Sap Srm Guide
SAP SRM - Overview SAP SRM (Supplier Relationship Management) is a SAP product that facilitates the procurement of goods via a web-based platform. Organizations can procure all type of products like direct and indirect material, services and this can be integrated with SAP ERP modules and other non-SAP backend systems for accounting and planning. SAP SRM allows you to optimize your procurement process to work effectively with suppliers to get long term benefits and also to perform forecasting, procurement cycle and to work with partners. You can reduce the time span and costing of procurement cycle using innovative methods to manage business processes with key suppliers. SAP SRM supports the full procurement cycle, i.e., starting from source and purchase to pay through complete procurement process with suppliers and effectively managing supplier to build long-term relationship.
SAP SRM helps you to emphasize supplier performance management and helps you to streamline the procurement operations, put compliance with contracts and purchasing policies, and improve overall cost management and expenditure. Key Benefits and Functionalities There are various benefits and key functionalities that you can achieve by using SAP SRM product and by integrating with other SAP ERP modules and non-SAP systems for planning and optimization. Following are the key benefits of SAP SRM − Catalog Management Suppliers can easily manage catalog data and this data can easily be integrated with business processes like accounting, finance and planning. Procure to Pay Optimization Using SAP SRP product, you can streamline procure to pay lifecycle and improve communication with supplier and cost management. Self Service Procurement End-users can search products using multiple product catalog and helps them to find and purchase product that are compliant with purchase and procurement policy of the company. Reporting Functionality Using SAP Supplier Relationship management, you can create reports related to procurement activities, compliance and contract management, and managing costing in procurement process. Contract Management You can manage contracts using secure central repository.
This helps to reduce compliance violations and allows end-users to follow business processes during self-service procurement. Technical Benefits of SAP SRM Following are the technical benefits of SAP SRM −.
Live Auction Cockpit to perform real time monitoring and bidding process in procurement process. SAP NetWeaver Business Intelligence to perform data warehousing, analytics and web-based reporting. Easy transactions between SAP SRM and online transaction processing system OLTP. SAP bidding engine to create quotations and to process them. SAP SRM - Navigation To check SAP SRM software navigation, you can login to SRM system using SAP GUI client. Legal environment today study guide. Select SRM system and enter the user name and password.
It will display the SAP Easy Access Supplier Relationship Management screen. In SAP menu, you have various folders like −. Master Data. Business Partner.
Products. Payment Cards To open Organization model, you can run T-code or go from Master data → Process Organization Model. When you build an organization structure, it is created downward. At the top, you have root organization structure and then you have other organization units like subsidiary, business units, etc. You can also access SAP SRM Portal Desktop using web URL.
The portal area is divided into the following parts −. At the top, you have SRM Work Centers. To the left, you have Navigation area. At the bottom, you have Content area. As per the SRM user role, the left side navigation area is displayed. If you have access, you can see additional fields in SRM portal. On the left side, you can select work set and Person Object Work list will be displayed on the right side.
The results of selected query are displayed in a table form. You can select any of the rows in table and can use the top buttons like display, edit, delete, preview, refresh and export, etc. In the following screenshot, you can see a table with a three-step approach to add goods to a shopping cart and complete and order. In the shopping cart, you can add, delete, copy, paste or duplicate an item in shopping cart.
Note that you need to create a separate shopping cart for each supplier. Performing search is easy and user-friendly. It eases the process of creating a Purchase Order for a few materials and some suppliers. In SAP GUI, you can see the following configuration options under SAP SRM − You can expand SAP SRM to see various settings under SRM system − SAP SRM - Functions You can perform various functions in SAP SRM. Using the SAP SRM portal, a user can use self-service option for different options.
The key functions in SAP SRM include the following − Navigation In SAP SRM, screens are easy to navigate. SRM portal has a user-friendly and easy to manage look. Searching In SAP SRM portal, you can easily perform search for different products and suppliers. Search criteria is easy to use. You can also restrict the number of entries in Search. To see the details, select the object and click the OK button. Purchase Orders You can create purchase orders for a few of the material type.
POs are also automatically created for some materials and suppliers. Account Assignment A user can also define default account preferences.
Cost assignments can be defined as per quantity, percentage or value of the material. You can also search G/L codes online using search option. Workflow In SAP SRM, the approval process for Purchase Orders is very easy. This allows organization to perform goods requisition in an easy and simple manner. Copying and Deleting A user can use copying option to copy the items in the shopping cart. Edit option can be easily used to edit the address, cost distribution, etc.
Deletion is also easy in shopping cart as you can easily select a good in cart and delete it. SAP SRM - Software Components There are various application and technology components that are a part of SAP Supplier Relationship Management product.
Application components include components that are required to create RFx and submit bids, for financial management, BI needs, Enterprise portal for application interaction and other various components to perform different functions. Technology component consists of NetWeaver Process Integration to integrate with SAP and non-SAP external systems, SAP GUI for configuration, and R/3 plugin for Master Data. Let’s see each of the components under application and technology in detail − SAP Supplier Relationship Management Server SAP SRM server includes SAP SRM server and SAP Bidding engine. SAP SRM is based on SAP NetWeaver application server and is available for different platforms and database. You can check all the releases of SAP SRM on SAP Market place under Product Availability Matrix (PAM). SAP SRM Bidding Engine SAP SRM Bidding Engine can be used to create and process requests for bids; bidders can submit bids and other functions in RFx. Bidding engine defines the rules for bidding and bidders can use it to submit bids in the system.
SAP NetWeaver BI In SAP SRM spend analysis, BI is primarily used and requires Application server ABAP on the same system. It may also require Java Application server and SAP Enterprise portal.
SAP NetWeaver Enterprise Portal This is used as an entry point for users to manage applications and information related to SRM. It provides role-based and secure access to applications and services. Online Transaction Processing System Various systems can be used for backend transaction processing to manage material and financial queries. SAP ERP system can be used and data exchange occurs between SAP SRM and SAP ERP system. You can also install SAP SRM as standalone without a backend system.
Live Auction Cockpit Server LAC web presentation server is a J2ee based software application. This provides the user with an option of real time bidding, real time monitoring and reverse auction options. Apart from these, technology component also includes SAP Process Integrator for integrating processes from different systems, SAP GUI for configuration and R/e plug in for data exchange between one or more R/3 systems and other components. SAP SRM - Deployment Options SAP SRM can be integrated with SAP ERP for backend processing for procurement, inventory and financial management. It can integrate with SAP ERP applications and non-ERP systems. There are four different deployment scenarios that you can use with SAP SRM − Standalone Deployment In a Standalone Deployment model, all the procurement processing is performed in SAP SRM system and backend accounting system is used for invoice financial processing.
In a Standalone Deployment scenario, purchase order management, shopping cart and goods receipt and invoices are processed in SRM system. This scenario is suggested for the following customers −. When there is no operational backend system for material management and there exists only financial accounting systems in landscape. When you want to move all procurement activities in SAP SRM system and hence allow companies to decrease the work load on the backend procurement system by transferring buyers which are interested to procure from selected options. It is recommended for customers who want to maintain only minimal product data and only rely on supplier catalogs.
Classic Scenario In a classing deployment model, you process the shopping cart in SAP SRM and supporting documents are processed in backend ERP system. You can perform goods receipt or invoices in any of the systems. This deployment model is suggested for those customers who have a strong backend procurement system and where buyers do not want to use multiple systems for their operations. Extended Classic Deployment In this deployment model, procurement process takes place in SAP SRM system and PO is generated in SRM system and a read only copy is created in backend ERP system.
You can perform goods receipt or invoices in any of the system as in the case of classic scenario. This model is recommended where you want few of procurement functionalities in SAP SRM like PO response, etc. You can implement direct material in extended classic deployment scenario.
Decoupled Deployment When you use all the three scenarios parallel, this is called decoupled scenario. When customers want to utilize all the functionalities of each component, SAP SRM allows to use all the above scenarios in parallel. Example Consider a customer who wants to use the standalone deployment model for certain indirect materials and routine services, the classic scenario for stock materials to utilize inventory and planning capabilities of backend materials management system, the extended classic deployment scenario to perform effective supplier management to provide response for PO’s.
SAP SRM - Contract Management In SAP SRM, a contract is defined as a negotiation between a supplier and an organization for supply of goods and material or delivery of services within defined terms and conditions in a specific time period. These contracts are placed at central secure location to resolve the lack of visibility into contract across the different groups.
This allows you to manage different local contracts with different terms and conditions for similar type of goods. CCM allows buyers form different departments of company from different locations to take advantage of negotiated terms and conditions. The terms and conditions are transitioned into a central contract and to be distributed to local purchasing group to perform procurement process for the company.
SAP SRM provides the following CCM features −. SAP SRM helps you to improve and fasten procurement process by automating and streamlining the contract management process. SAP SRM helps you to automate transfer of global negotiated conditions into multiple ERP systems and into non-SAP solutions using Enterprise Services. SAP SRM allows you to ensure contract compliance by providing a repository of standard contracts that can be used for creating new contracts.
You can easily create or change a central contract by directly negotiating with suppliers or by creating RFx. Using CCM, you can control access to central contract using the assignment of authorization on central repository. You can also configure system to generate alerts for the expiring contracts, etc. You can customize central contract distribution as per your needs and it can be an individual contract or multiple contracts for the same category. Integration with SAP ERP to Upload Contracts To upload the central contracts and to schedule agreements from SAP ERP system to SAP SRM system, you can use program BBPCONTRACTINITIALUPLOAD. As per your configuration, these contracts are loaded and scheduled from ERP to SAP SRM system. The initial upload is supposed to be a one-time activity and is performed at the time of installation in the backend system.
To perform contract search, you can use TREX search engine. This search engine is provided with SAP SRM but you have to install it and run a program to create indexing for all the available contracts.
You should run program BBPTREXINDEXADMIN that creates a new index for existing documents and helps you to perform indexing for all new or changed documents when a contract is saved. You can also evaluate your contracts by creating BI reports when you integrate with SAP NetWeaver Business Intelligence. To generate BI reports, go to SAP NetWeaver → BI Content → Supplier Relationship Management → Contract Management. Change History in Central Contract Management You can also view change documents available for all the fields in Central Contract Management (CCM) and they are used for audit trial. You can compare the versions of a contract by comparing changes at item and header level between these versions.
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Let us follow these steps to compare the versions − Step 1 − To perform this, go to SRM Server → Cross Application Basic Settings → Switch on version control for purchasing documents. Step 2 − Login to SRM system as in the following screenshot using SAP GUI.
Step 3 − Type SPRO → IMG → Navigate to SRM Server → Cross Application Basic Settings. Step 4 − You can view all business transaction categories for which version control is on/off.
Step 5 − To display change documents and to compare versions of a central contract, click on Tracking when you display the central contract. Uploading and Managing Central Contracts in ERP Let us now understand how to upload and manage central contracts in ERP. You can upload contracts in SAP ERP system by going to SAP ERP Central Component → Logistics → Materials Management → Purchasing → Outline Purchase agreements with vendors → Contract → Central Contract → SRM Central Contract Managing Authorization in Central Contract In SAP ERP, it is possible to authorize users to assign a role to create, change or display a central contract in repository. Company’s law department analyzes the agreement before it is released for users. You can assign a role display/change to the legal team to view notes with no access to confidential fields like terms and conditions. Let us follow these steps to assign a role display/change − Step 1 − To assign the authorization for Central Contract, go to SAP SRM → Strategic Purchasing → Contract Management → Contract.
Step 2 − If you are not able to call this transaction from SAP Easy access, you can go SRP portal and go to Strategic Purchasing tab. Step 3 − You have to go to Authorization tab → To edit an existing user, select a user and edit. You can create a new user and assign the authorization as per the requirement of the user. Performing Changes in Central Contract You can perform same changes to one or more central contracts or to a central contract hierarchy. This is used to perform mass changes to multiple contracts as per business needs. Example Consider a case where you have multiple contracts with a Supplier ABC. Now with increase in order volume, you will get an additional discount of x%.
Now to maintain multiple contracts with this supplier ABC, you have to change all contracts at one time. Note You can’t make changes to central contracts which are marked as completed.
To make mass changes for central contract, you have to search and select contracts in central repository. To perform mass change, go to mass change option and it will open the wizard. You can see all the contracts that you have selected. To perform a mass change, select mass change parameter and specify the change and same way select other mass change parameters and specify the change. You can see a flag next to all those fields for which parameter has been changed and this indicates that you have changed this parameter. All the contracts in Wizard remain locked when you are performing mass changes so that no other user makes changes to these projects.
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It is also possible to perform the changes in background as the time required to perform changes depends on the number of central contracts and you can close the Mass Change window. Once changes are completed, you will get an email with the link of mass changes completed. You can view if changes are applied successfully or not. SAP SRM - Creating a Central Contract You can create a central contract manually in SAP SRM.
If you have to create multiple contracts that are similar to each other, you can create a template and then copy an existing contract based on the template. To create a Central Contract, go to SAP SRM → Strategic Purchasing → Contract Management → Create Central Contract You can see different tabs — Header tab, Overview tab and Distribution tab. In Overview tab, go to fill the item details and general header data. You can fill the following details in a contract − Target Quantity and Value In this field, you need to enter the target quantity and target value.
This defines the quantity which shows the number of units to be purchased from a supplier in a time period. Release Value It is defined as accumulated value of all POs against the central contract. Basic Contract Now if you define a contract as basic contract, it only contains header data and conditions and you can’t put line items and cannot be distributed to a catalog. Item Category When you define item category as normal, it must contain a product category. Under product category, you need to define a target value and a product category item always refers to all connected catalogs.
Central Contract Status Following are the status available for a central contract in SAP SRM system − Awaiting Approval As per system configuration, an approval workflow is started when you select Release for a contract. In this case, contract status is set to Awaiting Approval. Completed When a contract is in expired or released status and you select Close Contract, the status of the contract is set to Complete and this is an irreversible status. You can search the completed contracts and use them as template for creating new contracts.
Deleted When a contract is not released, you can set the status to delete and this contract is achieved. Incorrect Distribution When the distribution of a central contract to backend system fails, then the system sets the status as distribution incorrect. Expired When the validity period of a contract expires, status is set to expire. A system administrator can schedule a report when a contract is expired. In Distribution When your contract is in distribution process in the backend system, the status of contract is set to in distribution. In Negotiation When a contract is selected for renew and is in saved state, the status of contract is set as in negotiation. In Renewal This is set when you select a contract for renewal in released state.
Locked When you want a contract to be temporary unavailable as source of supply, you can set the status to Lock. To unlock a locked central contract, you can select Unlock. Released Rejected When the central contract is not approved for release, the system sets the status of project to Release Rejected. Released When you select a central contract to release and it has been approved, the status of the contract is set to Release. This contract can be used for sourcing. Saved This status is set when you save a central contract. This contract is not available for sourcing till it is approved and released.
SAP SRM - Bid Invitation A bid invitation is defined as a request from a buyer to a supplier to submit a quotation for goods or services as per the mentioned criteria. Bid invitation is also known as request for quotation RFx.
A request for quotation RFx is an invitation sent to supplier by an organization’s purchase department to submit RFx response for the supply of certain goods under specified terms and condition. RFx document contains information like vendor’s name, vendor's address, quantity of goods and delivery dates for the material. You can create RFx with reference to a purchase requisition and all the information is copied from the purchase requisition. When RFx is created without any reference, you can enter the details manually in RFx document.
Creating Bid Invitations in Bidding Engine To create bid invitations for services and goods, buyers can use SAP Bidding Engine to create public and restricted bids. You can customize system to perform bid invitation automatically in the background for requirements where no source supply is assigned.
You can check assigned sources by going to SPRO → IMG → SRM Server → Sourcing → Define sourcing for product categories Login to SRM system → SPRO → IMG Here you can check sourcing for product categories − Types of Bid Invitation In SAP bidding engine, you can create two types of bid invitations − Public Bid Invitations These bid invitations are available to all bidders via a web portal. Bidders can access the url available on web portal to login to SAP bidding engine and there they can enter the bids. If you want some specific bidders to send the bid, you can directly email them the bid invitation. Restricted Bid Invitations In restricted bid invitations, the hyperlink to login to SAP Bidding Engine is sent to some specific set of bidders via email. Bidders can login to Bidding Engine and enter the bid. In addition to this, you can create emails using the Smart Forms feature − Step 1 − To create a bid invitation, you have to login to the SAP Bidding Engine. You can search for existing bid invitations or create a new invitation.
Step 2 − When you create a new bid invitation, you have to mention the name and number range at the top. Step 3 − Enter the basic data for bid invitation, this includes −. Type of Bid Invitation (public/restricted). Product Category. Start Date and Time − When a bidder can enter the bid details in the system.
When no time is mentioned, bidders can bid when the invitation is published. End Date and Time − Bidders can submit their bids until this time period. Opening Date and Time − This time is defined as the time when you can open and reject the bids. End of Bidding Period − This allows the bidder to mention the end of bidding period till when that bid is valid. Detailed Price Information − This condition can be used to allow bidder to put price scale. Bidders/Bid − You can search for suppliers/bidders from the supplier directories and extend the bid invitation to these bidders in case of public invitation.
Step 4 − Similar way, you can define other fields like currencies in which bid is accepted and if the bidder can bid in any currency of their choice. You can also attach any additional documents you want to share with bid invitations. Step 5 − Under Item data, you can fill item details by transferring items from a catalog or by transferring products from product master. Lot option can be used to group related items together. Step 6 − When you enter all the required information in relevant fields, you can perform a check by clicking on Check button at the top of screen. Step 7 − You can save your bid by clicking on Hold button. Step 8 − When you click on Complete, it shows that the bid has been checked and it is ready for publishing.
Step 9 − You can select the Publish button to publish the bid invitation. Step 10 − Go to SRM Portal → Strategic Purchasing → Strategic Sourcing Step 11 − On the left side, you have an option to create RFx. Click on RFX and you will be prompted to select RFx type.
Select RFx type and click on Start. Step 12 − At the top, you can see basic data bout RFx like RFx#, Name, type, status, created by, etc. Step 13 − Under Event parameters, you can define the output field — if it is a Purchase Order or a Contract. Step 14 − Go to Bidders tab; here you can search bidders from internal or external directories. Step 15 − You can also type the bidder company id and click on Add button to add the bidders to the list. Step 16 − Go to Items tab, enter item details like description, product category, quantity, Delivery date, lot and item type etc. Step 17 − You can add any other notes and attachments.
If you want some specific questions to be raised with the Bidder, go to RFx information tab → Questions → ADD Question. Step 18 − You can find existing questions or can create new questions as per the requirement. To add the comment in bid, select the check box. Step 19 − To add weight and score to the question, go to the tab and add weight. You can also assign percentage and value for which 100% score will be provided.
Step 20 − When all the details are entered, you can publish RFx. All the suppliers will get an email message. Step 21 − All the documents and RFx details will be sent in attachment as per the configuration. You can also attach images of goods in RFx and the same will be received by suppliers in an email message. Step 22 − In the email message, a hyperlink is provided where bidders can login and enter the bid details.
They can select RFx and submit a response. Step 23 − To participate in bidding, click on the Participant button and the purchaser will be notified. To create a bid and enter the details, click on the Create Bid button. SAP SRM - Quotation & Live Auction Cockpit A Quotation is defined as a response to RFx, where a bidder confirms the selling of goods and services to buyers/purchasers as per specific criteria. As part of bid invitation process when an email is triggered, the supplier gets the information on the request for quotation.
Suppliers start bidding as per the bid invitation and when they submit the bid in SAP Bidding Engine, the final price is shown. Suppliers can bid till the end date is reached and once bids are closed, purchasers can perform a price comparison to get the best supplier and to award the bid, and a purchase order can be raised for the best supplier. In case, when the number of bidders is less or purchaser feels that there is not a best bid, he can always convert RFx to live auction. Live Auction Cockpit allows purchasers to get a real-time environment for direct bidding on reverse live auctions. This provides an experience similar to a live auction by utilizing the technology to share the updated information. Creating Live Auction Let us now understand how to create live auction. To create a live auction, purchasers can use SAP Bidding engine and auction takes place in Live Auction cockpit.
Purchasers can create live auction −. Using an Auction template. By copying an Auction.
In SRM portal, from the Sourcing application. Purchaser can also convert RFx to a live Auction You can create different documents types under Auction, click on continue after selecting the document. Enter the details under different tabs to create a new Auction. Scroll down in the Header tab to define various roles for the auction like owner, collaborator, reviewer, etc. To add a user to auction, click on Add User. When you enter all the details, click on Save → Done Converting RFx to Auction You can create a live Auction from an RFx by choosing Convert to Auction button in RFx → Enter the Auction transaction type and bids to copy to the auction directly.
When you convert RFx to an auction, the RFx is set to the status Completed and you cannot make any changes to it. SAP SRM - Procurement Procurement functions are seamlessly integrated between SAP ERP and SRM.
There are various business functions that allow a fully integrated, end-to-end procurement management solution to improve both compliance and procurement management process as per business requirements. It helps in closing the gap in ERP sourcing functionality using SRM capabilities and provides a common UI for designing integrated procurement processes.