What is SAP SRM? (Supplier Relationship Management)

SRM stands for Supplier Relationship Management. Big organisations have to deal with hundreds of suppliers on a day to day basis. Those suppliers supply the organisation with materials and resources that will help the organisation to manufacture their products or deliver their services. So, it is important for an organisation to manage its suppliers efficiently which in turn will help them build a long-term relationship with them.

You might already start to notice a pattern with SAP’s product portfolio. They usually have an on-premise application for a particular domain which has been there for a long time. But in the recent years, they might also have a cloud application for the same domain which might succeed the on-premise version in the near future.

For example, SAP CRM 7.0 (on-premise version) and SAP C/4HANA (cloud application). SAP BW 7.5 or SAP BW4HANA (on-premise version) and SAP Analytics Cloud/SAP Datawarehouse Cloud (cloud application).

Watch my YouTube video about SAP SRM

In the same pattern, we have two different versions when it comes to SAP SRM as well. One is the on-premise version, SAP SRM 7.0. Enhancement pack 4 is the latest EHP version and it is based on the NetWeaver platform. It can run multiple databases such as MS SQL Server, Oracle, DB2, MaxDB and SAP HANA. End of mainstream maintenance for SAP SRM 7.0 is 31st December 2027. After that, SAP recommends its customers to transition towards its cloud application for procurement solutions called SAP Ariba.

SAP SRM 7.0 is usually integrated with MM (Materials Management) module in SAP ECC or SAP S/4HANA to achieve the end to end procurement business process operation which includes, purchase requisition, purchase order management, goods receipt, material management invoices, financial invoices, and open item clearings.

In this blog, we will be discussing SAP SRM 7.0, the on-premise version of SAP SRM.

Capabilities of SAP SRM 7.0:

  • Operational Procurement – Catalog management, creating invoices, processing purchase orders, shopping cart management for direct procurement and indirect procurement.
  • Strategic Sourcing – RFx and bids management and centralised sourcing.
  • Operational Contract Management – Managing supplier contracts centrally.
  • Supplier Self Service – Manage self-service capabilities for suppliers.
  • Services Procurement – To manage services procurement for large services provided or received.
  • Operational reporting and workforce mobility.

As mentioned previously, SAP also has a cloud based B2B sourcing and procurement application called Ariba where buyers and suppliers can do business in a networked structure. It provides capabilities such as Supplier Management, Strategic Sourcing, Supply Chain, Procurement, Services Procurement and External Workforce, Selling and Fulfillment. Let’s discuss SAP Ariba in detail in an another blog post.

Please let me know your thoughts in the comment section below.

P.S. Check out my course on Udemy – “Introduction to SAP – The Complete Package for Beginners