Strategic sourcing is the process of identifying, evaluating, and selecting suppliers for a company’s products or services. It is a critical function for any organization that wants to optimize its costs and improve its supply chain.
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SAP Ariba Sourcing: Overview
SAP Ariba Sourcing is a software-as-a-service (SaaS) solution that helps organizations to manage their strategic sourcing process. With SAP Ariba Sourcing businesses can discover qualified suppliers, speed up their sourcing cycles, and create the contracts for rapid, sustainable savings.
It provides a comprehensive suite of features that includes:
- Sourcing event management: This functionality allows organizations to plan and execute sourcing events, such as requests for proposals (RFPs) and auctions. It provides robust integration capabilities to third-party systems to exchange sourcing event information.
- Supplier discovery: This functionality helps organizations to identify and evaluate potential suppliers.
- Scoring and negotiation: This functionality helps organizations to evaluate supplier proposals and negotiate the best possible terms.
- Contract management: This functionality helps organizations to manage their contracts with suppliers.
- Spend visibility: This functionality helps organizations to track their spending and identify opportunities for savings.
Benefits of strategic sourcing
- Reduced costs: Strategic sourcing can help organizations to reduce their costs by identifying and negotiating better prices with suppliers.
- Improved efficiency: Strategic sourcing can help organizations to improve their efficiency by streamlining the procurement process.
- Increased compliance: Strategic sourcing can help organizations to comply with regulations and standards. The solution facilitates the entire procedure, starting from the publication on Tenders Electronic Daily (TED), through to the retrieval of procurement documents and the submission of expressions of interest by potential bidders within the European Union (EU).
- Improved relationships with suppliers: Strategic sourcing can help organizations to build strong relationships with their suppliers.
Stages of SAP Ariba Souring Process
The different stages of the SAP Ariba sourcing process are:
- Prioritize and plan for opportunities. This stage involves identifying opportunities to rationalize the supply base, negotiate lower pricing, or implement new requirements. Identified opportunities can then be prioritized and created within the software as new sourcing events or projects.
- Develop an informed sourcing strategy. This stage involves developing a strategic sourcing plan or process that enables the greatest potential impact on long-term business growth and profitability. Plans may include multiple deliverables and vary with the complexity of each project.
- Determine the right processes, activities, and tasks. This stage involves using category management functions to determine the right processes, activities, and tasks to use for a particular sourcing project given the category, geography, and business units involved.
- Source and select suppliers. This stage involves using multiple ways to quickly discover and select the best suppliers, and doing so in a way that aligns with your sourcing strategy.
- Track and report savings and spend. This stage involves using a savings pipeline and tracking functionality to define your sourcing program activities, measure your success by tracking and reporting savings and spend, and gain insight into what’s working and what’s not.
- Take advantage of best-practices center services. This stage involves using best-practices center services to obtain proactive project pipeline support, sourcing events reviews, coaching, and guidance on best practices for training users and administrators and sustaining user adoption.
SAP Ariba Sourcing offers several reporting and analytics features to help organizations gain insights into their procurement activities. Reporting capabilities include:
- Reporting on individual events during event monitoring
- Cross-event reporting
- RFI reporting
- Supplier activity reporting
- Audit log reporting
- Project and project task reporting
- Custom analytical reporting, including reporting across multiple fact tables
Keep in mind that the platform may have evolved and introduced new features since then, so it’s a good idea to consult the latest documentation or contact SAP Ariba directly for the most up-to-date information.
Below are the integration capabilities of SAP Ariba Sourcing with third-party systems:
- Enables integration via web services and file-over-HTTPS transfers.
- Allows event owners to create and update events using item masters.
- Facilitates the exchange of data between SAP Ariba Sourcing and third-party systems.
- Automates updates for department, commodity, user, and exchange rate master data.
- Offers single sign-on for both the SAP Ariba solution and third-party systems.
- Supports document copying to and from third-party document systems.
- Permits URL documents to link to objects within third-party systems.
- Allows users to create hyperlinks (“webjumpers”) between documents and projects in the solution and third-party systems.
- Provides standard integration capabilities with SAP ECC or SAP S/4HANA systems.
- Offers customers the ability to configure their own third-party integrations and access optional third-party integration services from SAP Ariba.
SAP Ariba Start Sourcing
SAP Ariba Start Sourcing is a web-based RFX management solution that is targeted towards small and medium sized companies to quickly execute simple sourcing projects. It also provided access to more that 2 million suppliers on SAP Ariba Network, the world’s largest online marketplace.
Impact on Modern Procurement
SAP Ariba Sourcing’s impact on modern procurement is profound. It aligns with the digital transformation wave that organizations are embracing to stay competitive. By automating manual tasks, reducing human errors, and providing real-time insights, the solution empowers procurement professionals to be strategic partners in the organization’s success.
Additionally, SAP Ariba Sourcing contributes to sustainability efforts. The platform allows businesses to assess suppliers’ environmental and social practices, promoting responsible sourcing and contributing to a more sustainable supply chain.
Strategic sourcing is a critical function for any organization that wants to optimize its costs and improve its supply chain. SAP Ariba Sourcing is a comprehensive SaaS solution that can help organizations to manage their strategic sourcing process and achieve these goals.