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

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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

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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

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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

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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)

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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)

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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
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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
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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

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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

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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
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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

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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

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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)

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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

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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)

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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

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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)

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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.

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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

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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
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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

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