You are on page 1of 28

EXPERIENCE YOU CAN TRUST INSIGHTS YOU CAN USE INNOVATION YOU CAN PROFIT FROM

Evolving your Enterprise Architecture for Supplier Relationship Management


Bernd Bergmann
Director NetWeaver & ESA Adoption, SRM Strategy, SAP AG

EXPERIENCE YOU CAN TRUST INSIGHTS YOU CAN USE INNOVATION YOU CAN PROFIT FROM

The Challenges in SRM Today Enterprise Service Architecture for SRM mySAP SRM powered by SAP NetWeaver Start ESA Today Your ESA Roadmap for SRM

Management Concerns and Business Challenges


Top line growth through business process Bottom line growth through increased
Visibility/Intelligence
Profitability (performance, benchmarking) Control of external and internal processes

innovation

Adaptiveness
Legal regulations Capture innovation from suppliers

productivity

Business flexibility
Ability to flexibly shift between different strategies and business models (e.g. Cost, Innovation, Quality Leadership

Multiple strategies implementation


Sourcing strategy by category Achieving optimal mix of suppliers

Supply Strategy Development


Track supplier contract compliance Actionable intelligence

Cost reduction
Measurement of realized cost savings Measurement of executioncompliance on a global basis

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 3

The IT Challenges in Supply Management Transformation Composition


that leverages existing investments
Data quality
Supplier and product data quality Harmonize data fragmented by division, country, spend category

Consolidation & Standardization


Automate processes
Collaboration with suppliers Supplier on-boarding

of technologies

Process integration
Cross-functional process integration Avoid value leakage from non-integrated systems

Increase supplier connectivity


Only for high-volume transactions and some suppliers Transitioning

Change management
Supporting change management measures Skill transfer and training

Cost reduction
Execution of cost savings Lowering of IT-Costs

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 4

EXPERIENCE YOU CAN TRUST INSIGHTS YOU CAN USE INNOVATION YOU CAN PROFIT FROM

The Challenges in SRM Today Enterprise Service Architecture for SRM mySAP SRM powered by SAP NetWeaver Start ESA Today Your ESA Roadmap for SRM

eBidding in SRM: Evolving Business Process

Focus: Differentiation INNOVATION eBidding extended by an order of magnitude Extended from 10s to 100s of events Category Mgmt

CORE

Focus: Productivity STANDARDIZATION Supplier qualification (eBidding) standardized Leverage industry best practices
OUT-TASK INSOURCE

CONTEXT

CONSOLIDATE COMPOSE

eBidding as competitive differentiator Automotive company looking to lower their procurement costs

INVENTION

SCALE

COMMODIZATION

eBidding out-tasked (option) Out-task services (supplier discovery & check, etc) to lower-cost countries

INVENT

RETIRE

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 6

Todays IT Dilemma in Sourcing Execution: Complex, Custom Built Integration


People as Human Integrators
Material Manager Requisitioner

CONSOLIDATE

(Process is captured only in peoples heads)


Category Manager Purchaser Supplier

is extremely difficult:
New platform New skills New integration

COMPOSE

RFx RFx (Internal) (Internal)

ProcureProcurement ment

Shipping Shipping

Supplier Supplier Mgmt Mgmt

N-tier N-tier suppliers suppliers (partner) (partner)

Innovation cannot easily leverage existing investments

Hard-wired Enterprise Systems

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 7

ESA Increases Business Process Flexibility at Lower Cost


Sourcing Delivered as Best Practice in mySAP SRM
CONSOLIDATE
Requisitioner Category Manager Supplier Purchaser

Ease of consolidation and standardization of loosely coupled systems to a tightly integrated SRM system delivering cross-functional processes

Pre-Event processing

Event Mgmt

Bidding

Awarding

Create Contract

Composition Platform

SAP NetWeaver

PLM (Internal)

ERP (Internal)

Supplier Mgmt

Procurement

Sourcing

CRM (Internal)

Consolidate (SRM)

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 8

ESA Enables New Business Strategies


IT Needs to Adapt to Changing Business Models
OUT-TASK

Requisitioner

Category Manager

Service Provider

Purchaser

Moving the supplybase to low cost countries: Purchasing activities delegated / out tasked but the OEM retains control over the sourcing process

Pre-Event processing

Event Mgmt

Bidding

Awarding

Create Contract

Composition Platform

SAP NetWeaver

PLM (Internal)

ERP (Internal)

SRM Service Provider (external) Supplier (external)

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 9

ESA Enables Greater Process Innovation


Flexibility for Business Process Innovation
COMPOSE
Sales Representative Material Manager Purchaser Category Manager Sales Representative

Create Innovative Composites - Based on mySAP SRM Sourcing (example xCQM)


Integrate real-time structured and unstructured data Accelerate the quotation response time and optimize the quoting procedure Improve the quality and accuracy of quotations
SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 10

Receive customer RFQ

Data cleansing & pricing

RFQ execution

Bid comparison

Approval & KPI comparison

Composition Platform

SAP NetWeaver

PLM (Internal)

ERP (Internal)

SRM Supplier (external) Supplier (external)

The Unique Value of Business Flexibility in Sourcing


User Productivity
Spend visibility Category Manager Supplier

Extensibility
New Services

Pre-Event Event processing Management

Bidding

Optimization

Awarding

Create Contract

Efficiency/ Automation

Activate Service RFQ Creation Initiate Bidding

Flexible Process Innovation / Extensibility Increased User productivity/ Collaboration Increased Process Efficiency / Automation
SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 11

Linking supplier bidding systems with own system Varied sourcing options for different categories Better supplier evaluation optimization Consolidate Supplier info from multiple systems Centralized sourcing: aggregate demand from various sources (plants, etc) Collaborative RFQ creation Identify demand check inventory level trigger an automatic sourcing process Identifying new suppliers and on-boarding them

The Unique Value of IT Flexibility in Sourcing


Collaboration
Requisitioner Category Manager Supplier Purchaser

Deployment Flexibility

Business Process Platform


Service Provider Supplier Legacy SRM PLM ERP

Integration

Increased Flexibility in Deployment and Extensibility Increased Collaboration and Visibility Ease of Integration and Consolidation

Open standards to achieve interoperability with Supply chain partners Flexible process Implementation for multiple Product categories User-specific information for real-time exception detection, alerts and workflow (e.g. allowing faster demand aggregation) Robust engagement arrangements internally & externally Consolidated and harmonized real time information from multiple systems Consolidated view to aid Decision Support

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 12

Procure to Pay Scenario on Customer and Supplier Side

Internal Request Processing

Purchase Request Processing

RFQ Processing

Purchase Order Processing

Goods and Service Confirmation

Supplier Invoice Processing

Due Item Processing

Payment Processing

Sales Order Quote Processing

Sales Order Processing

Service Confirmation Processing

Customer Invoice Processing

Due Item Processing

Payment Processing

Buying/customer side (P2P) Selling/supplier side (O2C) Logical deployment unit

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 13

Public Sector Requires Specific Tendering Process

Internal Request Processing

Purchase Request Processing

Public Sector Tendering

Purchase Order Processing

Goods and Service Confirmation

Supplier Invoice Processing

Due Item Processing

Payment Processing

Tendering
Financing Bidders Schedules Description of Services Bid Invitation Receive Bids Bid Opening Evaluate Bids Bidder Proposal Bid Acceptance Amendments
SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 14

AI Demo Scenario

Employee

Buyer

Employee
Shopping Cart Status?

Automated
Check Budget Financials

Employee
Shopping Cart Status?

Automated

Employee/ Buyer

Buyer

Shopping Cart Processing

Sourcing Cockpit

Supplier Creation

Approve

Create Po Match SC

Request Status Create RFQ

Check if budget available

Request Status Create Vendor Create PO

Create RFQ

Financing Candidates Schedules Documents

Publishing

Quotations Opening

Evaluation Selection

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 15

EXPERIENCE YOU CAN TRUST INSIGHTS YOU CAN USE INNOVATION YOU CAN PROFIT FROM

The Challenges in SRM Today Enterprise Service Architecture for SRM mySAP SRM powered by SAP NetWeaver Start ESA Today Your ESA Roadmap for SRM

mySAP SRM is Powered by SAP NetWeaver


Supply Strategy Development SAP Business Intelligence Spend Analysis SAP Master Data Management Supplier Negotiation SAP Web Application Server

Requisitioning SAP Mobile Business

Order Collaboration SAP Enterprise Portal Supplier Connectivity SAP Exchange Infrastructure

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 17

Supply Strategy Development


Capture, analyze, and follow up on supplier performance Typical issues
Data captured in multiple systems Rudimentary analytical capabilities Inability to track supplier compliance No actionable intelligence

SAP NetWeaver enables


Category management (e.g. actionable dashboard with category specific supplier data accumulated from multiple systems)

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 18

Spend Analysis
Create a common view of data Typical issues
Many (incomplete) data sources Inaccurate supplier and product data Multiple classification schemas Limited visibility on total spend
Business Unit A Product ID: 1447 Battery 1447Batter

SAP NetWeaver enables


Master data harmonization
Business Unit B Product ID: 34 987 01 34 987 02 34 987 03

Business Unit C Product ID: 455-BJ-Spain

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 19

Supplier Selection
Conduct online reverse auctions Typical issues
Scalability and stability Security Chat and message archiving Real-time monitoring

SAP NetWeaver enables


Adding a new level of security and scalability to Web-based business (e.g. Live Auction Cockpit)

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 20

Self-Service Procurement
Anytime, anywhere access Typical issues
Reliance on manual processes Long lead times Low user acceptance No access outside office

SAP NetWeaver enables


Mobile procurement (e.g. remote approval & replenishment orders)

Accommodating mobile professionals may remove one of the final barriers to effective spend capture

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 21

Order Collaboration
Build a supplier portal Typical issues
High transaction costs No inventory visibility Limited involvement in design

SAP NetWeaver enables


Web-based supplier self-service (e.g. online registration & status monitoring)

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 22

Supplier Connectivity
Exchange Electronic Documents Typical issues
Thousands of suppliers High cost for EDI connections Emerging standards for XML Vastly different supplier needs
SUPPLIER INTERACTIONS TOMORROW
100%

SAP NetWeaver enables


Processes extended to suppliers (e.g. inventory data exchange) SAP Supplier Network
PHONE, FAX & E-MAIL DOC. EXCHANGE SUPPLIER PORTAL PROCESS COLLAB.

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 23

EXPERIENCE YOU CAN TRUST INSIGHTS YOU CAN USE INNOVATION YOU CAN PROFIT FROM

The Challenges in SRM Today Enterprise Service Architecture for SRM mySAP SRM powered by SAP NetWeaver Start ESA Today Your ESA Roadmap for SRM

ESA: Start Today With SAP Solutions Powered by SAP NetWeaver


Evolve IT infrastructure

Value

Model

Compose

Enable flexible shift between different sourcing strategies by category Increase collaboration with suppliers Increase visibility/analytics in Sourcing Process Efficiency Process Flexibility Process/Business Model Innovation

Integrate

Evolve business practices

Tactical Approach

Strategic approach to ESA


SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 25

Your ESA Roadmap with SRM Powered by SAP NetWeaver


Value Biz Value

Expand your supply-base

Extend your sourcing processes by integrating internal & external application and leveraging Industry standards with SAP NetWeaver XI

Biz Value

Increase analytical capabilities

Synchronize execution across multiple internal and external groups based on common analytical data with SAP BI.

Biz Value

Extend user productivity

Create your own Enterprise Portal roles with role-specific iViews providing user-specific information, real-time exception detection, alerts and workflow.

Extend your usage of mySAP SRM Biz Value Use the procurement and sourcing best practices delivered with mySAP SRM
based on a common platform & open, standardized interfaces.

Functionality
SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 26

ESA: Turn IT into an Enabler of Flexible Business Strategies


Build processes fast, cost efficient and in high quality

for Differentiation

for higher Productivity

Consolidate and Standardize processes

Composite Apps by Customer

Composite Apps by SAP

Composite Apps by Partners

SAP NetWeaver Business Process Platform


Enterprise Services Repository

Platform Application components

Legacy

Custom Dev

Legacy

3rd Party

SAP SRM

SAP ERP

SAP Partner

Buyer

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 27

Copyright 2005 SAP AG. All Rights Reserved


No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM Corporation in the United States and/or other countries. Oracle is a registered trademark of Oracle Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. MaxDB is a trademark of MySQL AB, Sweden. SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

The information in this document is proprietary to SAP. No part of this document may be reproduced, copied, or transmitted in any form or for any purpose without the express prior written permission of SAP AG. This document is a preliminary version and not subject to your license agreement or any other agreement with SAP. This document contains only intended strategies, developments, and functionalities of the SAP product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that this document is subject to change and may be changed by SAP at any time without notice. SAP assumes no responsibility for errors or omissions in this document. SAP does not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. SAP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross negligence. The statutory liability for personal injury and defective products is not affected. SAP has no control over the information that you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web pages nor provide any warranty whatsoever relating to third-party Web pages.

SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 28