SAP E-Sourcing is a single, easy-to-use common sourcing process supported by the SAP platform.
The system will play a part in Royal Mail's three-year procurement transformation programme, which aims to save the business £300m by 2009.
The programme, led by Daniel Cameron, Royal Mail Group procurement director of performance and transformation, focuses on changing procurement across the key areas of people, processes and technology.
Cameron said, "The SAP system will play a key part of our transformation programme for Royal Mail Group procurement."
The e-sourcing programme is being rolled out across more than 100 staff within the Royal Mail Group procurement team. It is helping the team manage £2.3bn of annual expenditure through the contracting process.
Steve North, Royal Mail senior procurement manager for technology, said, "The system allows us to move away from our previous disparate systems. Now we have an integrated, standardised methodology, resulting in up-to-date reporting processes and contracts. This delivers true visibility across the entire team and a more efficient way of working, all resulting ultimately in cost savings."
The Royal Mail Procurement Transformation programme has been supported by consultant Deloitte.