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Competitive Sourcing in Procurement

By Procurement No Comments

Effective sourcing in procurement is no longer a luxury—it’s a necessity.

For finance and procurement executives, understanding the intricacies of sourcing is crucial in ensuring a stable supply chain, mitigating risks, and ultimately achieving a competitive edge.

But what exactly is sourcing in procurement, and how does it unlock value for businesses?

Understanding Sourcing in Procurement

Sourcing is the process of finding the most suitable suppliers of goods and services for a company. It’s about balancing cost, profit margins, and competitiveness. The right supplier must offer a good enough price so that the acquiring business can make a profit margin by trading or using the product in their production process, all while considering the actions of competitors.

Although often used interchangeably, sourcing and procurement are distinct but related concepts. Sourcing involves finding, vetting, and onboarding suppliers, whereas procurement deals with the steady flow of goods through the supply chain.

The Importance of a Sourcing Strategy

In order to attain a stable supply chain, it’s important to develop a proper sourcing strategy. A sourcing strategy serves several purposes:

  1. Consolidating purchasing power: A strategic approach to sourcing allows a business to negotiate for lower unit prices through bulk purchases. This can result in higher profit margins or lower selling prices, thereby increasing the competitiveness of a company’s products.
  2. Risk mitigation: By conducting research on prospective suppliers, a company can avoid suppliers who are not a strategic fit, perhaps in terms of capacity, culture, or regulatory compliance. This can protect the company from possible disruptions arising from a supplier’s non-performance.
  3. Scouring the market for opportunities: Strategic sourcing is an ongoing process of searching the market for new opportunities. New suppliers with superior product quality, more competitive prices, or even new production technology may emerge. The role of the sourcing team is to establish contact, gather intelligence, and lay the groundwork for future contracts, helping the business stay competitive in the long term.

The Sourcing Process: A Step-by-Step Guide

The sourcing process can be broken down into seven key steps:

  1. Analysis of Internal Needs: This involves determining the goods and services the company needs to acquire, as well as how much of each item is required based on past requirements and activity growth projections.
  2. Researching the Market: The organization should research the market to find potential suppliers and their offerings. This includes considering logistical costs and the risks that arise from working with each of them.
  3. Developing the Sourcing Strategy: The company comes up with a method of determining which supplier to work with, ensuring both reasonable costs and supply chain stability.
  4. Requests for Proposals and Quotes: Once potential suppliers have been identified, the company will invite them to send in their bids to supply goods or deliver a service. These proposals need to be detailed enough for the sourcing team to assess the supplier’s capacity to deliver.
  5. Negotiating Contracts: After receiving proposals, the company will shortlist suppliers they want to work with based on an objective criterion. This often involves negotiations for adjustment of certain terms.
  6. Onboarding and Integration of the Suppliers: Once a contract is signed, the supplier undergoes a formal onboarding process, which involves setting up communication lines.
  7. Assessment of Results: Sourcing is an ongoing process, and for current suppliers, the company has to monitor their performance against predetermined standards continually. This is a critical part of supplier relationship management.

Sourcing Strategies to Consider

There are several types of sourcing strategies, including near-sourcing, insourcing, global sourcing, sub-contracting, captive service operations, manufacturing, vertical integration, and joint ventures. Each comes with its own set of benefits and challenges.

For instance, near-sourcing can save on cost and time in transportation but may require a higher initial investment. Conversely, offshoring can offer cost savings but often incurs additional time and costs in transportation.

The Power of Technology in Sourcing

The use of technology can help streamline sourcing activities. From gathering information about suppliers and sending requests for proposals to performance benchmarking and assessment, digital tools have revolutionized the sourcing and procurement process.

According to a Gartner survey, 85% of businesses have already implemented, or plan to implement, digital procurement solutions in the next two years.

 

With a proper understanding of sourcing in procurement and the use of strategic sourcing practices, finance and procurement executives can unlock significant value for their organizations.

By adopting efficient sourcing strategies and leveraging the power of technology, businesses can streamline their procurement processes, reduce costs, increase competitiveness, and ultimately drive growth.

 

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Contract Management Software Boosts Quick Wins for Procurement Teams

By Procurement No Comments

Contracts are the heart and soul of procurement operations. Even a few outdated processes can slow down your team and impact supplier relationships. A modern contract management system, however, can eliminate many long-standing painpoints, save time, and even enhance communications with suppliers in ways that may lead to greater trust and better deals. The following are just a few reasons that robust contract management is a big win for your procurement team:

Easily Search Using Keywords

Do you know where all your contracts are? Do you know which suppliers provide which items without having to go on a wild goose chase? A good contract management system helps centralize your contracts in an indexed database so you can easily search for whatever contract information you need, even on the go.

Blaze Through Contract Processes With Templates

Most procurement teams send a lot of very similar contracts that go on to follow very similar processes. Instead of starting over from scratch every time or using makeshift methods (like the “find” function) can result in errors. Contract management based on SAP Ariba enables the use of templates to manage contract cycles that behave alike. By using templates, your team can ensure that all changes relevant to the supplier at hand have been made accurately and consistently across the board, more effectively and efficiently than other, outdated methods. Even if entire contract templates don’t sound suited to your business, SAP Ariba can handle a full clause library so your team can pick and choose as needed.

Templates help ensure agreement terms are in line with your company’s legal advice from the start, speeding up contract creation and completion to unprecedented speeds. This doesn’t mean you’re locked in, though. SAP Ariba-based contract management also allows for non-standard agreements which require closer review. 

Information Dashboards and Notifications

When one of these nonstandard agreements comes through, all relevant parties can receive a notification to review the requested changes. This helps eliminate minor changes that can turn into big risks that might otherwise go unnoticed without a templated system. This helps ensure a healthy start for buyer and supplier alike. 

Other information dashboards can present important info in a quick, digestible, easy-to-under format. Find data on all of your contracts like contract duration, bids, and upcoming important dates.

Alerts for impending contract renewal dates can offer teams enough time to re-evaluate each supplier and research alternatives before the renewal date instead of being blindsided when the renewal date has come and passed. This way, your team can enter negotiations well prepared as well as save everyone time in the process. 

Manage Compliance And Performance

Including managing compliance for nonstandard contracts and mitigating many of the associated risks, a good contract management system can manage both internal and external compliance concerns. Whether compliance from a regulatory body or an internal expectation of performance and quality, SAP Ariba can ensure that the entire procurement process is visible and everyone involved is compliant to all relevant standards so any issues can be dealt with early, not once they’ve already caused a problem.

Esignatures For Better Speed and Accuracy

Pens are a thing of the past for procurement contracts. Esignatures bring a lot of benefits to the table for procurement teams. Not only is it much, much faster for everyone to sign online than to fax or snail-mail back and forth, it’s also safer (in Covid-19 terms and compliance terms!). Esignature software like DocuSign which is the platform of choice for SAP Ariba users walk suppliers through every box that requires a signature or initial to ensure that nothing is missed in the signing process. Esigning software can also send automated reminders to clients to ask them to please sign the contract, saving your procurement team a lot of time, leg-work, and chasing. 

Nurture Supplier Relationships

All of the things combined help you nurture relationships with your clients. Your team will have more time and more energy to truly engage with suppliers to establish trust and rapport—two qualities of a great buyer-supplier relationship that can easily net your team better deals and priority communications. 

See Your Best-Value Suppliers At A Glance 

A proper contract management system is also able to pull all of the above together to show you which of your suppliers are the best value based on the data you have provided. Based on data, good procurement software can let you know which suppliers to focus on in order to make the greatest impact. That may mean deepening partnership opportunities with some suppliers but it may also call attention to low performers so changes can be made as soon as possible. 

If you want to see what we can do for you with our SAP Ariba-backed contract management system, reach out to us today. 

About Premikati

Premikati is a woman-owned business of procurement experts providing best-in-class software to maximize your company’s ROI.  

Our award-winning team has a 100% success rate implementing on-time and on-budget, due to our agility, leanness, operational experience, and the ability to tailor the transformation process from C-level to end user. (For more information, visit www.premikati.com)

5 Frustrations Procurement Professionals Will Understand

Five Frustrations Procurement Professionals Will Understand

By Procurement No Comments

Every profession comes with its frustrations, but procurement comes with its own very specific set. If you’ve been in the business for more than a minute, you’ve probably wanted to put your head through your desk on more than one occasion thanks to these special procurement nightmares.

Are You Ghosting Us?

We’ve all had it happen—after weeks of back and forth, we message a supplier an important question that will impact, well, everything else. And we wait. And wait. Days pass. Weeks. Centuries… Okay, maybe that’s a bit dramatic, but when we are relying on this one piece of feedback in particular, it can certainly feel this way. If you don’t have the answer to our question, let us know. It’s okay. Just please, please don’t put us through the special hell of ignoring us completely while we search for a solution or an answer.

How Big Are Your Shoes?

Did you promise us the moon? Well, buddy, you’ve got big shoes to fill. Unfortunately, lots of other departments (cough, cough suppliers, marketers, we’re looking at you) have their toes in their arch supports. It’s frustrating when the people we rely on to fulfill our job duties overpromise and underdeliver. It leaves us backed up and with a whole lot of explaining to do.

T Minus 10 Minutes

We get it—sometimes genius strikes at the midnight hour (and often when we are furthest away from pad and paper), but changing plans mega late in the game is really difficult in procurement. If we’ve spent months planning for everything you need to execute your brilliant plan, changing everything last minute makes us shudder. Oftentimes, it simply cannot be done on timescale that suits everyone, and we’re the ones who end up taking the flak. Give us plans and give us time and we will give you the world, though.

The Ol’ Switcheroo

We’re planners. Have we mentioned that enough? We like plans. More importantly, we like sticking to plans. So, marketers and sales folks, believe us when we say that we are looking for this one particular item, especially if we say that’s all we’re looking for. Extra especially if we’ve already said it once. Give it up on the upsell and the cross-promotion, and we’ll thank you for it. Respect our already limited time and we’ll pay it back in spades with loyalty and not-too-many emails. At least the former, as long as you keep your prices reasonable and your delivery on time.

Dripping in Gold

Speaking of upsells, do we look like we’re made of money? We can’t break the bank on every new request, every outlandish marketing idea, every new and ingenius product idea. We have to save for a rainy day and prioritize our cash flow toward the best and most efficient option. You can stop calling us names—we’re not literally always looking for the cheapest option, even if it seems that way sometimes. We’re not trying to make your life harder. We’re trying to make our dollars take us as far as we can and sometimes that means saying things like, “No, I get that it’s a more ergonomic option, but we cannot approve another (sigh) standing desk at this time.”

Did this list make you want to cry into your keyboard? You can find relief at the Premikati Marketplace where procurement is easy (and way less frustrating).

top 3 procurement strategies for SMBs

Top Three Procurement Strategies for SMBs

By Procurement No Comments

For SMBs, procurement can be the largest area of spending, often representing 50 percent of sales revenue. For companies looking to send value to the bottom line rather than take it away, optimizing the procurement workflow can help.

In many cases, SMBs tend to focus more on overall operations rather than more specific processes. However, targeting areas like procurement for process improvement can help accomplish goals that go beyond dollars and cents – it can also improve productivity throughout the organization, leading to greater efficiency from end-to-end.

Build bottom-line value with these procurement strategies

To help you chart a new, more profitable course forward, here are our top strategies in procurement for SMBs:

1.  Choose your supplier partnerships more strategically

If you have several buyers who tend to purchase from a range of different vendors, think about consolidating that spending into a smaller pool. Purchasing from fewer suppliers will help to streamline resources from many angles as it will reduce time you spend on sourcing and help you avoid excessive delivery fees.

Additionally, the more buying power you have with a specific vendor, the better the relationship may become over time, and it may be possible to negotiate bulk discounts based on the volume of business you do with them – a mutually beneficial situation that you could work to your advantage.

2.  Optimize procurement processes

Within smaller business operations, there is often less attention paid to purchasing from department to department. There may not be dedicated personnel or a finance department to oversee PO’s, so purchasing is done ad hoc without much regard to the availability of funds, pacing, or cost of sale implications.

In the enterprise, these functions are consolidated, and often evaluated and substantiated by technology and data, providing buyers with oversight and the tools they need to make informed decisions. Without this valuable financial data, a company runs the risk of overextending themselves by over-purchasing or overspending on the items they need.

Implementing a system to govern and consolidate all spending decisions is critical to achieving this goal, but if done manually, with spreadsheets and through other methods, error does occur, and an inordinate amount of time is spent in managing the process. An appropriate technology solution should be applied, as it will provide immediate value, reduce error, and allow employees to focus on higher-value tasks.

3.  Apply the latest procurement technology and tools

Today, SMBs have the advantage of being able to access enterprise-grade procurement technology and tools, giving them the same financial and strategic advantages as major industry players.

Procurement technology has many advantages, including:

  • Cloud-based systems are easy to manage and always available, assuring real-time insight into procurement activities.
  • The analytics delivered by procurement technology provides stakeholders with the ability to make data-driven decisions and optimize costs, improve processes, and streamline reporting workflows.
  • An e-procurement strategy removes silos within the organization, enabling collaboration between departments and consolidating efforts, resulting in cost reduction and process improvement.
  • Automation delivers great value to SMBs as repetitive tasks are accomplished efficiently and accurately, eliminating errors and improving the quality and voracity of internal data. Many SMBs spend an inordinate amount of time backtracking to find mistakes and often overlook small errors that add up over time. Automating these baseline processes improves accuracy and allows employees to devote their time to advancing business goals.
  • Another great advantage to applying an e-procurement strategy is the ability to predict trends in spending. Analytics deliver a clear picture of spending patterns and help the organization prepare for what’s to come based on actual data rather than just conjecture and instinct. Companies can be better prepared for the future and will be able to provide leadership with more accurate projections on the road ahead.
  • E-procurement also enables better risk management as it reduces overspending, redundancy, and costly errors in administration.
  • Compliance, whether related to company policy or regulatory mandates, is easily managed with e-procurement. If this is a priority for your business, an e-procurement solution will support your needs.

Premikati Marketplace: Procurement Solutions for SMBs

Premikati Marketplace runs on the SAP Ariba™ Buying and Invoicing platform. Developed specifically with SMBs in mind, it provides a way for small-to-medium sized companies to take advantage of enterprise-grade procurement strategies that will help them grow and scale.

To learn more about what Premikati Marketplace can do for your organization, visit www.premikati.com/marketplace or call us directly to get started.

Top 6 Ways to Engage Sustainable Sourcing for SMBs

Top 6 Ways to Engage Sustainable Sourcing for SMBs

By Procurement No Comments

Summary: Sustainable sourcing has become a consumer and investor expectation which impacts businesses not only morally and ethically, but alters customer loyalty, price point, risk level, and more. Because SMBs make up the vast majority of global businesses, the combined global impact of ethical choices can alter the course of history as long as businesses take steps toward responsible procurement environmentally, socially, and economically.

Sustainable sourcing is at the forefront of planning efforts for many businesses as climate change and consumer expectations offer a clearer and clearer call to action. As SAP Ariba Live and the coordinating Sustainability Summitfast approach, businesses of all sizes prepare to learn how to further augment and optimize their approach to sustainability in the supply chain.

There are benefits to businesses outside of morality and ethics as it pertains to responsible procurement and sustainable sourcing.

On the financial front, sustainable product sales have risen nearly 20% since 2014 and sustainable fast-moving consumer goods (FMCG) have a CAGR of 3.5%, almost four times that of conventional products. Another point for the bottom line—Millennials and Gen Z are more inclined to buy sustainable and ethical products devoid of harmful chemicals and which support social responsibility, with 73% and 72% respectively willing to pay additional costs for products that meet these requirements, according to Nielsen. Additional customer loyalty and increased prices can make a major difference to an SMB’s growth. And it’s not just consumers who expect transparency and sustainability—investors are increasingly on the lookout for responsible practices within the companies they choose to support.

Government initiatives are another reason to pursue sustainable sourcing, because many places around the globe offer incentives for responsible action. Similarly, avoidance of legal trouble and hefty fines is a byproduct of ethical decision-making in the procurement process. Because many unsavory practices hide in complex supply chains, opting for transparent sourcing platforms can help SMBs avoid unexpected compliance issues.

SAP Ariba, through their Procure With a Purpose campaign, supports the full list of UN Sustainable Development Goals (SDGs) which include basic rights and expectations such as access to clean water and food, elimination of poverty, gender equality, education, and responsible consumption and production. In order to achieve these goals and many others along similar lines, SAP Ariba focuses on three pillars of sustainability: social, economic, and environmental—all of which can guide the process for SMBs who seek to practice sustainable sourcing.

Society

Social sustainability refers to human and workplace rights, while social ethicality often refers to supplier diversity and similar measures. According to the speaker at the 2019 Sustainability Summit, Givewith CEO Paul Polizzotto:

“Society is demanding businesses change the way they operate by acting more sustainably and with greater transparency – all while generating a positive impact on the world. There’s an incredible opportunity for procurement teams to amplify their organization’s impact, not only by prioritizing ethical suppliers butby sourcing from suppliers who add social impact sales incentives into these transactions to drive even greater change.”

  1. Transparency, not slavery

With more than 40 million slaves worldwide, it is important to expect transparency from all members of a supply chain, all the way to the original source. Transparency is the enemy of unsavory practices such as slave labor and is an important first step in any sustainable supply chain. SMBs can require risk assessments and reports on working conditions, even through trusted third parties, in order to reduce the chance that slave labor is part of any step in the creation of their products.

  1. Engage diversity

By working with historically underutilized businesses (HUBs) and minority-owned businesses, SMBs are able to opt for ethical business decisions that help the world economy as a whole.

Economy

Approximately 50% of the world’s population lives on less than $2 per day. By supporting sustainable practices in businesses who pay workers a living wage, SMBs can impact poverty worldwide.

  1. Support economic growth in underserved communities

By choosing procurement processes which support indigenous workers and other underserved communities, wealth is spread and business grows symbiotically in tandem with one another. Single origin products can help ensure fair exchange of funds for exports from indigenous regions, but this is only one method to engage this practice.

  1. Verify risk levels for fair labor practices

Because poverty is an issue that spans the globe, SMBs can use a risk management platform to help ensure they do not support forced labor or child labor and to verify that all workers receive a decent, sustainable, living wage for the time they put in—and that the hours expected of them are similarly sane. The Ariba Network and platforms built upon it such as the Premikati Marketplaceintegrate supplier risk management software to avoid pitfalls such as this.

Environment

We often hear of large enterprises which take on environmental issues. For example, L’Oreal and McDonalds have opted to nix deforestation from their commodity supply chains. Similarly, Danone—maker of Evian water—has been developing a new, more sustainable and recyclable makeup for plastic bottles to help eliminate the pollution crisis. However, SMBs can have a substantial impact on the environment by simply choosing to work only with sustainable suppliers.

  1. Cut out toxins

Choose suppliers who elect not to use toxic and ozone-depleting substances in order to reduce pollution as well as hazards to workers and even consumers. As demand wanes, suppliers will be forced to change their processes—and those who were ethical and responsible from the outset are rewarded.

  1. Say “no” to waste

In a world overrun by pollution on land and at sea, sustainability as it pertains to wasteis a must. Ways SMBs can apply this to their own sustainable procurement process include choosing suppliers who:

  • Limit unnecessary packaging materials
  • Create recyclable products
  • Utilize recycled products in the creation of their own products
  • Create reusable products
  • Offer products which can be repaired rather than thrown away
  • Use environmentally-friendly, renewable materials in production such as bamboo

Considering SMBs with less than 500 employees account for 99.7%of employers in the US, the power held by businesses of this size is formidable. By functioning in unison, SMBs have immense sway over the state of both business and the world we live in. It is through this majority power share that GPO platforms such as ourPremikati Marketplace—powered by SAP Ariba—offer a truly actionable opportunity for SMBs to engage sustainable sourcing practices and become stewards of our future, all the while saving time and money.

supplier diversity

Supplier Diversity: How it Improves Business, and How it Works

By Procurement No Comments

Supplier Diversity: How it Improves Business, and How it Works

Diverse spend is an ongoing goal for companies large and small alike. For government contractors and their subcontractors along the supply chain, the goal of supplier diversity can even stand as a requirement to doing business.

Exacerbating the search for diverse spend, suppliers often don’t even realize their potential to benefit from formal recognition of their diverse supplier qualities.

Supplier diversity can therefore feel like an onerous goal at times, imposed on supply chain professionals and business owners who already face manifold compliance requirements and boxes to check elsewhere.

Fortunately, in almost any industry, supplier diversity initiatives can be successful on both the buy and the supply sides with an all-encompassing approach that utilizes business intelligence, researches outside knowledge, and takes proactive measures. (You’ve already made a good first step coming to this page!)

The benefits of supplier diversity

Most large companies have been striving to increase supplier diversity for decades. But just what is a diverse supplier?

In the case of supplier diversity where the U.S. government is concerned, the OFCCP – Office of Federal Contract Compliance Programs – provides the following major small business subcontractor categories:

  • Disadvantaged
  • Woman-owned
  • Veteran-owned
  • Service-disabled veteran-owned
  • HUBZone (Small Business Administration-designated “Historically Underutilized Business Zones”)

With the U.S. federal government requiring those contracting in excess of $700,000 ($1.5 million in construction) on a deal to pursue subcontract according to certain percentages with the above small business categories, it becomes crucial for these businesses to know their supplier bases inside and out.

There are other categories outside of or overlapping with the above, too, such as foreign businesses and National Institute for the Blind (NIB) or National Institute of Speech and Hearing (NISH) affiliate businesses.

Supplier diversity’s benefits are not limited to satisfying government contracting requirements. Having achieved supplier diversity – either as a buyer, or as an entrepreneur who has attained diverse certification (more on that below) – one’s business becomes more attractive to outside companies looking to improve diverse spend overall.

Moreover, from a marketing perspective, the potentially unique approaches of diverse suppliers can bolster a company’s ability to navigate the U.S.’s increasingly diverse demographics.

Identifying diverse suppliers

For many corporations, supplier diversity is nothing new. To illustrate, CVM Solutions found in a 2017 report that 75% of supplier diversity programs have been in place for more than 3 years. In the same survey, however, only 25% of supplier diversity professionals rated their programs as “very effective,” signaling a gap between those who knowwhat supplier diversity is and those who achieveit.

Of acute relevance to small and medium-size companies is to know how to demonstrate supplier diversity. Luckily, doing so is a relatively simple affair thanks to the existence of Supplier Diversity Certification.

Major national-level certifying agencies include the National Minority Supplier Development Council (NMSDC), Women’s Business Enterprise National Council (WBENC), and the U.S. Department of Transportation DBE Program, and the SBA Woman-Owned Small Business (WOSB) Program. Other major certifications exist, with even the state of Ohio operating its own Disadvantaged Business Enterprise (DBE) certification program.

Knowing about certifications is only half the battle. Suppliers may not realize the business benefits of certification, and their customers may not think to ask. Procurement supplier business surveys should always ask in plain terms about suppliers’ knowledge of diverse supplier certification beforeestablishing whether they have any! This simple question can save lots of time, money, and calories for all parties involved.

For small and medium businesses especially, the art of sourcing diverse spend can still seem excessively time-consuming, cost-intensive, or just overwhelming to approach. Easy-to-use tools exist to streamline this process.

Integrating diverse suppliers

Dun & Bradstreet (DNB) is meanwhile known for its deep supplier sourcing database, and assigning a D-U-N-S identification number is free for all businesses required to register with the U.S. Federal government for contracts or grants.

New networks and databases are cropping up to meet the unique demands supply chain professionals face, like in supplier diversity. Premikati Marketplace, an SAP Partner-Packaged Solution, enables diverse supplier sourcing with ease.

SAP Ariba is a major software suite that supply chain professionals use to drive all sorts of business decisions.  Using SAP Ariba in a turnkey, in-browser navigation system, Premikati Marketplace connects suppliers (including diverse) with buyers. It is free for suppliers to set up, with no costs or fees to maintain.

With Premikati as a WBENC-certified woman-owned business, enhancing users’ supplier diversity connections is a key function of its Marketplace. New suppliers have the opportunity to connect with potential buyers, and potential buyers to new suppliers, thanks to the low barrier to entry design of the network.

From electronic requisition processing to supplier information queries, Premikati’s Marketplace solution is easily tailored to diverse supplier integration.

Every supply chain initiative poses unique opportunities and challenges, and supplier diversity efforts are no exception. For a more personal touch to your unique supply chain initiatives, contact Premikati’s experts for a real human’s ideas and insights on how you can improve supplier diversity and enhance other efficiencies in your company’s supply chain now.

About PREMIKATI

Founded in 2009, Premikati, Inc. is a WBENC certified woman-owned Supply Chain Business Process Outsourcing (BPO) firm, providing cost savings and financial, contractual and supplier risk mitigation services to purchasing organizations for mid and large enterprises while leveraging best-in-class purchasing processes and technology. Premikati has partnered with SAP and is one of only five companies globally to have been granted the most exclusive partnership level with SAP Aribaas a BPO Partner.

SAP Ariba SNAP! FAQs

SAP Ariba Snap Frequently Asked Questions

By Procurement No Comments

As one of only eight companies in North America that have the ability to implement SAP Ariba Snap solution that is targeted at mid-market companies, we at Premikati, Inc. have compiled a list of frequently asked questions and their answers to help you decide if your organization is ready to take the next steps into solving your procurement obstacles and meeting your business objectives.  


Overview and Key Differentiators:

What exactly is SAP Ariba Snap and how does it differ from standard SAP Ariba?

Snap is an implementation of SAP Ariba Buying and Invoicing and encompasses the critical elements of a procurement foundation at a minimum of complexity.

What is the process of implementation?

Premikati, Inc. is able to take your business live with SAP Ariba Snap in under 12 weeks. You will get best practices on Day 1 out-of-the-box which can be adjusted during implementation and over time.  In order to maximize the return on investment, we recommend that SAP Ariba’s Spot Buy marketplace be turned on immediately.  We want you to be transacting in 2 weeks or less!

(See more about the incredible SAP Ariba Spot Buy Marketplace!)

Supplier enablement of the initially targeted suppliers are performed by Premikati.  This is a critical aspect of the successful implementation and has been fully integrated into the implementation process.  We train your team so you can be self-sufficient as you add suppliers over time.


Spot Buy:

Does the SAP Ariba Spot Buy Marketplace come with SAP Ariba Snap?

Yes, Spot Buy is included and can be ready for transacting early in the implementation process.

One great thing about Spot Buy is that you can control content by commodity. For example, the administrator has the ability to toggle on and toggle off what content your users are allowed to see.  In addition, approval workflows and cost center information can be added to any purchase.  These are unique value props to Ariba Marketplace. You choose the content for your users, no matter the number or location – a feature that NO competitor has.

Do users in countries such as Brazil, Argentina, Mexico, UK, Germany, and Australia have access to Spot Buy content immediately or is that limited to the US only?

The marketplace is growing fast! SAP Ariba Snap has up to 60 million SKU`s from sustainable, and vetted suppliers. It is available for users in US, Canada, UK, and Germany today.  Mercateo is the marketplace provider for EMEA.  Recently, SAP Ariba signed agreements with Mercado Libre that will make the marketplace available in Latin America.


Guided Buying:

Does Guided Buying come with SAP Ariba Snap, and if so, can you configure other categories to the guided buying landing page?

Yes, Guided Buying is included. While you can easily add additional categories that are specific for your business, with Snap you get pre-built categories with content and forms for:

  • IT & IT Services
  • Office Supplies
  • Advertising & Printing
  • Marketing Services
  • Financial Services
  • Legal & HR Services
  • Facilities / Maintenance
  • Travel

(See more about SAP Ariba’s Guided Buying)
 


Technical:

How do approval processes work? What do they look like?

You will receive SAP Ariba’s best practice approval workflow out-of-the box. You can approve via the application, via email, or by mobile device.  Approval workflows have tons of flexibility. There are parallel approvals to accelerate process. There is a concept of a watcher, and user approval groups.  Out of the box approvals include role, dollar value, special situation. This helps to minimize the need to build customizations.

How does Ariba & ERP’s integrate? Is there a standard set of integration scenarios for each process within Procure-to-Pay that no special development is needed if SAP best practices are followed?

Perhaps the most valuable aspect of Snap is the pre-determined flows, processes, and approvals out of the box. The structure is both robust and complete, essentially eliminating the need for customized integration. There are few instances where the custom integration justifies both the up front and ongoing maintenance costs.  With SAP software, there are 170 native integration points. The number of integrations is 8x of any competitor and covers the entire Source-to-Settle process.

Does this apply to non-SAP customers as well?

Yes. Ariba Snap is ERP Agnostic and will deploy in <12 weeks. 42% of Ariba customers are non-SAP.

Essentially all ERP systems can now be integrated to Ariba.

Are analytics provided? If so, how is reporting presented and managed?

Yes, analytics are provided which are focused on the P2P lifecycle.  As part of Snap, SAP Ariba has provided end to end capabilities to support the entire procure to pay process.  All of the basics are reported on (approvals, spend by categories, invoices exceptions, accruals, etc.) It is possible to set it up to have a weekly report sent to your stakeholders directly from the tool, or you may download in Excel.  Additionally, any data element captured can be reported with an unlimited number of customized reports that your team can create easily.

 


Upgrades:

If our company outgrows SAP Ariba Snap, do we have to redeploy/repurchase SAP Ariba?

Absolutely not!  SAP Ariba Snap is the same full Buying and Invoicing solution deployed at Large Enterprise customers but the focus is on the features and functionality that are critical to growing businesses and deploy only those features.  If you need additional features in the future, these are already included in your license and you can toggle them on at any time.

The beauty of SAP Ariba Snap is that it is a solution that is built to grow in complexity as your business matures. With implementation, we start with the key foundations that will give you the fastest time to value in key spend categories.  Once the foundation is set you can add those features and functionalities that best meet your needs while minimizing cost and operational risk.

What does SAP Ariba Snap cost?  Is the price determined by Spend Volume? by PO? Or transactions? Or connections?

Pricing is done by volume of Spend and the of the number of documents (PO and Invoices per year). Unlimited users are allowed so everybody in your company to have flexibility to access the tool without additional cost.

  


My Suppliers:

What is the process for suppliers to join the Ariba Network?

Suppliers can join the network at discovery.ariba.com but they are also invited to the Ariba Network from the buyer in their Ariba site. This can be done as an invitation or when a PO is sent to supplier prompting the invitation. Suppliers are considered customers too. SAP Ariba has used many UX principles to dramatically ease supplier interaction on the network.

What are the fees for Suppliers with SAP Ariba Snap?

Your suppliers can transact for free on the Ariba Network. They have the ability to send PO`s, Invoices, Order Confirmations, Ship Notices, and more. (Learn more about Light Enablement from SAP Ariba) 

Why should we buy SAP Ariba instead of a competitor’s product? Here are a few highlights:

  • Fast time to value (<12 weeks)
  • Best practices built in
  • Access to Spot Buy marketplace (content engine) that you control by commodity
  • UPGRADE Path without having to “upgrade”!!!
  • Local Resources – local language support and real-delivery expertise
  • Integration is simple and easy
  • Commercial flexibility i.e. Unlimited users and low subscription price
  • Suppliers can transact for free on the Ariba Network via Light Enablement

 


About PREMIKATI

Founded in 2009, Premikati, Inc. is a WBENC certified woman-owned Supply Chain Business Process Outsourcing (BPO) firm, providing cost savings and financial, contractual and supplier risk mitigation services to purchasing organizations for mid and large enterprises while leveraging best-in-class purchasing processes and technology. Premikati has partnered with SAP and is one of only five companies globally to have been granted the most exclusive partnership level with SAP Aribaas a BPO Partner.

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