SAP Ariba also affordable for midsize companies

The degree of electronic connection between suppliers and ordering companies in Germany is between five and 50 percent. This is what the market researchers at Lünendonk found in a survey that paints a typical picture of medium-sized companies in particular.

In concrete terms, this means that many SMEs still seem to be stuck halfway on the road to Purchasing 4.0. Apparently, they cannot and do not want to afford the costly e-procurement solutions and EDI connections to which most automation approaches have been limited to date.

Instead, they often still process their orders and invoices manually - by phone, e-mail or fax. However, these communication channels are slow and error-prone, and much of the necessary information is not available at the right time.

A new SAP study shows that there is no way around the automation of purchasing. According to the study, 73 percent of the purchasing, finance and supply chain managers surveyed from numerous international companies agree that the digital transformation offers great opportunities to improve purchasing.

By standardizing and automating processes, purchasing has more time for conceptual and strategic tasks. This enables companies to respond much more effectively to customers and markets and to anticipate new developments.

Cloud solutions increasingly popular

"With cloud solutions like SAP Ariba becoming increasingly popular, companies can already take advantage of electronic supplier connectivity options that are faster, easier and less expensive than on-premise systems"

explains Sebastian Asshauer, who specializes in Ariba-based procurement solutions as an associate partner at the IT consulting firm Apsolut.

Ariba is the global leader in cloud purchasing solutions, connecting buyers and suppliers from more than 2.5 million companies and 190 countries - with $1.25 billion in trade volume.

Ariba provides a broad range of functions for operational and strategic purchasing processes. Added to this is cash management for managing procurement processes, controlling expenditures, implementing potential savings and establishing a stable supply chain.

In addition, access to thousands of supply sources opens up the possibility for companies to achieve the best price-performance ratio in each case. For suppliers, SAP Ariba provides a platform to expand their global customer base and simplify sales cycles.

Global leading trading platform

Since SAP acquired the cloud specialist Ariba in 2012, larger companies in particular have opted to use the global trading platform. They have integrated SAP Ariba's cloud solutions into their existing SAP ERP or SAP SRM (SAP Supplier Relationship Management) systems via preconfigured interfaces.

These hybrid cloud scenarios offer them the advantage of protecting their existing investments. At the same time, processes can be outsourced to the cloud and standardized using best-practice solutions that are not part of purchasing's core competencies.

Most SMEs, however, are still skeptical about using SAP Ariba because they shy away from the time and expense involved in an implementation project. This can now change:

A customized and packaged SAP Ariba solution is now available for upper midsize companies. This preconfigured product was launched by SAP together with the consulting firm Apsolut, which specializes in procurement processes, as part of a midmarket initiative.

Since it uses certain core functions from the cloud-based Ariba full version, licensing and pricing are also affordable for SMEs. The advantage is the short implementation time of a few weeks and manageable project costs.

Email-based procure-to-pay

The preconfigured SAP Ariba purchasing solutions provide best-practice workflows, functions, and form templates that enable midsize companies to handle procure-to-pay processes as email-based procedures with suppliers: from purchase orders to goods receipt to invoicing.

As a result, purchasing processes can be handled faster and more cost-effectively, for example, because there are no paper-based invoices and no procurement transactions are bypassed by Purchasing, keyword: "maverick buying".

This also enables medium-sized companies to improve compliance and check whether the agreed conditions are adhered to in all order processes. The target group for the preconfigured SAP Ariba purchasing solutions are companies with an annual purchasing volume of around 50 million euros.

Since suppliers can use the SAP Ariba midmarket solutions for the most part free of charge, another hurdle on the path to Purchasing 4.0 can be removed. According to the Lünendonk study mentioned at the beginning, one important reason for the low level of networking with ordering companies is that "many suppliers seem to be overwhelmed by technological solutions and do not want to afford them financially.

Sebastian Asshauer from Apsolut advises SMEs to take an IT consulting partner on board for an SAP Ariba project who combines in-depth purchasing process knowledge with SAP and SAP Ariba knowledge.

"This partner can also handle supplier communications and catalog management if needed"

Asshauer points out another way to relieve purchasing of routine tasks. Professional external support is also useful if the preconfigured "Basic Sourcing" solution from SAP Ariba is to be supplemented with functions from the full version.