SAP ARIBA INTELLIGENT SPEND MANAGEMENT

Deepika Hirematt

Agenda

• Procurement​ & Digital Procurement
• Intelligent Spend overview
• Ariba Overview
• SAP Ariba Modules​
• SAP Ariba Supply Chain Collaboration​
• SAP Ariba Commerce Automation

Procurement and Digital Procurement

Procurement  is the process to purchase material or services through competitive bidding methods from different suppliers in the market and paying to the purchased goods and services on agreed terms and conditions for an organization, to ensure that production and business activities are smoothly carried out. 

Procurement process is divided into two parts : Direct Spend and Indirect Spend.

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Digital Procurement comes with the reorganized procurement strategy and streamlined process by automating manual, repeatable tasks with improved efficiency, transparent operations with reducing costs by new and emerging digital technologies.

Its an on-demand world : one click orders. Same day delivery and instant access to everything give us maximum convenience and minimal hassle.

So in this fast moving world to increase the productivity, identify and create sources of enduring value business and organization incorporate digital transformation by investing in the digital software’s like Ariba.

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Deepika Hirematt

Direct Spend

�Purchasing of goods or services directly associated with the product manufactured

Examples:

Raw materials

Direct Labor

Manufacturing supplies

Indirect Spend

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Purchasing of goods or services not directly associated with product or service manufacturing

Examples

Office supplies

Cleaning services

Rent & Utilities

Intelligent Spend Management – A Suite of Solutions​

Deepika Hirematt

Intelligent Spend Management is a suite of three cloud-based solutions, part of SAP’s solutions for the Intelligent Enterprise:​

• Direct and indirect spend (SAP Ariba)​
• Travel and expense (SAP Concur)​
• Services and external labor (SAP Fieldglass)

Why Intelligent Spend & what Differentiates with Legacy spend

Ariba overview

• SAP Ariba is a cloud-based innovative Procurement solution that allows suppliers and buyers to connect and do business on a single platform. ​
• It improves the overall vendor management system of an organization by providing less costly ways of procurement and making business simple. ​
• SAP Ariba digitally transforms our supply chain, procurement and contract management process.​
• Ariba acts as supply chain, procurement service to do business globally.​

Deepika Hirematt

SAP Ariba Modules

Deepika Hirematt

Ariba Upstream Modules​

• ​Ariba Supplier Lifecycle and Performance​
• Ariba Strategic Sourcing
• Ariba Contract and Compliance Management​
• Ariba Spend Analysis

Ariba Downstream Modules​

• Ariba Buying and Invoicing
• Guided Buying

Ariba Supplier Lifecycle and Performance​

Deepika Hirematt

Supplier Management Workflow in Ariba

SAP Ariba Supplier Lifecycle and Performance is a solution with a set of linked processes for managing suppliers from onboarding to qualification to preferred supplier to disqualification. ​

SAP Ariba SLP drives supplier qualification and segmentation with ease:

• Unified vendor master in the cloud
• Comprehensive supplier 360º view to manage these processes and monitor suppliers in one place
• End-to-end supplier lifecycle processes
• Matrix-based supplier performance management
• Two-way sync with backend Supplier information, lifecycle, performance and risk in one place

�This module Simplifies the risk management across procurement processes​

• Resolves barriers to information​
• Segments your supply base by risk​
• Embeds risk due diligence into procurement ​
• Enables efficiencies in risk management

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Deepika Hirematt

SAP Ariba Supplier Risk solution has 4 broad risk categories as mentioned below

The individual entries under each category are known as risk types.

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• The primary purpose of having risk categories is to segment suppliers to begin with and further segregate them to high, medium or low "risk" to achieve the necessary diligence.
• Customers can configure numeric weightage at the risk category level so that suppliers can be tracked based their risk behavior
• Risk Types can be mapped to questionnaires that suppliers need to answer, and subsequent relevant workflows.

Ariba Supplier Risk

SAP Ariba Strategic Sourcing suite addresses the challenges of sourcing both direct and indirect on a single platform

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It is a web-based application that enables you to manage and create bidding events online and exchange business information with other companies. It also allows the Organization’s Internal Stakeholders and Suppliers to communicate online and expedite the sourcing process

Deepika Hirematt

Ariba Strategic Sourcing

Ariba Sourcing has 4 types of Events:

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• Request For Information
• Request For Proposal
• Auction
• Forward Auction

Ariba Sourcing functionalities:

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• Guided Sourcing (Indirect procurement)
• Product Sourcing (Direct procurement)

Sourcing event process flow

Sourcing Project

Quick project

It’s a “standalone” document created directly from the dashboard and is not part of Full Project

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Deepika Hirematt

Full project

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A project is a workspace that includes support for process management, including document storage, tasks, a message board, and project team.

Guided Sourcing

The new guided sourcing capability available with the SAP Ariba Sourcing solution delivers a simplified, Smart, intuitive user experience. Ensure realization of business benefits such as savings, transparency and compliance with a user friendly interface, reduced change management and autonomous procurement capabilities.

Deepika Hirematt

Direct Sourcing

Deepika Hirematt

Product sourcing features of SAP Ariba Strategic Sourcing Suite provide a layer of innovations over SAP Ariba Sourcing to enable direct customers, customers who are sourcing materials for manufacturing a product, to collect and track material prices for a given period of time and calculate and track rollup costs for BOMs.

Product sourcing features are designed for three broad use cases:

1. BOM-based product planning and sourcing that provides a cohesive view of various materials and sub-assemblies that form a product and enables users to collect quotes for entire BOMs and view and track rollup costs for BOMs.
2. Materials-only sourcing that enables users to import materials from the material master, view the material details, collect prices for materials, and view historical pricing data for the materials.
3. Hybrid mode that combines the capabilities of both BOM-based and materials-only modes.

The process of product sourcing is typically driven by product lifecycle management (PLM) processes, customer demand, and material requirements planning (MRP) and the spend towards product sourcing is tracked under the cost of goods sold in the direct spend category.

SAP Ariba Contract Management

What is contract compliance ​�Method to set up compliance and buying channels to define how your organization to buy against a contract & their pricing terms ​

�Why set contract compliance?​�Provides the glue between sourcing/contracts & buying /invoicing enabling an E2E process​�Helps ensure savings are realized through sourcing/contracts linking to buying/invoicing and visibility of spend​�Enables reporting on contract compliance and non-compliance for appropriate action

Deepika Hirematt

Ariba Contract Management is an end-to-end solution designed to eliminate the paper from the creation, execution & management of any type of contractual agreement, With Ariba Contract Management companies can strengthen contractual & regulatory compliance

Contract type ​

1. Supplier level- which covers all products from a supplier.​
2. Catalog level- which covers all products from a catalog.​
3. Commodity level -which covers all products identified by specific commodity codes from a supplier.
4. Item level- which covers specific items from a supplier

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Based on the nature of the contract terms payment types is chosen for compliance  ​

• No-release order contract for an invoice-based process​
• Release order contracts for a PO-based process

Ariba Buying and Invoicing

Deepika Hirematt

SAP Ariba Buying

SAP Ariba Buying makes shopping easy for the things you need with an intuitive interface and standard eCommerce look and feel.

• Integrated req-to invoice process
• Dashboard and Analytics to provide real time visibility into spend
• Simple buying experience
• Enforce compliance

SAP Ariba Invoice Management

Reconcile and pay invoices with minimal manual effort for organizations focus less on transactions and more on enhancing cash and working capital.

• Support PO, Non-PO, Contracts and Services based invoicing
• Improve cash management Automate invoice processing
• Ensure Compliance for all invoices
• Eliminate manual processes

Guided Buying

• Non-Procurement Professionals who can purchase:
• Casual Users
• Users who make infrequent purchases (less than five per year)
• Functional Buyers
• Users from marketing or facilities departments (not procurement departments). spending a lot of their time buying goods and services for their department.

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Deepika Hirematt

Guided Buying is a persona-based application offering non procurement professionals one single place to search for goods and services, making purchases with little to no involvement from your procurement department.

SAP Ariba Supply Chain Collaboration

Deepika Hirematt

SAP Ariba Supply Chain Collaboration helps in Collaboration with all the Suppliers in real time on a single network, across all processes and Spend Categories by reducing the Supply Chain risk and direct spend Contract Leakage, while increasing visibility into the Supply chain.

Deepika Hirematt

SAP Ariba Commerce Automation is a cloud solution that enables electronic communication between buyers and suppliers through the SAP Ariba Network – the world´s largest online trading network.

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The cloud service enables electronic exchange of procurement documents between trading partners with the automatization of the Procure-to-Pay process:

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• sending a material purchase order to the supplier,
• sending a service purchase order to the supplier,
• purchase order confirmation by the supplier,
• shipment notice to the buyer,
• receipt notification of the buyer,
• sending an invoice,
• status update of an invoice,
• remittance advice,
• request for quote,
• supplier bid.

SAP ARIBA COMMERCE AUTOMATION 

Q & A

Deepika Hirematt

Thank you

Deepika Hirematt