SAP Supplier Relationship Management
Girish Dhondge
All rights reserved. The information contained herein is subject to change without notice.
2009, Cognizant Technology Solutions
Chief Procurement Officer - What Keeps Them Up at Night?
Managing Savings
Spend Management
Savings claims are difficult to measure and guarantee
Hard to manage all spend categories
No systems to ensure expected savings are delivered
Perception that purchasing doesnt always need to be involved
Cooperation with peer departments that hold the budgets
Prove savings to CFO and business units
Compliance
Supplier Costs
Difficulty ensuring regulatory/policy compliance
i.e., Sarbanes-Oxley and HIPAA, etc.
Constant search for new ways to manage and reduce supplier costs
Systems challenges: collaboration, user adoption, compliance
Requires new systems and skills
SAP 2008 / Page 2
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
Chief Procurement Officer - Procure to Pay Process Priorities
Increasing Pressure on Procurement..
Accelerating business value and efficiency Lowering costs Compliance imperative Supplier risk
is Driving CPO Focus
Lack of requisition-to-pay process efficiency Improve compliance (contract, process, price) Improve visibility of spend Lower transaction costs Increase spend under management
30% 41% 56%
27%
23%
Source: Aberdeen report E-Procurement Trials and Triumphs, (Oct 2007)
BUSINESS PRIORITIES
Ensuring lean, compliant procurement operations Automating compliance to contracts and policies Efficiency driven savings through integrated process
GOALS
Freeing up time and resources Improving operational execution and savings realization Closing the loop with suppliers, users and finance
SAP 2008 / Page 3
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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Confidential
Inefficient Procure-to-Pay Processes - Results in High Costs
Inefficient Procure-to-Pay Processes Result in Unrealized Savings, Costly Operating Costs and Poor Spend Control
High Procure to Pay Process Costs Due to non-standardized Reqto-PO processes, poor user adoption and disparate systems Ineffective Ability to Meet Sourcing Demand Lack of centralized view of demand increases cost and cycle times and decreases transparency
Lack of Contract Compliance Inability to monitor and reduce maverick buying, enforce contract usage and drive cost savings.
Inefficient Supplier Enablement & Collaboration Leads to poor supplier onboarding, communication, engagement, and visibility
SAP 2008 / Page 4
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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Confidential
Efficient Procure-to-Pay Processes - Ensures Cost Savings
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
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Procure to Pay Process - Measurements of Success
Significant Difference in Success Between Top-Performing Companies and Others
Key Performance Indicators
Average annual savings Spend under contract Contracts managed centrally Indirect purchases through catalogs PO error rate
Source: ASUG Benchmarks 2006, 2007
Bottom 3.1%
45.7% 55% 14.9% 10.5%
Average 5.4%
80.2% 76% 19.2% 8.1%
Leader 5.7%
82.2% 85.6% 28.3% 4.6%
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
SAP Supplier Relationship Management Automates the Procure to Pay Process
SRM Delivers Efficiency, Flexibility, and Insight
Requisition & Purchase Order Management Centralized Contracts
Supplier Collaboration
Centralized Sourcing
Finance
Spend Reporting
Supplier Qualification & Evaluation
Automates Requisition and Purchase Order Management with easy to use Catalog Centralized Sourcing reduces cost and cycle times Centralized Contracts drives compliance to contracts and policies Supplier connectivity enables transaction efficiency Supplier qualification & evaluation enables Supplier Management Spend Reporting delivers enterprise wide insight Integration with Business Suite/ ERP
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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Confidential
SAP SRM - Procurement Process & Supplier Collaboration
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM - Centralized Sourcing & Contract Management
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM - Spend Reporting, Supplier Qualification & Evaluation
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SAP SRM - Key Takeaways
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SAP SRM System landscape
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SAP SRM Deployment Scenarios
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM Deployment Scenarios
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SAP SRM Deployment Scenarios
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SAP SRM Deployment Scenarios
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM Deployment Scenarios
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SRM Functional Overview Self-Service Procurement Shopping Cart
Easy to use wizard for end users Generation of a Requisition, Reservation, or Purchase Order Team Purchasing concept Availability check and Assignment of Sources of Supply Preferred Vendor, Contracts Distribute Account Assignment
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SRM Functional Overview SRM-MDM Catalog
Robust Search by Free text, Supplier, Category Fuzzy search, linguistic search support Robust Catalog Administration Flexible Catalog mapping Image support Parametric attribute search Internal (stock item), Supplier, and Punch Out Catalogs
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions Confidential Confidential
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SAP SRM Functional Overview Self-Service Procurement Check Status
Check status of Workflow Change/ edit Shopping Carts Track PO status Extensive document search and sort Related documents
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SAP SRM Functional Overview Self-Service Procurement Approval
Flexible Approval flow to drive compliance Spending limit, Accounting access enforcements Header or Line item approval Mobile access Ad Hoc Approvers, Reviewers Business rule based Workflows Email notifications Delegations and Substitutions
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM Functional Overview Self-Service Procurement Confirmation & Invoice
Returns and Credit Memos Partial Confirmations, Cancellations Advance Shipping Notification Texts / Attachments can be flagged as Internal or External Invoice entry PO and Non-PO based invoices Procurement Card Tolerances Evaluated Receipt Settlement (ERS)
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
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SAP SRM Functional Overview Purchase Order Management
Electronic Purchase Orders
Supplier SelfServices (SUS) Electronic Service Confirmations Support for Services
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
SAP SRM Functional Overview Centralized Sourcing
Robust Sourcing for Direct, Indirect and Services spend Easy to use Bidding Engine Electronic Supplier response Collaboration to propose changes, chat and bid confirmation RFx creation from SRM and demand from ERP Multi-round processing Bid Evaluation and Award
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions Confidential Confidential
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SAP SRM Functional Overview Centralized Contracts
Central Contract repository and compliance across SRM and ERP Payment terms at Header, Line item, and distribution level Flexible Alerts on Contract value, Expiration date, Qty etc. Distribute Contract items to Catalog Document Change & Version Management Control on Exchange rate thresholds, multicurrency contracts
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions Confidential Confidential
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SAP SRM Functional Overview Supplier Collaboration
Supplier communication of key transactions User friendly dashboard for suppliers
Administration to manage user access
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
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SAP SRM Functional Overview Reporting
Operational Reporting with data access across SRM and ERP Financials Pre-packaged Reports Role-based Reports SAP NetWeaver support for BI Data extractors/ Mapping, Portal, MDM data harmonization Spend Performance Management
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
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SAP SRM - Best in Class Procure-to-Pay Solution
Comprehensive Functionality
Integrated process with SAP Business Suite Self-service procurement + Goods Receipt + Invoice + Payment Approval = P2P Catalogs, Shopping cart with automated Approval workflow Centralized Sourcing & Contracts
delivers value
Compliance tracking delivers realized savings Efficiency throughout the entire P2P process reduces costs Compliance and governance are achieved by using best practice
Positive ROI as measured key KPIs
Collaborative Services Procurement
Invoicing Reporting
SAP 2008 / Page 28
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
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SRM 7.0 Release Highlights
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP Business Suite 7.0 Direction
SAP Business Suite
EhP EhP EhP SRM 7.0 Continuous Innovation Stable core
SCM
ERP
SRM SRM 7.0
CRM
PLM
Planned roadmap functionality released in easy to consume Enhancement Packs*
*Target: EhP 1 in 2009 & EhP 2 in 2010
SAP NetWeaver 7.0
Stable Core
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
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SAP SRM 7.0 Procurement Stable Core - Summary
Delivers
Improved fully integrated procure to pay offering for core procurement processes Excellence in end to end collaborative services procurement
Increased investments to extend scalability, flexibility and reduce TCO
Procurement Excellence
Services Procurement
Foundational Investments
Unified Access and Information Centralized Global Operational Contracts Process Enhancements Document Search Across Source Areas
Collaborative End to End Process Specific Industry Category Focused Enhanced Sourcing Enablement Services Repository and Specification
Extended Workflow Capabilities TCO Reduction Enhancement Pack Enablement
Procurement Core
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SAP SRM 7.0 Unified Access and Information
User friendly Personalized Object Work list Harmonization of roles across the Business Suite Consolidated access to ERP and SRM business objects and queries
Quick links to application services
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SAP SRM 7.0 Technology Platform Enhancements
Widgets for Business user access (prepackaged and custom) Process controlled SRM Business Workflow Harmonized, UI for seamless usability across ERP and SRM Robust mobile and desktop support Non-disruptive innovation via EhP Easy, low-cost customization with Web Dynpro
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions Confidential Confidential
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SAP SRM 7.0 Centralized Contracts
Harmonization of Global Outline Agreements and Purchasing Contracts in SRM and multiple ERPs
Sophisticated and efficient grouping of contract line item distribution across different locations of the same back-end system Revision levels in SRM Mass change of contracts Currency flexibility on the distribution level
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions Confidential Confidential
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SRM 7.0 Centralized Sourcing
Support for Services Procurement in Sourcing Line-item revision level on all documents Confirmation of bidders participation Chat Response modification
Withdrawal of bids
Versioning of bids One bid per supplier company
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SRM 7.0 Delivering on Services Procurement
Services-based Catalog
Hierarchical definition of Services requirements
Catalog integration Service Master Integration Limits-based unplanned Services Demand aggregation PO and Contract creation Service Confirmations
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SRM 7.0 Supplier Evaluation Supplier Survey Cockpit
Supplier survey cockpit
Ad hoc surveys SAP NetWeaver BI integration for Consolidation and Reporting Excel import of suppliers and evaluators Response Monitoring and Reminders
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SAP SRM 7.0 Supplier Evaluation Create Questionnaire
Integration with Web Survey tool for Questionnaire creation
Custom invitations and Email distribution of survey Response Monitoring and Reminders
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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SAP SRM 7.0 Summary - Key Takeaways
SAP offers a market-tested end-to-end Procure-to-pay solution
SAP continues to make significant investments in procurement
SAP SRM 7.0 delivers efficiency, insight, flexibility with integrated process support with SAP Business Suite
SAP SRM drives bottom line value by reducing costs, increasing compliance, and delivering realized savings
| 2009, Cognizant Technology Solutions | 2009, Cognizant Technology Solutions
Confidential
Confidential
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Thank you
All rights reserved. The information contained herein is subject to change without notice.
2009, Cognizant Technology Solutions
