Content Is King

So your organization has transformed a paper-based, zero-control system to the latest, fresh-off-the-shelf Ariba Procurement platform.

You finished ahead of schedule and managed not to incite a revolt amongst your stakeholders. And now you have a fully “live” system. You should be on “Cloud” Nine!

However, a dark cloud is looming on the horizon – ADOPTION! In order to fully realize your return on investment, your organization must continue to increase adoption across all spend categories. The math is simple: Adoption = spend throughput = savings.

Enabling Spend: A Daunting Task

Enabling spend can be a daunting task. Each spend category may consist of several commodities, and each commodity may have features and attributes that require several enablement approaches. Hopefully, you took advantage of Ariba Value Enablement Services to create a strong Category Enablement Plan.

But, fear not! If you haven’t, all is not lost. As a rule of thumb, commodities usually fall into four major purchasing processes: Catalog, Non-Catalog, Purchase Order Against a Contract (POAC), and Invoicing Against a Contract (IAC).

Catalog: Streamlined Purchases for Known Goods

This type of purchasing process is great for buying known goods and services. At a minimum, the price and supplier are known. Catalogs allow users to buy only what the organization allows them to buy, but still provides choice. By working with your supplier and category managers, you can easily contract and define these items and aggregate them into catalogs.

Additionally, through the use of the Ariba Commerce Cloud, you can push catalog creation and maintenance to your suppliers while maintaining approval authority and control. As you move along your enablement journey, you should see an increase in catalog purchases and a decrease in non-catalog purchases.

Examples of catalog purchases: Office supplies, IT equipment, copier and fax machines—any consumables where both the price and supplier(s) are known.

Non-Catalog: The “Fail-Safe” Purchasing Process

The non-catalog purchasing process is a safety net when it’s difficult to get 100% of your known goods and services into catalogs. Your stakeholders still need a way to buy what they require. Instead of reverting to old processes, Ariba’s non-catalog function allows authorized users to request items and route those requests to a professional buyer for review. This enables greater oversight while still capturing spend within your procurement platform.

Over time, non-catalog spend should decrease as catalog purchasing grows.

Purchase Order Against a Contract (POAC): Enhanced Control

Even with catalogs and a functioning non-catalog process, you may want more control. POAC allows you to place stricter limits on items and suppliers. By linking catalogs, categories, or suppliers to contracts, you can control maximum quantities, spending limits, and apply dynamic discounting across your spending profile.

When goods or services are added to a purchase order, Ariba checks them against the contract’s terms and applies these controls automatically.

Invoicing Against a Contract (IAC): Flexibility with Control

Around 60 to 70% of organizational spend is related to professional services such as consulting, facilities maintenance, legal services, and security. Previously, companies issued blanket POs for this type of spend, an inefficient and ineffective process.

With IAC, you can set up contracts with clear terms for pricing, delivery, and maximum invoice amounts. Suppliers invoice through the Ariba Network, and any items outside the contract trigger an invoice exception. Clean invoices can be processed with zero human intervention, speeding up transaction times and reducing manual work for your A/P team.

Moving Toward Best-in-Class Spend Adoption

While there may be exceptions to each of these process groups, this framework provides a solid starting point for moving from weak adoption to industry-leading spend adoption. By continuously increasing adoption and spend throughput, you will set your organization on a path to achieve best-in-class procurement efficiency.