Now that self service procurement has left the purchasing department free to focus on strategic purchasing operations, how can this be achieved using SAP SRM?

Sourcing just does not happen through greater system functionality. The human factor is critical in achieving a fruitful relationship with a supplier. However SRM can contribute to it by providing good visibility and control across the entire procurement chain, as well as providing a support for managing an integrated supplier negotiation and award process.

SRM functions include:

• preparing a bidding event
• executing electronic requests for quotes and reverse auctions
• evaluating bids
• awarding suppliers
• creating and managing contracts.
  

The professional buyers can publish bid invitations on Internet marketplaces and interested parties can access the bid invitation and submit their bids directly from the marketplace. Bid invitations can also be converted to reverse auctions.

In sourcing, visibility is key. The implementation of a Business Intelligence (BI) system along with SRM can be a useful tool to, for example, rate a provider's services or analyse the Company spending. This helps achieving a seamless integration of SRM with SAP or non SAP backend systems.

Typical benefits 

The typical benefits of SAP SRM based e-sourcing are:

• automation of tedious request-for-proposal and request-for-quotation cycles
• rationalisation and optimisation of the supply base
• lower unit price through competitive bidding & reduce maverick spending
• the retention of history about previous bids.