Which features in SAP S/4HANA can help a global company in consolidating purchases for better pricing?

The selection of contract management as the correct feature highlights its vital role in enabling a global company to consolidate purchases for better pricing. Contract management within SAP S/4HANA allows organizations to create and manage contracts with suppliers effectively. By consolidating purchasing contracts across different regions or departments, companies can leverage their overall buying power to negotiate better terms and pricing. This leads to cost savings and enhanced supplier relationships, as larger volumes often result in more favorable purchase agreements.

When contracts are properly managed, it enables organizations to ensure compliance with negotiated terms and maximize the benefits obtained from bulk purchasing. This holistic approach not only streamlines the procurement process but also supports strategic sourcing initiatives by systematically handling supplier agreements and monitoring their performance against predetermined metrics.

While supplier performance tracking, inventory optimization, and price variance analysis are important components of a comprehensive procurement strategy, they do not focus as directly on the consolidation aspect of purchasing for the purpose of securing better pricing. Supplier performance tracking aids in assessing the effectiveness of suppliers, inventory optimization aims to manage stock levels efficiently, and price variance analysis helps in evaluating pricing discrepancies, but none of these features directly facilitate the consolidation of purchases like contract management does.