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 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.

Invoice Management: Managing invoices often involves lots of manual work that drains your internal and supplier resources. With SAP’s invoice management solutions you can bring invoices into the system from any source; classify, route and sort invoices automatically; receive both provisional and differential invoices for fluctuating commodities; automate taxation and reporting to support corporate financial requirements and trade regulations; support a rigorous process to help ensure compliance based on integrated, consolidated information and enhanced reporting features

Supplier Management: Many companies are deploying supplier management solutions that deliver a 360-degree view of supplier profile, performance and risk information to address such needs as better visibility into and connectivity with your supply base. SAP’s solutions enable users to take a global and category-based approach to managing supplier relationships, leveraging their own corporate data as well as networked information. This enables a proactive approach to performance management as a result of visibility into your top-tier suppliers and their suppliers. Users can also better enforce their corporate sustainability efforts and avoid potential supply disruptions.

Solution delivery options

SAP offers integrated solutions, flexible deployment options, and value-added services and support for best practices to help you achieve procurement transformation—and to do so in a way that maximizes your return on investment. SAP solutions are available in the cloud as on-demand solutions, as well as being available in a hosted environment or on premise. Users can choose a hybrid approach and utilize a mix of these offerings while still benefiting from integrated process support.

Total cost is well-managed via SAP Rapid Deployment solutions, and through SAP’s application enhancement approach. And, several solutions are available on-the-go through apps for your mobile workforce, and these are expandable through partner solutions built specifically to work with SAP procurement solutions.

Transform your organization today

With the portfolio of procurement applications from SAP, you can transform your organization to drive sourcing excellence, achieve procurement compliance, increase profitability and streamline your source-to-pay processes. SAP’s solutions help you work with your suppliers to achieve aligned goals; drive smart decisions using informed spend analytics and sourcing; adjust your purchasing according to economic and political influences; and operate better for gained efficiency and reduced costs through streamlined procurement.

As you achieve greater levels of transformation, your procurement organization can play an increasingly strategic role within your business—driving change and leading the way to achieving corporate goals through collaboration, business intelligence, and performance management.

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