srm 5.0 application overview

8/3/2019 SRM 5.0 Application Overview

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Copyright 2007 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

SRM Capability

SAP SRM 2005 Overview


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2Copyright 2007 Accenture All Rights Reserved.

Procurement

Executive's challenge

How do I stream

line the req. to

pay process?

How can I get

better price

breaks?

Is my spend

reported

adequately?

How can I

shorten contract

negotiation?

How do I enforce

contract

compliance?

Are we making

informed

sourcing

decisions?

Why are my PO

administration

cost so high?

How can I give

my buyers the

right focus?

Are we a hurdle to

fast new-productintroduction?


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Addressing Procurement

Challenges..SRM

SRM Capability ValueBusiness Challenge

High administrative cost per PO Approval workflow, automaticPO generation, simplerequisitioning process

Transaction cost reduction

Lengthy new product design

Lengthy contract negotiations

Collaborative product design

Collaborative contract negotiation

Faster time to market

Limited price negotiationmargin

Lengthy sourcing process

Dynamic Auctioning and bidding

Online RFx Management

Price reduction throughauctioning

Accelerated Sourcing Process

Poor visibility of spend

Little factual support for

sourcing decisions

Integrated spend analysis andsupplier evaluation tools

Improved sourcing decisionsand supplier performance

management

Poor Contract Compliance Visibility of approved suppliercatalogues and prices online

Document Management

Consolidation of volume andreduction of procurement cost

Lengthy and inefficientrequisition to pay process

Little focus by buyers onsourcing and contractmanagement work

Operational costs savings inprocurement and A/P areas

Buyers focus on strategicsourcing processes, instead oftransaction processing

RFQ, procurement, receiving ,invoicing and matching processautomation

Supplier self service

Contract management


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SAP SRM

mySAP Supplier Relationship Management is a purchasing

platform forsustainable savings and value generation throughfull-cycle sourcing and procurement.

Delivers value by reducing risk,tapping innovation, differentiatingproducts, and improving margins

Provides repeatable savingsand ongoing unit costreductions instead of one-timewins

Builds long-term foundationfor current and futuresupplier-facing businessprocesses

Increase Supplier Participationby reducing risk, tappinginnovation, differentiatingproducts, and improving margins

Closes the loop between sourcingand procurement, within theenterprise, and across the supply

base

Support Business Changebecause its flexible processesextend beyond multiple business

units and spend categories


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What SAP SRM is not?

SRM is not an Inventory Mgmt. System

These applications whichtraditionally handle inventorymanagement functions shouldcontinue to be handled in theseapplications (SAP_MM)

SRMs seamless integration toR/3 and ability to integrate to otherlegacy applications makes itpossible to monitor, check,validate, and integrate inventorydemand while establishing yourown rules of governance around

sourcing execution in P2P.

SRM is not a Financial application

SAP R/3 is the financial system ofrecord for most BP applications.

Related P2P functions like budgetcreation, GL postings, GL reconciliations,AFE setup, payment remittances, etc.

should continue to be handled in R/3.SRMs seamless integration to R/3 can

be leveraged to ensure that boundary andprocess control functions set up in R/3are validated as part of the P2P process(budget checks, cost object validations,COA validations, etc.,)

SRM is not a Work Management application

Those applications which traditionally handle management and plannedmaintenance of assets should continue to be handled by these applications

SRM should be used as a facilitating engine for handling document integration,messaging, process control and document output activities for demand requestswhich originate from these applications (SAP_MM, SAP_PM, etc.,)


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Copyright 2007 Accenture All Rights Reserved.

SRM Business Process

Framework

SRM facilitates the collaborative planning and execution of the supply

chain with suppliers in support of the organizations business strategies.

Strategic

Sourcing

Product Lifecycle Management

Supply Chain

Planning

Negotiation &

Supplier

Management

Procurement

Supply Chain Execution

Busine

ssStrategy

P

lanning

Execution

Customer Segmentation Channel Management Product Portfolio Management

Make vs. Buy Spend Profile Strategy Commodity Rationalization Supplier Rationalization

New Product Introduction Configuration Management

Part Rationalization Value Engineering Product / Component Retirement

eRFX Dynamic Bidding

Contract Management Supplier Management Spend Profile Data Analysis

Forecast Management Demand Planning Supply Planning Transportation Planning

Catalog Purchases Direct Materials Purchases Purchase Receipts

Integrated Logistics Inventory Mngmt.

Core SRM Capability

Complimentary SRM Capability

Business Strategy Capability

Sales &

Channel Mgmt

Operating

Model

BTO, CTO, MTS SC Network Design Customer Service Levels


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SRM Technology

Characteristics

SRM is poised to capitalize on the extended supply chain opportunity by

forming tight interdepartmental and inter-enterprise associations through

advanced collaborative processes and technologies.Supplier Relationship Management (SRM)

Enterprise System Framework

DirectChannel

In directchannel

Net Markets

Customer

ContractManufacturer

3PLWarehouses

Third-partyServiceProviders

Supplier

Sourcing&

Procurement

Supply

ChainPlan

&Exec

Sales &Dist

W/HTransportM

anufacture

HR &Financials

Virtual EnterpriseSystem

Product

Lifecycle

Mgmt

SRM Enabling Technologies

Automation:Automatic movement and processingof transactions to execute processes with suppliers

Integration: Provide a consolidated view of all of an

enterprises planning and execution systems as if the

enterprise had a virtual enterprise system

Visibility: Provide trading partners with visibility of

information and process flows in and between

organizations. Views are customized by role and

aggregated via a single portal view.Collaboration: The sharing of information and the

ability for suppliers to input information directly into an

organizations virtual system.

Optimization: Tools that provide enhanced analytic

capabilities that can be accessed within the

organization or by suppliers to evaluate the

effectiveness of the relationship.

Host Enterprise


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Copyright 2007 Accenture All Rights Reserved.

Potential Savings

Transaction savings 58% transaction savings from paper toelectronic

FTE reduction Elimination of XX transactions will

reduce Y transactional buyers

Cycle time reduction 50% sourcing cycle time reduction

through use of eSourcing tools

Increase # of bid events Sourcing cycle time reduction enables

more spend thru the sourcing processover a given period of time = $ Savings

eInvoice transactions 36% savings in electronic invoiceprocessing

Minimize invoice cycle time Increase payment discount yields Adjust payables staffing

Soft Savings Hard Savings


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SRM Components

Strategic Sourcing

Sourcing analytics

Supplier evaluation

RFx & auctions

Contract management

Supplier Enablement

Supplier portal

Supplier connectivity

Content

Content consolidation

Catalog content management

Operational Procurement

Self-service procurement

Plan-driven procurement

Services procurement


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SRM Process Areas

Procurement / Purchasing

Direct Procurement

Indirect Procurement

eProcurement

Shopping Cart / Requisition

Requestor / Requisitioner

Supplier / Vendor

Workflow

Strategic Sourcing

Purchase Order (PO)

PO Response

Advanced Ship Notice

Change Order

Receipt / Confirmation

Service Entry Sheets

Contracts

Catalogs

Punch-out / Roundtrip

Budget checks / commitments

Invoices

Credit Memos / Debit Memos

2-Way Matching

3-Way Matching

Evaluated Receipt Settlement

Reverse Auction

Sourcing / Bids

Categories / Material Groups

PCards


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Self Service Procurement

Self-service procurement empowers employees to create and

manage their own requisitions for MRO materials and services.

This relieves purchasing departments of a huge administrative

burden, and it makes the procurement process faster, more costeffective, more user-friendly, and more responsive.

mySAP SRM

SAP Enterprise Buyer

ShoppingCart

Creation

WorkflowApproval

Operat.Sourcing

InvoiceHandling

Ordering GoodsReceipt


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Plan Driven Procurement

Plan Driven Procurement allows us to procure material/service

requirements from planning systems, for example Material Requirements

Planning (MRP), Plan Maintenance (PM), orProject Systems (PS).

A large portion of a company's total procurement expenditure is on

materials used in core business processes that are managed by enterprise

systems for planning and production. Plan-driven procurement therefore

has to integrate supply chain management with e-procurement.

mySAP SRM


Generate

DemandSourcing Ordering Invoice/

AnalysisDelivery Inventory

Managmnt


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Services Procurement

Compared to procurement scenarios of materials, services

procurement is much more complex and by far less standardized.

Furthermore demands for services are generally not specified in

detail regarding quantity, duration and price until the confirmation of

the service performed by the service provider. Services can beconsulting, cleaning services, technical services, catering and so

on.

mySAP SRM


Requisition Order OrderResponse ServiceEntryInvoice


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Supplier Selection:

Bid Invitations

Sourcing describes a global concept of determining sources of

supply, as well as the Sourcing application in mySAPSupplier

Relationship Management. The objective of the sourcing concept is

the effective selection of a source of supply.

If there is no source of supply or if you are looking for new source ofsupply, you can create a Bid Invitation so that Business partners can

submit their quotations within the mySAPSRM

mySAP SRM


Transfer of

requirementCreation of

RFx

Bid

Invitation

Awardingthe Bid

Follow-onProcess


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Supplier Selection:

Live Auctions

Sourcing describes a global concept of determining sources of supply,

as well as the Sourcing application in mySAPSupplier Relationship

Management. The objective of the sourcing concept is the effective

selection of a source of supply.

If there is no source of supply or if you are looking for new source ofsupply, you can create a Bid Invitation so that Business partners can

submit their quotations within the mySAPSRM. In this scenario the

negotiation process takes place online in Live-Auction cockpit

mySAP SRM


Transfer of

requirement

Creation of

Live

Auction

Bid

Invitation

Awarding

the Bid

Follow-on

Process


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Contract Management

Negotiating tools

Prepare contracts (does not includeauthoring and redlining activities)

Pricing conditions

Approve and release contracts

Controls over usage and visibility(usage by location)

Distribution

Call off against open contracts

Release order tracking

Monitoring and AlertsSourcing Integration

Catalog Integration


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Spend Analysis

Global Spend Analysis

Generic Spend Analysis

Standard Data Extractors fromTransactional Systems (SAP, SRM Server,Legacy)

Standard Business Content for SRM suite

Supports Development of customer views

Master Data Mapping

Market Data Import from External Sources(Dunn & Bradstreet)

Corporate Spend by Product Category

Vendor spend allocationMonitor Contract Compliance

Monitor Maverick Spend


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Supplier Registration &

Selection

Requirements collaboration

Vendor Selection

Vendor Catalog Integration(internal/externally hosted (Dunn &Bradstreet) using OPI

RF(x) Functions

Bidding document creation

Bid Publication

Supplier Registration

Online Bid Response

Bid Tabulation and Analysis

Bid AcceptanceReverse Auctioning

Award and Decision Notification

Workflow Control Functions

Purchasing Document Creation (PurchaseOrder/Contracts)


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Content Management

Catalog Authoring Tool

Load catalog content from externalsources using various file formatsLoad internal dataFiltering

ClassificationEnrichmentCatalog values check (authorizedvalues)Approval ProcessDistribution

Catalog Search Engine

Quick searchAdvanced SearchNavigation thru classificationViews ManagementContract IntegrationSpecial support for Manufacturer part #

Contracts

Contracts get released in SRM

Contract data is published toCCM via XI

Contract items are displayedand searchable in the catalogand accessible through OCI

Product Master

Selection of relevant ProductMasters in SRM Server

Product Master data ispublished to CCM via XI

Product Master data is mergedwith external data andsearchable accessible throughOCI


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Example:

SRM Main Page


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Example:

Supplier Self Service


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Example:

Catalog


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SRM Business Benefits

Operating Model: Operating model

enhancements thatdrive spend undermanagement

Example: CentralizeSourcing activites

Processes: Consistentprocurement processesacross organization

Example: Eliminate

standing openpurchase orders

Program metrics to ensuresavings are achievedExample: Category

Management Reporting

Analytics:Governance:Policy changes to enable thebusiness caseExample: Delegation of

Authority

Technology Solutions: Technology solutions to enable sourcing and compliance benefits Example: Operationalize contracts through electronic catalogs

OperatingModel

Technology Solutions

Analytics

Governance

Processes

Illustrative


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Process Value Drivers

Capability Component Value Drivers

Self Service

Requisitioning

Enterprise Buyer Professional

Catalog Content Mgmt

Compliance

Process

Services Procurement Enterprise Buyer Professional

Catalog Content Mgmt

Supplier Self Service

Compliance

Process

Plan Driven Procurement Enterprise Buyer Professional

Integration w/ Backend system

Compliance

Process

Strategic Sourcing (RFx) Bidding Engine Sourcing

Process

Reverse Auctions Live Auction Cockpit Sourcing

Supplier Collaboration

Supplier Self Service CFolders (PLM)

Inventory Collaboration Hub (SCM)

Compliance

Process

Electronic Invoice and

Settlement

Supplier Self Service Compliance

Process

Spend Analytics Business Warehouse Sourcing

Compliance


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In Conclusion

Operationally, the value of SRM lies in the collaborative interactions

between traditional supply chain domains.

Reduced time to market 25- 50% lower design cycle time

Reduced SKU proliferation 25-50% reduction in parts^

Improved content mgmt. 40-80% savings in eng. admin. time^

Improved contract mgmt 20% increase in labor prod.**

Improved sourcing forecasts 40% lower premium freight-in costs**

Increased inventory visibility 25-50% cut in inventory costs**

Improved inventory mgmt. 25-50% cut in inventory costs**

Supply Chain Domain

Supplier

Re

lationship

Ma

nagement

Value Levers Potential Benefit Areas*

Design and Source

Reduced purchase cost 10-30% of non-contract spend**^

Increased contract compliance 2-5% of contract spend**

Reduced transaction costs 60-90% lower transaction costs**

**Source: Press articles ^Source: Accenture experience

Reduce material costs 5-20% reduction in material costs

Source and Plan

Plan and Buy

Source and Buy


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srm 5.0 application overview

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