
- Ensure clear communication of services and ordering mechanisms to the relevant parties

The Vendor Management process for Operational Vendor involves the following sub-process:
 Vendor Registration
 Vendor Creation
 Vendor master update ( Vendor details change request)

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Level 2Business Processes

Process: Supplier Creation (Registration/Manual)
UKPN’s second level process comprises the following Level 3 components:
Process Step Description
This process focuses on
Vendor 1) the necessity of creating a vendor and
Registration/Manual 2) The process of registering the vendor. The process flow illustrates how UKPN
will manage the Vendor Master
Approval of registered vendors and managing the replication of approved
vendors from SAP Sourcing to SAP ECC
Vendor Approval and
1) Registration of vendor
transfer to SAP ECC
2) Approval of vendor
3) Transfer to SAP ECC

Process: Supplier Maintenance (Changes instigated by suppliers, business users, internally by procurement or AP or by
regulations/laws)
UKPN’s second level process comprises the following Level 3 components:
Process Step Description
Vendor Master update is the process managing changes in Vendor details which
can be requested by Business user or by representative of Vendor using the
following processes:
Vendor Master and
1. Changes initiated by Business User
change management
2. Changes initiated by the supplier
3. Changes performed by Procurement / AP

3 .Functional Solution
3.1 Business Process Description: Vendor Management

The Vendor Management process for Operational Vendors involves the following sub-processes:
3.1.1 Vendor Registration
3.1.2Vendor Creation
3.1.3 Vendor Master update by Business (change request)
3.1.4 Vendor Master update by Supplier

 Vendor Registration: SAP Sourcing is to be used as the Vendor Master from legal perspective for new vendors,
the vendor is then published (pushed into ECC). There is an easy replication process between Sourcing and ECC
as the ECC functionality is also used, i.e. creation of Vendors (Vendor Master).

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 Vendor Creation: Vendor Creation is the process for managing the new vendor and addresses. Also accounting
data / bank details to be updated in Vendor Master post approval of Accounts Payable personnel
 Vendor Master Update (change request) : Vendor Master Update process is for Vendor Master Maintenance.
The change can be requested by Vendor or Business user in terms of Change request form.

3.1.1 High Risk Supplier Registration Process

This process focuses on High Risk Supplier Registration Process

The process flow illustrates how UKPN will manage the Vendor Registration Process:

3.1.1.1 Business Process Description – Vendor Management

Where changes are proposed to the prevailing vendor registration and arrangements these may be triggered by UKPN/Vendor/
Neutral events (i.e. change in law).

The extension of existing vendor will also follow the registration process.
Creation of a vendor master might include the following but not limited to:

 Registration of suppliers
 Manual Creation of Vendor Master
 Update Payment Data i.e. Banking details
 Change of Vendor Master i.e. address, email etc.

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As a Business operating in the UK, any vendor creation process must be considered in relation to a number of legislative
requirements i.e. HMRC Regulations, Utility Contract Regulations etc. and the associated risk of Breach of the Regulations. Failure
to comply with these obligations can expose UK Power Networks to challenge in a court of law and the application of significant
fines.

Business Process Detailed Description - Vendor Management (High Risk Supplier Registration Process)
Process ID Level 5 step Related Business Solution Solution SAP
No. Requirement Type Transactio
n code/
(E- Menu
Enhancem path
ent
S-
Standard
M-
Manual)

VM_3.1.1.2.1 Supplier NA Supplier receives Self M NA

receives Self Registration Link from
Registration Procurement for High Risk
Link from Supplier Registration Process.
Procurement

VM_3.1.1.2.2 Supplier fills NA Supplier fills in the Registration S NA

Registration Form as per the obligations,
form and rules and regulations and it is
submits submitted to the relevant
Category Specialist for approval
via the SAP sourcing workflow to
Supplier Management tab.
VM_3.1.1.2.3 Procurement NA Category Specialist registers on M NA
registers on behalf of the supplier by filling in
behalf of the same Registration form.
supplier
VM_3.1.1.2.4 Registration NA Category Specialist reviews and S NA
form Approval approves the Registration form,
Approve / if found valid. If not found valid,
Reject it will be rejected and the phase
status reverts to ‘under
submission’ *

VM_3.1.1.2.5 Supplier NA Category Specialist creates the M NA

Master Created Supplier Master, populating
Purchasing Organisation(s) and
Company code(s) details
VM_3.1.1.2.6 Suppliers will NA Suppliers will be short listed in Integratio
be short listed RFx activity n point
in RFx activity with SAP

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Process ID Level 5 step Related Business Solution Solution SAP

No. Requirement Type Transactio
n code/
(E- Menu
Enhancem path
ent
S-
Standard
M-
Manual)

Sourcing
event
VM_3.1.1.2.7 Awarded NA Procurement Team (Category M NA
supplier(s) Specialist) will publish awarded Integratio
published to supplier(s) to ECC n point
ECC with SAP
Sourcing
event
VM_3.1.1.2.8 Award NA Based on shortlisted suppliers in S NA
Contract to RFx Procurement Team Integratio
supplier (Category Specialist) awards n point
contract to supplier with SAP
Sourcing
event
VM_3.1.1.2.9 Vendor Master NA Accounts Payable creates S NA
created in ECC Vendor Master. It is an
(Automated) automated process and data
entered as per the listed
requirements on Vendor
creation spreadsheet. Email
notification to Procurement re
the Vendor Master number.
Accounts Payable also receives
E-mail notification that new
vendor master created.
VM_3.1.1.2.10 Send mail to NA An email notification is sent to M NA
supplier for supplier requesting Payment
Payment details
details
VM_3.1.1.2.11 Supplier NA Supplier receives email with a M NA
receives email link to SAP Sourcing to provide
notification for their payment details
their payment
details
VM_3.1.1.2.12 Supplier login NA Supplier login to Sourcing S NA
to Sourcing and system and updates payment
update details.
payment This operation can be executed
details numerous times of details

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Process ID Level 5 step Related Business Solution Solution SAP

No. Requirement Type Transactio
n code/
(E- Menu
Enhancem path
ent
S-
Standard
M-
Manual)

provided are incorrect

VM_3.1.1.2.13 Payment NA Accounts Payable receives email S NA
details notification of payment details
Approval ( Y/N) and accepts or rejects.*
Approve /
Reject
VM_3.1.1.2.14 Vendor Master NA Accounts Payable updates S NA
Published with Vendor Master with Payment
Payment details in ECC, based on
details in ECC approval.
VM_3.1.1.2.15 Receive Supplier receives email S NA
notification of notification of approval and
payment payment details updates.
details approval
VM_3.1.1.2.16 Receive Supplier receives email S NA
notification of notification of rejection of
payment payment details and they are
details requested to login to SAP
rejection Sourcing and update their
payment details again.

* All Workflows will trigger both a system email and workflow trigger to the relevent user for action

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3.1.2 Business Process –Low Risk Supplier Registration Process

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3.1.2.1 Business Process Detailed Description – Low Risk Supplier Registration Process

Process ID Level 5 step No. Related Solution Solution Type SAP

Business Transactio
Requiremen (E-Enhancement n code/
t S-Standard Menu path
M-Manual)

VM_3.1.2.1.1 Send the instruction NA Business sends email M NA

manual (PDF) to the notification to supplier with
supplier contact for instruction manual (PDF)
registration (Offline- enclosed in email to initiate
over mail) the Supplier Registration
Process following the offline
communication
VM_3.1.2.1.2 Receive Notification NA Supplier receives email M NA
notification from Business
with Self Registration Link
enclosed in email
VM_3.1.2.1.3 Submit Registration NA Supplier fills in the M NA
Form Registration Form in SAP
Sourcing as per the
obligations, rule and
regulations and it is submitted
to relevant Category Specialist
for approval. Material Group
to define the CS.
VM_3.1.2.1.4 Approve Category Specialist reviews M NA
Supplier(Y/N)Approv the form and accepts/ rejects.
e / Reject *

VM_3.1.2.1.5 Publish supplier to NA If approved the Category M NA

ECC Specialist enters Purchasing
Organisations and company
code details and publishes the
supplier to ECC.
VM_3.1.2.1.6 Vendor Master NA Accounts Payable creates NA
S
Created Vendor Master in ECC
VM_3.1.2.1.7 Receive Notification NA Business user receives email

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Process ID Level 5 step No. Related Solution Solution Type SAP

Business Transactio
Requiremen (E-Enhancement n code/
t S-Standard Menu path
M-Manual)

notification regarding Vendor

Master created in ECC
Accounts Payable also
receives E-mail notification
that new vendor master
created.
VM_3.1.2.1.8 Send mail to supplier NA An email notification is sent to NA
for Payment details supplier requesting Payment
M
details

VM_3.1.2.1.9 Receive Email NA Supplier receives email NA

Notification notification requesting their M
Payment Details
VM_3.1.2.1.1 Supplier login to NA Supplier logs in to SAP NA
0 Sourcing and update Sourcing and updates their M
Payment Details Payment details.
VM_3.1.2.1.1 Approve Supplier NA Accounts Payable receives NA
1 (Y/N) email notification of payment
M
details and approves or
rejects.*
VM_3.1.2.1.1 Vendor Master NA If Accounts Payable approves NA
2 published with the form, the Vendor Master
payment details in with Banking details is M
ECC updated in ECC. *

VM_3.1.2.1.1 Receive Notification NA Supplier receives email M NA

3 - Approve notification of approval and
Vendor Master updates.
VM_3.1.2.1.1 Receive notification Supplier receives email S N/A
4 of payment details notification of rejection of
rejection payment details and they are
requested to login to SAP
Sourcing and update their
payment details again.

VM_3.1.2.1.1 Receive notification Business receives email S N/A

5 of Supplier rejection notification of rejection of the
Supplier. Further process
stops.

* All Workflows will trigger both a system email and workflow trigger to the relevant user for action

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3.1.3 Vendor change request process initiated by the Supplier

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3.1.1.3 Business Process Detailed Description - Vendor Management(Change Management Process)

Process ID Level 5 step No. Related Business Solution Solutio SAP
Requirement n Type Transacti
on code/
(E- Menu
Enhanc path
ement
S-
Standar
d
M-
Manual
)

VM_3.1.3.2.1 Supplier submits NA Supplier change the details in SAP M NA

change in details Sourcing System and submit to UK
notification in SAP Power Networks for approval
Sourcing

VM_3.1.3.2.2 Approve Purchasing NA Category Specialist reviews the M NA

Data changes (Y/N) changes and approves / rejects. *
Approve / Reject

VM_3.1.3.2.3 Publish Changes to ECC NA If approved, the Category Specialist M NA

will publish the changes to ECC.
Supplier receives notification for
the same.
VM_3.1.3.2.4 Receive email NA Supplier receives email notification S NA
Notification of changes for changes made by Category
made Specialist.
VM_3.1.3.2.5 Receive notification - NA Category Specialist will review the M NA
rejection Purchasing Data changes and
reject, if found invalid. Supplier will
receive notification for the same. *
VM_3.1.3.2.6 Approve Accounting NA Accounts Payable will review the M NA
Data Changes (Y/N) Payment Data changes submitted
Approve / Reject and approve / reject. *

VM_3.1.3.2.7 Publish Changes to ECC NA Accounts Payable will publish M

changes to ECC on approval.
Supplier receives notification for
the same.

VM_3.1.3.2.8 Receive Notification NA Supplier receives email notification Manual NA

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Process ID Level 5 step No. Related Business Solution Solutio SAP

Requirement n Type Transacti
on code/
(E- Menu
Enhanc path
ement
S-
Standar
d
M-
Manual
)

of rejection of payment details and

they are requested to login to SAP
Sourcing and update their payment
details again. *

* All Workflows will trigger both a system email and workflow trigger to the relevent user for action

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3.1.4 Vendor change request process initiated by the Business

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3.1.4.1 Business Process Detailed Description - VendorManagement(Supplier Change Request Process)

Process ID Level 5 step No. Related Business Solution Solutio SAP
Requirement n Type Transacti
on code/
(E- Menu
Enhanc path
ement
S-
Standar
d
M-
Manual
)

VM_3.1.4.2.1 Fill in Vendor Change NA Business fills in the Vendor Change M NA

Request Form Request Form for Unblocking,
Blocking and Extension for vendor

VM_3.1.4.2.2 Specify requested NA Business specifies the exact type of M NA

change change request to be made.

VM_3.1.4.2.3 Approve the requested NA Category Specialist reviews the M NA

change ( Y/N) requested change and approves /
Approve / Reject rejects. *

VM_3.1.4.2.4 Block / Unblock / NA Category Specialist blocks / M NA

Extend Vendor Master unblocks / extend Vendor Master
and Publish to ECC as per the decision.
VM_3.1.4.2.5 Receive Notification NA Business receives email notification S NA
regarding the same.

VM_3.1.4.2.6 Extension updated in NA If extended, the extension is S NA

ECC (includes all updated in ECC by Procurement
Payment screens) including all payment screens.

VM_3.1.4.2.7 Receive notification NA For Unblocking request, Accounts M NA

and approval work Payable receives email notification
item and approval of work item. *

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Process ID Level 5 step No. Related Business Solution Solutio SAP

Requirement n Type Transacti
on code/
(E- Menu
Enhanc path
ement
S-
Standar
d
M-
Manual
)

VM_3.1.4.2.8 Liaise with supplier NA On the basis of notification M NA

finance contact offline received, Accounts Payable liaises
with the supplier’s finance contact.
This is offline process.

VM_3.1.4.2.9 Check and Update NA Accounts Payable checks and M NA

contact person and updates the supplier contact
send link to Sourcing person about the approval of
Portal requested change and sends
Sourcing Portal link through email.

VM_3.1.4.2.10 Login to Sourcing NA Supplier logs in to Sourcing Portal M NA

Portal and validate / using the received link and
update the relevant validates / updates the relevant
details details as per the procedure

VM_3.1.4.2.11 Approve Changes (Y/N) NA Accounts Payable reviews the M NA

Approves / Rejects changes made by supplier and
approves / rejects. *

VM_3.1.4.2.12 Remove Posting Block NA If approved, Accounts Payable M NA

from Supplier Master removes the Posting Block from
Supplier Master.

VM_3.1.4.2.13 Publish Vendor to ECC NA Accounts Payable will publish

vendor to ECC.

VM_3.1.4.2.14 Supplier receives Email NA M NA

Notification - rejection Supplier receives email notification

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Process ID Level 5 step No. Related Business Solution Solutio SAP

Requirement n Type Transacti
on code/
(E- Menu
Enhanc path
ement
S-
Standar
d
M-
Manual
)

of rejection of payment details and

they are requested to login to SAP
Sourcing and update their payment
details again. *
VM_3.1.4.2.15 Purchase Block NA If supplier is blocked, purchase M NA
updated in ECC block is updated in ECC by Category
Specialist.

VM_3.1.4.2.16 Receive Email NA Category Specialist receives email M NA

Notification notification for purchase block
updated in ECC.

VM_3.1.4.2.17 Receive Email NA Business user receives email

Notification notification if Procurement reviews
the requested changes and rejects
the same.

* All Workflows will trigger both a system email and workflow trigger to the relevent user for action

4 Technical /Development Related Items (RICEFW)

4.1 Technical developments

TS Description Type Complexity Relevant doc

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TS Description Type Complexity Relevant doc

4.2 Interfaces
There is 1 interface identified.

4.3Forms

FORMS/OUTPUT
RICEFW-ID Description Data Output Type (Form, EDI, Frequency Volumes Owner
Object etc.)
Supplier Supplier
Form
Registration Form (Sourcing)

4.4Workflow
Explanation of SAP Sourcing Workflow: The SAP sourcing workflow enables you to perform approvals of documents
electronically. Depending on your document data and your configuration settings, the system determines the necessary approval
and completion steps, as well as the required approvers.

WORKFLOW
RICEFW-ID Description Data Object Engaged Owner
Parties

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5 Authorization

The SAP authorisation concept protects transactions, programs, and services in SAP systems from unauthorised access. On the
basis of the authorisation concept, the administrator assigns authorisations to the users that determine which actions a user can
execute in the SAP System, after user has logged on to the system and after due authentication.

For BTP, we have identified the new roles against the processes in section 2 of the Blue print, and the same are detailed below.
New Roles and Authorisations will be created for Vendor Management Roles.

Various Roles have been identified for the Vendor Management process is as follows:

Role Role Description

Procurement Approver Document Approver

Category Specialist Document Creator

Business User Vendor creation /Change request

Accounts Payable Approver Document Approver – Payment details only

Super User Ability to have oversight of all activities being undertaken in the process
Supplier Vendor creations/Change request

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6Organizational Change Related Items (To be filled by Business)

6.1End User Training Considerations

1. Procurement training in SAP Sourcing –Vendor management process.

Procurement currently utilise the SAP sourcing solution for managing Procurement Events as part of the Procurement
process. The high level system functionality will be very similar to the Procurement process and therefore will be
familiar to the team.
The actual process and requirements placed on the team will contain greater detail and will therefore need to be trained
in more detail to enable effective understanding of their obligations under the process.

2. Accounts Payable training in SAP Sourcing – Vendor management process.

There is currently a defined Vendor Management team in Accounts Payable of 3 individuals who will require training on
the new system and process.

To enable an overall understanding of the process it is suggested that the Accounts Payable team receive the same
degree of training as Procurement.

3. Business users training in SAP Sourcing – Vendor management process

The new process will no longer require business users to request new vendors as the suppliers will be asked to provide
their data direct into the system. However the users will need to be made aware of the change to the process and the
medium by which the suppliers are provided access to the system for details submission.

Change requests will still be enabled for business users via SAP Sourcing. Therefore a group of regular users will be
provided with access and training on the system via webinars due to the diverse location of the user group.

6.2 Change Impact Summary

Organisational Change Impact

Change Impact Old Way New Way Positive Impacts Negative Impacts
Summary To Company To Company
To individual roles To individual roles

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7. Assumptions

.
1. New Vendor creation request will be always through SAP Sourcing
2. Change request creation for Vendor master update will be created in SAP Sourcing

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Appendix: Decision References/Cross References

RELATED/REFERENCED DOCUMENTS

Document Name Version Brief Description

ATTACHMENTS

Document Name Version Brief Description

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8. Glossary

Terms Description

Master data is the set of data which is commonly used across the entire organisation and all
business processes. Master data is shared by different people for different purposes at the
Master Data same time. Information about materials, services, customers and suppliers does not change
frequently. Master data is the data that remains unchanged over a long period of time. Hence
it’s efficient to keep this information in a place in which every user can access it.

This is an acronym, which stands for the key technical requirements which need to be
changed to accommodate the new system design. The requirements are consolidated into
the following six technical areas:
R- Reports
RICEFW I – Interfaces
C – Conversions
E- Enhancements
F – Forms
W – Workflows

Vendor Vendor is a supplier, who provides goods, works and services to the business users
Supplier is an organisation that is not yet entered into the UK Power Networks Vendor
Supplier
Master Database

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