Recognize how critical it is for organizations to thoroughly analyze all available procurement solutions and research all procurement options. This article delves into this outstanding product as the answer that can best suit your organization’s procurement demands. SAP Ariba provides organizations seeking growth and profitability with a powerful solution for optimizing spending efficiently in procurement, supplier management, financial processes and related areas of procurement. Let’s dive in deeper to this topic as we examine its significance:
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What is SAP Ariba?
SAP Ariba is a cloud-based application suite designed to optimize spend management throughout the procurement lifecycle, seamlessly integrating with existing systems while providing an inclusive platform for buyers, suppliers, and stakeholders.
SAP Ariba is a user-friendly cloud-based procurement system that assists businesses in streamlining and automating their procurement processes. Businesses that use this application may interact with suppliers more simply, manage contracts more easily, and optimize procurement operations – a perfect combination for businesses of all sizes! SAP Ariba’s intuitive user interface features, such as built-in smart analytics capabilities, enable businesses to automate and optimize these procedures for higher efficiency and savings.
SAP Ariba is the most popular cloud-based procurement solution provider. In this blog, we will discuss the solution’s business requirements and key benefits. SAP Ariba is a cloud-based procurement and supply chain management platform designed to help organizations streamline and automate their procurement processes. It includes various modules and features designed to support various aspects of procurement and supply chain management.
SAP Ariba offers a powerful suite of solutions to help companies manage “spending” so that expenses fall faster than revenues in downtimes and grow more slowly than revenues in uptimes. Ariba Spend Management’s overall solutions remarkably improve the bottom-line results of a business’s expectations. It is now only selling the cloud version of the product in the market and calls it SAP Ariba On-Demand Suite of Applications.
This SaaS model allows for better availability, security, and release management. Customers using the On-Premise versions of Ariba going forward need to migrate to the cloud version.
It was founded in late 1996 by Steve Krach and six other 6 people on the idea of using the Internet to enable companies to improve the procurement process.
Ariba provides a “Spend Management Solution” that helps companies analyze and manage their corporate spending to achieve cost savings and business process efficiency. The Ariba solution on the backbone is the Ariba network, the world’s largest B2B Network.
In late 2012, SAP has acquired Ariba.
Why does SAP Ariba matter?
Buyers, suppliers, and stakeholders can all benefit from its single platform, which it creates by integrating with existing systems effortlessly. Discover the significance of SAP Ariba
- Cost Reduction: SAP Ariba can help organizations save costs related to procurement processes by streamlining sourcing, purchasing and supplier management activities.
- Visibility and Control: With real-time visibility into spending patterns, supplier performance, contract compliance issues and decision making capabilities for informed decision making, this solution facilitates real time.
- Supplier Collaboration: SAP Ariba facilitates collaboration between buyers and suppliers, strengthening relationships while propelling them toward mutual success.
Key Benefits.
- One of the key advantages of using the Ariba solution is that it simplifies the procurement and sourcing processes with easy synchronization to SAP SRM and other ERP software.
- It enhances supplier, buyers and user experiences by bringing in a digital transformation to the supply chain process.
- With the cloud-based solution, it can be accessed from different locations. It requires a very low initial capital cost for setting up the solution
- With this cloud-based solution, there is an easy setup of key procurement processes: procure to pay (integration of purchase department with the accounts payable department), and procure to Order by maintaining shopping carts.
- There is an easy transfer of master data. Organization structure, suppliers, and GL data can be easily transferred to the Ariba solution using optimal integration.
- It enables the easy transfer of transactional data. Invoice details, goods receipts, and PO details can be easily transferred to the Ariba solution with optimum integration.
- We can use the integration toolkit to connect the ERP system with the Ariba solution.
Key Portfolios within SAP Ariba
High-level Process flow
High Level outlines integration steps / Process flow between SAP ERP and Ariba Solutions.
Payables Integration (19O)
Business Benefits:
- Pay with more flexible terms
- Use working capital better
- Reduce inquiries about payments from suppliers
- Increase productivity in the accounts payables department
Key Process Flows:
- Upon receiving supplier invoices in SAP S/4HANA Accounts Payable, automate negotiating new payment terms for early payment using SAP Ariba discounting capabilities
- Forward updated payment proposal to your suppliers on the Ariba Network
- Receive confirmation of new payment terms from your suppliers on the Ariba Network
- Start payment run
- Automatically send remittance advice to a supplier via Ariba Network
SAP Ariba Commerce Automation Integration (J82)
Business Benefits:
- Reduce transaction costs
- Speed up procurement processes
- Enforce compliance
- Reduce manual process steps and achieve 98% touch-less invoice processing
- Increase productivity of procurement and accounts payable staff
Key Process Flows:
- Approved purchase orders are sent electronically to the suppliers you interact with via the Ariba Network
- Automatically receive digital order confirmations from your suppliers
- Electronically process digital advance shipping notices sent by your suppliers in the Ariba Network into inbound deliveries in SAP S/4HANA
- Automatically send goods receipt notices to suppliers in the Ariba Network
- Electronically receive invoices from suppliers in the Ariba Network
- Digitally update suppliers in the Ariba Network on invoice status updates
SAP Ariba Sourcing Integration (1A0)
Business Benefits:
- Enjoy fast time-to-value and low total-cost-of-ownership with cloud-based delivery
- Improve project management and compliance with advanced, automated workflow and approval-routing
- Integrate your SAP S/4HANA to SAP Ariba Sourcing by simple activation
- Simplify and accelerate your configuration by taking advantage of built-in SAP Best Practices
- Get predictable results fast as these best practices guide you through the integration process step-by-step
Key Process Flows:
- As a purchaser, create a request for quotations (RFQ) for SAP S/4HANA purchase requisitions that do not automatically find a single source of supply
- Send the RFQ to the SAP Ariba Sourcing application; this triggers a sourcing request
- As sourcing manager in SAP Ariba Sourcing, access your worklist and convert sourcing requests into sourcing projects
- As sourcing manager, monitor sourcing projects that result in (reverse) auctions or requests for quotations, and provide these to suppliers on the Ariba Network. Monitor suppliers’ responses.
- As sourcing manager, award one or more bids in SAP Ariba Sourcing
- Awarded bids are automatically sent to SAP S/4HANA, where for awarded bids purchase orders or operational contracts are created.
SAP Ariba Sourcing Integration (2GW)
Business Benefits:
- Source your materials and simple services from millions of suppliers in the Ariba Network
- Automate repetitive process steps with integrated workflows
- Improve project management and compliance with advanced, automated approval-routing
- Integrate your SAP S/4HANA to SAP Ariba Sourcing by simple activation
- Simplify and accelerate your configuration by taking advantage of built-in SAP Best Practices
- Enjoy fast time-to-value and low total cost of ownership with cloud-based delivery
- Get predictable results fast as the best practices guide you through the integration process step by step
Key Process Flows:
- As a purchaser, create a request for quotations (RFQ) for SAP S/4HANA purchase reqs that do not automatically find a single source of supply
- Send the RFQ to the SAP Ariba Sourcing app; this triggers a sourcing request
- As sourcing manager in SAP Ariba Sourcing, access your worklist and convert sourcing requests into sourcing projects
- As sourcing manager, monitor sourcing projects that result in (reverse) auctions or requests for quotations and provide these to suppliers on the Ariba Network. Monitor suppliers’ responses.
- As sourcing manager, award one or more bids in SAP Ariba Sourcing
Awarded bids are automatically sent to SAP S/4HANA, where for awarded bids, purchase orders or contracts are created
SAP Ariba Guided Buying Integration (2NV):
Business Benefits:
- Increase employee performance with a simple guided user experience
- Apply procurement policies automatically through the guided process, enforcing compliance during the purchasing process, not afterward
- Use flexible configuration to allow the line-of-business-specific definition of forms, permissions, and system behavior at the field level and for workflows, so each persona in the process only needs to fill in their respective data, avoiding clerical errors and streamlining purchasing for each LOB
Key Process Flows:
- Access customized guided buying app and searches for items across catalogs, including partial items, forms, and suppliers in a single search box
- Get policy guidance as items are added to the shopping cart
- Perform budget checks in SAP S/4HANA Cloud before submitting the shopping cart
- Approve decisions as per the configured workflow
- Replicate approved shopping carts into SAP S/4HANA Cloud as purchase requisitions
- Automatically create purchase orders from those requisitions
- Receive and account for items in SAP S/4HANA Cloud with the Goods Receipt app
- Receive and post supplier invoices in SAP S/4HANA Cloud
- Update the SAP Ariba shopping cart with follow-on document record IDs for traceability
SAP Ariba Buying and Invoicing Integration (1ZM)
Business Benefits:
- Get a simple and elegant shopping experience that helps employees buy goods and services compliant with your procurement guidelines
- Experience optimized control and transparency of purchasing data (for example, commitment updates)
- Manage processes, budgets, approvals, and payments for operations anywhere in the world
- Integrate easily with SAP S/4HANA Cloud to improve the speed, usability, and performance of your procure-to-pay process
- Leverage the supplier community on SAP Ariba Network to reduce your costs and risks
- Connect and collaborate with your suppliers more efficiently
Key Process Flows:
- Select items from the punch-out catalog or simple forms and add them to your shopping cart
- Submit shopping cart for approval
- Create purchase requisition in SAP S/4HANA Cloud (Status: In Release)
- Confirm or reject the shopping cart as an approver
- Release purchase requisition (Status: Active)
- Create purchase order in SAP Ariba Buying and Invoicing
- Transfer purchase order to SAP S/4HANA Cloud
- Confirm goods receipt in SAP Ariba Buying and Invoicing
- Create supplier invoices in SAP Ariba Network
- Receive supplier invoice in SAP Ariba Buying and Invoicing
- Forward invoice to SAP S/4HANACloud for payment after comparison with goods receipt and purchase order in SAP Ariba Buying and Invoicing
SAP Ariba Quote Automation Integration for Procurement (32P)
Business Benefits:
- Reduce spending by reducing the cost of your purchases
- Increase price transparency with frequent digital quote requests
- Increase your purchaser’s productivity by automating the quote request process via Ariba Quote Automation
- Use your Ariba Network subscription for Quote Automation at no additional cost
- Implement this SAP S/4HANA scope item integration by following the SAP Activate methodology and SAP Best Practices, and reap benefits within days
Key Process Flows:
- Create a request for quotation (RFQ) of type Price Request from S/4HANA purchase requisition or from scratch
- Automatically send RFQ to suppliers on Ariba Discovery for submitting their quotes
- At submission deadline automatically receive supplier quotes in SAP S/4HANA
- Award supplier quotes in SAP S/4HANA automatically after a deadline you set
- Automatically create purchase orders from awarded quotes
- Automatically update purchasing info records from awarded quotes
SAP Ariba Purchase Order to Invoice Integration with Procurement (24Z)
Business Benefits:
- Reduce transaction costs
- Speed up procurement processes
- Enforce compliance
- Reduce manual process steps and achieve 98% touch-less invoice processing
- Increase productivity of procurement and accounts payable staff
Key Process Flows:
- Approved purchase orders are sent electronically to the suppliers you interact with via the Ariba Network
- Automatically receive digital order confirmations from your suppliers
- Electronically process digital advance shipping notices sent by your suppliers in the Ariba Network into goods receipts in SAP S/4HANA
- Automatically send goods receipts to suppliers in the Ariba Network
- Electronically receive invoices from suppliers in the Ariba Network
- Digitally update suppliers in the Ariba Network on invoice status updates
SAP IBP – Business Network Collaboration – Supplier Commit with Ariba (2P2)
Business Benefits:
- Share information with your business partners and react to changes in supply and demand quickly and efficiently
- Reduce inventory carrying cost by enhancing supplier visibility and interactivity while automating replenishment processes at a lower cost
- Reduce IT spend by minimizing the effort needed for the onboarding of new partners and connecting many suppliers with technology at a minimal cost
Key Process Flows:
- Copy Initial Stock and Unconstrained Forecast
- Generate Component Forecast
- Review & Release Component Forecast
- Review Forecast
- Publish Supplier Commits
- Check Alerts
- Analyze Supplier Committed Forecast
SAP Ariba Quote Automation Integration (1L2)
Business Benefits:
- Reduce spend by reducing the cost for your purchases
- Increase price transparency with frequent digital quote requests
- Increase your purchaser’s productivity by automating the quote request process via SAP Ariba Quote Automation
- Use your Ariba Network subscription for SAP Ariba Quote Automation at no additional cost
- Implement this SAP S/4HANA scope item integration by following the SAP Activate methodology and SAP Best Practices, and reap benefits within days
Key Process Flows:
- Create request for quotation (RFQ) of type Price Request from S/4HANA purchase requisition or from scratch
- Automatically send RFQ to suppliers on Ariba Discovery for submitting their quotes
- At submission deadline automatically receive supplier quotes in SAP S/4HANA
- Award supplier quotes in SAP S/4HANA automatically after a deadline you set
- Automatically create purchase orders in SAP S/4HANA from awarded quotes
- Automatically update purchasing info records in SAP S/4HANA from awarded quotes
Real-World Use Cases:
Here are two real world use cases of successfully implementing SAP Ariba.
- Coca-Cola uses SAP Ariba to manage its global procurement processes. By centralizing purchasing, Coca-Cola realizes cost savings, ensures compliance and collaborates effectively with suppliers.
- Vodafone utilizes SAP Ariba for procurement automation. The platform streamlines purchase orders, invoice reconciliation and payment processes to increase operational efficiency while strengthening supplier relationships.
Happy Learning ..!!
What are the costs of using Sap Ariba?
This is dependent on your company’s size and needs; contact Sap Ariba directly for a precise price.
Is it possible to integrate Sap Ariba with other systems?
Yes, SAP Ariba can be easily integrated with other systems.
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