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Bonn Boston Sachin Sethi Enhancing Supplier Relationship Management with SAP ® SRM

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Page 1: Sappress Enhancing Supplier Relationship

Bonn � Boston

Sachin Sethi

Enhancing Supplier Relationship Management with SAP® SRM

Page 2: Sappress Enhancing Supplier Relationship

To my parents whose incessant sacrifices to “do the right thing” no matterhow tough the path always inspires me to make the right choices.

To my wife Ekta for her unconditional support, boundless understanding, andinfectious energy. Her endless efforts helped me bring this book concept to life.

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Contents at a Glance

PART I How SRM Fits Within an Organization .......................................... 27

1 Introduction to Supplier Relationship Management ......................... 29

PART II What is SAP SRM? ........................................................................ 39

2 SAP SRM — An Introduction .............................................................. 413 Operational Procurement ................................................................... 574 Strategic Sourcing and Contract Management .................................. 1455 Supplier Enablement .......................................................................... 199

PART III SAP SRM Implementation, Integration, and Upgrades ............... 239

6 Catalog and Content Management — Crafting Your Catalog Strategy .............................................................................................. 241

7 Choosing Implementation Scenarios .................................................. 2818 Organizational Structure .................................................................... 3059 Integration with Financials and Project Systems ............................... 34910 The Role of Workflow in SAP SRM .................................................... 37911 Managing Security in SAP SRM ......................................................... 42712 Dependency of Master Data in SAP SRM and SAP R/3 ..................... 47313 Architecture and Technology of SAP SRM ......................................... 49914 Upgrade — A How-To Approach ........................................................ 51915 Performance Reporting via SAP NetWeaver Business Intelligence ... 54716 Enterprise Portals and SAP SRM ........................................................ 583

PART IV Industry Solutions for SAP SRM .................................................. 593

17 Government Procurement — Public Sector ........................................ 595

PART V Selected Configuration in SAP SRM .............................................. 603

18 Selected Configuration in SAP SRM ................................................... 605

Appendix ..................................................................................................... 623

A SRM Functionality Matrix .................................................................. 625B Jobs that Require Scheduling ............................................................. 627C Using Different Browsers with SAP SRM ........................................... 633D Using Business Add-Ins (BAdIs) with SAP SRM ................................ 635E Customer Fields in SAP SRM .............................................................. 649F Business Objects in SAP SRM ............................................................ 655G Authorization Objects ........................................................................ 657H Quiz for Testing your SAP SRM Knowledge ...................................... 659I System Refresh Procedures ................................................................ 671J Organization Structure Attributes ..................................................... 673K Useful Transactions and Function Modules ....................................... 681L About the Author ............................................................................... 686

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Contents

Preface ...................................................................................................... 21

PART I: HOW SRM FITS WITHIN AN ORGANIZATION

1 Introduction to Supplier Relationship Management ........... 29

1.1 E-Procurement and SRM ......................................................... 301.2 The SRM Vendor Landscape .................................................... 341.3 Why SAP SRM? ....................................................................... 351.4 Summary ................................................................................. 37

PART II: WHAT IS SAP SRM?

2 SAP SRM — An Introduction ............................................... 41

2.1 Evolution of SAP SRM ............................................................. 412.2 SRM and SAP Enterprise Applications ...................................... 422.3 Benefits of SAP SRM ................................................................ 43

2.3.1 Opportunities and Business Benefits Within SAP SRM .................................................................... 44

2.3.2 Process Benefits .......................................................... 452.3.3 Technology Benefits .................................................... 462.3.4 People Benefits ........................................................... 47

2.4 Dissecting my SAP SRM ........................................................... 482.4.1 Core Supply Processes ................................................. 492.4.2 Operational Procurement ............................................ 492.4.3 Strategic Sourcing ....................................................... 502.4.4 Supplier Enablement ................................................... 50

2.5 SAP Components ..................................................................... 512.5.1 SAP Enterprise Buyer (SAP EBP) .................................. 522.5.2 SAP Bidding Engine ..................................................... 522.5.3 SAP Supplier Self-Services (SAP SUS) ........................... 532.5.4 SAP Catalog Content Management (CCM) ................... 542.5.5 SAP Business Information Warehouse ......................... 542.5.6 SAP Exchange Infrastructure (SAP NetWeaver

Exchange Infrastructure) .............................................. 552.5.7 SAP Enterprise Portal (SAP NetWeaver Portal) ............ 55

2.6 Summary ................................................................................. 55

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3 Operational Procurement .................................................... 57

3.1 Self-Service Procurement ......................................................... 613.1.1 STEP 1: Create Shopping Cart ...................................... 623.1.2 STEP 2: Approve Reject? ............................................. 983.1.3 STEP 3: PO Processing ................................................ 993.1.4 STEP 4: GR Processing ................................................. 1123.1.5 STEP 5: Invoice Processing .......................................... 122

3.2 Services Procurement .............................................................. 1293.2.1 Shop with Limit .......................................................... 1303.2.2 Request for External Staff ............................................ 1313.2.3 Services with MM-SRM Integration ............................ 1343.2.4 Confirmation and Invoice Entry ................................... 135

3.3 Plan-Driven Procurement ........................................................ 1363.4 What’s New in Operational Procurement? ............................... 1403.5 Summary ................................................................................. 143

4 Strategic Sourcing and Contract Management ................... 145

4.1 Strategic Sourcing .................................................................... 1464.1.1 Supplier Screening and Selection ................................. 1464.1.2 Source of Supply Determination (Sourcing) ................. 1474.1.3 RFQ and Bidding ......................................................... 1594.1.4 The Bidding Engine — Bid Invitation in Detail ............. 1634.1.5 Bid Evaluation in Detail ............................................... 1674.1.6 Live Auction ................................................................ 169

4.2 Contract Management ............................................................. 1774.2.1 Contract Initiation ....................................................... 1804.2.2 Contract Creation and Negotiation .............................. 1814.2.3 Contract Review .......................................................... 1904.2.4 Contract Utilization ..................................................... 1914.2.5 Contract Monitoring ................................................... 1914.2.6 Contract Renegotiation ............................................... 1924.2.7 Contract Distribution .................................................. 194

4.3 What’s New in Sourcing and Contract Management? ............... 1964.3.1 Initial Upload of Contract from ERP to SAP SRM ......... 1964.3.2 New Strategic Sourcing Offering — On-Demand

Sourcing ...................................................................... 1964.4 Summary ................................................................................. 198

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5 Supplier Enablement ............................................................ 199

5.1 Supplier Enablement Using SAP SRM ....................................... 2015.1.1 Direct Access of SUS Application via BSP URL ............. 2025.1.2 Business Package or iView in the SAP NetWeaver

Portal .......................................................................... 2035.2 Supplier Registration ............................................................... 205

5.2.1 Buyer Organization Registers the Supplier ................... 2055.2.2 Supplier Self-Registration ............................................ 206

5.3 Supplier Collaboration: Order Collaboration ............................ 2105.3.1 Service Procurement with Supplier Integration

(EBP-SUS) ................................................................... 2135.3.2 Plan-Driven Procurement Scenario with Supplier

Integration (MM-SUS) ................................................. 2245.3.3 Payment Status ........................................................... 227

5.4 Supplier Collaboration: Inventory and Replenishment .............. 2305.4.1 SAP NetWeaver Portal Business Package for Supplier

Collaboration .............................................................. 2305.4.2 SAP Supply Chain Solution ICH (Inventory

Collaboration Hub) ..................................................... 2305.5 Design Collaboration Using SAP PLM ...................................... 2325.6 Design Collaboration Using SAP SRM ...................................... 233

5.6.1 Design Collaboration via Bidding Engine by Professional Purchaser ................................................ 234

5.6.2 Design Collaboration via a cFolders Project by an Engineering Professional ............................................. 235

5.7 Summary ................................................................................. 236

PART III: SAP SRM IMPLEMENTATION, INTEGRATION, AND UPGRADES

6 Catalog and Content Management — Crafting Your Catalog Strategy ................................................................... 241

6.1 Building a Robust Catalog Strategy ......................................... 2436.1.1 Types of Catalogs ........................................................ 2446.1.2 What are RoundTrip and Punch-Out? ......................... 2456.1.3 A Single Catalog Solution Might Not be Enough ......... 2476.1.4 Connect with Your Suppliers for Onboarding .............. 2506.1.5 Standardize Commodities ............................................ 252

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6.2 Catalog and Content Management Using SAP SRM ................. 2546.2.1 SAP Catalog and Content Management (SAP CCM) ..... 2556.2.2 SAP CCM — Organize Content Import ........................ 2576.2.3 SAP Catalog and Content Management (SAP CCM)

— Manage Content ..................................................... 2626.2.4 SAP Catalog and Content Management — Create and

Publish Catalogs .......................................................... 2656.2.5 SAP CCM — Search ..................................................... 2676.2.6 SAP CCM — Architecture ............................................ 2686.2.7 SAP Open Catalog Interface (OCI) ............................... 2726.2.8 Customizing the Catalog in SAP SRM .......................... 2746.2.9 New Catalog Application — SRM MDM Catalog ......... 276

6.3 Summary ................................................................................. 278

7 Choosing Implementation Scenarios ................................... 281

7.1 Overview — SAP SRM Implementation Scenarios .................... 2817.2 The Classic Scenario ................................................................. 283

7.2.1 Impact of Classic Scenario When Integrating Enterprise Buyer with Supplier Self Services ................ 286

7.2.2 Which Organizations Should Look at this Scenario? ..... 2877.2.3 Restrictions of the Classic Scenario .............................. 2877.2.4 Impact on the SRM Organizational Structure ............... 2887.2.5 Technical Extras .......................................................... 288

7.3 The Extended Classic Scenario ................................................. 2897.3.1 Impact of Extended Classic Scenario When

Integrating Enterprise Buyer with SUS ......................... 2927.3.2 Which Organizations Should Look at This Scenario? .... 2927.3.3 Restrictions of the Extended Classic Scenario .............. 2937.3.4 Impact on the SRM Organizational Structure ............... 2947.3.5 Technical Extras .......................................................... 294

7.4 The Standalone Scenario .......................................................... 2957.4.1 Impact of Standalone Scenario When Integrating

Enterprise Buyer With SUS .......................................... 2977.4.2 Which Organizations Should Look at This Scenario? .... 2977.4.3 Restrictions of the Standalone Scenario ....................... 2987.4.4 Impact on the SRM Organizational Structure ............... 2987.4.5 Technical Extras .......................................................... 299

7.5 Other Scenarios ....................................................................... 2997.5.1 Decoupled Scenario .................................................... 2997.5.2 Combining Scenarios ................................................... 300

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7.5.3 Running Scenarios in Parallel ....................................... 3017.5.4 Technical Extras .......................................................... 301

7.6 Things to Remember and to Watch Out For ............................ 3017.7 Relevant OSS Notes ................................................................. 3027.8 Summary ................................................................................. 303

8 Organizational Structure ...................................................... 305

8.1 Overview of the Organizational Structure in SAP SRM ............. 3078.2 The Details Area of the Organizational Structure ...................... 313

8.2.1 Basic Data Tab ............................................................ 3148.2.2 Address Tab ................................................................ 3158.2.3 Function Tab ............................................................... 3168.2.4 Responsibility Tab ....................................................... 3198.2.5 Attributes Tab ............................................................. 3218.2.6 Extended Attributes Tab ............................................. 3238.2.7 Check Tab ................................................................... 325

8.3 Uploading Attributes via a Function Module ............................ 3278.4 Customizing Attribute Maintenance ........................................ 329

8.4.1 Customizing Delivered Standard Attributes ................. 3298.4.2 Create a New Attribute in the Organizational

Structure ..................................................................... 3308.4.3 Maintaining Attribute Rights by Role .......................... 331

8.5 Deleting Organizational Objects in SRM .................................. 3328.6 Best Practices for Creating and Managing the Organizational

Structure ................................................................................. 3338.6.1 Key Organizational Structure Challenges ..................... 3338.6.2 Transport the Organizational Structure ........................ 334

8.7 Integration with SAP HR — A Key Decision ............................. 3358.7.1 Need for SAP SRM Integration with the HR

Organizational Structure ............................................. 3368.7.2 HR Integration Scenarios — When To Integrate .......... 3368.7.3 Distributing the HR Organizational Plan ...................... 3398.7.4 Maintenance of Organizational Structure After HR

Integration .................................................................. 3398.7.5 Responsibility Matrix for Setting Up the Organizatio-

nal Structure During an Implementation ..................... 3408.8 Pros and Cons of Creating an Organizational Structure in

EBP or Distributing from HR .................................................... 3418.8.1 Creating an Organizational Structure in SAP SRM ........ 3418.8.2 Integrating and Using the HR Organizational

Structure ..................................................................... 341

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8.9 Impact of the Extended Classic Scenario on SRM Organizational Structure .......................................................... 343

8.10 System Refresh Procedure Steps .............................................. 3448.11 Things to Remember ................................................................ 3468.12 What’s New in the Organizational Structure? ........................... 3468.13 Summary ................................................................................. 347

9 Integration with Financials and Project Systems ................ 349

9.1 Financial Accounting in SAP .................................................... 3509.2 Integration of SAP Financials with SAP SRM ............................ 352

9.2.1 Integration at the Master Data Level ........................... 3539.2.2 Transaction Level Integration ...................................... 3589.2.3 Account Determination Based on Expense vs.

Stocked Items ............................................................. 3619.3 Overview of the Purchase-to-Pay Cycle .................................... 362

9.3.1 Classic Scenario: SAP SRM and Back-End System is SAP R/3 ................................................................... 364

9.3.2 Extended Classic Scenario: SAP SRM and Back-End System is SAP R/3. ...................................................... 365

9.3.3 Standalone Scenario: SAP SRM with Non-SAP Back-End System ......................................................... 366

9.4 Budget Check in SAP SRM ....................................................... 3679.5 Integration with Project Systems .............................................. 3709.6 Limitation of Extended Classic Scenario for SAP Public Sector

Solution ................................................................................... 3749.6.1 Identified Gap ............................................................. 3759.6.2 Solution Approach ...................................................... 375

9.7 Relevant OSS Notes ................................................................. 3779.8 Summary ................................................................................. 377

10 The Role of Workflow in SAP SRM ...................................... 379

10.1 Workflow in SAP SRM ............................................................. 38210.2 Standard Delivered workflows in SRM ..................................... 387

10.2.1 Shopping Cart Workflows ........................................... 39010.2.2 Purchase Order Approval Workflows ........................... 39910.2.3 Confirmation Approval Workflows .............................. 40010.2.4 Invoice Entry Approval Workflows .............................. 40110.2.5 Purchase Order Response (POR) Approval

Workflows .................................................................. 402

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10.2.6 Contracts and Contract Changes (Version) Workflows .................................................................. 403

10.2.7 Bid Invitations and Bid Workflows .............................. 40410.2.8 Procurement Card Workflows ..................................... 40510.2.9 User Master and Vendor Master Workflows ................ 405

10.3 Online and Offline Approvals ................................................... 40610.3.1 Approval in SAP SRM Inbox ........................................ 40710.3.2 Approval via URL Link from Email ............................... 40910.3.3 Approval Directly in Email Client (Offline Approval) .... 411

10.4 Implementation Best Practices ................................................. 41410.5 Security and Authorizations in Workflow ................................. 41710.6 Responsibility Rules vs. Custom Z tables .................................. 42210.7 Extras ...................................................................................... 42310.8 Relevant OSS Notes ................................................................. 42410.9 Summary ................................................................................. 425

11 Managing Security in SAP SRM ........................................... 427

11.1 Overview of Security in SAP ..................................................... 42811.2 Security in SAP SRM ................................................................ 430

11.2.1 Common Questions About SRM Implementations ...... 43011.2.2 Similarities Between SAP R/3 Enterprise and

SAP SRM .................................................................... 43111.2.3 Security Related Differences in R/3 vs. SAP SRM ......... 435

11.3 User Creation in SRM for Enterprise Buyer (Internal) ................ 43711.3.1 Using SRM as a Standalone System ............................. 43811.3.2 Using HR Integration Scenario ..................................... 44611.3.3 Using CUA Within SRM .............................................. 449

11.4 User Creation in SRM for Enterprise Buyer (External) ............... 45011.5 Deleting Users in SRM ............................................................. 45211.6 Checking Users in SRM ............................................................ 45311.7 Roles and Authorizations in SRM ............................................. 455

11.7.1 Authorization Objects in SRM ..................................... 46011.7.2 Roles Containing BSP Transactions Instead of

ABAP Transactions ...................................................... 46111.8 Impact of Organizational Structure in SRM on Security ............ 463

11.8.1 Organizational Structure as a Security Mechanism ....... 46311.8.2 Securing the Organizational Structure in a

Decentralized Environment ......................................... 46811.9 Position-Based Security in SRM ............................................... 46911.10 Relevant OSS Notes ................................................................. 47211.11 Summary ................................................................................. 472

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12 Dependency of Master Data in SAP SRM and SAP R/3 ....... 473

12.1 Middleware ............................................................................. 47512.2 Locations, Payment Terms, and Pricing Conditions .................. 478

12.2.1 Locations .................................................................... 47912.2.2 Payment Terms ........................................................... 47912.2.3 Pricing Conditions ....................................................... 480

12.3 Interlinkages ............................................................................ 48112.3.1 Interlinkages and Info Records .................................... 481

12.4 Vendor Lists, Contracts, and Catalogs ...................................... 48112.4.1 Vendor Lists ................................................................ 48212.4.2 Contracts .................................................................... 48512.4.3 Catalogs ...................................................................... 485

12.5 Delivery Addresses .................................................................. 48612.5.1 Addresses for Business Partners ................................... 486

12.6 External Business Partners in SRM ........................................... 48812.6.1 Vendors ...................................................................... 48812.6.2 Bidders ....................................................................... 49612.6.3 Portal Vendor ............................................................. 497

12.7 Relevant OSS Notes ................................................................. 49812.8 Summary ................................................................................. 498

13 Architecture and Technology of SAP SRM ........................... 499

13.1 SAP SRM Components and Matrix ........................................... 50113.1.1 Definition of Components ........................................... 50113.1.2 SRM Server Components — Overview ......................... 50313.1.3 Business Scenario-Based Component Matrix ............... 504

13.2 SAP SRM Architecture Based on Business Scenario .................. 50613.2.1 Self-Service Procurement Business Scenario ................ 50713.2.2 Plan-Driven Procurement Business Scenario ................ 50813.2.3 Service Procurement Business Scenario ....................... 50913.2.4 CCM Business Scenario ............................................... 51013.2.5 Strategic Sourcing Business Scenario ........................... 51113.2.6 Spend Analysis Business Scenario ................................ 512

13.3 SAP SRM Business Scenarios Using SAP NetWeaver XI ............ 51313.4 ITS as Part of Web AS .............................................................. 51413.5 SRM Sizing .............................................................................. 51513.6 Summary ................................................................................. 516

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14 Upgrade — A How-To Approach .......................................... 519

14.1 Why Upgrade? ......................................................................... 52014.1.1 Decision Methodology ................................................ 52214.1.2 Working with a Decision Methodology ....................... 523

14.2 Answer the Question: Technical or Functional? ........................ 52414.3 Understand Your Current Environment .................................... 52514.4 Expected Changes in New SRM Release ................................... 52914.5 Upgrade — Tools and Resources .............................................. 531

14.5.1 SAP Documentation .................................................... 53114.5.2 Modified Objects ........................................................ 533

14.6 Best Practices — Upgrade Impact ............................................ 53514.6.1 Upgrade Assessment — Process-Based Impact to

User Community ......................................................... 53514.6.2 Upgrade Assessment — Technical and Development

Impact ........................................................................ 53714.6.3 Upgrade Assessment — Impact on End User

Training ...................................................................... 54014.7 SAP SRM Upgrade — Lessons Learned .................................... 54214.8 Upgrade Assessment — via a Questionnaire ............................ 54314.9 Summary ................................................................................. 546

15 Performance Reporting via SAP NetWeaver Business Intelligence ........................................................................... 547

15.1 SAP NetWeaver BI with SAP SRM ........................................... 54815.1.1 Business Intelligence within SAP NetWeaver ............... 54915.1.2 Basic Reporting Concepts ............................................ 55015.1.3 SAP SRM Integration with SAP NetWeaver BI ............. 55015.1.4 Source System ............................................................. 55115.1.5 Accessing Reports from SAP NetWeaver BI in

SAP SRM .................................................................... 55315.2 Standard SAP BI Business Content for SAP SRM ...................... 558

15.2.1 Key Benefits for Standard SAP BI Content ................... 55915.2.2 Release Compatibility for SAP SRM and SAP

NetWeaver BI ............................................................. 55915.2.3 BI Content Delivered for SAP SRM .............................. 56015.2.4 Operational Procurement Scenario .............................. 56115.2.5 Some Standard BI Reports for SAP SRM ...................... 564

15.3 SAP SRM Implementation Scenario Impact on BI Reporting .... 56815.3.1 The Classic Scenario .................................................... 570

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15.3.2 The Extended Classic Scenario ..................................... 57215.3.3 The Standalone (Lean) Scenario ................................... 57315.3.4 The Decoupled Scenario ............................................. 574

15.4 What’s New in SAP SRM 5.0 Analytics? ................................... 57615.4.1 SAP Analytics xApps for SAP SRM 5.0 ......................... 577

15.5 Things to Remember ................................................................ 58015.6 Relevant OSS Notes ................................................................. 58015.7 Summary ................................................................................. 581

16 Enterprise Portals and SAP SRM ......................................... 583

16.1 SRM Business Packages for Enterprise Portal ............................ 58616.2 Portal Security ......................................................................... 587

16.2.1 User Authentication and SSO ...................................... 58716.2.2 Provide Roles and Authorizations for Accessing

Content in Portal Environment .................................... 58816.3 Considerations for Portal Strategy ............................................ 59016.4 Summary ................................................................................. 591

PART IV: INDUSTRY SOLUTIONS FOR SAP SRM

17 Government Procurement — Public Sector ......................... 595

17.1 SAP SRM and SAP Government Procurement .......................... 59517.2 What is Different in Government Procurement? ....................... 59817.3 Summary ................................................................................. 601

PART V: SELECTED CONFIGURATION IN SAP SRM

18 Selected Configuration in SAP SRM .................................... 605

18.1 Integrate Organizational Structure with SAP HR ..................... 60518.1.1 Prerequisites for Integration ........................................ 60518.1.2 Filtering of Objects to be Distributed from R/3

into SRM .................................................................... 60618.1.3 Activating Change Pointers ......................................... 60918.1.4 Distribute the HR-Organizational Model

(Initial Distribution) .................................................... 61218.1.5 Synchronizing Data Distributed from SAP R/3 HR

to SRM ........................................................................ 612

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18.2 Workflow: Restriction for Changing and Adding Approvers in the Shopping Cart ................................................................ 61318.2.1 Changing the Approver Determined by the System ..... 61418.2.2 Adding an Ad-Hoc Approver ....................................... 616

18.3 MRP Integration with SAP SRM ............................................... 61618.4 Summary ................................................................................. 62018.5 Book Conclusion ...................................................................... 621

Appendix .................................................................................... 623

A SRM Functionality Matrix ................................................................... 625B Jobs that Require Scheduling ............................................................. 627

B.1 Jobs Required in SAP SRM ....................................................... 627B.2 Jobs Required in SAP R/3 or ERP ............................................. 631

C Using Different Browsers with SAP SRM ............................................. 633D Using Business Add-Ins (BAdIs) with SAP SRM ................................... 635

D.1 Implementing a BAdI ............................................................... 636D.1.1 Multiple Use ............................................................... 636D.1.2 Filter Dependent ......................................................... 636

D.2 Examples of BAdIs in SAP SRM ................................................ 637D.2.1 BAdI: Change Display in Shopping Cart

(BBP_SC_MODIFY_UI) ................................................ 637D.2.2 BAdI: Define Target Objects

(BBP_TARGET_OBJECTS) ............................................. 638D.2.3 BAdI: Change Purchasing Document data

(BBP_DOC_CHANGE_BAdI) ........................................ 639D.2.4 BAdI: Check Purchasing Document

(BBP_DOC_CHECK_BAdI) ........................................... 640D.3 List of BAdIs in SAP SRM ......................................................... 641

E Customer Fields in SAP SRM .............................................................. 649E.1 Customer-Specific fields in SRM document types ..................... 649

E.1.1 Procedure for Creating a User-Defined Field ............... 650E.2 Related OSS NOTES ................................................................. 652

F Business Objects in SAP SRM ............................................................. 655G Authorization Objects ........................................................................ 657H Quiz for Testing your SAP SRM Knowledge ........................................ 659

H.1 Questions ................................................................................ 659H.2 Answers .................................................................................. 663H.3 Explanations for the Answers ................................................... 663

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I System Refresh Procedures ................................................................. 671J Organization Structure Attributes ....................................................... 673K Useful Transactions and Function Modules ......................................... 681L About the Author ............................................................................... 686

Index ......................................................................................................... 687

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“With the SAP Supplier Relationship Management (SAP SRM) solu-tion, we want to enable our customers to unleash the value potential of a holistic and strategic approach to purchasing and supply man-agement by offering a purchasing platform for continuous savings and value generation” — Peter Kirschbauer, General Manager, SAP AG, SAP Applications

2 SAP SRM — An Introduction

2.1 Evolution of SAP SRM

SAP introduced its e-procurement solution in 1999. Since then, the solutionoffering and its acceptance have seen tremendous growth. The SAP SRMsolution has been the fastest-growing SAP application in two of the last threeyears, up to 2006. Customers that were early adopters of this solutionremember the solution branding as Business to Business Procurement (BBP)or Enterprise Buyer Professional (EBP). Over the years, the solution hasgrown from a web-based catalog requisitioning solution aimed at opera-tional excellence to the solution today that offers complete supply manage-ment. Figure 2.1 provides a chart that shows the progression of this solutionfrom B2B to SAP SRM.

Figure 2.1 SAP SRM Solution Growth — From B2B–EBP to SRM

B2B PROCUREMENT 1.0

B2B 2.0 / ENTERPRISE BUYER* 1.0

SRM 2.0 / ENTERPRISE BUYER*3.5

YR 1999 YR 2000 YR 2001 YR 2002 YR 2003 YR 2004 YR 2005 YR 2006-07

SRM* 5.0 / ENTERPRISE BUYER*5.5

* EBP

* EBPBBPCRM2.0B/CBBPCRM 3.0

“Best of Breed” Solution Market “LEADER”

SRM 3.0 / ENTERPRISE BUYER*4.0

SRM* 4.0 / ENTERPRISE BUYER*5.0

* EBPBBPCRM 4.0

* EBPSRM SERVER 5.5

* EBPBBPCRM 3.5

* EBPSRM SERVER 5.0

SRM 2007 /ENTERPRISEBUYER* 6.0

SAP America-SAP Markets-

CommerceOne Partnership

ENTERPRISE BUYER*2.0, 3.0SRM 1.0

* EBPSRM SERVER 6.0

SRM 6.0 RE-BRANDEDas SRM 2007

B2B PROCUREMENT 1.0

B2B 2.0 / ENTERPRISE BUYER* 1.0

SRM 2.0 / ENTERPRISE BUYER*3.5

YR 1999 YR 2000 YR 2001 YR 2002 YR 2003 YR 2004 YR 2005 YR 2006-07

SRM* 5.0 / ENTERPRISE BUYER*5.5

* EBP

* EBPBBPCRM2.0B/CBBPCRM 3.0

“Best of Breed” Solution Market “LEADER”

SRM 3.0 / ENTERPRISE BUYER*4.0

SRM* 4.0 / ENTERPRISE BUYER*5.0

* EBPBBPCRM 4.0

* EBPSRM SERVER 5.5

* EBPBBPCRM 3.5

* EBPSRM SERVER 5.0

SRM 2007 /ENTERPRISEBUYER* 6.0

SAP America-SAP Markets-

CommerceOne Partnership

ENTERPRISE BUYER*2.0, 3.0SRM 1.0

* EBPSRM SERVER 6.0

SRM 6.0 RE-BRANDEDas SRM 2007

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SAP SRM — An Introduction2

In 1999, SAP introduced the B2B Procurement 1.0 solution and has since re-branded the offering from BBP to EBP to the solution available today as Sup-plier Relationship Management (SRM). The solution release generally avail-able to customers today is SAP SRM 5.0. Recently SAP has announced plansto rebrand the SAP SRM 6.0 release as SRM 2007. Based on current informa-tion SRM 2007 (or 6.0) will be generally available towards the third quarterof 2007, until which time it will remain in ramp-up mode with selected cus-tomers.

2.2 SRM and SAP Enterprise Applications

The SAP SRM solution integrates seamlessly with enterprise resource plan-ning (ERP), product life-cycle management (PLM), and supply chain manage-ment (SCM) applications to ensure an effective implementation of cross-application business processes (see Figure 2.2).

Note

SRM is a separate solution, independent of the R/3 or ERP solution offered by SAP.It is common for people to forget that SAP SRM is installed and implementedwithin its own three-tiered architectural landscape, independent from the SAP R/3or ERP landscape. However, it is still an SAP system; the GUI for SRM is the sameas for native SAP R/3, with an IMG for core-configuration. The difference lies in theactual end user interface for SRM. End users only require a Web browser to accessall the transactions. Figure 2.3 provides an example.

Figure 2.2 SAP SRM Integrates Cross-Enterprise Business Processes

SRM ERP

SCM

PLM

CRM

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Benefits of SAP SRM 2.3

Note

Until SAP SRM 5.0 the user interface was based on ITS or BSP technology. FromSRM 2007 (or SRM 6.0) onwards SAP will phase out ITS and BSP by introducing aportal user interface for SRM based on Web Dynpro.

2.3 Benefits of SAP SRM

Often it’s not easy to clearly understand the business benefits within a solu-tion offering or a new business process unless at some level we’re able tounderstand the underlying business challenges within the organization.Once we as users realize and understand the challenges faced, we then canbe open to hearing about the solutions. We frequently question why weneed to change our current system or business processes. It is advisable fororganizations to review the challenges faced by their internal business sys-tems and processes and then review the business benefits offered by SAPSRM.

Figure 2.3 SAP SRM User interface — End User and Configurator

End User Interface

Configuration/ Super User

Interface

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SAP SRM — An Introduction2

Figure 2.4 illustrates the business impact of strategic sourcing within organi-zations. According to a study done by A.T. Kearney, procurement organiza-tions spend as much as 85 % of their time on activities such as answeringbasic supplier inquiries, or processing purchase orders and change ordersthat do not create added value. With SAP SRM, their purchasing profession-als (buyers, contract administrators, etc.) can focus their efforts on buildingstrategic supplier relationships and streamlining the procure-to-pay process.

Example

Organizations using SAP SRM empower end users to keep track of their ordersusing real-time status checking. Requisitioners do not have to call the purchasingdepartment to find out the status of their shopping cart request; they can use theCheck Status application in SRM to monitor the status of their order. Using theBiller Direct application, your organization can enable suppliers to view the statusof their invoices and view in real time what payments have been disbursed. Thisreduces drastically the time spent by the purchasing and accounts payable depart-ments in handling end user and supplier calls.

2.3.1 Opportunities and Business Benefits Within SAP SRM

Solutions driven solely by technological enhancements only provide a siloedresponse to the competitive and strategic needs of organizations today.World-class business solutions need to use advancements in technology as astrategic advantage to provide solutions that cater to the unique businessprocesses that exist in organizations.

Figure 2.4 Operational Procurement Focus vs. Strategic Sourcing Opportunity

Strategic(Sourcing)

Operational(Ordering)

Low(MRO)

High(Direct materials)Business Impact

50% 20%

20%10%

Proc

urem

ent

acti

viti

es

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Benefits of SAP SRM 2.3

Organizations that are leaders in their markets and industries are better at us-ing IT to enable business strategy. The SAP SRM solution provides benefitsthat exist in three realms, which are listed as follows and illustrated in Figure2.5:

� Process benefits

� Technology benefits

� People benefits

2.3.2 Process Benefits

SAP SRM is based on SAP best practices that stem from proven business andindustry expertise. In addition, with the SAP SRM solution, SAP provides awide range of pre-configured business scenarios that organizations canquickly deploy and benefit from with improved efficiency in their businessprocesses. Let’s examine some process benefits now:

� Overall reduction in requisitioning, order processing, and supply-manage-ment cycle time are a direct result of the streamlined procure-to-pay pro-cesses within SAP SRM.

� Efficiencies in business process eliminate costly process-related errors andincrease productivity by implementing adequate internal controls.

� SAP SRM replaces manual procurement processes with a streamlined req-uisitioning and approval process. Delays caused by lengthy manualapprovals are replaced by faster electonic workflows and online status dis-plays.

Figure 2.5 The Three Realms — Process, Technology, and People

PRO

CES

S

TECHNOLOGY

PEOPLEPRO

CES

S

TECHNOLOGY

PEOPLE

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SAP SRM — An Introduction2

� Web-based catalogs provide a quick and easy mechanism for finding nego-tiated goods and services, comparative prices, and required attributes.Additonally, catalog-based selection ensures compliance with approvedvendors.

� An Internet-based request for proposal (RFQ) and bidding process reducesthe source evaluation cycle time.

� Greater visibility of the historical spending data reduces the source deter-mination time. Purchasing professionals can optimize sourcing decisionsbased on such criteria as past supplier performance data to determine thebest source for goods and services. This helps to continously enhance thesourcing knowledege within the organization.

� Synchronization of back-office functions by integrating with corporatefinance and ERP systems. SAP SRM offers the capability to integrate withone or many SAP and non-SAP back-end systems.

� Improved contract compliance and governance are achieved by drivingspending towards selected suppliers with negotiated products and prices.Spending analysis within SAP BW matches contracts with purchase trans-actions to monitor off-contract spending

2.3.3 Technology Benefits

SAP SRM provides real-time integration with ERP as the backbone, ensuringreal-time data validation across SAP modules like Financial Accounting andHR. Let’s take a look at some technology benefits:

� Web-based requisitioning, bidding, and supplier interaction provide easeof use and increased collaboration across the supply chain.

� Out-of-box, ready-to-use workflow templates promote reduce implemen-tation efforts.

� SAP SRM replaces paper approvals with online approvals, reducing theprocessing time drastically. It also provides greater visibility and aware-ness with an electronic audit trail.

� Email integration with standard mail clients such as Microsoft Outlook orLotus Notes provides greater productivity and user acceptance.

� Pre-delivered Business packages within SAP Enterprise Portal provide endusers with a single interface for all purchasing needs.

� Better on-demand reporting and improved compliance.

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Benefits of SAP SRM 2.3

� Flexible and scalable architecture and implementation scenarios provideorganizations the opportunity to configure for their specific businessrequirements.

� Integration technologies such as XML and Supplier Networks promoteopportunities to standardize supplier adoption.

� Users only require a Web browser to access the functionality in SAP SRM.This in turn reduces end user maintenance costs with a lower total cost ofownership (TCO).

2.3.4 People Benefits

Benefits for the organization’s users are listed here:

� Streamlined Wizard and Extended Form requisition navigation in SAP SRMprovide a solution for both casual and power users.

� Online check status provides users with real-time visibility on the status oftheir requisition and reduces time-consuming follow-up.

� Professionals within the purchasing organization can focus on strategicsupplier relationships and contract negotiations instead of requisition pro-cessing.

� Online supplier catalogs in SAP SRM ensure that users can quickly searchfor goods and services. This greatly reduces the need for intervention bypurchasing professionals for negotiated goods and services ordered fromthese catalogs.

� An intuitive Web-based interface provides the similarity of online applica-tions like Office Depot and Grainger, easing change management andtraining.

� A single interface to all the procurement functions allows users to focus ontheir tasks and activities improving productivity. Additionally, BusinessPackages for SAP SRM provide the ability to direct information to differ-ent user group on an individual basis, which increases productivity andenhances user acceptance.

In SAP’s recently published SAP SRM Statement of Direction 2005, SAP out-lines the business benefits of SAP SRM and describes how SAP SRMaddresses the business challenges faced by organizations today. Table 2.1 isan excerpt from the document.

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SAP SRM — An Introduction2

Organizations interested in reading the statement of direction can downloada copy from SAP’s website at www.sap.com/solutions/business-suite/ srm/bro-

chures.

Now that you are familiar with the key benefits of SAP SRM, let’s use thenext section to further dissect the SAP SRM solution. In Section 2.4 I willintroduce three key concepts, which are:

� Core supply processes

� Business scenarios

� Technology components

Let´s proceed with this now.

2.4 Dissecting my SAP SRM

There are a few terms and concepts that we need to define in order for youto properly understand the makeup of SRM. SAP constantly changes theSRM framework and often introduces new concepts for arranging the con-stituents SRM. Fundamentally there three key concepts to understand: coresupply processes, business scenarios within each core process, and underly-ing technology components that enable the business processes.

Capability Business Need Business Benefit

Sourcing Gain visibility into and actively control more spending categories and manage demand; ensure com-pliance across business units and supply base

Better sourcing decisions that opti-mize overall value contribution from suppliers

Procurement Simplify, standardize, automate, and integrate the procure-to-pay process

Streamlined procure-to-pay process with less administration and more efficiency, resulting in elimination of errors, increased productivity, reduced cycle times, and lower processing costs

Supplier Enablement

Enable the supply base to collabo-rate and work more effectively

Increased adoption of e-procure-ment practices through scalable supplier-connectivity capability

Table 2.1 Some Business Benefits of SRM

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Dissecting my SAP SRM 2.4

It should be noted that for the implementation of each business scenario,one or more SAP components or third-party applications might be required.For example, the Supplier Enablement business scenario is powered by anumber of underlying technology components, such as, Supplier Self Serv-ices (SUS), Biller Direct, Enterprise Portal, Inventory Collaboration Hub(ICH), to name a few.

2.4.1 Core Supply Processes

SAP defines three core supply processes that collectively make up the SAPSRM solution, which are:

� Operational procurement

� Strategic sourcing

� Supplier enablement

Chapters 3, 4, and 5 are dedicated to each one of these core supply processes.

2.4.2 Operational Procurement

Each core supply process has multiple business scenarios that I’ll describehere:

� Self-Service ProcurementIndirect procurement enables your employees to create and manage theirown requirement requests. This relieves your purchasing department of ahuge administrative burden while making the procurement process bothfaster and more responsive.

� Plan-driven Procurement (direct procurement)This automates and streamlines ordering processes for regularly neededcore materials. Because SAP SRM is integrated with planning, design, andorder-processing systems, you can link your procurement processes to aplan-driven strategy that gets you the materials you need for core businessprocesses exactly when you need them. Plan-Driven Procurement inte-grates seamlessly with back-end systems such as enterprise planning andproduction. The scenario allows you to integrate operational procurementwith your existing supply-chain management solution.

� Service ProcurementE-procurement has produced great opportunities for saving costs in thepurchasing process. However, companies generally fail to extend cost sav-ing measures to services, even though services amount to more than 50 %

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SAP SRM — An Introduction2

of annual purchasing volumes. The Service Procurement business scenariowithin SAP SRM covers a wide range of services such as temporary labor,consulting, maintenance, and facility management.

2.4.3 Strategic Sourcing

It is estimated that sourcing accounts for up to 75 % of the total opportunityfor procurement savings within an enterprise. The following business scenar-ios enable the strategic sourcing capabilities within SAP SRM to fulfill supplyneeds, negotiate supplier contracts, and evaluate supplier performance:

� Catalog Content ManagementThis scenario provides a solution for creating, maintaining, and managingcatalog content within your e-procurement application. This concept willbe discussed in detail in Chapter 6.

� Strategic Sourcing and Contract ManagementThis application in SAP Enterprise Buyer provides professional purchaserswith a wide range of actions and information to help them source theirrequirements. As a purchaser, you can use the interface to process therequirements and determine the best source of supply. Once you havedone this, you can create a purchase order or contract directly from thesourcing application or SAP Bidding Engine. Save it either locally or in theback-end system, depending on the technical scenario you are using (Clas-sic, Extended Classic or Standalone).

� Spend AnalysisThis is a decision-support application that enables you as a purchaser toanalyze your total spending across system and organizational boundaries.You can perform the analyses per supplier, per product or per product cat-egory.

2.4.4 Supplier Enablement

Supplier Enablement provides a quick and easy process for suppliers andcustomers to collaborate along the supplier relationship lifecycle. Supplierorganizations can connect to a customer-hosted portal to communicateacross a number of supplier related activities. Let’s examine them here:

� Supplier Self-RegistrationWith this application, organizations can provide a simple Web-based self-registration process for potential suppliers. The main aim for this processis to allow strategic purchasers to identify new suppliers for doing busi-

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SAP Components 2.5

ness; accepted suppliers can then participate in strategic sourcing eventssuch as bidding and auction events.

� Design CollaborationThis scenario allows organizations to involve suppliers beginning with theproduct design stage which enables collaboration on design objects likespecifications and bills of materials. Organizations using the product life-cycle (PLM) application can use C-folders to invite suppliers to participatein the design aspect of acquiring specialty products and services.

� Order CollaborationOrganizations can use the supplier self services (SUS) component toexchange business documents with their suppliers. Purchase orders, pur-chase order acknowledgements, invoices are examples of some of thebusiness documents that can be exchanged with suppliers using a Web-based application hosted by the customer. Suppliers only require a Webbrowser to log in to the application and receive purchase orders and cancollaborate on all procurement-related activities.

� Collaborative ReplenishmentCollaborative replenishment optimizes the supply-chain performance byenabling suppliers to access customer inventory data and making themresponsible for maintaining the inventory levels required by customersthrough exception-based replenishment.

2.5 SAP Components

SAP components are the underlying technologies that enable the SAP busi-ness scenarios. The key SAP components are listed below and described insome detail in the remainder of Section 2.5:

� SAP Enterprise Buyer (SAP EBP)

� SAP Bidding Engine

� SAP Supplier Self-Services (SAP SUS)

� SAP Catalog Content Management (SAP CCM) or SRM-MDM Catalog

� SAP Business Information Warehouse (SAP BW)

� SAP Exchange Infrastructure (SAP XI)

� SAP Enterprise Portal (SAP EP)

Let´s explore these in more detail now.

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SAP SRM — An Introduction2

2.5.1 SAP Enterprise Buyer (SAP EBP)

SAP EBP promotes self-service procurement. It is a Web-based solution thatprovides the complete procurement process for the procurement of both di-rect and indirect goods and services. The process begins with the creation ofa shopping cart and ends with the entry of an invoice. SAP EBP is the executionhub for the majority of processes within SAP SRM, as shown in Figure 2.6.

Most organizations initiate their supplier-relationship management journeywith implementing the EBP component in SAP SRM. Once implemented,EBP acts as a catalyst for all the other components. For example, the SAPCCM component is not used by itself; instead, users creating shopping cartsor purchasing professionals creating purchase orders in EBP use catalogs toquickly search for and order products and services.

2.5.2 SAP Bidding Engine

The Bidding Engine is an Internet solution that provides organizations theability to strategically source and obtain optimal prices for goods and ser-vices. Tools such as RFx, Auctions, Reverse Auctions, and Bid Evaluation

Figure 2.6 Enterprise Buyer — Execution Engine in SAP SRM

Enterprise Buyer Professional(EBP)

Supplier Relationship Management

(SRM)

Bidding Engine

Supplier Self Services

Catalog Content Management

Contract Management

Enterprise Buyer Professional

(EBP)

Supplier Relationship Management(SRM)

Bidding Engine

Supplier Self Services

Catalog Content Management

Contract Management

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SAP Components 2.5

enable organizations to create and process bid invitations and Auctions tosource products and services. Suppliers access the bid invitations using aWeb browser where they can submit bids and access all the details of the bid.

As an example of how organizations might use the Bidding Engine capabili-ties is as follows, let’s say your company wants to replace all the existingcomputers because they’re getting outdated and wants to purchase state-ofthe-art laptops for all 5,000 users in the organizations.

This type of a purchase could cost an organization anywhere from $75,000— $100,000 just in equipment purchase, apart from the services and main-tenance cost. Organizations could use the SAP Bidding Engine to invite aselect group of suppliers such as Dell Corporation, IBM Corporation or HP.to a Bidding Event where they would get competitive bids electronically.Your company can then evaluate the bids received in an electronic mannerbased on a number of different criteria and select the most suitable supplierto contract the purchase.

2.5.3 SAP Supplier Self-Services (SAP SUS)

Supplier Self-Services, or SUS, is a hosted Internet solution that provides anintegrated application for organizations to collaborate with their businesspartners. A Web browser such as Internet Explorer is all that is required foraccessing SAP SUS. This offers smaller and mid-sized suppliers the opportu-nity to electronically integrate the procurement processes without the needfor their own sales systems. SUS provides hosted order-management capabil-ities, including purchase-order processing, goods-receipt confirmation,invoice entry and the ability to view the payment status.

Organizations can invite strategic suppliers that are smaller in size and thosethat do not have the capability to exchange business documents electroni-cally using XML or EDI. By enabling smaller suppliers with supplier self-ser-vices capabilities, your organization can ensure that documents are deliveredto the supplier electronically via a hosted solution. Supplier organizationscan assist in order collaboration and can acknowledge the PO receipt anddelivery of the goods and services electronically, alleviating the manualefforts required by your purchasing department.

Also, suppliers can enter invoices electronically using SUS, and these canthen be sent to the appropriate individuals in your organization for properapprovals using workflow prior to payment. This can reduce the manualefforts for your accounts payable department to enter invoices.

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SAP SRM — An Introduction2

2.5.4 SAP Catalog Content Management (CCM)

SAP CCM is a new solution offering as of release SAP SRM 4.0 that enablesorganizations to manage enterprise and supplier content. Users can searchfor products and services using a robust search tool with added flexibility tosearch cross-catalogs, comparisons, and get detailed information on productsor services. SAP CCM is a competitive offering to the widely used BugsEyeand Emerge products offered by Requisite. SAP support for Requisite prod-ucts expired in 2005. This means that organizations that have been using theRequisite applications with the previous SRM releases will have to decidewhether to implement SAP CCM or enter into a new independent contractwith Requisite.

Additionally, your organization might need to evaluate whether it willimplement SAP CCM or NetWeaver Master Data Management (MDM),given that SAP has announced the strategic shift in content-managementstrategy in May 2006. SRM- MDM Catalog will be the strategic content-man-agement offering by SAP beginning in Q4 2006, and all new SRM customersare being advised to implement SRM-MDM catalog instead of SAP CCM.There will be some confusion for customers on the selection of the right cat-alog solution. Chapter 6 will help clarify this for you.

2.5.5 SAP Business Information Warehouse

Business Information Warehouse (sometimes shortened to Business Ware-house or BW) is a packaged, comprehensive business-intelligence (BI) prod-uct centered around a data warehouse that is optimized for (but not limitedto) the R/3 environment from SAP. SAP BW is an integral component of theSAP suite of applications with an added advantage of being a software pack-age that can be used in both SAP and non-SAP environments.

It is important to note that all analytics in SAP SRM are powered by the busi-ness warehouse. This is one reason why SAP´s BI solution is integrated as acomponent within the SAP SRM solution offering; organizations really needto implement to enable analytics in SRM. The positive aspect for organiza-tions is that they can quickly use more than 100 reports and queries that areprovided via the standard content in BW for SAP SRM. SAP pre-deliversthese reports for SAP SRM that can be used out of the box.

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Summary 2.6

2.5.6 SAP Exchange Infrastructure (SAP NetWeaver Exchange Infrastructure)

SAP NetWeaver Exchange Infrastructure (SAP XI) provides open integrationtechnologies that support process-centric collaboration among SAP and non-SAP applications, both within and beyond enterprise boundaries. SAP XI is amiddleware solution that organizations can use to exchange data betweenSAP SRM and business partner systems or electronic marketplaces, over theInternet. SAP XI is used in SAP SRM, to integrate processes between SAPEBP, SAP SUS, and SAP CCM.

Organizations that want to exchange business documents such as purchaseorders, acknowledgements, and invoices electronically via XML or EDI withtheir suppliers need to implement the SAP XI component.

2.5.7 SAP Enterprise Portal (SAP NetWeaver Portal)

SAP NetWeaver Portal unifies key information and applications to give usersa single view that spans IT siloes and organizational boundaries. With theSAP NetWeaver Portal, you can quickly and effectively integrate SAP solu-tions, third-party applications, legacy systems, databases, unstructured docu-ments, internal and external Web content, and collaboration tools.

2.6 Summary

Thus far, we have talked about supplier relationship management in generaland have briefly defined the SAP SRM solution. In this book, we will try todescribe in detail the functionality available in SAP SRM. Chapters 3, 4, and5 focus on SAP supply core processes: operational procurement, strategicsourcing, and supplier enablement respectively.

In Chapter 3, we discuss in detail operational procurement, which is prima-rily enabled using the EBP component. We will introduce the concept of theshopping cart in SRM, which is similar to a requisition in SAP R/3. In addi-tion, we discuss in detail the business scenarios: Self-Service Procurement,Plan-Driven Procurement, and Services Procurement.

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687

Index

A

ABAP dictionary 533Account assignment 108, 353

Category 354Account determination 361Add Approver 65Add Items 79Add Reviewers 65Add to Work Area 152Additional specifications 85Address data tab 315Ad-hoc approver 616Aggregators 250ALE distribution model 606Alert management 192Alert workflow 404Alerts 192All-in-one installation 268Analytical reports 583Analytics xApps 577Anchor 383Approval

In SAP SRM Inbox 407Approval limit 393Approval of items 264Approval Preview 65, 73, 117Approval preview 384Approvals 98, 191, 406Approved shopping carts 564Approved sources of supply 148Ariba 31, 245, 250, 283Asset 87Attachments 87, 108, 186Attribute access rights 467Attributes 64, 307, 464

define new 330Attributes tab 321Auction profiles 171Auctions 52Audit 464Authentication 274Authorization level 419Authorization objects 428, 461Authorizations 417

Automatic authentication 246Automatic data transfer 403Auxiliary account assignment checks

295Availability control (AVC) 368

B

B2B 41Basic data 86, 102, 106, 182Basic data tab 314Basis team 516BBP_WFL_SECURITY 419Benefits of SAP SRM 43

People 45Process 45Technology 45

Best of breed solutions 31Best practices 414

For upgrades 535BI Business Content 558BI content 506BI manager role 555Bid comparison 165Bid evaluation 52, 165, 167Bid invitations 159, 193Bidder view 173Bidding Engine 52, 159, 192, 233, 234,

501Bidding on behalf of 176Bidding process 163Bill of lading 116Biller Direct 49Blanket 130Blind bidding auction 171Blueprint phase 243Brokers 250BSP 268BT Integration with SAP NetWeaver 550Budget availability check 368Budget bearing object 367Budget check 367Budget display 368Budget workflow 398Building a catalog strategy 243

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Index

Business Add-Ins 538Business Application Programming Inter-

face 288Business benefits 44Business documents 53Business Information Warehouse 54Business packages 203, 556, 586Business reporting 569Business Scenarios 48, 60, 211, 457, 499

Plan- driven procurement 211Service procurement 211Supplier enablement 49

Business Server Pages (BSP) 461Business to Business Procurement 41Business workflow 382Buyer intervention 150, 158Buyer organization 205By quantity 87By value 87

C

Calculation schema 187Cancellation 119CAT 255Catalog 190, 241

Content 242Customizing 274File 257Management 241Search 267Strategy 243

Catalog and Content Management 50, 54, 241, 254, 501, 510, 511

Catalog Authoring tool 255Catalog management 254Catalog outbound call structure 274Catalog Search Engine 255Catalogs 151

Broker hosted 244Buyer or internally hosted 244Supplier hosted 244Types of 244

Category Management 578CATT 535Central receiver 118, 401cFolders 233

Project 235Change 409

Change pointers 609Changed version 190Changes between SRM 4.0 and previous

releases. 529Changing the approver 614Check functionality 67Check status 66, 93Check tab 325Check users 453Checkout button 246Classic scenario 364, 372Click Commerce 254Collaborative replenishment 51CommerceOne 31, 245Company best-bid auction 171Comparision between SRM 1.0 and SRM

4.0 527Comparison analysis 524Completion workflow 398Component matrix 504Component Upgrade Guide 532Components of SAP 51

Bidding Engine 51Business Information Warehouse 51Catalog Content Management 51Enterprise Buyer 51Enterprise Portal 51Exchange Infrastructure 51Supplier Self-Services 51

Configuration in SAP SRM 605Configuration information 24Confirm goods or services 113Confirmation 112, 135, 400Consistency 325

check 326Contact persons 165Content import 256Content Management 254Contract

Development 179Execution 179Monitoring 179Negotiation 179

Contract creation 181Contract data 258Contract distribution 194Contract initiation 180Contract lifecycle management 177

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Index

Contract Management 145, 177, 196, 505, 578

Contract monitoring 191Contract negotiation 181Contract review 190Contract-management process 180Control 249Controlling (CO) 367Copy contracts 186Core supply processes 48Corporate Governance 350Cost assignment 77, 87Cost Center 353

Upload 328Cost Distribution 360Create and publish catalogs 265Create auction 153Create Bid Invitation 153Create contract 153Create purchase order 153Create template 162Create with Limit 75, 130Creating views 265Credit memo 123, 129CSE 255Current SAP SRM environment 525Custom fields 580Customer-specific “Z” roles 456Customizing 158, 171

D

DataSource 550, 553, 563, 569, 570DataStore 570

layer 550Objects 550

Decision methodology 522Five-step 523

Default settings for items 77Delete bids 176Delete users 452Delivery address 89, 315Describe requirement 71, 83Design collaboration 51, 232, 233Details area 310, 314Details of cost assignment 360Difference between a technical and func-

tional upgrade 525

Difference between Bid Invitations and live auctions 170

Difference between contracts and cata-logs 179

Direct material 361Direct procurement 57Discount 108Distribute 360Distribute contract to catalog 260Document Builder 596Document status 189Document types 616Documentation for the upgrade 531Documents and attachments 87Download bids 168Duplicate invoice 140Dynamic attributes 168

E

E-catalog 242eCATT 534ECDP 96, 97, 100eCl@ss, 253e-commerce definition 241ECPO 96, 100Effective catalog strategy 247Email notification 406Encumbrances 376End of maintenance period 254English auction 171Enterprise back-end 243Enterprise Buyer 52, 195, 220, 283, 285,

289, 293, 295, 297, 358, 386, 548, 554, 583, 616

Enterprise Buyer Professional 41Enterprise Portal 49, 55, 583, 587

Single Sign-On approach 583e-Procurement 30, 548ERP instances 243E-sourcing on demand 197Evaluation path O-S-P 612Evolution of procurement 29Exchange Infrastructure 55, 209, 271,

293, 502Execution 191Expense 361Expiration 192Express confirmation 95, 114, 120

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Index

Express invoices 127Extended attributes tab 323Extended Classic scenario 318, 343, 365,

374, 530Extended Details 64Extended Form 63, 75Extended Search 65External business partners 450External Catalogs 81External Procurement business scenario

372External suppliers 258External users 437

F

Factored cost 173Federal Acquisition Regulation 596Filter groups 606

Employees 607, 608Organization objects 606Relationship with linked objects 609Relationships 607

Financial Accounting 350Financial checks and postings 284Financial postings 365Financial Supply-Chain Management

350Fisher Scientific 82Fixed source 150Follow-on documents 103, 570Frictionless 197Function tab 316Fund 87, 353, 360Funds Management 358, 595Funds reservation 375

G

Generate users 441Global outline agreements 181Go-live strategy 541Goods receipt 112, 570Government entities 595Government Procurement 591, 595

Add-on to SAP SRM 5.0 596Technical components 596

Grant 87, 360Graphical workflow 423

Graphical Workflow Editor 382Groupwise 410

H

Header data 101, 182Hierarchical view 305Hold 126, 154Hold functionality 66HR data 605HR integration 446HR organization 469HTML 275

templates 515Hybrid approach 247

I

i2 31ICG Commerce 250IDoc 612

Interface 612Message type(s) 285

Impact of poor contract management 178

Implementation scenarios 154, 568, 570Choosing 281Impact 568Three main types 281

Implementation scope 526Import process 257In renewal 193Inactivated 184Inbound section 272Incomplete purchase order 153Indirect procurement 57Industry-relevant classifications 252InfoCube layer 550InfoCubes 550InfoSources 550Integrated call structure 274Integrating Enterprise Buyer with SUS

292Integration at a transaction level 359Integration testing 541Integration to email mail clients 410Integration with SAP Financials 352Internal catalogs 82Internal goods or services 71, 82

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691

Index

Internal notes 87Internal order 353Internal users 437Internally hosted 244Internet connectivity 515Internet Pricing Configurator 502Internet Pricing Engine 530Internet Transaction Server 501, 514Inventory Collaboration Hub 49Invoice Management System 140, 291Invoice Monitor 140Invoice posting 364Invoices 122

data 553entry 401, 573

Item Category 134Item data 106, 116, 183Item details 86Item-level approval 396Items in shopping cart 84iView 203

J

Java applet 384Job scheduling 611Jobs 616

L

Last delivery 116Launch pad 553Limits 133Linear 168Live Auction 169Lock 184Lotus Notes 410Lump sums 133

M

Maintenance 339Manage Business Partners 451Manage content 262Manage user data 439Management Accounting 350Manual 168Master Catalog 258Master Data 260, 473, 474, 475

inclusion scenario 260level integration 353Management 242, 499texts 569

Master schema 258Material data from SAP ERP system 262Material master data 258Material master valuation based G/L con-

trol 357Materials Management 595Maverick buying analysis 566MDM 243MIME files 515Minimum Order Qty 183MM-SRV 134Modified objects 533Monitoring 191Monitoring workflow 404Movement type 119MRP 137

integration 616tables 616

Multiple procurement catalogs 265Multi-provider layer 550My settings 323

N

Negotiate 185, 193NetWeaver BI functionality 550NetWeaver components 500NetWeaver platform 499NetWeaver Portal 550, 554, 580NetWeaver technology 499New BAdIs in SAP SRM 5.0 for follow-on

documents 539New user 405No approval workflow 390Non-SAP back-end 370Notes for approval 73Notification 164N-step approval 388Number ranges 616

O

OCI 272Office Depot 81, 244Offline approval 411

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Index

Old purchase orders and templates 71, 79

Onboarding 250Supplier 251

On-demand solutions 196One-step approval 390Open Catalog Interface 246, 272Operational procurement 49, 58, 554,

561Benefits 59

Order as direct material 97Order Collaboration 51, 210Order functionality 68Ordering direct materials 96Organizational management 305Organizational structure 305, 436, 463,

468Attributes 323benefits 336Impact on 288managing challenges 333pros and cons 341SRM 288synchronize 311uses 306

Organizational structure integration 605OSS Messages 539OSS Notes 424, 472, 539, 580Outbound section 274Output 103

P

Parameters (PIDs) 466Parametric search 268Payment 102People benefits 47Percentage 87Percentage discount 187Perfect Commerce 250Performance reporting 546, 548Performance reporting measures 547Personalization tab 393, 419Plan-driven procurement 49, 136, 211,

298, 508Plants 324PO reference 125PO-cockpit 529POR 109

Portal administrators 586Portal security 587Position-based security 447, 469Pre-commitment 375Price dependent on location 187Price variances 140Pricing scales 188Print 94Process Benefits 45Process in CCM 257Procurement 30, 48, 57

Business to business 35Processes 21

Procurement card 405Procurement Catalogs 265Product category to G/L account mapping

356Project cutover 541Project systems 136, 371Project Systems integration 370Propose source of supply 153Public Bid Invitations 164Public sector 374, 595Publishing a catalog 267Punch-out 245Purchase order 399, 530

information 552response 109, 402with transaction type 101

Purchase to pay 362Purchasing group 319Purchasing organization 317

Q

Queries 550

R

Rank-only auction 171Real-time validation 358Reasons to upgrade 521Re-assignment of purchaser workload

155Records Management 596Redistribute workload 156Refresh existing clients 344Release compatibility 559Release contracts 184

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Index

Release notes 532Remote Function Calls 551Re-negotiation 192Reports 203, 548

Accessing 553Standard BI 564

Request for external staff 131Required on 85Requisite 254

BugsEye 528products 254

Requisitioners 516Requisitions 96Requisition-to-delivery time 59Reservations 96Responsibility rules 421, 422Responsibility tab 319Restricted Bid Invitations 164Restriction for location 187Return Goods Authorization 119Return Material Authorization 119Returns 119Reverse Auctions 52RFI 159RFQ 159Role maintenance 432, 457Role-based security 428, 469Roles and authorizations 455RosettaNet 253RoundTrip 245

buying process 246

S

Sample project plan 540SAP back-end 573SAP Bidding Engine 50SAP BugsEye solution 528SAP Business Intelligence 547SAP Catalog and Content Management

262SAP CCM 244

Architecture 268SAP components 457SAP Connect 410SAP ERP 2005 431SAP GUI 590SAP HR 305SAP implementation

Typical 521SAP MM 285SAP MM functions

Output determination 285Pricing determination 285Source of supply 285Tax determination 285

SAP NetWeaver 430, 583SAP NetWeaver Portal 203SAP Notes 539SAP PLM 232SAP R/3 520

Back end 522Enterprise 431Release 4.0 429

SAP SRMcomponents 583solution growth 41solution map 536Upgrade 542user interface 43

SAP TREX 502, 510SAP XI 528Sarbanes-Oxley 177, 349Save functionality 68Scenarios 224

Classic 281, 283, 570Combining 300Decoupled 299, 574Extended Classic 222, 281, 289, 572Plan-driven procurement 224Standalone 281, 295Standalone (Lean) 573

Scheduling agreement 195Schema 263SciQuest 244, 250Screening questionnaires 146Search for requirements 154Searchable product catalogs 61Secure socket layer 515Security 417

Authorizations 428Management 427Overview 428Profiles 428Teams 430

Security Guide 457Selective configuration 601Self registration 451

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Index

Self-service procurement 49, 52, 61, 516Service procurement 49, 211, 213, 509Services 129Settings transaction 466Ship-to address or performance location

89Shop for 75, 78Shopping cart 62, 530Simple search 65Simplified form 63, 74Single Sign-On 587Single-step approval over limit 392Single-user interface 591Sizing 515SNOTE 534Source of supply 147Source system 551Sources of supply 90Sourcing 48, 145, 196

Definition of 145On-demand 196Strategic 145

Sourcing and Bidding Engine 529Sourcing application 148, 160, 556Sourcing decision 616Spend analysis 50, 512Spending limit 392, 393Split criteria 112SRM 29SRM contract upload 260SRM Delta Guide 523SRM Inbox 406SRM MDM Catalog 276SRM Product Master 259SRM software providers 34SRM solutions 34SRM value generation 33SRM-MDM Catalog 255Standard call structure 274Standard content 580Standard roles 456Standard taxonomy 252Starting sonditions 381Statement of direction 47Statistics 109Status management 189Storage locations 325Strategic sourcing 50, 499, 511, 521Structures 550

Submit to grouping 153Supplier collaboration 210, 590Supplier directory 147Supplier enablement 48, 50

Multi-channel 21Supplier hosted 244Supplier Integration 213Supplier On-boarding 250Supplier order management 579Supplier Registration 205Supplier relationship management 29Supplier Relationship Management Ser-

ver 501Supplier relationship management suite

32Supplier screening and selection 146Supplier Self Services 49, 209, 286, 292,

297Supplier Self-Registration 50, 206Supplier website 251

T

Table view 385Task 381Team 79, 520

Functional 520Project management 520Technical 520

Technology benefits 46Templates 160

HTML 538Temporary labor 131Texts 87Tolerance 182, 403Total cost of ownership 522Traditional procurement process 58Training strategy 590Transaction integration 358Transactions 428Transfer to the catalog 190TREX 268Two-step approval 391

U

Under or overdelivery tolerance 106United Nations Standard Products and

Services Code 253

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695

Index

Update contract 194Upgrade 517, 524

Assessment 535decision methodology 523Functional 524How to 519Master Guide 531strategy 522Technical 524

Upgrade assessment 540, 543Upload contract from ERP to SAP SRM

196US Defense Logistics Agency 596User access 435User authentication 587User creation process 436User interface 63, 529User management 433, 438User settings 63Utilization 191

V

Valuation factors 168Value analysis 564Value-based cost distribution 360Vendor landscape 37Vendor lists 91, 151Vendor product number 106, 183Vendor text 87Vendor-supplied content 259

Version 105Version management 189, 190

W

Web templates 550, 555Web-based e-training 540Weighting and ranking 167Wireless connectivity 515Workflow 98, 191, 377, 379, 538

customizing 396Event-driven 380restriction 613Standard SAP delivered 387template 382Timeline 424

Worklist 100, 151Worksets 589

X

XI 271XI Integration Engine 512XML 275, 402

invoice 126

Z

Z tables 421Custom 422