SAP ARIBA

Most of the buyers are worried about the suppliers’ ranking in case an audit is going on in their company. Searching for appropriate partners at the time of negotiating contracts and then segmenting them is the major task of the buyer.

The basic problem to category management is the different approach in different organizations. Every organization calls material groups with a similar or same function in a waythat suits their business profile. When a company declares itself for the manufacturer of a particular materialfor a given niche application, then it’s easy to search the internet. And on the other hand, if a material is a covering material for the supplier and the manufacturer, then it is difficult to find an alternative.

How to make smart and safe decisions while choosing a supplier?

Some buyers think that the most challenging part is completed when the classification of goods is done because the only job left is to search the category or name on the web browser, and you are offered with several proposals from sellers. But in reality, it is difficult to choose a trustworthy seller out of the lot.

With a strategic approach in purchasing, companies use supplier segmentation for given assortment groups, like optimization of electronic catalogues, auction, seller base and framework agreements with the particular suppliers. Companies should consider expansion with foreign partners for more effective creation of strategy. Suppliers should be segmented on the basis of innovation and technology apart from finding the cheapest sources.

For a comprehensive risk profile of seller, companies should employ SAP Ariba Risk Management solution so that effective strategies and decisions can be made. This tool monitors events that affect supply chain continuity, natural disasters disrupting supply, fraud, corruption and political situation of the country where the supplier is from. It also helps in companies’ involvement in environmental and social issues and verifies companies’ reputation.

Why SAP Ariba Risk Management is required for achieving procurement goals?

Earlier, companies had to collect delivery data and turnover from one system, data related to complaints from another system, gather supplier ratings from files which are manually managed, and send emails to respective representatives from other department or regions demanding feedback. But after the easy access to supplier profile and clear graphical representation made the situation more ideal to work.

For making more secure and smarter decisions before conducting a transaction, SAP Ariba Supplier Risk Management support the purchasing professionals. The main idea is that the buyers to be well informed so that they can make strategic decisions without disrupting the supply chain, prevent the loss of reputation and financial damage possibility. SAP Ariba also ensures that the information from suppliers’ end is highly reliable and up-to-date. This solution is a market-leading concept to evaluate supplier risk amid customized views. Segmentation on the basis of exposure to risk is done with the help of this tool. Long term relationships are built with the partners by gathering full insight into each supplier and making decisions accordingly.

SAP Ariba Supplier Risk, with the help of external data providers, provide the complete picture of risk possible. One of the famous companies providing commercial data is Dun & Bradstreet. It is an American business intelligence company responsible for the creation of commercial reports. It assigns DUNS numbers to confirm business activity and registration. In data analysis, EcoVadis has collaborated with SAP Ariba Supplier Risk to provide risk, sustainability and performance assessments all over the global supply chains. So, with this, SAP Ariba’s clients have the opportunity for evaluating suppliers and verifying that they are in par with sustainability requirements in variables of social and environmental risks before deciding to begin procurement projects.

Major benefits of SAP Ariba Supplier Risk Solution

• It providesthe supplier’s comprehensive risk profile.
• It allows access to around 600,000 data sources to monitor environmental, regulatory, social, legal and operational risks.
• Based on a large data, flexible risk management solution is provided.
• It provides a self-service portal to work with suppliers for accessing and reducing risks.
• Additional subscriptions are provided under this platform from external content providers to monitor in areas like compliance, financial risk and forced labor.

This integration gives consistency in the process of purchasing and facilitates in the achievement of brand protection, sustainability, customer loyalty, growth, and investor trust. Administrative work can be reduced to 80% by automating and standardizing purchasing process. Ariba network access allows companies in increasing securityand gaining new business opportunities.

This tool is designed for medium and large-sized companies. Thousands of companies around the globe use this tool whether they have a SAP system or they do not have till date.

Costs associated with employing SAP Ariba

Each implementation will be different, which depends upon the company’s size, revenues, number of documents and actual expenses. A standard implementation which includes important modules required to improve procurement processes is completed in 14-16 weeks. The scope of work is the major factor deciding the cost, although SAP Ariba with the savings generated, allows return on investment in 18 months after the process of implementation making it an efficient tool to employ.

Conclusion–

Once a supplier is found that meets the company’s expectations, the final contract is signed after negotiation. The buyer should be very well prepared for the talks with the suppliers. With the help of SAP Ariba Risk package, you can digitally transform the process of procurement. Convenience and automation are the key benefits that come with this package. Companies can easily access 600,000 public and private sources such as information sources, crises management systems, government data and so on. Companies can easily understand their supply base with the information provided by integrating SAP ERP, Ariba network and SAP Ariba Procurement. Effective and efficient due diligence is engaged with an accurate measurement of risk exposure levels. So, to streamline the procurement process and properly make decisions regarding purchasing, SAP Ariba Risk package is the ultimate solution to consider.