And why every procurement professional should care
In procurement, securing the “best price” in a contract is only half the battle — the other half is making sure you actually pay that price. While it sounds obvious, the reality is that purchase order prices and invoiced prices often don’t match. Surcharges, late price changes, or inconsistent billing can silently erode savings and undermine trust in supplier relationships.
SAP’s Supplier Evaluation by Price app in the Fiori environment brings this issue into sharp focus. Instead of only showing who is the cheapest supplier, it measures price reliability: how well suppliers stick to the agreed prices over time. This insight is essential for enforcing contract compliance, controlling spend, and making supplier performance reviews more fact-based.
Understanding the Metrics
The app compares the purchase order (PO) price with the invoiced price for each delivered item over a rolling 12 month period. It looks at both positive deviations (invoice > PO price) and negative deviations (invoice < PO price), then calculates a variance score for each supplier.
In the screenshot you see:
- Dark Blue Bar – Variance Score
This is a weighted score reflecting the overall price reliability of a supplier. A high positive or negative score signals significant deviations from agreed prices. - Light Blue Bar – Variance %
The average percentage difference between PO price and invoice price. Large spikes often indicate systemic pricing issues or contractual misalignment. - Brown Bar – Number of PO Items
The volume of individual line items ordered from the supplier in the selected time frame. - Orange Bar – Number of POs
The number of distinct purchase orders placed with that supplier.
Why This Matters
A supplier’s ability to stick to agreed prices is a clear sign of a reliable partner. Price deviations, whether up or down, can disrupt budgeting, distort spend analysis, and complicate supplier performance reviews. In high volume procurement, even small percentage differences can add up to significant unplanned costs over the course of a year.
These deviations aren’t always intentional — they can originate from fluctuating raw material costs, late applied discounts, or unexpected surcharges. But without visibility, it’s difficult to separate justifiable changes from avoidable issues. Over time, uncontrolled variance erodes trust in supplier relationships and weakens the impact of carefully negotiated contracts.
The Supplier Evaluation by Price app turns these hidden gaps into measurable data points. With clear variance scores and percentages, procurement teams can quickly spot where the biggest issues lie, address them in supplier discussions, and protect the value of negotiated agreements.
Practical Examples
- The hidden surcharge problem
Your company orders 100 units of a material at €50 each. The PO total: €5,000.
The invoice arrives for €5,250 — a “logistics surcharge” has been added without prior notice. This may seem minor, but across hundreds of orders per year, the extra costs quickly become substantial. - Gradual price creep
In January, invoices match the PO perfectly. By June, you notice a +3% increase. By November, the increase is +6%. Without continuous monitoring, this creeping variance can quietly erode negotiated savings. - Inconsistent discounting
One month, the supplier applies an unplanned discount. Another month, no discount appears. While your costs may go down in some months, the unpredictability disrupts accurate cost forecasting.
The Business Value
With the Supplier Evaluation by Price app, procurement teams can:
- Identify high-variance suppliers and address issues in performance reviews or renegotiations.
- Enforce contract compliance with data-backed conversations.
- Improve spend predictability by working with suppliers who keep prices consistent.
- Integrate price reliability into a broader supplier scorecard alongside delivery performance and quality metrics.
Price negotiations are only valuable if the agreed terms are honoured in practice. The Supplier Evaluation by Price app gives procurement professionals the visibility they need to bridge the gap between contract intent and actual spend. By turning pricing reliability into a measurable, trackable performance indicator, it empowers teams to protect negotiated savings and strengthen supplier partnerships. In procurement, consistency is as valuable as competitiveness — and now, you have the data to prove it.
Would you like to learn how to integrate Supplier Evaluation by Price into your supplier scorecards and procurement processes? Our experts will be happy to show you how to turn price reliability into a competitive advantage.
