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SAP Ariba brings predictive insight to procurement with new functions

SAP Ariba released seven procurement functions it says will bring real-time insight to supply chains and improve the user experience for purchasers.

SAP Ariba has unleashed a number of new services intended to improve its suite of procurement products.

SAP Ariba provides cloud-based procurement and supply chain services that allow buyers and suppliers to connect and do business on the global Ariba Network. The new services -- Guided Buying, Supplier Management, Supplier Risk, Direct Materials Sourcing, Supply Chain Finance, Cloud Integration Gateway and Extension Studio -- are intended to make the procurement process seamless, integrate it with other business processes and gain real-time insights into the supply chain, according to Alex Atzberger, president of SAP Ariba.

Working closely with customers and partners was the key to developing innovative products, Atzberger said.

"We had six or seven co-innovation customers working on the solutions, and I think this has changed the speed and the relevancy, and this only comes through that close co-innovation process," he said.

Supply chain insights gained

NTT DATA Corp., one of the co-innovation partners, used the opportunity to gain insights into its supply chain via the Ariba Network. The Tokyo-based company, which provides a wide range of IT services for a variety of industries, worked with SAP Ariba to build an application that allows its buyers connected on the Ariba Network to monitor global shipments in real time.

This capability is critical to managing supplier risk, according to Bhalchandra Bhosale, senior vice president of global SAP practice at NTT DATA.

"Increased regulation, globalization and changing competitive boundaries are redefining shipping and logistics as we know it, and in many cases, creating supply risk," Bhosale said in an email. "In leveraging SAP Ariba's Open Partner Ecosystem, NTT DATA can deliver an innovative solution through which supply chain organizations can minimize this risk and optimize their business outcomes."

This risk management was one of the key innovation areas for SAP Ariba, Atzberger said.

"The high interest in the supplier-risk solution has been a big area," he said. "We have been focusing on how you actively monitor risk -- the source of risk, the compliance and financial risk in your supplier base."

The whole is greater than the sum

SAP Ariba has been able to develop its network and take advantage of the SAP business network, more analytics and, increasingly, artificial intelligence and machine learning to make its technology more user-friendly and guide people through the procurement process, said Dana Gardner, president and principal analyst with Interarbor Solutions LLC in Gilford, N.H.

The result is "the ability to make the whole greater than the sum of the parts and bringing together many different facets of the business process across procurement, supply chain, integrating those and making them available through various interfaces [and] leveraging more cloud services and technological strengths on the back end," Gardner said. "A lot of these are the things that companies don't want to do themselves, particularly for business applications. They're looking for this to be something where the complexity has been engineered out for them, and that's why they want to go to SaaS [software as a service]; that's why they want a provider, rather than to be their own systems integrator. That's been a trend for a long time, and we're really starting to see the fruits of that."

Building intelligence into business functions is just one way Ariba helps users boost productivity, Gardner said.

The vendor also gives users the ability to get predictive insight into their supply chain risk equations, as well as personalized user interfaces, he said. "Each choice they make and each guided choice that they're given creates the next set of options for them, so it's a much more intuitive and customizable approach to business functions."

The market for these services is lucrative and attractive, however, and Gardner noted that SAP Ariba faces increasing competition, including SaaS providers like Tradeshift, Coupa and Amazon. The winners will be the ones who provide the best interfaces and intelligence for decision-making. But, in the end, users will be the ultimate winners.

"We're going to see a lot of competition and other approaches like an Amazon approach to B2B buying, which is becoming more prevalent, so may the best business network win," he said. "The good news is that, for buyers, it's never been a better time to be using applications for business. You're going to have choice and less lock-in, but you're going to be able to pick and choose based on that total equation of productivity and the greatest intelligence and lowest risk brought to your business processes."

Next Steps

SAP Ariba announces new innovations at Ariba Live user conference.

Here are some things to consider if you want to integrate SAP Ariba with SAP ECC.

SAP Ariba procurement software helps improve efficiency and lower costs.

Dig Deeper on SAP supplier relationship management software

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