New Version of SAP® E-Sourcing On-Demand Solution Helps Customers Cut Costs Through Negotiated Savings

January 19, 2010 by SAP News 0

Lennox International and Scotts Miracle-Gro Company Use SAP® E-Sourcing On-Demand Solution to Evaluate Supplier Responses in a Collaborative Format

WALLDORF, GermanyUnder constant pressure to create profitability in the face of global competition, businesses must find ways to reduce costs and generate additional savings from procured goods and services. SAP AG (NYSE: SAP) today announced that the latest release of the SAP® E-Sourcing on-demand solution is available now and provides customers like Lennox International and The Scotts Miracle-Gro Company the ability to address these challenges with flexible and cost-effective software and services in the areas of strategic sourcing, contract lifecycle management and supplier management. The latest release of SAP E-Sourcing integrates with the enterprise resource planning (ERP) application, SAP® ERP, and contains an enhanced user interface and additional embedded best practices and on-demand services. These new capabilities complement and extend customers’ current procurement investments in SAP® Business Suite software. To date, over 300 customers have realized an average of five to 25 percent savings in most categories of spend by leveraging this advanced strategic sourcing to contract solution.

Lennox International Creates Cost-Effective Climate to Expand Market Share
To help sustain and expand its leading position in climate control solutions for heating, air conditioning and refrigeration markets around the world, Lennox International must drive margin expansion and support growth into other segments while still keeping costs under control. With the SAP E-Sourcing on-demand solution, the company was able to create a global sourcing process based on an open technology platform that supports SAP and non-SAP systems and has the ability to quickly deploy key solutions to drive immediate value.

“The flexibility of the SAP E-Sourcing on-demand solution lets our sourcing team use their own templates to quickly migrate meaningful data into our SAP infrastructure,” said Kathie Kelsey, manufacturing and supply chain IT manager, Lennox International. “The platform allows Lennox to have a lower total cost of ownership as well as enable a secure IT environment while providing the ability to begin leveraging additional functionality over time, as we are ready to adopt it.”

The Scotts Miracle-Gro Company Feeds Savings Through Integrated Sourcing Process
As the world’s largest marketer of branded consumer lawn and garden products, The Scotts Miracle-Gro Company needed to drive demand for commodity spend through an integrated sourcing process, as previous attempts using non-integrated solutions had not yielded acceptable results. As a result, Scotts Miracle-Gro turned to the SAP E-Sourcing on-demand solution to drive sourcing events based on direct material demand from ERP, allowing it to integrate the sourcing process with procurement execution to realize identified savings.

“Our focus was not only to obtain price quotes,” said Diane Pekunka, manager of strategic sourcing, The Scotts Miracle-Gro Company. “We needed a solution that would allow us to assess a supplier’s capabilities, financial situation and its ability to service Scotts Miracle-Gro. SAP E-Sourcing makes it possible for our key stakeholders to focus on the business while leaving the day-to-day operations of the system to SAP.”


Embedded Best Practices and On-Demand Services

The SAP E-Sourcing on-demand solution helps customers launch events using sample templates with embedded sourcing processes. These tools help repeat best practices, reduce cycle time and share knowledge among sourcing professionals, while eliminating cumbersome, paper-based supplier negotiations and awards. Standard integration to the SAP backend enables customers to link their strategic source to contract process to their procurement execution systems, helping to ensure that they are buying against negotiated contract terms to drive realized savings and compliance. On-demand services include customer on-boarding and optional value-added services inclusive of business process consulting, category sourcing strategy expertise and ongoing customer support. With on-demand software, companies can get up and running quickly and obtain rapid time to value.

“SAP E-Sourcing helps customers innovate faster and extend the value of their current investments in SAP Business Suite,” said David Marchand, head of SAP E-Sourcing Solution Management, SAP AG. “The integration of data and processes helps ensure consistency with system and business configurations between SAP Business Suite and on-demand solutions from SAP. As a result, customers avoid the data sharing and integration issues that occur when dealing with disparate best-of-breed applications and obtain immediate impact on their business.”

About SAP
SAP is the world’s leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 92,000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP.” For more information, visit www.sap.com.

(*) SAP defines business software as comprising enterprise resource planning, business intelligence, and related applications.

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