Leverage SAP Ariba for Effective Supplier Management

⇨ Integrating P2P functions into supplier network solutions such as SAP Ariba can help procurement play a more prominent role in managing suppliers.

⇨ Many organizations struggle to enhance their SAP Ariba deployment as they lack the necessary resources.

⇨ With the help of customizations in SAP Ariba, organizations can optimize their supplier management needs.

The role of procurement has changed dramatically in recent years, and supply chain leaders must now strategically leverage this function, and more specifically the procure-to-pay (P2P) function within the procurement process, to effectively manage supplier relationships.

In the past, procurement was primarily focused on invoices and payments. Today it is about digitizing workflows and integrating different types of information (transactional, master data, logistics, etc.) to support an integrated P2P function capable of delivering greater efficiency and a better overall experience. Over a quarter of SAPinsider respondents from our SAP S/4HANA Finance and Central Finance Benchmark Research report identify P2P as a focus area of their finance and accounting innovation and investment strategy.

Driving Strategic Value with SAP Ariba

An integrated P2P function can help drive strategic value within supplier network solutions, such as SAP Ariba, enabling procurement to become a powerful tool for supplier management. Through SAP Ariba, supply chain leaders can gain visibility into the entire supply chain, from raw materials to finished products. This visibility allows them to identify risk and opportunity areas and make informed decisions that enable business agility amid disruptions while maintaining high-quality products at competitive prices.

Additional benefits of implementing SAP Ariba include:

• Proposals, contracts, and invoice payments are more efficient (and supply a source of record for auditing).
• Ability for a catalog of vendors to make things more efficient and to ensure the business is using approved (compliant) vendor sources and not going rogue.
• Improve cash flow through increased engagement with vendors, which reduces cycle time, provides ease of self-service for suppliers, and helps mitigate risk.
• There can be a two-way sync with SAP ERP which keeps both places updated and consistent.

However, optimizing SAP Ariba deployments to address current supplier management needs can be a challenge for many organizations, according to Wende Burgess, Associate Partner for CCP Global, a boutique SAP Ariba consulting company. “Supplier management is the most complex solution to prepare for from a deployment standpoint. It is also the most crucial because your suppliers are quite literally the backbone of your SAP Ariba solution.” This challenge compounds due to the growing uncertainty across global supply chains.

One way to address supply chain uncertainty is increased supplier collaboration and management. Yet, providing information on a timely basis with supply chain partners typically requires investments in automation to help enable continuous and accurate communication across your supplier network. For SAP organizations deploying ECC or S/4HANA, SAP Ariba’s Supply Chain Collaboration solution provides a path to standardize supplier collaboration and communication within the SAP landscape.

Need for SAP Ariba Customizations to Address Unique Business Needs

According to Wende Burgess, supply chain uncertainty continues to elevate unique challenges within supplier networks, requiring many organizations to customize SAP Ariba systems to satisfy new business needs. “There is no ‘one-size-fits-all’ approach to implementing an SAP Ariba system. The best approach is understanding what information your unique company in your specific industry needs to gather before your SAP Ariba consulting team formally starts the project.”

The current business environment is a significant catalyst for organizations to modernize supplier management functions away from manual procurement and P2P operations and toward more integrated and efficient ones. The ability to automate purchasing, invoicing, and payment approval, allows organizations to strategically leverage procurement, thus enabling supply chain leaders to mitigate supplier frustrations better and ensure business resiliency.

What Does This mean for SAPinsiders?

Consider opportunities to automate procure-to-pay (P2P) processes to help enable supplier management. Lack of visibility into payment statuses and related supplier inquiries can create inefficiencies and cause delays in your procure-to-pay (P2P) process. Solutions that digitize and streamline P2P activities can help you overcome these challenges. By automating key processes and integrating with supplier networks, such as SAP Ariba, you can improve efficiency, reduce costs, and gain greater visibility into your spending. As a result, you will be able to manage your relationships with suppliers better and improve your overall financial performance.

Enhance product taxability by integrating SAP Ariba with Indirect Tax Management solutions. SAPinsider organizations are under constant pressure to minimize costs and improve efficiencies. The procurement process is no exception. Tax touches every part of the procurement process, and tax compliance can significantly burden businesses. A tax engine integrated with a procurement system can help minimize this burden, improve operations, and reduce audit risk.

Stay up to date on the latest updates to the SAP Ariba module. End users should stay informed of the latest changes to ensure that they can take full advantage of the new features in SAP Ariba. The updates typically include several bug fixes, performance enhancements, and new features. CCP Global provides additional insights on the latest updates from SAP for SAP Ariba end-users.