I Making Procurement Strategic

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Making Procurement Strategic
How the Ariba Network Improves Efficiency and Reduces Costs
Gurminder Sandhu
Director, Advisory
PwC
I
n a global economy, finding ways to streamline and
functionality without depending on IT budgets and
integrate the procurement process is a top challenge
resources. The potential to discover new supply sources
for C-level and supply chain executives. With suppliers
and transact in real time with vendors opens up new
located all over the world, the increasing importance of
avenues for cost savings and process efficiency. This is
collaboration, and the trend toward specialization lead-
why solutions such as the Ariba Network are generating
ing to new supplier streams and product variety, the
heavy interest. PwC has worked with several organiza-
days of procurement professionals relying on spread-
tions that are looking to transform current processes
sheets and paper-based purchase orders are long gone.
or add capabilities through a hybrid approach. We help
Organizations are also under increasing pressure to
customers develop a roadmap for such a transformation
reduce costs and improve efficiency. Opportunities exist
with technology as the key enabler. The Ariba Network
to integrate procurement processes downstream for
and its suite of procurement applications provide an
greater visibility, but companies struggle to take that first
opportunity to just do that.
step for a variety of reasons. For starters, there is usually
An optimized supply base is another challenge that
a considerable on-premise system investment, creating a
organizations are facing today. With disparate, siloed pro-
reluctance to move to a new platform. Second, procure-
cesses, companies are sometimes buying the same product
ment has traditionally been more operational than strate-
from different vendors. The Ariba Network allows compa-
gic. Third, users are comfortable working with their own
nies to consolidate spend, improve visibility, and increase
spreadsheets and methods of communication. Transition-
collaboration throughout its supply base, even shifting
ing to a state-of-the-art procurement platform is often
some operational day-to-day tasks onto the suppliers.
seen as a leap of faith for end users and decision makers
without a clear vision for how integration can transform
Everyone’s a Customer
procurement into a strategic business partner.
For the long-standing SAP customer, one of the advan-
A Path to Value
tages to leveraging the Ariba Network for procurement
is collaboration functionality. In a digital economy that
The clearest path to value is to create an integrated
values real-time collaboration, traditional business-
procurement suite that provides end-to-end visibility
to-business interactions are tilting toward more of a
that includes sourcing, spend analytics, contract man-
business-to-consumer model. So having access to a
agement, and downstream transaction management. A
nearly unlimited number of vendors, and being able to
cloud-based business-to-business procurement network
automate interactions with them, is an advantage.
such as the Ariba Network may be a logical choice for
Ariba’s integration with SAP systems provides the
organizations that are looking to reduce procurement
same sort of collaboration internally, as procurement
costs and manage transactional spend. Traditional
now has the flexibility to link with SAP ERP Financials,
on-premise procurement implementations are labor-
for example, providing additional transparency and
intensive and may take a long time to realize return
another outlet for procurement to become a strategic
on investment (ROI). Procurement organizations have
arm of the business.
to depend on IT departments to continuously maintain and upgrade functionality. In the cloud, however,
A Helping Hand
implementation timelines are short and leading prac-
PwC helps customers fine-tune their vision to re-
tices are built in, which helps organizations realize ROI.
engineer procurement with the goal of saving time and
The cloud provides organizations an opportunity to
money. With the Ariba Network, companies can do just
keep pace with new practices, processes, and software
that, and make procurement strategic.
Reproduced from the Apr n May n Jun 2015 issue of SAPinsider with permission from its publisher, WIS Publishing | SAPinsiderOnline.com