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On this page you can find Contract related documentation

Central Contract Management is used to negotiate a global longer-term agreement between a purchasing organization and a supplier regarding the supply of materials or the performance of services within a certain period according to predefined terms and conditions.

Central Contract Management supports in resolving the following issues:

  • Negotiated savings are often not leveraged in operational procurement due to the lack of integration with the contract repository
  • Lack of visibility and transparency into contract spend across the group
  • Different local contracts with different prices and conditions exist for same category

Central Contract Management ultimately enables purchasers from various parts of the company at different locations to take advantage of the negotiated terms and conditions. These terms and conditions can already be negotiated in a sourcing event triggered out of Central Sourcing, are then transitioned into a central contract and finally distributed to the local purchasing groups to be leveraged in the local purchasing processes.

Central Contract Management is offered by the application SAP SRM and provides the following functionality:

  • SAP SRM helps automate transfer of global negotiated conditions into multiple SAP ERP systems and into non-SAP solutions using Enterprise Services.
  • SAP SRM helps ensure contract compliance by creating a repository of standard contracts for the contract-generation process
  • SAP SRM helps accelerate the procurement cycle by automating the contract management process:
    • Availability of global conditions in ERP’s local source of supply assignment
    • Transparency of all local contract releases against central contract through one central view
    • Monitor contract compliance and maverick buying using SAP SRM and SAP BI

SAP SRM supports the following contract management processes:

  • Contract creation: Create an operational contract from a bidding event, renewal, or net new. SAP SRM enables mass updates and appending of contracts based on a winning bid via an easy wizard interface.
  • Contract execution: Use contracts as a "source of supply" across SAP SRM and one or more integrated back-end systems, track contract usage, and drive compliance to negotiated terms - achieving realized savings.
  • Contract monitoring: Track contract performance and compliance to agreed-upon terms and conditions using configurable alerts.