In key sectors like Oil & Gas, Utilities, and Construction, tendering processes are vital to the success of any project. These industries handle large-scale contracts and must comply with strict technical and regulatory requirements. However, many companies that already use SAP face a common issue: tender management is often carried out inefficiently.
In this article, we’ll take a closer look at these inefficiencies, the challenges they present, and how to address them effectively.
Why Tendering and RFP Processes in SAP Are Critical
Instead of leveraging SAP’s structured workflows, it’s common to rely on external tools like spreadsheets and emails to request quotations and compare offers. This fragmented approach causes key information — such as supplier data or offer versions — to become scattered, reducing traceability. This not only leads to errors and delays but also makes decision-making more difficult.
When the process isn’t centralized within SAP, several challenges arise:
- Lack of standardization
- Increased administrative workload
- Absence of traceability and compliance risks
While the SAP MM (Materials Management) module offers basic functions for RFQs and price comparisons, it lacks a robust tool for managing complex tenders end-to-end. It’s not designed for processes that require extended collaboration, multifactor supplier evaluations, and transparent step-by-step tracking. This lack of integration results in non-transparent decisions, compliance breaches, and cost overruns that impact both profitability and corporate reputation.
Key Challenges in Managing Tenders in SAP — and How to Solve Them
Based on our experience resolving inefficiencies in SAP MM, we’ve identified five recurring challenges when managing tenders and RFPs in SAP. Each poses an obstacle to efficiency, control, or transparency, particularly in high-risk, highly regulated industries.
Let’s explore each challenge, with a sector-specific example and a practical approach to solving it:
Challenge 1: Manual Processes and Lack of Direct Integration
Tender and RFP management in SAP becomes inefficient due to manual workflows and lack of direct system integration. A buyer must generate documents in SAP, send them manually via email to each supplier, and wait for responses through the same channel — a process that slows everything down and increases the risk of error.
- Example (Utilities): In a utility company issuing a tender for transformer maintenance, the procurement team sends requests and documentation by email to each contractor. If there are 10 suppliers, dozens of emails and replies are exchanged manually. Any oversight or documentation error may delay the tender, and traceability is lost in employee inboxes.
- How to solve it: Automate the tender and RFP management process in SAP to eliminate repetitive tasks and ensure that all suppliers receive the same information simultaneously. By integrating tender initiation into SAP’s workflow, you can track who has responded and send automatic reminders. Specialized tender management tools in SAP — such as SIGO — add this automation layer over SAP MM, transforming a manual process into one that is faster and more reliable.
Challenge 2: Complex Comparisons Without Standardized Criteria
Once bids are received, comparing them becomes complex without standardized criteria or an integrated tool. In standard SAP, analysis is done manually using spreadsheets, which are error-prone and subjective.
And it’s not just about price — technical specifications, delivery timelines, and guarantees must also be considered. This makes tender and RFP management in SAP difficult and prone to mistakes.
- Example (Oil & Gas): A company issuing a tender for the construction of a compressor station receives proposals with construction timelines, performance metrics, and safety clauses — not just prices. The evaluation team manually transfers this information into Excel to assign scores. This process is slow, error-prone, and difficult to audit, potentially leading to the selection of a suboptimal supplier.
- How to solve it: Implement an SAP-integrated solution that enables standardized evaluation matrices with both technical and commercial criteria. This allows the system to automatically calculate scores for each proposal, eliminating the need for multiple spreadsheets. By capturing bids in a structured and consistent way, tender and RFP management in SAP becomes more objective and transparent. This ensures that all suppliers are compared using the same metrics, resulting in fairer and more well-grounded decisions.
Challenge 3: Lack of Traceability and Auditability
When tenders are managed outside the SAP system, the centralized record of communications and documents is lost, creating a risk of non-compliance. Without a single, unified tender file, reconstructing the process for an audit becomes complex, making it difficult to justify procurement decisions — particularly in regulated sectors.
- Example (Construction): A public construction company awarding an infrastructure contract is subject to government oversight. If supplier communication occurred via email and the evaluation took place in undocumented meetings, it would be difficult to prove that the award process was transparent and objective.
- How to solve it: Tender and RFP management in SAP should be centralized within a single source of truth. Every step — from invitation to award — must be recorded and documented to create an auditable digital file. A specialized solution like SIGO can store all associated data and documents, simplifying justification of procurement decisions and protecting the company during audits or legal disputes.
Challenge 4: Document Management via Email
Managing bids through email in SAP is inefficient and error-prone. The exchange of tender documents, blueprints, and proposals generates hundreds of messages, increasing the risk of missing files or incomplete submissions. It also complicates internal collaboration, as teams must manually compile and share correspondence.
- Example (Utilities): A utility company issuing a tender for the construction of a power line exchanges large files and hundreds of emails with suppliers. Responses to questions are sent via email, and proposal documents are downloaded and saved in shared folders. Any issue with attachments or spam filters could jeopardize the integrity of the entire process.
- How to solve it: Implement a centralized document portal integrated with SAP for tender and RFP management. Instead of relying on email, documents are uploaded to a secure platform where suppliers can download information and upload their proposals directly. This eliminates the need for email chains, ensures no documents are missing, and simplifies internal collaboration — as all relevant information is available in one centralized location.
Challenge 5: Inclusion of Unqualified Suppliers
Tender and RFP management in SAP can become inefficient if unqualified suppliers are invited to participate. The standard system requires that suppliers be pre-registered, which can limit competition to existing vendors or force a rushed onboarding process for new ones. This increases the risk of receiving unviable proposals or awarding contracts to problematic suppliers.
- Example (Oil & Gas): An oil company needs offshore maintenance services, but the top international contractors are not registered in its supplier system. Including them would require navigating SAP’s bureaucratic onboarding process — not feasible in the short term. The company faces a dilemma: invite known but less specialized vendors, or onboard new ones without proper pre-evaluation — risking compliance issues.
- How to solve it: The solution is to implement a prequalification process before launching the tender, managed through a tool integrated with SAP. Through a supplier portal, potential vendors can register and submit their information and certifications without being created in SAP’s vendor master. This enables the company to assess whether they meet minimum standards and only invite those who are qualified. This approach ensures healthy competition, regulatory compliance, and a fairer, more efficient supplier selection process within SAP’s tender management flow.
How SiGO Enhances Tender Management in SAP
In response to the challenges outlined above, Innova has developed SiGO, a specialized solution that centralizes and streamlines tender management within SAP. This tool extends the capabilities of SAP MM, allowing users to manage the entire cycle — from supplier prequalification to award and purchase order creation. SiGO integrates natively with both SAP ECC and S/4HANA, adding a modern web interface and a workflow engine for the tendering stages, without replacing SAP’s core module.
Key Features of SiGO for Bid Management in SAP
- Automated RFQs in SAP: SiGO accelerates the tender initiation process. With just a few clicks, the buyer can take an internal SAP requirement and generate a request for quotation (RFQ) for multiple suppliers simultaneously. All relevant information is shared automatically, eliminating manual data entry and reducing errors.
- Centralized Supplier Portal: SiGO’s web portal replaces email communications. Suppliers can securely log in to download documents, submit inquiries, and upload their proposals directly. This centralizes documentation and communication, ensuring bidder confidentiality and transparent communication for all participants.
- Technical and Commercial Evaluation Matrices: SiGO enables users to define custom evaluation criteria with weighted scores. This facilitates objective bid comparisons, allowing evaluators to score technical and financial aspects on the same platform. The system generates a clear comparison chart, eliminating subjectivity and spreadsheet-related errors.
- Full Traceability and Auditable Records: The tool documents every stage of the process — from supplier invitations to final decisions. All documents are stored in an organized manner and linked to the tender file within SiGO. This creates a reliable, auditable digital history that ensures compliance with procurement policies and regulations, providing peace of mind in the event of an audit.
- Supplier Prequalification and Assessment: SiGO supports RFI (Request for Information) processes to prequalify suppliers who are not yet in the SAP system. Buyers can invite potential suppliers to a portal to submit their information and certifications, then apply evaluation criteria to ensure that only qualified candidates participate in the formal tender. This functionality broadens competition without compromising quality.
- SAP Integration for Awarding: Once a winning supplier is selected in SiGO, the tool integrates with SAP to automatically create the purchase order or contract. Awarded offer data is converted into an SAP MM document, avoiding re-entry and transcription errors — and accelerating the procurement cycle closure.
Conclusion
Manual tender and RFP management in SAP represents a high risk for sectors such as Oil & Gas, Utilities, and Construction. Lack of traceability, bureaucratic workflows, and fragmented data result in inefficiencies that can lead to cost overruns, compliance issues, and poor decision-making.
In a highly competitive market, a specialized solution like SiGO transforms SAP bid management into an efficient, auditable, and competitive process. This tool addresses critical challenges by automating RFQs and centralizing communication, documentation, and evaluation.
By integrating SiGO into SAP, companies modernize a critical function — not only reducing risks and errors, but turning their tendering processes into a competitive advantage. The ability to award contracts quickly and transparently, with well-documented proposals, has a direct impact on profitability and project execution. Digitalizing tender management is essential for sustainable growth and meeting today’s market demands.
