With the current economic situation, every global organisation is grappling with higher market velocity, lower margins, increased supply risk, and the immediate need for new ways to maximise bottom-line cost savings. As a result, procurement has become a key corporate function entrusted with protecting corporate profitability.

A 2008 Aberdeen survey of chief procurement officers found that best-in-class organisations adopt a centre-led procurement structure 50% more often than their peers.* But yet, misaligned processes and systems still remain the top barrier to delivering cost-saving objectives.

To address this challenge, world-class organisations are turning to SAP to centralise sourcing and contract management processes and policies by unifying all operational procurement systems of their local entities. This pragmatic hub approach is enabling enterprise-wide transparency into demands, identification of the best sources of supply, better negotiation with suppliers, and compliance with contracts.

How do best-run businesses translate this centralised approach into tangible benefits? A leading high-tech company realised significant business benefits by using SAP software to unify all procurement processes across its business units. It achieved 80% compliance with preferred suppliers, saved $250 million over the last 5 years, and reduced the requisition-to-order cycle from weeks to days. In addition, 98.5% of all business requirements were satisfied without any further customisation.

Solutions Designed for Centralising Sourcing and Contract Management

Solutions from SAP and our partners can help you connect your multiple enterprise resource planning systems to one central supplier relationship management system, providing you with complete control over procurement throughout the organisation. With centralised sourcing and contract management, you can achieve compliance with contracts to sustain savings, while reducing operational costs and reducing your supply risk – all key benefits for driving higher profits.

Gain Control Over Procurement
By combining supplier management, central sourcing, central contract management, and operational procurement processes, you can enable effective control over the source-to-pay process globally across the organisation.

Ensure Global Compliance and Usage of Contracts
With centralised procurement, you can best negotiate savings with suppliers and foster global compliance with critical contracts, corporate guidelines, and regulatory requirements.

Standardise and Automate Operational Procurement Across Your Local Entities
With standardised and automated operational processes across your local entities, you are enabled to streamline procurement for all goods and services, reduce purchasing errors, avoid maverick buying, and eliminate manual tasks and redundancies. Your local procurement staff can also make decisions and take action more quickly with simplified and personalised access to key information.

Minimise Supply Risk
By dynamically linking suppliers to your organisation, you can further automate and accelerate the procurement order cycle. In addition, simplified access to timely supplier evaluations can help you continuously improve supplier performance. Further, SAP NetWeaver can help you enable data sharing across heterogeneous systems within your global supplier network.

SAP Services can help you assess and analyse procurement processes by delivering a clear road map based on best business practices to achieve rapidly your key objectives.

*Aberdeen report CPO Rising: The CPO's Agenda for 2008 (February 2008)