Unleashing E-Procurement

Feature Article | September 5, 2005 by admin

Leading enterprises are deploying e-procurement solutions as part of their efforts to increase both margins and supply chain efficiency. Successful e-procurement projects must make suppliers an integral part of the supply management solution with the ability to connect and conduct transactions online. However, not all of these companies have realized their anticipated return on investment (ROI), and supplier enablement has proven to be a significant challenge because of different levels of technical capabilities and supplier readiness, a variety of communication standards, the availability of required internal resources, and the readiness of catalog content for procured items.
What’s more, the prevailing integration alternative, electronic data interchange (EDI), is cost-effective only when major suppliers agree to exchange a large volume of documents and data on a regular basis. Without a comprehensive, scalable supplier enablement solution, companies will continue to encounter delays in lowering transactions costs, limited spending visibility, and controlling maverick spending.
The business value of supplier enablement also extends beyond the enterprise. Being able to connect with suppliers worldwide makes it easier for companies to explore regions with lower business costs and to develop new relationships with suppliers globally. In addition, as companies outsource nonstrategic activities to their suppliers, they are increasingly dependent upon close and e-enabled partnerships. For these reasons, accelerated supplier enablement can significantly improve an organization’s ability to succeed.

Rapid supplier adoption

SAP Supplier Network within mySAP SRM

SAP Supplier Network within mySAP SRM

Many enterprises already benefit from the e-procurement capabilities provided by the mySAP Supplier Relationship Management (mySAP SRM) solution. SAP now offers SAP Supplier Network, a global document exchange platform that allows buying organizations to transact business electronically with thousands of suppliers worldwide using a single, standards-based network connection. Providing low-cost, hosted services for nonstrategic maintenance, repair, and operations (MRO) procurement, SAP Supplier Network enables rapid supplier adoption and facilitates millions of transactions and billions in spending per year.
By making it easy to add suppliers and collaborate on procurement, SAP Supplier Network complements the existing capabilities of mySAP Business Suite solutions. For strategic procurement of direct materials and assets, mySAP Business Suite provides supplier enablement capabilities, as well as self-managed collaboration with strategic partners in such areas as design, sourcing, inventory and replenishment, and forecasting and planning.

Outsourced management of the supplier network

Collaboration Channels

Collaboration Channels

SAP Supplier Network allows the outsourcing of time-consuming activities, such as the maintenance of catalog data, acknowledgements, and invoice data. It also makes it simpler to connect suppliers technically. Before beginning collaborative activity with any supplier, buyers need to register and qualify prospective vendors, so SAP Supplier Network provides supplier invitation tools that buyer can use to invite existing or new suppliers to trade with them on the network. To ensure privacy, the solution sends selected suppliers an e-mail message linking them to online registration forms. This automated, streamlined process accelerates supplier adoption and shortens time to value. To improve sourcing process efficiency, all relevant business partner data is stored in a central directory so the data is available for sourcing-related activities, such as supplier identification, request for proposals, and supplier evaluation.
SAP also offers optional catalog management services. Upon request SAP partners host and manage vendor catalogs and handle processing, creation, layout, and ongoing maintenance and management. Hosted catalog management services make it easy for buyers to rapidly find, compare, and select products and then transfer them into the procurement system included with mySAP SRM. To ensure compatibility with various procurement applications, SAP Supplier Network uses an open catalog interface that supports single sign-on capabilities inside an application.

Processes Behind Supplier Enablement

Processes Behind Supplier Enablement

SAP Supplier Network allows buyers and high-volume suppliers to automate all system-to-system document processing. Buyers can safely send and receive an unlimited number of purchasing documents. Documents currently supported include purchase orders, purchase order changes, purchase order responses, purchase order cancellation, advance shipping notifications, invoices, and credit notes. Document delivery is guaranteed and monitored end to end.
Another important capability of SAP Supplier Network is a Web-based order collaboration service – a streamlined order management system – for low-volume suppliers with restricted IT capabilities. Outbound, discrete purchase orders are sent from a buyer’s purchasing system to the network, where suppliers can view, change, and respond to the orders via the Internet. All subsequent communications about purchase orders are exchanged electronically, resulting in fewer errors, reduced risk of supply delays, and increased process transparency.

Connect once – transact with many

SAP Supplier Network

SAP Supplier Network

With the proven e-marketplace services provided by SAP Supplier Network partners, Perfect Commerce and cc-hubwoo, users have instant access to more than 16,000 suppliers. Because SAP Supplier Network includes both strategic and nonstrategic suppliers, it probably already includes most companies’ main suppliers.
The standards-based connection eliminates the need to support separate network connections with suppliers. SAP Supplier Network can route documents in both directions, regardless of a supplier’s communication standards. Because users don’t have to pay for each connection, they take advantage of economies of scale in supplier connectivity.
Through its SAP Supplier Network partners, SAP also offers professional services to facilitate on-boarding, such as back-end integration of a sales order system, and ongoing support. SAP Supplier Network maximizes the value of relationships for buyers and suppliers. Buyers expect increased supplier participation and automation of cross-company processes. Suppliers benefit from access to an unlimited number of customers and efficient collaboration with them – without the need for costly IT investments.

Marko Schomber

Marko Schomber

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1 comment

  1. Lucas Ritondale

    Ho Marko, can I connect from SAP Business One to the SAP SUpplier Network??…. we are SSP and we have a procurement 100% web enabled, and we would like to use the network for supplier identification and document transactions

    Is there a way to think on such a project??

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