Cloud-based sourcing and procurement software SAP Ariba has a number of benefits, including helping to automate...
and improve the buyer-seller relationship.
However, CIOs need to evaluate if the company is better off implementing SAP Ariba as a standalone procurement system or if it makes business sense to integrate it with SAP ERP Central Component, in the case that company is already using ECC. Evaluating the cost, time, effort and resources involved will be critical. As one consideration: In the integration approach, the data between SAP Ariba and SAP ECC flows in and out via the Process Integration tool, adding further integration costs.
It's important to note that the Materials Management (MM) component in ECC also handles procurement functions, but it does not offer the comprehensive and automated procurement options that SAP Ariba does. For example, with MM, there is often a need to contact suppliers to get quotes and manually enter such quotes. On the other hand, SAP Ariba offers time-saving features such as automatically alerting suppliers of new requirements from the buyer. Suppliers can then respond by submitting their quotes and delivery and payment terms.
Here's how the SAP Ariba integrates with SAP ECC:
Ariba Upstream Solutions Integration. The purchase requisition created in ECC, followed by the creation of the request for quotation, gets transferred to Ariba Sourcing via Process Integration. The remaining procurement steps, such as suppliers' quotes submissions and delivery and payment terms' comparison, takes place in Ariba Sourcing. When a procurement planner awards a supplier with an order, the data is transferred back to SAP ECC in the form of contracts or purchase orders.
Ariba Downstream Solution Integration. The supplier maintains information in Ariba such as confirming having received the purchase order and informing on advanced shipping notification. The goods receipt in Ariba triggers an automatic goods receipt in ECC.
Ariba Network Solutions Integration. Ariba Network is a central collaboration hub between buyers and suppliers and remains so until the buyer awards a purchase order to a selected supplier.
SAP Ariba not only integrates with SAP ECC for materials procurement, but also for services procurement. In services procurement, procurement personnel validate delivered service through a service entry sheet. The services vendor submits invoices and received payment for the services rendered.
CIOs will need to decide what's best for their company. However, it's important to note that implementing SAP Ariba as a standalone procurement solution is less complex and costly than integrating it with SAP ECC.
Primer on S/4HANA Sourcing and Procurement
Changing the rules of selecting procurement software
What you should know about manufacturing sourcing and procurement
Dig Deeper on SAP Ariba
Related Q&A from Jawad Akhtar
These nine key components of SAP MDG help ensure regulatory, legal, environmental and financial compliance of your master data and improve ... Continue Reading
Many SAP customers are taking a wait-and-see approach to the vendor's next-generation ERP business suite. One expert shares three reasons why. Continue Reading
The need for dedicated and completely integrated real estate management software is more important than ever as the drive for urbanization and ... Continue Reading
Have a question for an expert?
Please add a title for your question
Get answers from a TechTarget expert on whatever's puzzling you.