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Hannah Smalltree, Editorial Director
SAS SRM and e-Procurement are complimentary solutions which assist the
strategic sourcing process. While e-Procurement will help organizations
reduce the cost of PO processing, SAS SRM is focused on understanding what
the most profitable strategies should be for their supplies.
How do they relate? We have customers who use SAS SRM to determine which commodities would be the best to put towards an e-procurement solution. Once a company is using e-procurement, SAS SRM can tract the usage and notify when their is rogue spending. In this way, SAS SRM and e-procurement are completely complimentary.
How does SAS SRM and e-procurement systems differ? SAS SRM can read all procurement data, include transactions from ERP, AP, G/L and e-procurement systems. This gives a company a full view of all their spend, across direct and in-direct goods. Once we get to all the data, we then apply our analytics capabilites which not only looks at what happened, but what should I do in the future in terms of which commodities/suppliers I should do business with. SAS SRM has a depth and breath of analytical capabilities which goes beyond simple reporting to help companies really understand their data. They include:
Ranking - Ranking provides tools needed to establish an objective & repeatable measuring system that reliably identifies the best suppliers for your organization and responds effectively to changing business conditions. With the use of weighted averages to add balance and flexibility to the process of ranking suppliers, you can objectively narrow, measure and rank which supplier or suppliers are best suited for your needs.
Optimization - Is a mathematical technique which can be applied to business objectives (typically attempting to minimize of maximize these objectives) within a set of known constraints. SRM uses these techniques for developing a risk minimization strategy. These include minimizing purchasing costs, and increase your leverage when negotiating which companies should be part of your supply chain.
Data Mining - Is a broad set of descriptive and predictive techniques which can be used to look for fraudulent supplier activity, analyze supplier trends, and score your suppliers by rating the quality of their goods and services.
This analytical power is important to any large company which is trying to stay competitive. Characteristics of our SAS SRM customers are that they have various procurement data located across divisions, countries in multiple legacy systems or ERP's.
One general point whether we are talking about CRM or Supplier Relationship Management: we have spoken with a large number of customers and industry analysts who tell us that one of the most important aspects of these critical business solutions is the ability to apply analytic techniques to materialize a deeper understanding of the relevant subject areas. This certainly applies to organizations' suppliers as well as their customers.
This was first published in February 2002
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