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29 January 2019
Over the past few months, SAP Ariba have actively shared a number of procurement technology and infrastructure roadmap elements with clients, prospects, and partners. This includes focusing on, among other areas, the continued delivery and development on many (but not all) common products, platforms and application environments (e.g., cloud vs. on-premise) between the two companies. Eclectic consulting as an SAP implementor in Indonesia for SAP Ariba shared several specific areas of investment and development and application offerings, including leveraging SAP’s in-memory database, HANA, to power its own spend analytics application.
SAP Ariba is now using its Discovery tool to recommend suggested suppliers. According to SAP Ariba, this “Suppliers You May Like” capability “helps guide buyers to qualified suppliers based on a host of inputs, including buyer requirements, supplier capabilities and performance ratings, and how often other buyers on the network have awarded business to them.”
There are many use cases for this new capability, including what are sometimes referred to as spot-buy and tail-spend sourcing scenarios. For SAPAriba users, these are cases where an item (or series of items) may or may not be in a catalog (or on a punch out site), but regardless, the dollar volume is significant enough to warrant at least some competitive bidding rather than simply awarding a requisition to a supplier through an eProcurement purchase. SAP Ariba also announced that their new Spot Buy capabilities were integrated with their P2P and Discovery applications to enable front-line buyers to more easily drive competition in the context of a requisition (or to flip a “buy” over to a sourcing or category management resource) to blast an RFP out to additional suppliers on the network.
Such activity is certainly not a replacement for strategic sourcing, simply, such activities are likely to benefit significantly from added competition even if it is only a single round competitive bid without feedback given to the market. For companies looking to make the business case for this type of “tactical sourcing” with SAP Ariba P2P, Discovery, and the new Spot Buy integrated capability, Hackett data shows that the procurement ROI for tactical sourcing (defined by annual cost reduction as a percentage of sourced spend) is greater than 3.5X, compared with an ROI of 3.5X for traditional strategic sourcing activity. In other words, there’s untapped low-hanging sourcing fruit in them thar tactical sourcing/spot buy hills!
Eclectic Consulting a gold partner SAP implementor in Indonesia will continue to explore the latest from SAP/Ariba including the latest from SAP Ariba Spend Visibility (and related cleansing/classification services) and integration with SAP Spend Performance Management. Eclectic Consulting a gold partner SAP implementor in Indonesia will also look at the impact of the HANA in-memory database on spend analysis analytics performance.