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SAP CLM - Contract Lifecycle Management

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SAP CLM - Contract Lifecycle Management


Boost Savings and Revenue Whilst Lowering Risk Contracts are dynamic in nature and require varying levels of management along the entire life cycle, from strategy and creation to execution and monitoring. Whatever the purpose, an organization must maintain tight control over of their contracts and address common issues, such as: Inconsistent language Incomplete approvals Long contract completion cycles, and Limited visibility and compliance.

SAPs Contract Lifecycle Management (SAP CLM) application supports your company's entire Contract management process. The application supports all contract types and can integrate with back-end systems or operate as a stand alone application to support contract compliance.

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SAP Contract Lifecycle Management


Implementing SAPs CLM will enable you to proactively manage all aspects of the contract life cycle by: Accelerating the contract process through automated contract creation and collaboration. Lower legal, financial, and regulatory risk through standardized language and reporting. Protect your company's bottom line by reducing revenue loss in the contract lifecycle. Realize full savings and revenue through contract visibility and awareness. Ensure greater control and improved compliance throughout the contract life cycle via system integration, alerting, and reporting.

Powered by SAP NetWeaver SAP CLM is powered by the SAP NetWeaver technology platform. SAP NetWeaver unifies technology components into a single platform, enabling your organization to reduce IT complexity and obtain more business value from your IT investments.

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SAP Contract Lifecycle Management Features


Features for SAP CLM Full text search (using TREX), you can search across clauses, contracts, and attachments, thereby making it easier to locate and access contract documents in your contract repository. Improved contract amendment process with automatic amendment document creation. You can initiate an amendment for a released contract document, and view of the changes with a full audit trail and versioning function. The improved contract creation flow has streamlined the contract creation process And improved usability. You can automatically create a master agreement and contract document with a single contract document template.

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SAP E-Sourcing application Features


SAP E-Sourcing application helps to attain bottom-line savings and accelerate time to benefit by cutting costs and encouraging user adoption with features including: Category and Project Management Configurable RFP, Auction, and Bid Optimization Management Contract Lifecycle Management Supplier Management Spend and Compliance Management

The SAP E-Sourcing application also enables negotiation activities, including: Spend analysis Category and project management Requests for proposals, information, and quotation Forward and reverse auctions Contract generation and management Supplier management

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R/3 / SRM / CLM Integration Together with the SAP SRM application, SAP ESourcing gives a complete sourcing to-contract management process with several points of entry into the process, multiple delivery model options, and a seamless migration path to transform purchasing functions.

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CLM R/3 Integration


More detail required???
R/3 RFQ (RFx) PO Contract

XI (PI)

CLM RI (RFx) RFQ (RFx) Contract

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More detail required???


Functionality
Shopping Cart RFx Purchase Orders Scheduling Agreements Contracts GR/GI Invoice Processing Contract Management Contract Collaboration

R/3
Possible Y Y Y Y Y Y N N

SRM
Y Y Y Y Y Y Possible N N

CLM
N Y N N Y N N Y Y

Comments

R/3 Integration Stand Alone Capable

Y Y

Possible Possible

Possible Possible

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ERP / CLM / SRM Integration


More detail required???

SRM

CLM

SAP

ERP

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SRM Scenarios
SRM Scenarios Local / Standalone

In the local or standalone scenario, all procurement documents are processed in the SAP SRM system itself. Procurement requisitions in the form of shopping carts and follow- on documents, such as purchase orders, goods receipts, and invoices, are processed in the SAP SRM system. Only the invoices are integrated with the backend financial accounting system and payments are made from the backend accounting system.

Classic

In the classic scenario, the shopping cart is processed in SAP SRM and the follow -on documents are processed in the backend ERP system. Goods receipts or invoices can be created either in SAP SRM or in the backend system.

Extended Classic

In the extended classic scenario, the shopping cart and the follow- on documents are processed in SAP SRM. Purchase orders are replicated to the backend system. However, changes to purchase orders can be made only in SAP SRM. Goods receipts or invoices can be created either in SAP SRM or in the backend system.

Decoupled

Officially, SAP SRM does not have a scenario called decoupled. However, this scenario name is loosely used to indicate the ability to use all of the previous three scenarios in parallel. That is, you can run all of the previous scenarios in parallel based on product category. For example, you can specify that services are processed in SAP SRM and stock items are processed in the backend system. By using a Business Add- In (BAdI), you can define your rules on whether the purchase order should be created in SAP SRM or in the backend system.

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CLM Scenarios
CLM Scenarios Local / Standalone

In the local or standalone scenario, all procurement documents are processed in the SAP CLM system itself, with no integration to the backend accounting system.

Integrated

The integration of CLM to the backend system is also possible where the follow -on documents are processed in the backend ERP system. Goods receipts or invoices can be created either in SAP SRM or in the backend system.

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ERP FI and e-sourcing integration

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SAP ERP FI / MM and e-sourcing integration

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CLM Technical Integration


CLM Technical Integration Infrastructure E-Sourcing Platform SAP LDAP Connector Optimizer Contract Generation

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SAP CLM Infrastructure


Typical Infrastructure

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SAP CLM Infrastructure


E-Sourcing Platform

The SAP E-Sourcing platform is a J2EE application that provides the core sourcing functionality. In addition to a J2EEcompliant application server, the E-Sourcing configuration requires an Oracle database, an LDAP directory, and an SMTP \ server. Optionally, the sourcing application can leverage an external HTTP web server and a Symantec AntiVirus Scan Engine server.

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SAP CLM Infrastructure


The SAP LDAP Connector

The following part gives a short introduction to the technological mechanism providing the synchronization functionality between the directory service and the SAP system the so-called SAP LDAP Connector. The protocol used for communicating with a directory is usually the Lightweight Directory Access Protocol (LDAP). The SAP LDAP connector allows direct access to directories within ABAP applications using the LDAP protocol. It provides this functionality in form of an API for connecting and searching, reading and editing of directory entries. This API has already been shipped with the basis release 4.6. But this release does not provide any functionality to synchronize user master data between SAP and the Active Directory. This functionality was first introduced with basis release 6.x that is used for SAPs Web Application Server architecture and is therefore also available for all components based on SAPs NetWeaver platform.

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SAP CLM Infrastructure


Optimizer

The SAP Optimizer is also a J2EE application that requires a J2EE-compliant application server that supports the EJB2.0 spec. The E-Sourcing application makes requests to the Optimizer service. The Optimizer has no direct end-user interface. The Optimizer is typically deployed on a separate physical application server from the E-Sourcing application. This prevents the computation-intensive processing of the Optimizer from impacting the performance of user interaction with the E-Sourcing application.

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SAP CLM Infrastructure


Contract Generation

Contract generation is a Microsoft .NET service. This service processes requests from the ESourcing application. The Service generates Contract documents in Microsoft Word format. This service requires the Microsoft .NET application framework and should be deployed on a server independent of any J2EE application component. However, it may be deployed with other .NET services.

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Functions of SAP E-Sourcing 5.1


Category and 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.

Configurable RFP, Auction, and Bid Optimization Management Conduct simple or complex sourcing activities in direct, indirect, and service categories by automating the creation of requests for information, proposals, quotations, and reverse auctions. Analyze bids using collaborative scoring, weighted scoring for multiple attributes, total cost calculations, side-by-side comparisons, and pricing and savings reports.

Contract Lifecycle 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 contract-generation process. Configure an approval process using such factors as a contract's monetary value and spend category. Automate all contract activity, such as rebidding, auditing, renewing, and renegotiating prior to expiration.

Supplier Management Employ a single, searchable repository to support a supplier portal in which suppliers can register themselves, maintain and modify their own profiles and category records, send updated files, participate in collaborative discussions, respond to bid requests and auctions, view scorecard performance, and view active contracts and sourcing events. Define metrics for supplier performance scorecards.

Spend and Compliance Management These functions are limited to Oracle database instances. Achieve comprehensive reporting and analysis. Realize effective spend data cleansing and comprehensive reporting and analysis.

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Architecture of SAP E-Sourcing 5.1


SAP E-Sourcing 5.1 is delivered to the customer in two companion products: SAP E-Sourcing 5.1 provides support for strategic sourcing business processes. SAP CLM 2.0 provides contract lifecycle management for strategic sourcing and other business process areas.

The SAP E-Sourcing architecture was designed from the beginning to be an adaptive software solution, which supports a variety of deployment scenarios and offers a high degree of flexibility to the customer environment. The following list and figure describe the required and optional components. SAP E-Sourcing core is deployed on the SAP NetWeaver application server. If SAP CLM is installed and used, then KM and the TREX services are required. Both are deployed on the SAP NetWeaver instance. If SAP E-Sourcng is integrated with the ERP systems, then the PI component is needed to exchange messages between the two systems. Micrcosoft IIS is used for the contract generation activities and is an optional component based on the use of SAP CLM.

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Architecture of SAP E-Sourcing 5.1


Architecture of SAP E-Sourcing 5.1

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SAP Netweaver
SAP NetWeaver
SAP NetWeaver is SAP's integrated technology platform and is the technical foundation for all SAP applications since the SAP Business Suite release.

SAP NetWeaver is marketed as a service-oriented application and integration platform.


SAP NetWeaver provides the development and runtime environment for SAP applications and can be used for custom development and integration with other applications and systems. SAP NetWeaver is built using open standards and industry de facto standards and can be extended with, and interoperate with, technologies such as Microsoft .NET, Sun Java EE, and IBM WebSphere. SAP NetWeaver's release is considered as a strategic move by SAP for driving enterprises to run their business on a single, integrated platform that includes both applications and technology. Industry analysts refer to this type of integrated platform offering as an "applistructure" (applications + infrastructure). It is widely held that this approach is driven by industry's need to lower IT costs through an enterprise architecture that is at once (1) more flexible; (2) better integrated with applications; (3) built on open standards to ensure future interoperability and broad integration; and, (4) provided by a vendor that is financially viable for the long term. SAP is fostering relationships with system integrators and independent software vendors, many of the latter becoming "Powered by SAP NetWeaver". SAP NetWeaver is part of SAP's plan to transition to a more open, service-oriented architecture and to deliver the technical foundation of its applications on a single, integrated platform and common release cycle. With the SAP NetWeaver platform, you can align IT with business requirements. SAP combines composition technologies and application functionality to reduce IT complexity and increase business flexibility. With SAP NetWeaver, you can compose applications using enterprise services, orchestrate business processes and events, manage enterprise information, and deliver applications and content to users more quickly and cost-effectively.

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KM - Knowledge Management
Knowledge Management
Knowledge Management is a part of SAP Enterprise Portal. The entire functional scope and configuration of Knowledge Management are available in portal iViews. Functions such as discussions, feedback, and sending items from KM folders by e-mail are integrated into Knowledge Management and enable you to work across role and department borders. In addition, Knowledge Management functions are used in Collaboration, for example, to store documents in virtual rooms. Knowledge Management supports the SAP NetWeaver scenario Information Broadcasting. You can use the BEx Broadcaster and Knowledge Management to make business information from SAP NetWeaver Business Intelligence available to a wide spectrum of users in the portal. You can store the following BI objects in KM folders: Documents with precalculated reports. Links to BEx Web applications and queries with live data. Various Knowledge Management functions, such as subscriptions for documents, are available for these items. There is a specially modified user interface for displaying BI items in KM folders. You can also change or extend this interface to meet your requirements.

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TREX - Text Retrieval and information EXtraction


TREX
TREX is a search engine in the SAP NetWeaver integrated technology platform. The TREX engine is a standalone component that can be used in a range of system environments but is used primarily as an integral part of SAP products such as Enterprise Portal, Knowledge Warehouse, and Business Intelligence (BI, formerly SAP Business Information Warehouse). In SAP NetWeaver BI, the TREX engine powers the BI Accelerator, which is a plug-in appliance for enhancing the performance of online analytical processing. The name "TREX" stands for Text Retrieval and information EXtraction, but it is not a registered trade mark of SAP and is not used in marketing collateral. Search and Classification (TREX) is an integral part of Knowledge Management. It is the technical component that enables the use of search and classification operations to access documents stored in KM repositories. TREX enables: Flexible search in large collections of electronic documents Mining of interesting and relevant information from documents Classification of documents into meaningful structures TREX can perform these functions on document collections in almost any file format that can be rendered as text, in almost any major language.

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SAP PI (XI)

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IIS - Internet Information Services


Internet Information Services (IIS) Internet Information Services (IIS) - formerly called Internet Information Server - is a set of Internetbased services for servers created by Microsoft for use with Microsoft Windows. It is the world's second most popular web server in terms of overall websites behind the industry leader Apache HTTP Server. As of November 2008 it served 34.49% of all websites according to Netcraft. The servers currently include FTP, FTPS, SMTP, NNTP, and HTTP/HTTPS.

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Things to clarify: CLM is not available in 'Extended Procurement' pricing package, CLM is included in 'Extended Sourcing' package but limited to Procurement contracts. If Extended Sourcing licensing package is taken, then the Pricing metric will be 'Spend Volume' (not revenue). Part of CLM functionality is available as part of SRM offering, (Extended Procurement or Extended Sourcing industry packages) limited to procurement contracts only. CLM itself may be licensed separately for the broader set of all contract types (e.g. sales and procurement). Pricing is typically based on revenue or other metrics, depending on the industry: Defense & Security: Program Budget. Public Sector: Operating Budget. Insurance: Gross Premiums Banking: Assets Under Management Other: Total Revenue

Definition of Metric: Total Revenue of the customer. Pricing applies if only one contract type is handled. If two or more different contract types are handled the price needs to be multiplied by two. There are three contract types defined: Procurement "Procurement" applies to all contracts which designate an agreement where the company will pay a third party for something the company receives. This will include related agreements to complete a purchase agreement such as NDAs and the like. Pass through payment contracts such as those for health insurance (w/doctors and hospitals) and media buying would fall under this area. Sales "Sales" applies to all contracts which designate an agreement where the company will receive payment for something they provide, and all related agreements. All Others (Non-Procurement and Non-Sales). "All Others, Non-Procurement and Non-Sales" captures agreements not relating to a specific purchase or a sale with third parties such as general NDAs, partnerships, IP non-infringement, etc, and internal contracts that may or may not have monetary elements such as employee agreements.

Note also that CLM is one of the solutions that is offered by our BPO partners, (e.g. Quadrem in Australia).

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Questions?

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ISS - Internet Security Systems


Internet Security Systems (ISS) Is the Latest Addition to the Microsoft's SecureIT Alliance ISS will be able to exchange security development practices with the already existing members, aiming to achieve seamlessly integration with Microsoft's platforms. ISS brings unique, multi-layered capabilities to the Microsoft platform, centered on protecting networks, desktops and servers before they suffer from attack. ISS will enhance the collaborative dialogue among members and elevate the solutions guidance available to IT security professionals, with vulnerability assessment and intrusion detection/prevention solutions,

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SAP to Expand Sourcing Offering with Acquisition of Frictionless Commerce Customers to Gain Rapid Time-to-Benefit; Transaction Aims to Simplify Business Between Buyers and Suppliers While Enabling the Complete Source-to-Settle Process ORLANDO, Fla. - May 17, 2006 - Recognizing the value customers gain by having a fast on-ramp for sourcing, SAP AG (NYSE: SAP) today announced that it is acquiring Frictionless Commerce, a privately-held, leading provider of supplier relationship management (SRM) software. Through the addition of Frictionless Commerce, SAP will be able to help customers act quickly and save strategically while also providing a seamless and easy migration to the proven and robust mySAP SRM. Acquiring Frictionless Commerce extends the value of SAP applications, representing a key component of the companys strategy to offer the preferred global purchasing platform for organizations of all sizes and across all industries. The announcement was made today at the onset of SAPPHIRE 06, SAPs international customer conference, being held in Orlando, Florida, May 16-18. Terms of the all-cash transaction were not disclosed. Headquartered in Cambridge, Massachusetts, Frictionless Commerce serves large and midsize enterprises across an array of vertical markets, including banking, insurance, professional services, consumer products, discrete manufacturing, life sciences, telecommunications and utilities. The transaction with Frictionless Commerce is consistent with SAPs strategy to use targeted, fill-in acquisitions that add superior functionality to its broad solution portfolio while continuing to grow its business organically. With globalization and increasing cost pressures, companies need to take a strategic approach to managing suppliers. With this acquisition, SAP will combine the proven e-Sourcing capabilities of Frictionless with the robustness of SAP applications, including mySAP Supplier Relationship Management. As Powered by SAP NetWeaver solutions, Frictionless products are fully compatible with SAP applications, minimizing product integration concerns and assuring a seamless solution road map as customer requirements grow.

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