M.Video interacts with suppliers in the E-tender system based on SAP SRM

The Novardis company in the summer of 2016 announced a project startup on vendor relationship management of non-commercial purchases regarding tendering process in M.Video company. Due to the implementing solution E-tender based on SAP SRM (Supplier Relationship Management) the number of the carried-out procurement procedures grew by 70%.

M.Video is retail network of Russia selling electronics and home appliances on revenue level. Constantly growing quantity of a product line of shops caused need of implementation of a corporate system on tendering process with suppliers. For accomplishment of this task the consulting company Novardis and the solution E-tender based on SAP SRM focused on business process optimization and decrease in the total costs connected with logistics and purchase of services was selected.

"On the first stage of the project on implementation of electronic marketplace before us there was a difficult task of the choice of the general approach and the IT platform for its implementation. We considered two main options: use of third-party electronic marketplaces or implementation of own solution based on set up a "boxed" product. — Dmitry Afanasyev, the head of support department and development of portal solutions of M.Video comments. — In an analysis result of all pluses and minuses, the decision to go on the second way, and the IT solution to implement based on the SAP product Supplier Relationship Management (SAP SRM) was made. In many respects it was dictated by high flexibility of a system, an opportunity to configure it completely "under itself" and also to quickly modify it in the future under the changing business processes of the company. Also important was reliability of NOVARDIS as supplier of the solution and their developed examination in the field of implementation of SRM systems".

Using the SAP solution SRM there was an automated management of vendor relations of non-commercial purchases regarding tendering process, including such processes as registration of participants of the tender, accreditation, preparation of the procedure of the tender, holding a tender procedure, the choice and the statement of the winner, assessment of suppliers and signing of the contracts.

"The solution E-tender based on SAP SRM is of the strategic value expressed as significant economy of costs. As a result of successfully implemented project, a SRM system was effectively integrated into the existing SAP architecture. — Anna Shuvalova, the manager of projects of M.Video comments. — Business divisions received the tool for operating activities regarding carrying out non-commercial purchases, and potential suppliers of works and services – an opportunity to participate electronically in the regulated procedures of M.Video company, using the web interface of the SAP portal".

During the project the objects set for the contractor — consulting company Novardis were completely achieved. Step-by-step reduction of a tender threshold by 5 times and also a possibility of consolidation of purchases and carrying out regional tenders was led to more regulated and standardized process of purchases. All this influenced significant reduction of influence of a human factor by decision making.

"The implemented functionality provided effective management of vendor relations of non-commercial purchases regarding tendering process. — Ruslan Aitkulov, the top manager of department of tender procedures of M.Video comments. — The number of participants of procurement procedures increased twice due to integration of the SAP SRM system with open electronic marketplaces. Implementation of the portal allowed us to implement an effective objective — to carry out open and transparent procurement procedures for increase in efficiency of purchasing function and cost reduction. It should be noted that at the moment on cost reduction it is ahead of schedule by 5 times, and the number of the companies registered on the portal is already about 2 thousand".