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EXPERIENCE YOU CAN TRUST

INSIGHTS YOU CAN USE

INNOVATION YOU CAN PROFIT FROM

Bernd BergmannDirector NetWeaver & ESA Adoption,SRM Strategy, SAP AG

Evolving your EnterpriseArchitecture for SupplierRelationship Management

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Enterprise Service Architecture for SRM

Your ESA Roadmap for SRM

The Challenges in SRM Today

mySAP SRM powered bySAP NetWeaver Start ESA Today

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SAP AG 2005, SAPPHIRE Copenhagen / SPS04 / Bergmann / 3

Management Concerns and Business Challenges

Legal regulations

Capture innovation from

suppliers

Adaptiveness

Measurement of realizedcost savings

Measurement of execution-compliance on a global basis

Cost reduction

Sourcing strategy by

category Achieving optimal mix of

suppliers

Multiple strategiesimplementation

Track supplier contractcompliance

Actionable intelligence

Supply Strategy

Development

Profitability (performance,benchmarking)

Control of external andinternal processes

Visibility/Intelligence

Ability to flexibly shift bet-

ween different strategies andbusiness models (e.g. Cost,Innovation, QualityLeadership

Business flexibility

Top line

growth through

business

process

innovation

Bottom line

growth through

increased

productivity

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Collaboration with suppliers Supplier on-boarding

The IT Challenges in Supply Management Transformation

Consolidation &

Standardizationof technologies

Composition

that leveragesexisting

investments Automate processes

Execution of cost savings Lowering of IT-Costs

Cost reduction

Only for high-volume

transactions and somesuppliers

Transitioning

Increase supplierconnectivity

Supporting changemanagement measures

Skill transfer and training

Change management

Supplier and product dataquality

Harmonize data fragmentedby division, country, spendcategory

Data quality

Cross-functional process

integration Avoid value leakage from

non-integrated systems

Process integration

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eBidding in SRM: Evolving Business Process

eBidding as competitive

differentiator

Supplier qualification

(eBidding) standardized

eBidding out-tasked

(option)

eBidding extended by

an order of magnitude

COMMO-

DIZATION

INVENTION

INNOVATION STANDARD-

IZATIONCONSOLIDATE

COREFocus: Differentiation

CONTEXTFocus: Productivity

COMPOSE

RETIREINVENT

SCALE

INSOURCE

OUT-TASK

Extended from 10s to

100s of events

Leverage industry

best practices

Automotive company

looking to lower theirprocurement costs

Out-task services

(supplier discovery &check, etc) to lower-cost

countries

CategoryMgmt

T d IT Dil i S i E ti C l

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Todays IT Dilemma in Sourcing Execution: Complex,Custom Built Integration

is extremely difficult: New platform

New skills

New integration

Hard-wired Enterprise

Systems

Innovation cannot easily

leverage existing investments

People as

Human Integrators(Process is captured only in peoples

heads)

COMPOSE

CONSOLIDATE

N-tier

suppliers

(partner)

N-tier

suppliers

(partner)ShippingShipping

SupplierMgmt

SupplierMgmt

RFx(Internal)

RFx(Internal)

Procure-ment

Procure-ment

CategoryManager

SupplierPurchaserMaterialManager

Requisi-tioner

ESA Increases Business Process Flexibility at Lower

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PLM(Internal)

ERP(Internal)

ESA Increases Business Process Flexibility at LowerCost

Sourcing Delivered as Best Practice in mySAP SRM

Ease of consolidation

and standardization of

loosely coupled

systems to a tightly

integrated SRM

system deliveringcross-functional

processes

CONSOLIDATE

SAP NetWeaverComposition Platform

Purchaser

SupplierMgmt

SourcingCRM

(Internal)Procure-

ment

Consolidate

(SRM)

Category

ManagerSupplierRequisitioner

Event

Mgmt

Bidding AwardingPre-Event

processing

Create

Contract

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PLM(Internal)

ERP(Internal)


Moving the supply-

base to low cost

countries:

Purchasing activities

delegated / out tasked

but the OEM retainscontrol over the

sourcing process

ESA Enables New Business Strategies

Event

Mgmt

Bidding AwardingPre-Event

processing

Create

Contract

Supplier

(external)

Service

Provider

(external)

SRM

PurchaserCategory

Manager

Service

ProviderRequisitioner

IT Needs to Adapt to Changing Business ModelsOUT-TASK

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ESA Enables Greater Process Innovation

Datacleansing

& pricing

RFQ

execution

Bid

comparison

Receivecustomer

RFQ

Approval

& KPI

comparison

Supplier

(external)Supplier

(external)

SalesRepresentative

CategoryManager

Material

ManagerPurchaser

SalesRepresentative

Flexibility for Business Process Innovation

COMPOSE

Create Innovative

Composites - Based onmySAP SRM Sourcing(example xCQM)

Integrate real-timestructured andunstructured data

Accelerate the quotationresponse time andoptimize the quotingprocedure

Improve the quality andaccuracy of quotations

PLM(Internal)

ERP(Internal)

SRM

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ActivateService

RFQ

CreationInitiateBidding

Extensibility

The Unique Value of Business Flexibility in Sourcing

Efficiency/

Automation

User Productivity

Linking supplier bidding systems with own system Varied sourcing options for different categories

Better supplier evaluation optimization

Consolidate Supplier info from multiple systems

Centralized sourcing: aggregate demand from various sources(plants, etc)

Collaborative RFQ creation

Identify demand check inventory level trigger an automaticsourcing process

Identifying new suppliers and on-boarding them

Flexible ProcessInnovation /Extensibility

Increased User

productivity/Collaboration

Increased ProcessEfficiency /

Automation

Pre-Eventprocessing

BiddingEventManagement

Optimization AwardingCreate

Contract

Category Manager Supplier

Spendvisibility

New Services

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The Unique Value of IT Flexibility in Sourcing

Open standards to achieve interoperability with Supply chain

partners

Flexible process Implementation for multiple Product categories

User-specific information for real-time exception detection, alerts

and workflow (e.g. allowing faster demand aggregation) Robust engagement arrangements internally & externally

Consolidated and harmonized real time information from multiple

systems

Consolidated view to aid Decision Support

Increased

Flexibility inDeployment andExtensibility

Increased

Collaborationand Visibility

Ease of Integration

and Consolidation

Deployment

Flexibility

Business Process Platform

Collaboration

PLM

ERP

L

egacy

S

ervice

Provider

Supplier

SRM

Integration

Category

ManagerRequisitionerSupplier Purchaser

Procure to Pay Scenario on Customer and Supplier

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Procure to Pay Scenario on Customer and SupplierSide

Buying/customer side (P2P)

Selling/supplier side (O2C)

Logical deployment unit

Purchase

Order

Processing

Payment

Processing

Internal

Request

Processing

CustomerInvoice

Processing

SalesOrder

Processing

Supplier

Invoice

Processing

Payment

Processing

Sales OrderQuote

Processing

Goodsand

Service

Confirmation

ServiceConfirmation

Processing

Purchase

Request

Processing

RFQ

Processing

Due

Item

Processing

DueItem

Processing

P bli S t R i S ifi T d i P

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Public Sector Requires Specific Tendering Process

PublicSector

Tendering

Purchase

Order

Processing

Internal

Request

Processing

Supplier

Invoice

Processing

Payment

Processing

Goodsand

Service

Confirmation

Purchase

Request

Processing

Due

Item

Processing

Tendering

Financing

Bidders

Schedules

Description of Services

Bid Invitation

Receive Bids

Bid Opening

Evaluate Bids

Bidder Proposal

Bid Acceptance

Amendments

AI D S i

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AI Demo Scenario

Shopping

Cart

Processing

Supplier

Creation

Create Po

Match SC

Sourcing

Cockpit Approve

Shopping

Cart

Status?

Shopping

Cart

Status?

Check

Budget

Financials

Financing

Candidates

Schedules

Documents

Create

RFQPublishing

Quotations

Opening

Evaluation

Selection

Employee Employee Employee Employee/

Buyer

BuyerBuyer

Create

RFQ

RequestStatus

RequestStatus

Check ifbudget

available Create

Vendor Create

PO

Automated Automated

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mySAP SRM is Powered by SAP NetWeaver

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mySAP SRM is Powered by SAP NetWeaver

Supply Strategy Development

SAPBusiness Intelligence

Spend Analysis

SAPMaster Data Management

RequisitioningSAPMobile Business

Supplier Negotiation

SAPWeb ApplicationServer

Order Collaboration

SAPEnterprise Portal

Supplier Connectivity

SAPExchangeInfrastructure


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Capture, analyze, and follow up on supplier performance

Typical issues Data captured in multiple systems

Rudimentary analytical capabilities

Inability to track supplier compliance No actionable intelligence

SAP NetWeaver enables Category management (e.g. actionable

dashboard with category specific

supplier data accumulated from

multiple systems)

Spend Analysis

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Spend Analysis

Create a common view of data

Typical issues

Many (incomplete) data sources

Inaccurate supplier and product data

Multiple classification schemas

Limited visibility on total spend

SAP NetWeaver

enablesMaster data harmonization

Business Unit A

Product ID:

1447 Battery1447Batter

Business Unit CProduct ID:

455-BJ-Spain

Business Unit B

Product ID:

34 987 01

34 987 02

34 987 03

Supplier Selection

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Supplier Selection

Conduct online reverse auctions

Typical issues

Scalability and stability

Security

Chat and message archiving

Real-time monitoring

SAP NetWeaver

enables Adding a new level of security

and scalability to

Web-based business(e.g. Live Auction Cockpit)

Self-Service Procurement

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Self-Service Procurement

Anytime, anywhere access

Typical issues

Reliance on manual processes

Long lead times Low user acceptance

No access outside office

SAP NetWeaver enablesMobile procurement (e.g. remote

approval & replenishment orders)

Accommodating mobile professionals may removeone of the final barriers to effective spend capture

Order Collaboration

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Order Collaboration

Build a supplier portal

Typical issues

High transaction costs

No inventory visibility Limited involvement in design

SAP NetWeaver enables

Web-based supplier

self-service (e.g. online

registration & status

monitoring)


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Exchange Electronic Documents

Typical issues

Thousands of suppliers

High cost for EDI connections Emerging standards for XML

Vastly different supplier needs

SAP NetWeaver enables Processes extended to suppliers

(e.g. inventory data exchange)

SAP Supplier Network

PHONE, FAX

& E-MAIL

PROCESS

COLLAB.

SUPPLIER

PORTAL

DOC.

EXCHANGE

100%

SUPPLIER INTERACTIONS TOMORROW

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ESA: Start Today With SAP Solutions Powered bySAP NetWeaver

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SAP NetWeaver

Process Efficiency Process/Business

Model Innovation

Integrate

Com

pose

Mo

del

Process Flexibility

Strategic approach to ESA

Tactical Approach

Evolve ITinfrastructure

Evolve

business

practices

Enable flexibleshift between differentsourcing strategies bycategory

Increasecollaborationwith suppliers

Increasevisibility/analytics

in Sourcing

Value

Your ESA Roadmap with SRM Powered by SAP NetWeaver

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p y

Extend your usage of mySAP SRMUse the procurement and sourcing best practices delivered with mySAP SRMbased on a common platform & open, standardized interfaces.

Increase analytical capabilitiesSynchronize execution across multiple internaland external groups based on common analytical datawith SAP BI.

Expand your supply-baseExtend your sourcing processes by integratinginternal & external application and leveragingIndustry standards with SAP NetWeaver XI

Extend user productivityCreate your own Enterprise Portal roles with role-specific iViews providinguser-specific information, real-time exception detection, alerts and workflow.

Functionality

Value

Biz

Value

Biz

Value

Biz

Value

Biz

Value

ESA: Turn IT into an Enabler of Flexible BusinessStrategies

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Strategies

Consolidate and

Standardize processesfor higher Productivity

Build processes fast, cost

efficient and in high qualityfor Differentiation

SAP NetWeaver

Business Process Platform

Legacy3rd

PartyBuyer

EnterpriseServices

Repository

Composite Apps

by SAP

SAPPartner

SAPSRM

SAPERP

PlatformApplication components

Legacy Custom

Dev

Composite Apps

by PartnersComposite Apps

by Customer

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