Achieve Procure-to-Pay Excellence - SAPfm.sap.com/data/UPLOAD/files/SAPChicagoWorldTour_Achieve Procur… · Procure-to-pay excellence yields significant outcomes Impact on managed

Achieve Procure-to-Pay Excellence Customer Case Studies and Product Overview

Suresh Ramanathan, Senior Principal, SAP Procurement Solutions

Suzanne Miglucci, Senior Director, SAP Procurement Solution Marketing

© 2011 SAP AG. All rights reserved. 2

Globalization Sustainability Economic downturn

Focus on efficiency

Growing supplier

risk

Supply base becoming

more global

Need to manage risk

effectively and provide

insights

Importance of

governance

Increased pressure on

sustainability

objectives

New regional and

global regulations

Increased focus on

total cost

New approaches to

savings

Pressure to increase

spend visibility and

management

Global trends are driving change in procurement practices

Demand for rapid

productivity

Employees requiring

intuitive self-services

Focus on automated

and integrated

processes


Our procurement portfolio Support for the end-to-end source-to-pay process

Spend

analytics

Supplier

management

Sourcing

Contract

management

Operational

procurement

Invoice

management

Across all categories and sources of spending:

direct, indirect, and services


Procure-to-pay excellence yields significant outcomes

Impact on managed spend and savings

Best-practice adoption: average annual savings (direct)

Low High

5.6% 3.8%

+ 46%

Impact on maverick spending

Best-practice adoption: maverick spending 3.2% 5.2%

- 40%

Low High

Impact on overall procurement costs

Best-practice adoption: overall procurement costs

0.8% 1.0%

-20%

Low High

Impact on average days for requisition-to-PO process

Best-practice adoption: average days for requisition-to-

PO process

2.6

days

4.8

days

-47%

Low High


Overview of the SAP Supplier Relationship Management

(SAP SRM) application

A streamlined

procure-to-pay process

delivers realized savings

and enforces enterprise-

wide compliance to policies

and contracts

Key benefits

Centralized sourcing

Online RFX and auctions

Management of complex services sourcing

Centralized contracts

Distribute contract usage to ERP systems

Track contract compliance

Supplier management

Flexible Web-based surveys and survey

cockpit

Supplier evaluation

Self-registration; self-service data

maintenance

Operational procurement

Easier-to-use self-service procurement

Electronic catalog management

Powerful workflows

Order responses, confirmation of delivery

of goods and services, invoicing, and

bidding

And more

Procurement analytics

Integration with multiple ERP systems

Public sector–specific enhancements

Solution highlights

Reduced procure-to-pay

process costs (50%) and cycle

time (50%)

Increased visibility and policy

compliance (30%–60% spend

under management increase)

Ability of leaders to double

average annual savings: all

amounts saved go directly to

the bottom line, and a reduction

in external spend has more

impact on net income than a

revenue increase

Price reduction from increased

contract compliance: 10%–20%

Price reduction from reduced

maverick spend: 30%–70%

Process efficiency through

procurement processes

reduces efforts (15%–30%) and

frees time for value activities


SAP SRM 7.0 EHP1 with SAP ERP 6.0 EHP 5 What’s new?

Value proposition

Strengthening of the central purchasing hub: support orchestration of local and central procurement

E-procurement functionality of the SAP ERP application: pushing SAP SRM to all installed base customers of SAP ERP

Increased supplier collaboration: extend reach outside company boundaries

Highlights

Usage of central contract

also for services

Functional improvement in

the bidding engine

Embedded contract

analytics for central

contracts

Central purchasing hub

Highlights

Offline bidding via SAP

Interactive Forms software

by Adobe

Bid response processing

within supplier self-services

Enhanced supplier

registration, qualification,

and on-boarding

Supplier collaboration

Highlights

New shopping cart as part

of employee self-services

Additional scenarios for the

one-client deployment

Usage of SAP SRM without

a portal installation

Preconfigured scenarios for

customers of SAP Business

All-in-One

E-procurement in SAP ERP


SAP SRM 7.0 EHP 2 and SAP ERP 6.0 EHP 6 What’s new?

Highlights

Sustainable catalog search

and shopping

Enhanced supplier and info

record masters

Sustainable supplier

evaluation and monitoring

Sustainable procurement

Highlights

Unknown account

assignment category

Improved integration with

SAP ERP for info record

and source list updates

Enhancements for public

and regulated industries

Unbundled service line

items

Catalog visibility in SAP

SRM – flat and hierarchical

views

Continuous procurement

innovation

Highlights

Quick quote (RFX) from

shopping cart

Shopping cart modifications

from sourcing

Improved sourcing

decisions with embedded

analytics

Enhanced bid comparison

Streamlined operational

sourcing


SAP Cart Approval mobile app

Quick approval of needed products and equipment

can boost overall productivity. Designed with this

principle in mind, the SAP Cart Approval mobile

app can enable managers to process and approve

employee-ordered shopping carts in a timely

manner.

Key functions

Receive notification of pending

shopping carts for approval

View list of shopping carts to be

processed

View shopping cart and product

details

Approve or reject shopping carts and

process multiple carts

View requester and approver details

Specifications

Architecture Sybase Unwired

Platform

Dependencies SAP SRM 7.0 SP02+

Devices

Apple iPhone OS 4

RIM BlackBerry

Device OS 5.0 and 6.0

Supported Mode Online

Delivery Date October 31, 2011

Delivered by SAP

Return to Table of Contents


SRM and procurement benchmarking Study scope


Benchmarking results Move the needle to close the gap


High-impact improvement strategies Prescriptive recommendations


Examples of business transformation

Customer

Mill products – primary metals

Revenue: US$2.6 billion

Employees: 20,370

SAP solutions

SAP Supplier Relationship Management

Operational benefits

Key performance

indicator

Impact

Cost of goods and

services procured

-26%

Maintenance of legacy

systems

-50%

Employee productivity +25%

Customer

Mining

Revenue: US$4.7 billion

Employees: 8,000

SAP solutions

SAP Supplier Relationship Management and SAP ERP


Key performance

indicator

Impact

Value delivered in

materials

and services spend

US$25 million

Paper invoices -40%

Invoice errors -25%

Manual POs -40%


Business transformation study: examples

Customer

Life sciences – pharmaceuticals

Revenue: US$535 million

Employees: 3,300

SAP solutions



Key performance

indicator

Impact

Consumable goods

inventory

-40%

Direct materials

purchased for production

-50%

Purchasing cycle time -30%

Material acquisition cost

savings due to catalogs

+8%

Customer

Banking

Revenue: US$15 billion

Employees: 7,700

SAP solutions



Key performance

indicator

Impact

Accuracy and traceability in

cost accounting

100%

Procurement card transaction

approval processing times

-90%

First year purchasing savings US$10 million

Percentage of staff

reassigned to strategic tasks

30%


Business transformation study: examples

Customer

High tech

Revenue US$6 billion

Employees 34,500

SAP solutions



Key

performance

indicator

Impact

Cost reduction US$250 million savings

over 5 years

Invoices per clerk +32%

Aging invoices -50%

Special request POs -20%

Supplier compliance +80%

Customer

Industrial machinery and components – heavy

engineering

Revenue US$100 million

Employees 12,000

SAP solutions



Key performance

indicator

Impact

Employee productivity +20%

Procurement cycle time -30%

Administrative costs and

efforts in procurement

Significantly reduced

Vendor satisfaction Significantly increased

Thank You!

Suresh Ramanathan

Senior Principal – Procurement Solutions

E-mail: [email protected]

Tel: +1 484-431-2990

Suzanne Miglucci

Senior Director – Procurement Solution

Marketing

E-mail: [email protected]

Tel: +1 919-522-5229

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Documents

Achieve Procure-to-Pay Excellence - SAPfm.sap.com/data/UPLOAD/files/SAPChicagoWorldTour_Achieve Procur… · Procure-to-pay excellence yields significant outcomes Impact on managed