SAP SRM


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SAP Spend Management: SRM

When an organization has many suppliers, it is critical to manage them efficiently and build long-term relationships. Establishing long-term relationships allows for more ideas and feedback to flow freely, streamlined operations, cost reductions, and improved customer service.

SRM Defined

SRM stands for Supplier Relationship Management, which falls under supply chain management. The main purpose is to establish two-way relationships between organizations and suppliers via a web-based platform. It covers innovative methods to coordinate business processes with suppliers, so they are more productive. SRM is integrated with the vendor’s systems for greater efficiencies with interactions. With SAP Supplier Relationship Management (SAP SRM), organizations can examine purchasing history, shorten procurement cycles, and collaborate with partners all in real time.

SAP Spend Management: SRM

When an organization has many suppliers, it is critical to manage them efficiently and build long-term relationships. Establishing long-term relationships allows for more ideas and feedback to flow freely, streamlined operations, cost reductions, and improved customer service.

SRM Defined

SRM stands for Supplier Relationship Management, which falls under supply chain management. The main purpose is to establish two-way relationships between organizations and suppliers via a web-based platform. It covers innovative methods to coordinate business processes with suppliers, so they are more productive. SRM is integrated with the vendor’s systems for greater efficiencies with interactions. With SAP Supplier Relationship Management (SAP SRM), organizations can examine purchasing history, shorten procurement cycles, and collaborate with partners all in real time.

Key Capabilities are:

  1. Operational Procurement: Catalog management, invoice creation, processing purchase orders, and shopping cart management.
  2. Strategy Sourcing: RFx and bids management and centralized sourcing.
  3. Operational Contract Management: Centrally managing supplier contracts.
  4. Supplier Self-Service: Self-service capabilities for suppliers.
  5. Services Procurement: Managing services for procurement.
  6. Operational Reporting: With workforce mobility option.

The significance of SRM is that it automates and streamlines the processes for materials that are ordered frequently, optimizing procurement. It allows organizations to maintain long-term relationships with the right suppliers who have proven historically to be reliable partners. SRM supports supplier information management, compliance, risk management, and performance management.

Benefits of SRM

  • Coordinates business operations
  • Automates workflows
  • Standardizes goods and services acquisitions

It is important to note the difference between SRM and procurement. SRM focuses on contracts and relationships, while procurement focuses on purchases, like ordering, invoicing, or paying. SAP has a cloud-based B2B sourcing and procurement application called Ariba where buyers and suppliers can do business in a networked structure. It provides capabilities such as supplier management, strategic sourcing, supply chain, procurement, services procurement and external workforce, and selling and fulfillment.

Vendor partners offering SRM include apexanalytix, SAP, smartShift.

Key Considerations for SAPinsiders are:

  • Increase Supplier Compliance with Sustainable Business Networks. Discover why accurate records of supplier compliance in procurement and ongoing supplier management activities is an important activity.
  • Simplify Supplier Qualification with SAP Supplier Lifecyle Management. Learn the functionality of how to simplify and foster supplier relationships, by reading this article.
  • Understanding the Key Aspect of Supply Chain Visibility. Kumar Singh, SAPinsider describes what supply chain visibility is, how organizations struggle, and explains one method to kickstart your approach.

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  1. National Grid Transmits Procurement to the Cloud with SAP Ariba Solutions

    Reading time: 9 mins

    In keeping with its commitment to efficiency, National Grid needed to simplify its procurement process for its customers and internal users. After a move to SAP ERP and SAP Supplier Relationship Management (SAP SRM), the business decided a move to the cloud would improve its system scalability as well as the supplier experience. Learn how…