Procurement Continues Its Transformation

The role of procurement is entering a new era. Organizations are shifting from a decentralized to a centralized model that gives procurement tighter controls, standardized processes and power to negotiate with vendors and achieve new efficiencies and...


The role of procurement is entering a new era. Organizations are shifting from a decentralized to a centralized model that gives procurement tighter controls, standardized processes and power to negotiate with vendors and achieve new efficiencies and savings. Executives are identifying: What tools are needed to achieve centralized procurement excellence? And what best practices have proven to maximize growth and profits?

Given the global trends driving changes in procurement practices, this shift toward centralization is occurring just in time. Most businesses face aggressive savings and cost management goals—and management looks to procurement to help achieve them.

As more organizations go global, so do supply bases which typically introduces new risks to businesses and drives the need for tight controls over supplier performance. With this in mind, the issues of sustainability and corporate social responsibility (CSR) continue to grow in their relevance. These trends are occurring at a time when companies are striving to create the highest levels of operational efficiency while also supporting an increasingly mobile workforce. Now, more than ever, procurement must address these changes and provide organizations with secure access to systems anytime, anywhere.

Evaluate available procurement solutions

When evaluating procurement solutions, there are many factors to take into consideration. Yet, whichever solution you choose, know that there’s no one-size-fits-all approach. Depending on the unique situation of your procurement organization, a number of options could be right for you in improving such processes as spend analysis, sourcing, contract management, operational procurement, invoice management and supplier management.

SAP procurement solutions are comprised of an array of source-to-pay products to help you drive efficiencies and infuse best practices across the entire procurement lifecycle.

Spend Analysis: When procurement is faced with top-down directives to reduce costs, increase purchasing control, gain full visibility into spend and reduce supply risk, it’s time to focus on spend performance management. SAP’s spend analysis tools will help you to increase spend visibility through data cleansing and enrichment; allow you to link spend data across business units; enable you to normalize, validate and enrich supplier data; and increase collaborative performance management and predictive supplier risk management.

Sourcing: With sourcing solutions from SAP, you can manage projects; model global sourcing best practices; run collaborative requests for information, quotations, and proposals (RFx); conduct auction events; and incorporate supplier profile information. You can then quickly analyze supplier responses and determine your award decisions to shorten your time to savings.

Contract Management: With thousands of transactions and suppliers, your organization faces the uphill task of ensuring there is no leakage of possible savings or legal risk due to breach of contracts. SAP provides you with the tools to enable standardized contract creation; transfer negotiated terms and conditions to operational contracts; and provide portfolio visibility, systemic governance and compliance management.

Operational Procurement: If your procurement organization faces pressure to reduce costs while maintaining high-quality output, you need ways to boost the efficiency of your procurement operations.

SAP offers operational procurement solutions that enable you to automate, simplify and accelerate goods and services procurement for all categories of spend. The software supports a “zero touch” process that enforces purchasing from preferred suppliers while shortening order cycle times and driving procurement discipline.

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