For What Benefits?

Bottom-line results are what matters a lot to every competing company, and achieving cost reduction seems an obvious way to boost profitability without putting too much pressure on generating more revenues.
But reducing costs by simply squeezing suppliers for better prices can prove dangerous in the long term, as it can consequently have some side effects such as reducing the quality of the goods or services purchased, or decreasing the quality of service supplied by these suppliers.
This can ultimately jeopardise the initial company goal of boosting profitability.
In the long run, building sustainable, workable relationships with the suppliers is far more profitable than pressuring individual suppliers for marginal cost reductions.

As far as procurement is concerned.
Clearly, the number one benefit I have observed over the past few years in every Company I have implemented SRM to is the possibility to achieve the decentralization of procurement.
At first this might sound wrong when today centralisation is often seen by Companies as a way forward to improve their purchase to pay process; On the contrary, in the SRM context, decentralisation of procurement promotes centralisation by empowering employees with self-service procurement. This can be achieved because SRM is so easy to use, and because purchasing and budgetary approvals can be done directly in the system by being automatically routed to the relevant people, so any end user can order goods or services without going through the purchasing department, hence reduce overhead, and allows purchasing professionals to focus on managing relationships instead of transactions.

Since SRM can be accessed internally or externally, organisations with a large portion
of service technicians in the field will find the mobile capabilities of this integrated system particularly useful.

Automation of procurement process and faster procurement execution through online approval reduce procurement cycle time and increase efficiency.

As far as sourcing and supplier collaboration is concerned???.
Catalogue management is a great way of building a good relationship with a supplier, whether the catalogue is internally managed or whether it remains the responsibility of the supplier, its maintenance implies a close and frequent relationship between the buyer and the supplier that can lead to more advanced collaboration with critical suppliers, hence reduce unit price by encouraging demand consolidation across the business and by reducing maverick spending.

More complex functions can also be implemented to push further collaboration with suppliers. Entry points to marketplace, supplier self service, EDI.

An improved sourcing strategy enabled by a better understanding of what people need to purchase in order for the company to function properly brings immediate benefits such as rationalisation and optimisation of the supply base and ultimately improved quality of supply at a better price with reduced risk.

In summary

Over the last few years SAP has been putting lots of efforts into taking SRM up to the same level of functionality as its competitors.
Current version 5.0 of mySAP SRM still leaves SAP's SRM offer behind its best-of-breed e-sourcing competitors such as Emptoris or Ariba, but the announcement of version 6.0 creates hope for an improvement in the future, although we understand that this new version is much more complex to implement than previous ones as a result of technology changes.
Key features lacking from SRM are especially in the areas of the user interface, optimisation, analytics and reporting.
SAP recently acquired Frictionless Commerce, a supplier of SRM. Frictionless SRM software enables large and midsize enterprises to effectively perform spend analysis, supplier profiling and performance management, sourcing and contract management. The challenge is now to integrate Frictionless capability into core SRM components, so to provide customers with integrated "one-stop shopping" for all their procurement application needs.  So, according to SAP, all good things to come!