Procure to Pay in Public Sector – Previous Situation

1

SAP AG 2004, Document Title / 1

Procure to Pay in Public Sector – Previous Situation

Procure Receive

Source Pay

Request Product

Sourcing SpecialistRequester Purchaser

Goods recipient Accountant

Government

regulations

� Poor integration of specialized processes (government regulations).

� Delay‘s in the process, process breaks, and time consuming syncronizationbetween processes

� Requester needs to call the sourcing specialist to know the status.

� Key process steps are handeled manually, e.g. Regulations compliance (lock the budget when RFQ is published), and status checks by requestor (budget availablility)

� Highly regulated processes with ever changing law regulations

� Time consuming process of selecting suppliers

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SAP AG 2004, Document Title / 2

Procure to Pay with “Best of Breed” in Public Sector

Flexible Process Innovation / Extensibility

User productivity/ Collaboration

ProcessEfficiency/ Automation

� Easy and fast adoption of new process variants (like government regulations)

� Up-to-date status checks for Product Mgr � Immediate Budget checks - no need to wait for response from finance.

� Efficient communication with RosettaNet and other B2B communication - replacing fax/ telephone

� Alerts based on user defined criteria

ProcureRequest Product PayReceive

Efficiency/ Automation

User Productivity

Extensibility

Sourcing SpecialistRequester Purchaser

Goods recipient

Accountant

Source

Publish

RFQ

Receive

QuotesEvaluate

Quotes

Select

SuppliersAward PO/

Contract

1 2 3 4 5

� User‘s are more effective: check‘s can be done in a integrated fashion:

�Status check‘s Product Mgr is always informed no need to call.

�Budget checks can be done on the fly no need to wait for response from finance.

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SAP AG 2004, Document Title / 3

Procurement process: Today’s IT Challenges

SRM

AI

Inventory

Finance

Purchasing

IT Landscape

Sourcing

SpecialistRequester Purchaser

Goods

recipient Accountant

� Integration of complex regulated processes, business

processes, and existing systems � Cross processes managed and maintained in isolated systems

� Integration of new BoB applications, e.g. AI to support various countries

� Inefficient data collection, synchronization, consolidation and reformat

between systems and parties involved in the process

� Data re-entry into multiple systems (SAP and AI)

� Status information and budget availability spread in different systems

� Missing consolidated real time information (status information, budget availability in different systems)

� High cost of maintaining disconnected legacy systems

� High risk in replacing „one piece of the puzzle“

� Process Innovation limited by static system architecture

� Unable to share information with other agencies

� Consolidate information for better compliance

� „One view on the taxpayer“

� Quickly implement new tax schemes

� Changes to existing tax rules

� Enhance System to other business models

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SAP AG 2004, Document Title / 4

� Fully automated, real-time

exchange of information

between systems (SAP and

AI) (e.g. RFQ status)

� Minimal need for data

replication through

services, e.g. Budget.

� Efficient adoption of new

best of breed systems to

ensure unique business

advantages

� Reduced maintenance

cost by harmonized

platform

The unique Value of IT Flexibility in procurment in Public Sector

Increased

collaboration and visibility

Increased Flexibility

in Deployment and Extensibility

Ease of

Integration and Consolidation

� Ease of establishing new

channels (e.g. Supplier

Portal)

� Consolidated and

harmonized real time

information, accessible

across multiple systems

(e.g. on RFQ status)

Deployment

Flexibility

Business Process Platform

Collaboration

SR

M

Inv

en

tory

AI

Fin

an

ce

Pu

rch

as

ing

Integration

Sourcing

Specialist

RequesterPurchaser

Goods

recipient Accountant