SAP Info Marzo 2002

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SAP INFOQUICK GUIDE 3/2002

mySAP Supplier Relationship Management

Maximizing Return on Relationship

MAT.NR.:50052708


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SAP INFO QUICK GUIDE 3/2002 s

s Eye-to-eye with your suppliers

The Power of Teams 4

s Expert opinions

Why Does SRM Matter? 6

s Good reasons for mySAP Supplier Relationship Management

Tapping into New Sources of Added Value 8

s Overview of mySAP Supplier Relationship Management

Optimize Sourcing Strategies and

Supplier Relationships 10

s mySAP SRM

Selected Key Capabilities

Contract Negotiation and Management 14

Supplier Self Services 16

Operational Sourcing 18

Relationship Monitoring 20

s Linking up with other e-business applications

Fits Seamlessly in Place

with Room for Expansion 22

s Best Practices for mySAP SRM

A Quick Route to Success 24

s Procter & Gamble

Harmonizing Global Procurement 26

s SK Telecom

Automated Procurement of Critical Materials 28

s Quick Links 30

s Glossary 32


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you can evaluate your supply strategy, increase

the efficiency of your supply base, and get the

maximum return on relationship with all your

suppliers on a recurring basis.

This SAP INFO Quick Guide provides you

with insights into the concepts of supplier rela-

tionship management. Learn what it means to

collaborate with suppliers and why SRM drivesa holistic view of all your supplier facing activi-

ties, from sourcing to procurement execution.

Use mySAP SRM to replace unmanaged, sav-

ings-driven transactions with long-term collab-

orative relationships for mutual benefit.

Sincerely,

Peter Graf,

Vice President Marketing,

SAP Markets, Inc. s

For most companies, only a handful of

suppliers represent enough business to

warrant the heavy investments required for

electronic data interchange, or EDI. Most glob-

al organizations have invested years and mil-

lions of dollars on EDI solutions just to con-

nect to their top 10 or 20 suppliers.

All suppliers are important

These suppliers often account for two-thirds or

more of the money you spend each year. The

assumption is that since most corporate spend

is channeled through these few suppliers they

are the ones that only matter.

The fact is that all suppliers are important.

And automating your sourcing processes across

the entire supply base is one of the fastest, easi-

est ways to pull excess costs out of the procure-

ment puzzle. Only a comprehensive solution

that goes beyond pure e-procurement process-

es can address these requirements and help

achieve those goals.

Optimize supplier relationships

with mySAP SRM

Building on mySAP E-Procurement, mySAP

Supplier Relationship Management (mySAP

SRM) adds significant new functionalities to

allow for strategic sourcing and supplier en-

ablement. mySAP SRM allows you to synchro-

nize business processes in new ways with your

most important sourcing partners and connect

you for the first time with the thousands of re-

lationships you didnt even know you had.

mySAP SRM gives you the ability to build

efficient processes with suppliers you trust, so

The Power of Teams

Over the last decades, organizations have bought more and more value they

sell to customers from their suppliers. And with purchasing expenses totaling

about 50 percent of a companys revenues in many industries, the dependen-

cy on suppliers keeps growing. Supplier relationship management (SRM)

enables companies to cover the full cycle from strategic and operational

sourcing to supplier enablement and procurement execution. In this way,

companies gain the visibility and control to clearly evaluate strategies and

relationships, enable collaboration, and effectively engage with suppliers.

s SAP INFO QUICK GUIDE 3/2002

Eye-to-eye with your suppliers


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Supplier relationship management (SRM)

is being extolled by many as a key to e-

business success. Indeed, with an increasing

level of product value coming from suppliers

(on average, a company spends 45 cents on ex-

ternal purchases for every dollar it earns in re-

venue), few companies can afford to overlook

SRM as a key to profit enhancement and cost

reduction.

Why SRM matters

In the continuing quest for companies to cut

costs and respond more quickly to market

changes, there is a trend toward ever-increas-

ing dependence on the quality of the supply

base to improve competitiveness. If supplier

relationships are managed appropriately, sup-

pliers can contribute to the innovation and

growth of the enterprise. On the other hand,

companies can only bring innovation to the

market as fast as the slowest member of the

supply chain, and product/service quality is

only as good as the weakest member.

A systematic approach to SRM spans func-

tional areas as well as enterprise boundaries. It

provides important decision support processes

and functions to purchasing departments and

key decision makers within the supply chain. It

requires an extended-enterprise approach to

squeeze waste out of the supply chain and to

re-engineer the processes that link buyers and

suppliers together. Ultimately, a combination of

SRM business practices, strategic sourcing

practices and applications, and procurement

processes and applications will replace inflexi-

ble spreadsheets (and high-priced consultants)

with fact-based information on which to base

sourcing decisions decisions that support

business objectives and priorities. Effective sup-

plier relationship management will result in:

s Ability to introduce innovative product fea-

tures or entirely new products with a clearer

understanding of overall market issues

s Improved processes and reduction in overall

costs while maintaining or improving quali-

ty and delivery time

s Shared knowledge of costs of alternative

technologies while reducing the risk associ-

ated with applying them

s Attainment of the ever-elusive goal of fewer

out-of-stock or overstocked items and lower

inventory costs

s Reduced costs of doing business globally.

*This text is taken from

Gartner Supplier Relationship Management:

Why Does it Matter?, C. Spencer, B. Reilly, May 2001. s

Expert opinions

Why Does SRM Matter?

Few companies deploy a systematic approach to supplier eval-

uation, selection and ongoing relationship management. Most

have disparate supplier management processes. According to

the Gartner* analyst house, SRM offers companies a new basis

for competitive advantage.

To be competitive in the get real econ-

omy, companies need innovative solu-

tions for identifying and maximizing pro-

fits. A key area for improvement is more

proactively managing supplier relation-

ships. By building on its expertise in col-

laborative business processes, its under-

standing of customer needs and its

proven history of execution, SAP Markets

has put together an impressive SRM so-

lution that provides the required func-

tional depth and integration capabilities

to continuously manage a companys

supply base.

John Moore, ARC Advisory Group

s SAP INFO QUICK GUIDE 3/2002 SAP INFO QUICK GUIDE 3/2002 s


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Tapping into New Sourcesof Added Value

The more globally focused a companys activities are, the more complex their

procurement processes generally become. In order to manage such complex

processes successfully, companies need to extensively automate and optimize

their relationships with suppliers. With mySAP Supplier Relationship Manage-

ment, sourcing strategies and supplier relationships can play a greater role in

securing the companys success.

Good reasons for mySAP Supplier Relationship Management

With globalization, mergers, tremendous

cost pressures, increasing outsourcing

and not least, the Internet, companies today

are facing major challenges. Thus, companies

making purchases in this economic environ-

ment are confronted with the task of finding

new sources of added value that cut procure-

ment and process costs, safeguard the supply

of high-quality materials and services and bring

products to the market faster. However, these

economic conditions also offer a whole rangeof opportunities. To achieve this collaborative

advantage, integrated business processes are

essential both within and between companies

and should include all business partners, espe-

cially suppliers, explains Michael Augsburger,

Director Solution Center at SAP Markets

EMEA. SRM can play a key role when tapping

into new sources of added value, since it opens

up new opportunities in purchasing and helps

companies towards long-term success.

Added value factors of mySAP SRM

Which products are procured most frequently?

How many suppliers is a particular product

purchased from? And under what terms and

conditions? Most companies dont have the

systems in place to answer such questions.


(mySAP SRM) enables companies to make ma-

terial and supplier data transparent beyond the

confines of individual business units and IT

systems. Therefore, they can consolidate their

materials and supplier information globally to

identify redundancies and reduce costs.

With mySAP SRM, companies are in a po-

sition to analyze their supplier structure in de-

tail and boost the efficiency of their supplier

selection process. In this way, they can negoti-

ate prices and terms more easily, better scope

out framework agreements and leverage their

purchasing power. The result is optimized

prices and lower procurement costs. Suppliers

can be assessed according to their reliability

and the quality of their products and services.

This enables companies to boost their cus-

tomers satisfaction, raise their own competi-

tiveness, and cut the costs incurred when

working with less effective suppliers.

Whats more, mySAP SRM can increaseadded value in the procurement process by

shortening product development cycles. This is

achieved by facilitating collaboration between

product developers and suppliers to jointly cre-

ate products or reach make-or-buy decisions.

Added value is also created by cutting

transaction costs and optimizing buy-sell

processes between companies. mySAP SRM

enables companies to consistently automate

their procurement processes for all types of

materials and to integrate their entire supplier

base with the aim of using electronic procure-

ment across the board, without any need to

switch from one medium to another, says

Augsburger.

mySAP SRM taps into added value sources

because it covers the full cycle of sourcing and

procurement and because it includes all suppli-

ers within these processes to the benefit of

everyone involved. s


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Add value with the

new generation of e-procurement

Until now, many global companies have only

integrated their ten or twenty most important

suppliers into their internal processes. But in

fact all suppliers are important. The quickest

and easiest way to cut procurement costs, min-

imize risks and improve quality is to integrate

all partners into the procurement processes

by automating the latter. Companies can use

mySAP SRM not only to synchronize their

business processes, but also to link them to

the processes employed by their key trading

partners. mySAP SRM builds on mySAP

E-Procurement with new functionality (see

diagram), thereby unlocking new potential for

added value in purchasing.

Evaluate your supply and

sourcing strategy

mySAP SRM creates enterprise-wide trans-

parency of collaboration with suppliers and al-

lows companies to systematically formulate

and optimize a global procurement strategy.

With mySAP SRM, companies can

s consolidate their procurement needs

and estimate future ones,

s analyze procurement patterns

and market trends,

s automate tendering procedures, and

company core processes and this regardless of

whether they supply mission-critical parts or of-

fice supplies. Suppliers use a simple Web brows-

er to gain access to a forum where they can work

with the customer to agree specifications, update

their product availability and maintain price lists.

Instead of incurring substantial costs to connect

just 20 suppliers, companies can effectively inte-

grate thousands of suppliers into their business

processes via the open portal and exchange in-

frastructure. In this way suppliers can be in-

volved in product development processes, plans

can be adapted dynamically, confirmations can

be made available immediately, and potential is-

sues can be detected and avoided.

s evaluate the capacity of suppliers to im-

prove quality and delivery times.

The solution gathers information about suppli-

ers by using various performance parameters,

analyzes that information constantly and clas-

sifies it in terms of individual business require-

ments. Contract negotiations can thus be con-

ducted more efficiently and the procurement

strategy can be geared to those suppliers that

contribute the most value.

Enable your supply base

mySAP SRM can network companies with all

their suppliers, who can then be integrated into

Overview of mySAP Supplier Relationship Management

Optimize Sourcing Strategiesand Supplier Relationships

With mySAP Supplier Relationship Management companies can

constantly evaluate and refine their supply strategies, collaborate

more closely with suppliers and integrate them into their procure-ment processes to the advantage of both parties. This provides

a sound basis for building lasting relationships with suppliers who

have shown themselves to be reliable and valuable partners.

New and Extended Key Capabilities with mySAP SRM

mySAP E-Procurement mySAP Supplier Relationship Management

EVALUATE

YOUR SUPPLY AND SOURCING STRATEGY

Spend reporting s Supply strategy development

s Supplier qualification

Tendering s Supplier selection

s Contract negotiation and management

ENABLE

YOUR SUPPLY BASE

s Supplier self services

Catalog content s Content management

management

ENGAGE

YOUR SUPPLY RELATIONSHIPS

s Operational sourcing

Indirect procurement s Self service procurement

Direct procurement s Plan driven procurement

s Relationship monitoring

2001 2002


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Engage your supply relationships

Many e-procurement solutions cover only the

procurement of office materials. With mySAP

SRM, however, users can purchase goods and

services for operation, maintenance and repair,

as well as production materials. On the one

hand, the procurement process is decentral-

ized, on the other hand the company remains

in control by managing processes centrally. Be-

cause the solution is integrated with planning,

design and order-processing systems, materialsfor key business processes can also be ordered.

And, instead of performing an expensive,

one-time inspection of sourcing relationships,

mySAP SRM continuously monitors and

benchmarks supplier performance so compa-

nies can see exactly how their trading partners

are performing. s

mySAP Supplier Relationship ManagementKey Areas and Key Capabilities

Evaluate Your Supply & Sourcing Strategy

Enable Your Supply Base

Engage Your Supply Relationships

build strong partnerships that help to re-

duce buffer inventories throughout the

value chain.

Supplier selection

s Purchasers can use electronic auction and

bidding tools to specify requirements, find

the best prices, and select the most appro-

priate suppliers for their specific needs,even for custom-designed and engineered

goods.

Contract negotiation and management

s Project teams can collaborate online to

share documents, host meetings and nego-

tiate contracts while version control, pri-

vacy and security is ensured.

Content management

s Various functions allow the creation, syn-

chronization and maintenance of content

across the internal and external supplier

base, reducing costs and increasing the

consistency of distributed content.

purchasing process, relieving the purchas-

ing department of administrative overhead

while maintaining central control.

Plan driven procurement

s Integration with any logistics system allows

the integration of production planning with

procurement and sourcing, so contract defi-

nitions and material masters are automati-

cally re-used to generate purchase orders.

Relationship monitoring

s Continuous monitoring and benchmark-

ing of supplier performance helps to im-

prove business relationships and refine

procurement strategies.

Supply strategy development

s Enterprise-wide visibility and process

transparency allows companies to con-

stantly analyze and refine their procure-

ment strategy to improve the efficiency

of their sourcing, procurement and pro-

duct development.

Supplier qualifications Automated processes for qualifying sup-

pliers minimize the risk of supply and

Supplier self services

s Supplier integration is facilitated by en-

abling suppliers of all sizes to process or-

ders, generate invoices and update specifi-

cations directly within the purchasing

system.

Operational sourcing

s Professional purchasers can view, review

and edit all shopping carts in the system

to consolidate orders, assign contracts

and find alternative sources of supply, e.g.

from an approved vendor list.

Self service procurement

s Employees can create and manage their

own requisitions through a decentralized


13

The key capabilities of mySAP SRM are

explained briefly in the adjacent table,

while the next few pages explain some of

them in more detail. The technical com-

ponents that form the basis of the solu-

tion are described in the glossary.


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SAP INFO QUICK GUIDE 3/2002 ss SAP INFO QUICK GUIDE 3/2002

Today, procurement processes are still

characterized by different divisions andbranches within the same company conducting

negotiations independently from one another

and managing the contracts on several plat-

forms. The result is that there are different con-

tracts and negotiation strategies in place. Of-

ten, important documents are not available in

electronic form or are not linked with relevant

contracts. This means that the benefit of expe-

rience gained through supplier interactions

cannot be spread across the company as a

whole.With mySAP SRM, all the relevant informa-

tion can be collected centrally both internally

and used for coordinated supplier negotiations.

The SAP Markets Collaborative Room allows

users to collaborate, for example, on legal regu-

lations and contract provisions, and new con-

tracts can be imported into SAP Markets En-

terprise Buyer (Professional Edition) for

instant worldwide access. s

Contract negotiation and management

Coordinated Sourcing

Shorter sourcing cycles as a result of more efficient contract negotiations

companies can now achieve this thanks to new contract negotiation and

management capabilities of mySAP Supplier Relationship Management.

14

WAN wide area network is a geographically widespread network

in contrast to local area networks (LANs).

L AN local area network is a communications network dispersed

over a limited area of up to 10 kilometers.

You can find another 9,000 specific technical SAP terms in our SAP

terminology database, and our glossary contains general SAP vocabulary

and IT terms.

THE BE ST-R UN E- BU SI NE SS ES RU N SA P

OUR WAN LANWONTNEED CHOPSTICKS!

(DONT BELIEVE US? VISIT OUR GLOSSARY WWW.SAP.INFO)


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16

Supplier self services boost the efficiency of

the procurement process by making the labori-

ous task of manually entering documents such

as invoices or delivery confirmations redun-

dant. Product information, such as new items

or prices, can also be entered directly by the

supplier into the customers purchasing system,

eliminating the need for companies to con-

stantly update and maintain catalog data. Buy-

ers and sellers alike profit from the automation

and standardization of the process since the er-

ror rate during data transfer is low.

Transparent customer needs

Supplier self services give suppliers a stan-

dardized communication channel to their cus-

Small and medium-sized suppliers of

goods and services have struggled to

connect their systems with those of their cus-

tomers. SAP Markets Supplier Self Services

gives these suppliers the ability to confirm or-

ders and manage invoices without needing

their own e-selling system. Moreover, suppliers

can also update their corporate and product

data within the customers system without re-

quiring additional investments in infrastruc-

ture. Access to the SAP Markets Supplier Self

Services can be obtained via the web browser

without any integration effort, says Frank

Eck, Head of SAP Markets SRM Product Man-

agement, highlighting the significance of

mySAP SRMs new functionality.

Most buying organizations have only optimized and streamlined their internal

business processes with their top suppliers since technical integration with

smaller suppliers and service providers is typically too expensive to justify

the cost. With mySAP Supplier Relationship Management, this hurdle can be

overcome using its new supplier self services capabilities.

tomers, by which documents can be sent di-

rectly to the procuring system. Supplier self

services also enables suppliers to directly con-

firm delivery dates with customers, to send

order confirmations and to generate and send

invoices all via an electronic network, thus to

work more closely with their customers says

Eck. All suppliers benefit from the fact that

customer needs are made more transparent.

This also applies for service providers who can

transfer data relating to their services directly

into the service entry sheet within their cus-

tomers e-procurement system.

Continuous exchange of information

Suppliers have access to a wide range of pre-

defined reports which are delivered with SAP

Markets Decision Support. Suppliers can use

these reports, for example, to query open pur-

chase orders and incoming payments. Supplier

self services also let companies exchange infor-

mation with all or some of their suppliers, for

instance to provide access to company news or

other information. This transparent coopera-

tion increases the satisfaction levels of cus-

tomers and suppliers alike. s

s Suppliers gain inexpensive access to

supplier self services through a web

browser.

s Orders, order confirmations and in-

voices are quickly exchanged in a

standardized format between suppliers

and customers.

s Services can be documented easily by

their providers.

s Suppliers can themselves update pro-

duct information in the customers pro-

curement system.

s Buyers are relieved of the tedious task

of manual data entry.

s The error rate in data transfers is mini-

mized.

s Improvements in the procurement

process also boost the efficiency of

the suppliers' selling processes.

Advantages for Buyers and Suppliers


Easier CooperationBetween Enterprises

Supplier self services


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tation with just a few clicks. It also provides an

interface to external supplier databases. With

this wealth of information and functions, the

sourcing cockpit enables purchasers to search

systematically for suppliers and contracts, select

the best suppliers or request suggestions for

supply sources. Above all this, the sourcing

cockpit can also be used to aggregate multiple

requisitions into a single order, taking advan-

tage of bulk discounts and reducing the number

of separate transactions.

Faster processing of

open purchase requisitions

If a source of supply is not found automatical-

ly, the process is referred to the sourcing cock-

pit, where open purchase requisitions con-

verge. Purchasers can search systematically for

alternative products or new suppliers. In order

to extend the choice beyond the existing sup-

plier list, quotations can also be obtained from

a private or public marketplace. In this case,

the open purchase requisition is automatically

transferred to SAP Markets Dynamic Bidding.

This component supports the purchaser in

placing tenders and evaluating quotations. s

Purchasers sometimes find themselves in

the difficult position of having to procure

rarely-used materials or, in the event of delivery

problems, having to find an alternative supplier.


(mySAP SRM) improves and speeds up opera-

tional sourcing by allowing reliable suppliers to

be identified quickly in such situations. Profes-

sional purchasers find all relevant information,

including data on substitute materials, approved

vendor lists and alternative suppliers, within a

sourcing cockpit that forms the basis for opera-

tional sourcing within mySAP SRM.

Supply sources at a glance

Purchasers use the sourcing cockpit, for exam-

ple, to access price information in the catalogs

and product master, view all order requests for

their particular areas and use this information

to achieve optimum bundling of orders. The

following described performance features of the

sourcing cockpit are particularly relevant for

operational sourcing. Access is opened up to an

approved vendor list that includes all qualified

suppliers. Purchasers are enabled to view and

assign contracts, or issue a new request for quo-

18


Operational sourcing

The Purchaser in theSourcing Cockpit

Modern-day procurement is usually highly automated, but not everything can

be planned. In response to unplanned or unassigned demands, for instance

if a supplier is unable to meet commitments, a new source of supply must be

found so production is not affected. Operational sourcing, one of the new

key capabilities within mySAP Supplier Relationship Management, introduces

new capabilities to support this critical process.

s Aggregates multiple requests for a

specific material

s Processes open requisitions and

generates purchase orders

s Finds alternative suppliers to overcome

delivery issues

s Facilitates ad-hoc procurement for

materials and services

s Supports bid invitations from private

and public marketplaces

Purchasing Made Easy


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Relationship monitoring, a new key capa-

bility within mySAP Supplier Relation-

ship Management (mySAP SRM), creates cross-

company transparency of all dealings with

suppliers by maintaining a history of statistics

such as procurement volume and delivery relia-

bility, to tracing individual transactions. Com-

panies can implement strategic procurement

initiatives on the basis of this knowledge, for

example, setting up an appropriate contract

management system. mySAP SRM uses the

SAP Business Information Warehouse (SAPBW)

and SAP Markets Decision Support to lay the

foundation for relationship monitoring and per-

formance analysis.

But it is not just internal information that

can be used to evaluate supplier relationships.

Companies can only paint a complete picture

by also including external data in their analy-

sis. For example, a comparison of price data

from internal procurement records and con-

tracts at the market prices of various suppliers

who have previously not been taken into ac-

count is a valuable aid in decision-making

when re-allocating procurement volumes. Ad-

ditional factors such as financial stability are

also important, particularly in new markets.

SAP Markets Decision Support provides

pre-defined reports and queries that can be ex-

tended to fit individual reporting requirements.

Since it is based on a full-blown data ware-

house, it can be particularly effective for coor-

dinating and managing supplier relationships

across multiple business units and companies. s

Relationship monitoring

Everything Under Control

In order to manage supplier relationships, companies

need comprehensive and up-to-date information.

Only then can optimum contracts be negotiated and

strategic procurement concepts implemented.

21



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lutions. This means that competent suppliers

can be selected and integrated at an early stage

in the product life-cycle. For example, selected

suppliers can work together with the customer

on specifications, with the result that products

can be placed on the market more quickly.

On the business management side, mySAP

SRM works equally well with ERP and finan-

cial systems to support back-office functions

such as invoice approval, purchase order crea-

tion and payments. Because suppliers can link

their e-selling solutions directly with mySAPSRM, the entire buy-sell processes becomes a

lot more efficient.

Open to all systems

mySAP SRM can be connected to SAP as well

as non-SAP applications using the latest Inter-

net technologies so companies can exchange

information with suppliers of all sizes and ca-

pabilities. With the exchange infrastructure of

mySAP Technology, for example, mySAP SRM

reduces operating costs for processes that in-

volve multiple business units or companies,

and enables collaboration both within the

company and between the customer and the

supplier. s

If, for example, mySAP Supplier Relation-

ship Management (mySAP SRM) is

linked to a supply chain management solution,

companies can promptly procure when de-

mand arises. Changes in collaborative plan-

ning or inventory management automatically

trigger corresponding procurement processes

within SRM. Process-centric integration with

diverse systems through SRM provides a com-

plete picture of all business processes involving

suppliers. This means that supplier relation-

ships are improved for mutual benefit, points

out Peter Graf, Vice President Marketing of

SAP Markets.

mySAP SRM also integrates with product

design and product life-cycle management so-


mySAP Supplier Relationship

Management can be linked to any

SAP or non-SAP application for

supply chain management (SCM),

product life-cycle management

(PLM) or enterprise resource

planning (ERP).

Linking with other e-business applications

Fits Seamlessly in Placewith Room for Expansion

SUPPLIERS

CUSTOMERS

CRM SRM

PAYMENTS,FULFILL-

MENT CRM

COLL. PLANNING,INVENTORY MGMT.

COLL. DESIGN

SCMSCM

PLMPLM

ERPSELLING

The graphic illustrates the inter-

faces between mySAP SRM and

other business applications both

within and across company

boundaries.



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What is Best Practices for?

Mller: With Best Practices for mySAP.com,

SAP offers an integrated demonstration, evalu-

ation, training and implementation tool.

Thanks to fully preconfigured settings, compa-

nies can get integrated key processes running

straight away with minimum installation effort.

The preconfigured business scenarios are fully

documented. Best Practices for mySAP.com al-

so includes information material that can be

used in training. In addition, there are user

roles, test catalogs and data conversion tools to

support evaluation and implementation of

mySAP.com solutions.

What is the result of this for mySAP SRM?

Eyermann: Within a short space of time, our

customers have a re-usable, customer-specific

prototype than can cover 80 percent of all re-

quirements. This means that a solution such as

mySAP SRM can be implemented much faster.

Best Practices for mySAP SRM supports our

customers in evaluating and implementing

business scenarios for Enterprise Buyer. Jointly

with PwC Consulting, we selected suitable key

processes for electronic procurement. Using

Best Practices for mySAP SRM, e-procurementprocesses can also be adapted easily to indus-

try-specific requirements.

What are the particular benefits?

Eyermann: With the personalized prototype as

a basis, our customers can effortlessly re-use

the preconfigured model and adapt it to the re-

quirements of their implementation project to

either easily implement a new solution or to

extend an existing one. The benefit of this ap-

proach: mission-critical parameters such as

costs, time and risk are optimized. For exam-

ple, in one project, Enterprise Buyer was con-

figured in half the usual time.

Mller: Particularly important for our cus-

tomers is the fact that they receive Best Prac-

tices for mySAP SRM at no extra cost together

with the mySAP SRM solution. But customers

and their partners can also order the CDs for

documentation and preconfiguration online

using the software download center on the

SAP Service Marketplace.

The full version of the interview is available from

Ms. Claudia Heussen, PwC Consulting,

e-mail: [email protected]

Further information:

http://www.sap.com/bestpractices

http://service.sap.com/bp-srm

or by e-mail: [email protected] s


Best Practices for mySAP SRM

SAP is developing Best Practices for

mySAP Supplier Relationship Manage-

ment together with Pricewaterhouse-

Coopers Consulting. Preconfigured

business processes with main focus

for SAP Markets Enterprise Buyer

(Professional Edition) help customers

implement proven functionalities

quickly and cost-effectively. Project

Manager Dirk Eyermann and Product

Manager Eva-Maria Mller from the

SAP Best Practices team introduce

this service product.

s Best Practices for mySAP SRM con-

tains predefined roles for implementa-

tion that guide the user automatically

through the entire installation process.

This makes it easy to configure Enter-

prise Buyer and link it to SAP R/3 for

master data replication and to SAP

Business Information Warehouse for

reporting and analysis.

s

The implementation steps of the pre-configured business scenarios for En-

terprise Buyer 3.0 are fully documented

and facilitate an easy set up of the sys-

tem with customer-specific data.

s All predefined key processes in pro-

curement cover the entire business

process, from order requisition to the

procurement of goods via the Internet.

Scope of Supply

A Quick Route to Success


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26


Procter & Gambles international pro-

curement processes previously varied

from country to country and used completely

different IT systems. Some branches made pur-

chases online with credit cards, while others

bought their products and services manually.

We had as many as 25,000 employees making

purchases, but we had no global view of what

they were buying, because they werent linked

to the core enterprise system, says Brad Com-

erford, Program Manager of Procurement at

Procter & Gamble, illustrating the situation be-

fore the introduction of mySAP E-Procurement

and its core component, Enterprise Buyer.

Globally standardized processes

By standardizing its automatic procurement

processes worldwide, the company is looking

to streamline and bundle its activities and cre-

ate efficient workflows to obtain the best possi-

ble prices. The decision for mySAP E-Procure-

ment was based upon its support of multiple

languages and currencies and its ability to inte-

grate seamlessly into the existing SAP architec-

ture. Enterprise Buyer synchronizes the systems

and enables the procurement of production

materials without having to use the planning

software in SAP R/3. Procter & Gamble also

plans to use Enterprise Buyer for purchasing

raw materials and services.

Quick purchases from catalogs

Thanks to the excellent cooperation between

our IT, purchasing, and accounts payable ex-perts, we needed just three months per site

and in some cases only one month to imple-

ment the system, states Comerford. More than

4,700 Procter & Gamble staff in more than 17

subsidiaries can now use a personalized user

interface to select from an internal catalog fea-

turing 40,000 products from 170 suppliers.

Everything can be purchased in a matter of

minutes at the best prices and terms available.

Whats more, the staff also has access to exter-

nal catalogs featuring some four million pro-

ducts with prices and terms agreed upon in ad-

vance in corporate agreements. The entire

process from ordering to invoice processing

occurs automatically.

The integrated analytical functions of mySAP

E-Procurement centrally log all processes, and

data is now being consolidated in the system.

By having a global view at all times of all or-

ders, deliveries, and vendor agreements, we

can optimize our strategic decisions and man-

age vendor agreements on a global basis, says

Comerford. s

Procter & Gamble

HarmonizingGlobal Procurement

Procter & Gamble used SAP Markets Enterprise Buyer (Professional Edition) to

harmonize and optimize its global procurement processes. Thanks to excellent

functions, which will become even more powerful as part of mySAP Supplier

Relationship Management, the global company now has the ideal tools to cut

costs and generate value from added purchasing leverage.

Procter & Gamble markets over 300

brands in 140 countries. The brands in-

clude well-known names such as Ariel,

Pantene Pro-V, Always, Bounty, and Pam-

pers. The company, headquartered in

Cincinnati, Ohio (USA), achieved sales of

U.S.$ 39.2 billion in 2001.

Procter & Gamble


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28


SK Telecom is building a third-genera-

tion (3G) wireless network in Korea. To

keep pace with the growing number of wireless

network users, the company must constantly

upgrade network performance. The upgrades

require technical equipment, such as base sta-

tions, which play a key role in satisfying sud-

den surges in demand over large areas and are

ideal for eliminating technical problems quick-

ly. The way our employees purchased things

manually was expensive, slow, and inefficient.

It also prevented us from gradually increasing

Accelerated purchasing big savingsThe advantages of the SAP Procurement solu-

tion soon became evident. The solution flaw-

lessly allows ordering mission-critical supplies,

monitors inventory levels and shipment dates,

and ensures that the best pricing from pre-

ferred hardware vendors can be obtained.

Thats because this solution enables SK Tele-

com to purchase goods and services automati-

cally, saving time and money. So instead of

needing four weeks to obtain a base station, we

now need just one. Were investing these sav-

ings in state-of-the-art technology for our net-

works, and using them to enhance our pro-

ducts and finance new projects, explains Lee.

With the aid of digital signatures, orders and

deliveries are confirmed instantly. The wireless

network provider also has plans to link its cus-

tomers and suppliers logistics networks on

SAP Markets Web-based private exchange so-

lution.

A broader exchange could lead to greater

efficiency across the companys Asia opera-

tions, says Lee, and would allow SK Telecom

to stay ahead of the competition. s

the networks capacity. Our dynamic businesscalled for an equally dynamic solution for pro-

curement, says Jung Hun Lee, ERP & Enter-

prise Buyer Project Manager at SK Telecom,

explaining the companys requirements when

purchasing mission-critical components. With

a standardized process for all products and ser-

vices, were looking at obtaining better prices,

cutting process costs, and improving our rela-

tionships with preferred suppliers.

A catalog of 5,000 suppliers

The wireless network provider opted for mySAP

E-Procurement with its core component SAP

Markets Enterprise Buyer (Professional Edition),

since this SAP solution was the easiest to inte-

grate into the company's existing SAP R/3 sys-

tem. The solution's vast set of features con-

vinced the company. Authorized SK Telecom

employees can now easily access external cata-

logs featuring some 500 suppliers (soon to be

increased to 5,000) and learn about products,

price lists, and delivery times based upon the

agreements negotiated with each supplier. Fre-

quently required and strategically important

materials can now be purchased effectively. The

suppliers benefit from closer customer relation-

ships because their sales systems are integrated

into SK Telecoms procurement solution.

SK Telecom

Automated Procurementof Critical Materials

SK Telecom, one of Koreas leadingwireless service providers, relies on

mySAP E-Procurement to achieve

savings when procuring strategically

crucial equipment for its wireless

network. mySAP E-Procurement en-

ables the company to extend the

technology it uses on its network and

keep it up-to-date.

SK Telecom services more than

11 million customers. Its offerings

include mobile telephony, high-speed

Internet access, mobile video services,

and other next-generation products.

SK Telecom


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30


Quick Links

http://www.sapmarkets.com/srm

The official Web site of SAP Markets

provides an overview of mySAP SRM.

http://inside.sapmarkets.com/srm

SAP Markets extranet for partners and

customers provides even more compre-

hensive information on mySAP SRM. *

http://www.sap.com/community/

The Web site of Line56 Media delivers

global news and analysis of e-business

technology and strategy.

http://service.sap.com/srm

http://www.sap.com/bestpractices

This page provides information on Best

Practices for mySAP.com in general and

for mySAP SRM in particular.

http://service.sap.com/bp-srm

Registered users can download the

complete CD set of Best Practices for

mySAP SRM, including documentation

and pre-configuration. *

http://www.line56.com/

Official Web site of the Institute for

Supply Management (ISM), formerly

NAPM (National Association of Pur-

chasing Managers).

http://www.ism.ws

The SAP Community page provides

access to the mySAP SRM discussion

forum to share experience with SAP

experts, to Webcasts, and to chats.

The SAP extranet for partners and ser-

vices, another entry point for informa-

tion on the SAP Markets extranet. *

* for registered users only


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32

s mySAP Product Lifecycle Management

mySAP PLM provides a complete solution for

driving product development processes and for

managing new products through their entire life

cycle. With mySAP PLM, you can share detailed

product information and work closely with allkey participants involved in developing, manu-

facturing, and maintaining your product from

marketing and sales people to designers and

from suppliers to engineers, manufacturers, qual-

ity managers, operations experts, and customers.

s mySAP Supplier Relationship

Management (mySAP SRM)

mySAP SRM is SAP Markets solution for maxi-

mizing the return on relationship with all sup-

pliers across all categories of spend on a contin-

uous basis by providing all the functionalities

you need to evaluate your supply and sourcing

strategy, enable your supply base to collaborate

with you, and engage those supply relationships

for long-term, mutual benefit.

mySAP SRM is instrumental to effective

supplier management as it replaces unmanaged,

savings-driven transactions with long-term col-

laborative relationships for mutual benefit. It

builds on the success of mySAP E-Procurement

and leverages mySAP Technology. It provides a

holistic view of all supplier-facing relationships

through open integration with supply chain

management, product life-cycle management,

and enterprise resource planning solutions.

s mySAP Supply Chain Management

mySAP SCM is the SAP solution for the supply

chain. mySAP SCM enables, for the first time,

end-to-end integration of supply-chain plan-

ning, execution, networking, and management.

s mySAP Technology

mySAP Technology is an open infrastructure

built upon native Web technology for e-busi-

ness solutions in heterogeneous, component-

based environments. mySAP Technology pow-

ers enterprise and collaborative business pro-

cesses. It features syndication of Web services

allowing for user-centric and process-centric

collaboration and is the foundation of all

mySAP.com solutions.

s Strategic sourcing

The process of determining long-term supply

requirements, finding sources to fulfill those

needs, selecting suppliers to provide the ser-

vices, negotiating the purchase agreements,

and managing the suppliers performance.

s Supplier relationship management (SRM)

SRM is the proactive management of a compa-

ny's entire relationships with suppliers across

all business areas with the goal of delivering,

procuring, and developing products better,

faster and with lower costs through better co-

operation with all suppliers. SRM differs from

e-procurement because it does not only look at

the operative business processes, but also sup-

ports such strategic sourcing tasks, such as

strategy development, outsourcing decisions,

supplier integration, and materials-group man-

agement.Accordingly, it helps create strategic

competitive advantages through external re-source management. (definition according to

Dr. Daniel Corsten and Joerg Hofstetter,

University of St. Gallen, Switzerland)

s Content management

Content management is the process of mana-

ging the flow of content that supports procure-

ment activities. Most frequently, content re-

volves around suppliers and product data

(often in the form of a searchable catalog). De-pending upon the sophistication of the pro-

curement processes, synchronization of back-

end, on-ramp, and exchange content is

required.

s E-procurement

E-procurement is the business-to-business pur-

chase and sale of supplies and services over the

Internet, respectively Web-enabled electronic

purchasing. It automates the traditional manu-

al and paper-based procurement process and

thus, results in reduced maverick buying, lower

transaction costs, lower cycle times and in-

creased efficiency.

s mySAP Enterprise Portals

mySAP Enterprise Portals is an enabling solu-

tion. It unifies all types of enterprise information,

including business applications, databases,

stored documents, and Internet information.

It facilitates the users role-based access to and

action upon business-critical information with-

in the extended enterprise. Because all infor-

mation is unified through the portal, staff can

resolve business issues significantly faster and

more easily within the portal.


Glossary


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s SAP Markets Decision Support

SAP Markets Decision Support provides ana-

lytics to support all SRM processes. Analytics

are flexible, predefined reports based uponpowerful, state-of-the-art, and data warehouse

technology that builds upon the SAP Business

Information Warehouse. SAP Markets Decision

Support offers a 360 approach to SRM intelli-

gence by providing analytics to support sup-

plier strategy management, strategic sourcing,

relationship monitoring, global spend analysis

and document-level procurement-process

monitoring.

s SAP Markets Dynamic Bidding

SAP Markets Dynamic Bidding enables busi-

nesses to access a variety of dynamic pricing

mechanisms, such as reverse auctions, request

for proposal (RFP), request for quotation

(RFQ), trades, and classifieds. It allows them

to benefit from freely moving prices and the

competition created by variable supply and de-

mand. With that, it helps to turn planned, un-

planned, and strategic demand into contracts

and purchase orders. It includes automated de-

cision-support to determine winning suppliers

and stipulate follow-on processes.

s SAP Markets Enterprise Buyer

(Professional Edition)

Enterprise Buyer is the procurement and

sourcing application of mySAP SRM and assuch a central piece of the solution. It enables

all key stakeholders employees, managers,

professional buyers, and even selected vendors

and other partners to collaborate easily in e-

procurement using a Web-based interface tai-

lored to their individual roles. For example, it

empowers employees with self service procure-

ment functions, enables centralized, direct pro-

curement, and provides professional pur-

chasers with tools to make the best sourcing

decisions.

s SAP Markets Supplier Self Services

A Web-based application for smaller and medi-

um-sized suppliers providing them access to

hosted order and content management func-

tionality. The application drives participation

within the supplier community, reduces process

costs, and increases speed across the value

chain. SAP Markets Supplier Self Services can

be used to procure goods as well as services.

s Requisite BugsEye

BugsEye by Requisite is an easy to use and ex-

tremely flexible search engine that accommo-

dates wide variations in the quality and consis-tency of electronic content, user skills,

experience, and needs.

s Requisite eMerge

eMerge by Requisite is a catalog content mana-

gement tool that provides the structure and

processes necessary for successful creation,

management, and maintenance of a unified

catalog. It applies only to content management

of non-stocked materials and materials without

product master integration.

s SAP Markets Collaborative Room

(C-Room)

SAP Markets Collaborative Room is a Web-

based application for collaborative projects in-

side and outside a companys boundaries. It of-

fers a safe environment for structured and

logically connected collaboration and project

data. It integrates communication tools with

document-management and business applica-

tions. Thus, the SAP Markets C-Room supports

a multitude of scenarios, including communi-

cation, purchasing, and contract and document

management.

Publication Details

SAP AGGlobal Corporate CommunicationsGlobal Customer AffairsBernhard HochlehnertNeurottstrasse 16D-69190 WalldorfTel.: +49(0) 6227 7-4 82 58Fax: +49(0) 6227 7-4 43 73Internet:http://www.sap.comhttp://www.sap.infoE-mail: [email protected]:Katy Anderlik, SAP AGEditorial Planning: Sabine Vogler

Photo Sources:Cover: Zefa, Berlin; SAP: 4, 5, 14 (comp. Anja

Daum, Signum), 16/17, 18 (both: comp. AnjaDaum, Signum), 22; PhotoDisc, Seattle: 7, 8, 21(all: comp. Sven Felgendreher, Signum); Bavaria,Mnchen: 24 (comp. Sven Felgendreher, Signum);Procter & Gamble: 27; SK Telecom/PhotoDisc,Seattle: 28 (comp. Torsten Walker, Signum).

Subscription:Tel.: +49(0) 6227 7-4 82 58,E-mail: [email protected]

Advertising Sales:Signum communicationLange Rtterstr. 1168167 MannheimE-mail: [email protected]

Produced by: SIGNUM GmbH, MannheimLithos by: Repro Braun GmbH, NeuhofenPrinted by: Colordruck GmbH, LeimenPrinted on BVS-Plus matt, wood-free, with matt-coated paper from Papierfabrik Scheufelen,Lenningen, Germany. Illustration printing bySchneidershne Papier. SAP AG April 2002. Reproduction allowedonly with the publishers express permission.

Material number: 500 52 708

SAP, the SAP logo, mySAP, SAP R/3, SAP R/2, SAPB2B, SAP BW, SAP CRM, EarlyWatch, SAP Archi-veLink, SAP GUI, SAP Business Workflow, SAPBusiness Engineer, SAP Business Navigator, SAPinter-enterprise solutions, SAP (Word), SAP APO,AcceleratedSAP, Accelerated Solutions, AcceleratedHR, Accelerated HiTech, Accelerated Consumer Prod-ucts, ABAP, ABAP/4, ALE/WEB, BAPI, BusinessFramework, BW Explorer, EnjoySAP, mySAP.com,mySAP.com e-business platform, mySAP EnterprisePortals, RIVA, SAPPHIRE, TeamSAP and Webfloware trademarks or registered trademarks of SAP AGin Germany and in many other cou ntries. All otherproducts mentioned are trademarks or registeredtrademarks of their respective companies.

Selected Key Components of mySAP SRM


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MAXIM

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mySAPTM

SRMEYE TO EYE WITH

YOUR SUPPLIERS

SAP Info Marzo 2002

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Transcript of SAP Info Marzo 2002