You use this business scenario to access SAP SRM contract features, such as contract hierarchies, discount across contract hierarchies, contract negotiation, and contract monitoring and analysis.

Contract management enables purchasers from various parts of a company — at different locations — to take advantage of the terms of globally-negotiated contracts for specific product categories. If a contract is categorized as confidential, you can provide users with specific levels of authorization.

You create a central contract in SAP SRM, and from there it can be used as a source of supply in both SAP SRM and SAP ERP. Either the relevant data is sent to SAP ERP for source of supply determination, or a specific type of contract or scheduling agreement is sent to SAP ERP directly.

Central contracts are distributed to SAP ERP by release-authorized purchasing organizations, and these organizations can then use the corresponding contract and scheduling agreement documents as sources of supply in the appropriate SAP ERP system.

Contract hierarchies can be used to organize, structure, display, and search for contracts.

If you use SAP NetWeaver Business Intelligence (SAP BI), you can view various consolidated reports of contract management. For example, you can view aggregated value released against all contracts in a specific contract hierarchy. In addition, the new analytics functions of SAP SRM provide analysis of contract information, enabling purchasers to make strategic decisions.