Sap Automating Strategic Sourcing

SAP Solution Brief SAP E-Sourcing

AUTOMATING STRATEGIC SOURCING Manage Spend for Continuous Profitability

The SAP® E-Sourcing application is Web-based software that helps you maximize savings by automating and streamlining the strategic sourcing process across all of your supplier expenditures. SAP E-Sourcing enables you to perform processes such as spend analysis, collaborative project manage-

Under pressure to support constant profitability in the face of global competition, procurement organizations like yours must increase visibility into expenditures and streamline the process of selecting suppliers. Continually battling maverick spending – with internal departments purchasing materials or services from suppliers with which you have no contracts – your procurement group must also aggregate expenditures and identify new areas for savings. The group also struggles to meet sourcing deadlines when using time-consuming, manual processes. Traditional communication methods – such as phone calls, faxes, and e-mails – often result in long cycle times and difficulties in standardizing and sharing best practices for procurement.

ment, online bidding, contract negotiation, and contract management. It lets you address the supplier relationship management needs of your entire procurement organization – now and in the future.

These issues are hindering procurement from accelerating its evolution from a back-office function into one that drives strategic, competitive advantage. As a procurement professional, you need a solution that helps you collaborate across departments, discover and qualify suppliers, cooperatively plan projects with suppliers, and continually evaluate and govern your suppliers. To help address these concerns, the SAP® E-Sourcing application enables you to streamline and improve the entire sourcing process. This includes performing essential capabilities such as spend analysis, collaborative project management, online bidding, contract negotiation, and contract management. The Web-based software helps you attain savings and accelerates time to benefit by cutting deployment costs and encouraging user adoption. Meanwhile, SAP E-Sourcing is integrated with your back-end systems, such as the SAP ERP application, to ensure that negotiated savings reach the bottom line.

With SAP E-Sourcing, your procurement operations can grow at your own rate; when you’re ready, you can easily and quickly add to your supplier relationship management solution by using advanced features and other modules such as operational procurement, while retaining your existing investment. A Complete E-Sourcing Solution

SAP E-Sourcing supports the end-to-end sourcing process, enabling you to perform the following actions to improve your supplier-spend capabilities: • Identify savings opportunities Using the spend-analysis reporting tools, quickly identify those categories with fragmented spend that would benefit from aggregated purchase contracts and supplier rationalization. Through integrated spend analysis and contract management, track compliance of actual spend to negotiated contracts and terms.

• Ensure a competitive bidding environment SAP E-Sourcing helps you ensure that the right suppliers are competing for your business. Using the self-registration process and supplier repository, you can easily identify which suppliers should be part of your sourcing events. Suppliers can maintain their profile information so that you stay current on their capabilities. • Manage requests for information, proposals, and quotations Conduct simple or complex sourcing activities in direct, indirect, and service categories by automating the creation of requests for information, proposals, and quotations. Analyze bids using collaborative scoring, weighted scoring for multiple attributes, total cost calculations, side-by-side comparisons, and pricing and savings reports.

• Extend procurement’s reach Key to extending procurement’s reach is collaborating with business units to drive additional savings. With SAP E-Sourcing, you can create an environment in which you work jointly with enterprise-wide departments to reach key sourcing decisions, such as defining requirements and evaluating supplier proposals and contract reviews.

• Conduct online reverse auctions Create tailored negotiation environments for reverse auctions. Interact with suppliers in real time, using instant messaging, bidding consoles that automatically refresh, and a countdown clock. Manage advanced bidding rules, such as bid visibility, automatic extensions, ranked-bidding format, weightedbidding format, staggered start and end times for individual items, and reserve prices.

• Enhance project management Link all sourcing activities to specific projects, to track results and decisions during each project’s duration. Monitor project status, manage employee workload, and track opportunities for savings.

• Optimize supplier awards Identify the lowest total-cost and best-value award strategies by using rules-based functions to optimize your award decisions. Easily analyze optimization possibilities by comparing options using reports and charts.

• Reduce cycle times SAP E-Sourcing enables you to create templates of every key sourcing process, from projects to online bids to contract terms and conditions. These templates reduce the cycle times while ensuring that best practices are repeated consistently throughout your organization.

• Enable end-user bid management Allow users outside of purchasing to initiate rapid requests for quotations, using your preferred supply base. Provide categoryspecific templates, terminology, and business processes for sourcing events.

• Help ensure compliance Use the following functionalities of SAP E-Sourcing to help ensure compliance with a variety of policies, procedures, and regulations, such as the Sarbanes-Oxley Act: – Contract management Generate, negotiate, and manage contracts with a single, searchable contract repository. Create a library of standard contracts and contract clauses to promote and enforce your organization’s legal standards during the contractgeneration process. Configure a workflow-based approval process using such factors as a contract’s monetary value and spend category. Automate all contract activity. Track rebates and thresholds. – Integration with your SAP software infrastructure Connect with other enterprise business solutions from SAP through out-of-the-box integration to the SAP ERP application and the SAP ERP Financials solution. Integrate key processes – such as requisitions, awards, and contracts – to ensure compliance of internal employees and external suppliers with preferred supplier agreements. • Streamline collaboration with suppliers Streamline collaboration with suppliers by using the following functionalities of SAP E-Sourcing: – Supplier repository Employ a searchable repository to support a supplier portal in which suppliers can register themselves, maintain and modify their own profiles and category records, and send updated files such as certificates. – Supplier collaboration Participate in collaborative discussions, respond to bid requests and auctions, negotiate contract terms, and view scorecard performance. – Supplier performance management Define metrics for supplier-performance scorecards. Use an activity library to define standard events, tasks, and activities that you can easily apply to suppliers’ records.

• Tailor e-sourcing to your business Tailor SAP E-Sourcing to your specific company needs, by using the following functionalities: – Executive dashboards Support project portfolio management, business process management, and performance analysis, using data collected from across the SAP E-Sourcing application and presented in a single view. – Flexible configuration Create templates, reports, page views, user-access rights and roles, and new data fields to capture information and processes specific to your organization. Undisputed ROI, Quick Payback

You can achieve clear ROI with SAP E-Sourcing, including time and cost savings from hosting, improved decision making, and repeatable processes. Plus, services from SAP and our partners can help ease the transition to e-sourcing. Multiple Deployment Options

You can deploy SAP E-Sourcing according to your needs. For example, to get up and running quickly, you may want the application hosted by SAP. Or, you can also choose to deploy SAP E-Sourcing on your own infrastructure. Note that you can seamlessly migrate from a hosted environment to an onpremises environment. When SAP hosts your application, you benefit from a secure, reliable, and scalable foundation without the associated investment in IT infrastructure and strain on your internal IT resources. Hosting fosters fast ROI, and rapid implementation helps you generate savings quickly.

www.sap.com/contactsap

Those customers just getting started with e-sourcing may want to consider the SAP E-Sourcing on-demand solution, a subscription-based hosted offering. The on-demand solution is rapidly deployed, contains preconfigured templates to help you achieve early success, and includes end-user help-desk support. Greater Savings and Value

E-sourcing activities result in better decisions that optimize the overall value contribution from suppliers. Through analysis tools, you can evaluate and compare supplier bids on factors that are most important to your organization. For example, your procurement team can weigh and collaboratively score responses to requests for proposals on the basis of factors such as existing supplier-performance scorecards, on-time delivery rates, price, and so on. Through SAP E-Sourcing, you can develop and source from a qualified supply base that delivers the best value to your enterprise. Sustainable Results

Templates with embedded sourcing process and category information can help you repeat best practices, reduce cycle times, and share knowledge among category managers. Automated sourcing events and analytical functions help you eliminate cumbersome, time-consuming, and paper-based supplier negotiations and awards. Integration with your SAP ERP application back end ensures that negotiated savings hit the bottom line though effective compliance of both internal employees and external suppliers.

50 080 330 (07/04)

©

2007 by SAP AG. All rights reserved. SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, Duet, PartnerEdge, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

Services for Total E-Sourcing

Initial success generates long-term e-sourcing acceptance. Available services through SAP and its partner ecosystem include product training and support for auction events involving requests for proposals, quotations, and information. These value-added services help increase user adoption and overall value, as well as help you initiate events, hold mock negotiation requests for proposals and auctions, and manage live events. Find Out More

If you would like to know more about SAP E-Sourcing and learn how it can help your procurement organization improve business processes, visit www.sap.com/srm/e-sourcing/index.epx. Powered by SAP NetWeaver®

SAP E-Sourcing is powered by the SAP NetWeaver® platform. SAP NetWeaver unifies technology components into a single platform, allowing organizations to reduce IT complexity and obtain more business value from their IT investments. It provides the best way to integrate all systems running SAP or non-SAP software. SAP NetWeaver also helps organizations align IT with their business. With SAP NetWeaver, organizations can compose and enhance business applications rapidly using enterprise services. As the foundation for enterprise service-oriented architecture (enterprise SOA), SAP NetWeaver allows organizations to evolve their current IT landscapes into a strategic environment that drives business change.