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

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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

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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

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Efficient Procure-to-Pay Processes - Ensures Cost Savings

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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%

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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

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SAP SRM - Procurement Process & Supplier Collaboration

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SAP SRM - Centralized Sourcing & Contract Management

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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

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SAP SRM Deployment Scenarios

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SAP SRM Deployment Scenarios

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SAP SRM Deployment Scenarios

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SAP SRM Deployment Scenarios

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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

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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
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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

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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

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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)

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SAP SRM Functional Overview Purchase Order Management

Electronic Purchase Orders
Supplier SelfServices (SUS) Electronic Service Confirmations Support for Services

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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
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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
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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

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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

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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

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SRM 7.0 Release Highlights

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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

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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

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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

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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
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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
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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

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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

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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

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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

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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

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Thank you

All rights reserved. The information contained herein is subject to change without notice.

2009, Cognizant Technology Solutions