When mentioning SRM, people often look as if they knew what it was without really knowing what it is. Could it be that they get confused because SRM sounds like a mixture of SAP and CRM?
SRM actually sits at the other end of the SAP business suite and stands for Supplier Relationship Management, and is a SAP procurement and sourcing tool.

A bit of history

The first SAP e-procurement tool, BBP v1.0 was launched in 1999 and offered limited functionality to start with. Year 2002 saw the launch of the first SAP SRM, which was significant because it provided the company with much deeper product functionality, where prior to this launch, SAP Markets' capabilities were limited to e-procurement and exchange technologies.
Today SAP SRM is a comprehensive sourcing and procurement tool that runs on the SAP NetWeaver platform, and is designed to be used across all Industries.

The procurement element of SRM is called EBP (Enterprise Buyer Professional) and over the past 4 years it has become a good and stable e-procurement tool, much loved by end users because it is intuitive and easy to use and well loved by senior management because its implementation can be quite straightforward and can provide immediate and visible benefits to the purchasing community without costing too much.

Over the last few years, and with the e-procurement aspect of the product being more mature, SAP has been focusing their efforts on improving the sourcing side of SRM, and although there is still quite a lot to be done to compete with other e-auction offers and bidding engines such as Ariba or Emptoris, SRM in its currently available version 5.0, already offers a few interesting functionality. Version 6.0 will be soon available and promises to be going further into that direction.

So, what are these functionality?

1 - Procurement

The procurement functions of mySAP SRM complement a typical ERP-based procure-to-pay process with integrated catalogue-based requisitioning, often referred to as operational procurement or e-procurement.

Being web-based and easy to use, SRM can typically be used by any end user in any company who needs to purchase indirect materials and services (goods and services used for maintenance, repair, and operations) and direct materials and services (things that directly affect production).

SRM covers 3 scenarios:

• Self service procurement - Ability to requisition and buy goods or services
  Typical tasks include employee buying office stationery or IT equipment from supplier catalogues, employees buying items that are not covered in catalogues from centrally agreed contracts, for example procurement of services.
  Catalogues can be either internally managed or maintained by the supplier and items retrieved from the supplier???s web site using punch out technology.
• Service procurement - SRM covers a wide range of Services. It promotes supplier collaboration for services such as temporary labour, consulting or facilities.
  The real business value here is in the enhanced supplier collaboration to define service requirements and align resources more accurately. Planned and unplanned items can be mixed in one shopping cart.
• Plan driven procurement - This scenario is relevant for Direct procurement.
  In a highly integrated and automated procurement process, demands for products and services can come from several different planning systems that reside outside of mySAP SRM, such as MRP or APS systems. SRM integrates with SCM and plant maintenance.

Deployment Options

Although it makes more sense to implement SRM along SAP ERP so to beneficiate from existing fully integrated functionality, SRM can also sits on top of any other ERP system and can be fully integrated with any existing procure to pay process.

SRM offers three options, the choice of implementing one or the other depends on how much the company wants to use SRM for its Materials Management functions instead of the ERP system. This often comes down to how complex the P2P processes are.

• Classic deployment
  SRM is implemented with one or more ERP systems. All Materials Management (MM) is mapped in the ERP system. Accounting (FI) and Controlling (CO) are processed in the ERP system.
• The extended classic deployment
  SRM is implemented with one or more ERP systems. The complete procurement process takes place in SRM. The purchase order in SRM is the leading purchase order and the ERP backend system gets updated from SRM. Goods receipts (confirmations) and invoices can be pre-entered in SRM but data is updated from the backend system.
• The standalone deployment
  In this deployment scenario, there is no Materials Management (MM) in the ERP system and the MM functions of SRM are used for all non-production procurement. Accounting (FI) and Controlling (CO) can be connected. However, this is optional.