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SAP Solution Brief

SAP E-Sourcing

AUTOMATING
STRATEGIC SOURCING
Manage Spend for Continuous Profitability

The SAP® E-Sourcing application Under pressure to support constant profitability in the face of
is Web-based software that global competition, procurement organizations like yours must
increase visibility into expenditures and streamline the process
helps you maximize savings by
of selecting suppliers. Continually battling maverick spending –
automating and streamlining
with internal departments purchasing materials or services from
the strategic sourcing process suppliers with which you have no contracts – your procurement
across all of your supplier group must also aggregate expenditures and identify new areas
expenditures. SAP E-Sourcing for savings. The group also struggles to meet sourcing deadlines
when using time-consuming, manual processes. Traditional
enables you to perform pro-
communication methods – such as phone calls, faxes, and
cesses such as spend analysis, e-mails – often result in long cycle times and difficulties in
collaborative project manage- standardizing and sharing best practices for procurement.
ment, online bidding, contract
negotiation, and contract man-
These issues are hindering procurement from accelerating its
evolution from a back-office function into one that drives stra-
agement. It lets you address
tegic, competitive advantage. As a procurement professional,
the supplier relationship manage- you need a solution that helps you collaborate across depart-
ment needs of your entire pro- ments, discover and qualify suppliers, cooperatively plan projects
curement organization – now and with suppliers, and continually evaluate and govern your
suppliers.
in the future.

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 • Ensure a competitive bidding environment
at your own rate; when you’re ready, you can easily and quickly SAP E-Sourcing helps you ensure that the right suppliers are
add to your supplier relationship management solution by using competing for your business. Using the self-registration process
advanced features and other modules such as operational and supplier repository, you can easily identify which suppliers
procurement, while retaining your existing investment. should be part of your sourcing events. Suppliers can maintain
their profile information so that you stay current on their
A Complete E-Sourcing Solution capabilities.
SAP E-Sourcing supports the end-to-end sourcing process,
enabling you to perform the following actions to improve • Manage requests for information, proposals, and
your supplier-spend capabilities: quotations
• Identify savings opportunities Conduct simple or complex sourcing activities in direct,
Using the spend-analysis reporting tools, quickly identify those indirect, and service categories by automating the creation of
categories with fragmented spend that would benefit from requests for information, proposals, and quotations. Analyze
aggregated purchase contracts and supplier rationalization. bids using collaborative scoring, weighted scoring for multiple
Through integrated spend analysis and contract management, attributes, total cost calculations, side-by-side comparisons,
track compliance of actual spend to negotiated contracts and and pricing and savings reports.
terms.
• Conduct online reverse auctions
• Extend procurement’s reach Create tailored negotiation environments for reverse auctions.
Key to extending procurement’s reach is collaborating with Interact with suppliers in real time, using instant messaging,
business units to drive additional savings. With SAP bidding consoles that automatically refresh, and a countdown
E-Sourcing, you can create an environment in which you clock. Manage advanced bidding rules, such as bid visibility,
work jointly with enterprise-wide departments to reach automatic extensions, ranked-bidding format, weighted-
key sourcing decisions, such as defining requirements and bidding format, staggered start and end times for individual
evaluating supplier proposals and contract reviews. items, and reserve prices.

• Enhance project management • Optimize supplier awards
Link all sourcing activities to specific projects, to track results Identify the lowest total-cost and best-value award strategies
and decisions during each project’s duration. Monitor project by using rules-based functions to optimize your award
status, manage employee workload, and track opportunities decisions. Easily analyze optimization possibilities by com-
for savings. paring options using reports and charts.

• Reduce cycle times • Enable end-user bid management
SAP E-Sourcing enables you to create templates of every key Allow users outside of purchasing to initiate rapid requests for
sourcing process, from projects to online bids to contract quotations, using your preferred supply base. Provide category-
terms and conditions. These templates reduce the cycle times specific templates, terminology, and business processes for
while ensuring that best practices are repeated consistently sourcing events.
throughout your organization.
• Help ensure compliance • Tailor e-sourcing to your business
Use the following functionalities of SAP E-Sourcing to help Tailor SAP E-Sourcing to your specific company needs, by
ensure compliance with a variety of policies, procedures, using the following functionalities:
and regulations, such as the Sarbanes-Oxley Act: – Executive dashboards
– Contract management Support project portfolio management, business process
Generate, negotiate, and manage contracts with a single, management, and performance analysis, using data collect-
searchable contract repository. Create a library of standard ed from across the SAP E-Sourcing application and present-
contracts and contract clauses to promote and enforce ed in a single view.
your organization’s legal standards during the contract- – Flexible configuration
generation process. Configure a workflow-based approval Create templates, reports, page views, user-access rights and
process using such factors as a contract’s monetary value roles, and new data fields to capture information and pro-
and spend category. Automate all contract activity. Track cesses specific to your organization.
rebates and thresholds.
– Integration with your SAP software infrastructure Undisputed ROI, Quick Payback
Connect with other enterprise business solutions from SAP You can achieve clear ROI with SAP E-Sourcing, including time
through out-of-the-box integration to the SAP ERP applica- and cost savings from hosting, improved decision making, and
tion and the SAP ERP Financials solution. Integrate key repeatable processes. Plus, services from SAP and our partners
processes – such as requisitions, awards, and contracts – to can help ease the transition to e-sourcing.
ensure compliance of internal employees and external sup-
pliers with preferred supplier agreements. Multiple Deployment Options
You can deploy SAP E-Sourcing according to your needs. For
• Streamline collaboration with suppliers example, to get up and running quickly, you may want the
Streamline collaboration with suppliers by using the following application hosted by SAP. Or, you can also choose to deploy
functionalities of SAP E-Sourcing: SAP E-Sourcing on your own infrastructure. Note that you
– Supplier repository can seamlessly migrate from a hosted environment to an on-
Employ a searchable repository to support a supplier portal premises environment.
in which suppliers can register themselves, maintain and
modify their own profiles and category records, and send When SAP hosts your application, you benefit from a secure,
updated files such as certificates. reliable, and scalable foundation without the associated invest-
– Supplier collaboration ment in IT infrastructure and strain on your internal IT
Participate in collaborative discussions, respond to bid re- resources. Hosting fosters fast ROI, and rapid implementation
quests and auctions, negotiate contract terms, and view helps you generate savings quickly.
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.
www.sap.com/contactsap

Those customers just getting started with e-sourcing may want Services for Total E-Sourcing
to consider the SAP E-Sourcing on-demand solution, a Initial success generates long-term e-sourcing acceptance.
subscription-based hosted offering. The on-demand solution is Available services through SAP and its partner ecosystem include
rapidly deployed, contains preconfigured templates to help you product training and support for auction events involving
achieve early success, and includes end-user help-desk support. requests for proposals, quotations, and information. These
value-added services help increase user adoption and overall
Greater Savings and Value value, as well as help you initiate events, hold mock negotiation
E-sourcing activities result in better decisions that optimize the requests for proposals and auctions, and manage live events.
overall value contribution from suppliers. Through analysis
tools, you can evaluate and compare supplier bids on factors that Find Out More
are most important to your organization. For example, your pro- If you would like to know more about SAP E-Sourcing and learn
curement team can weigh and collaboratively score responses to how it can help your procurement organization improve busi-
requests for proposals on the basis of factors such as existing ness processes, visit www.sap.com/srm/e-sourcing/index.epx.
supplier-performance scorecards, on-time delivery rates, price,
and so on. Through SAP E-Sourcing, you can develop and source Powered by SAP NetWeaver®
from a qualified supply base that delivers the best value to your SAP E-Sourcing is powered by the SAP NetWeaver® platform.
enterprise. SAP NetWeaver unifies technology components into a single
platform, allowing organizations to reduce IT complexity and
Sustainable Results obtain more business value from their IT investments. It provides
Templates with embedded sourcing process and category infor- the best way to integrate all systems running SAP or non-SAP
mation can help you repeat best practices, reduce cycle times, software.
and share knowledge among category managers. Automated
sourcing events and analytical functions help you eliminate SAP NetWeaver also helps organizations align IT with their
cumbersome, time-consuming, and paper-based supplier negoti- business. With SAP NetWeaver, organizations can compose and
ations and awards. Integration with your SAP ERP application enhance business applications rapidly using enterprise services.
back end ensures that negotiated savings hit the bottom line As the foundation for enterprise service-oriented architecture
though effective compliance of both internal employees and (enterprise SOA), SAP NetWeaver allows organizations to evolve
external suppliers. their current IT landscapes into a strategic environment that
drives business change.

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