What is SAP Ariba? Overview & benefits

The scope of procurement is constantly evolving, but it’s always going to involve digital transformation and strategically leveraging new technologies. Companies need better data to optimize procurement processes, increase efficiency, and achieve strategic sourcing goals. 

SAP Ariba, a cloud-based source-to-pay procurement solution, helps companies manage their procurement processes more effectively. Widely adopted by larger enterprises and mid-market companies, SAP Ariba offers a suite of tools for managing end-to-end procurement—and is a perfect fit for procurement orchestration integration with Zip. 

‍

‍

‍

What is SAP Ariba?

‍

SAP Ariba is a comprehensive, cloud-based solution designed to streamline and optimize procurement and supply chain management processes. Integrating seamlessly with existing ERP systems, including SAP S/4HANA, Ariba offers a range of modules that cover the entire procure-to-pay process, from sourcing and procurement to invoicing and payment.

The platform offers several key features like robust vendor management, supply chain collaboration, and ‘Ariba Buying’, which guides users through purchasing processes efficiently. SAP Ariba contracts helps to ensure compliance and reduce risk, and even offers a mobile app that enables procurement on the go. 

Popular among larger enterprises and upper middle-market companies, SAP Ariba facilitates management of supplier relationships and procurement activities, making it a leading choice for larger companies looking to enhance their procurement strategies with digital tools.

‍

SAP SRM vs. SAP Ariba: Do you need both?

‍

SAP SRM (Supplier Relationship Management) and SAP Ariba are both procurement solutions offered by SAP. While the systems share some similarities in functionality and automation, they are distinct solutions designed for different purposes.

SAP SRM

SAP SRM is an on-premise procurement solution companies use to manage their end-to-end procurement processes. It includes features for sourcing, contract management, supplier management, and procurement analytics. It’s generally used by larger companies that need a high degree of customization and control.

SAP Ariba

This cloud-based procurement solution facilitates the procurement process for buyers and suppliers. It includes features like e-sourcing, supplier discovery, procurement analytics, and contract management. It is generally used by companies that want to simplify complex processes and leverage the cloud.

Do I Need Both SAP SRM and SAP Ariba?

The capabilities available in SAP SRM and SAP Ariba overlap. Generally, SAP Ariba is the more modern solution, and companies using SAP SRM are planning for end of life support by 2027. 

It should be noted that SAP has been actively moving toward a cloud-first strategy. This means SAP Ariba processes have been identified as the go-to solution for most procurement tasks moving forward. So, for any new procurement projects, SAP Ariba solutions work best. 

If you already have SAP SRM implemented, it might be worth considering migrating to the SAP Ariba network to take advantage of the latest features, including functionality in the cloud.

‍

Top SAP Ariba use cases

‍

Companies use the SAP Ariba procurement platform for many reasons, like reducing costs, gaining greater visibility into spending, and increasing efficiency. 

In addition, the system enables a business to discover new suppliers and better manage these relationships. This ensures they work with trustworthy and reliable partners throughout their supply chains. 

Additional SAP Ariba use cases include:

• E-sourcing — Businesses can conduct e-sourcing events, like request for proposals (RFPs) collection and online auctions, to obtain better pricing and contract terms.
• Purchase order management — Create and manage POs, streamline procurement, and better manage spending.
• Contract management — Author supplier contracts more efficiently, ensuring all parties comply with terms and issues are addressed immediately.
• Invoice management — Electronically process invoices, reducing errors and delays while providing greater visibility into the payment process.
• Procurement analytics — Report on all procurement spend and identify improvement areas for more informed real-time decision-making.

SAP Ariba offers a single platform for automating and managing various aspects of the procurement process. As a result, it helps companies improve their bottom line and achieve purchasing goals.

‍

Key SAP Ariba features to know

‍

There are a number of features on the SAP Ariba platform that buyers value and seek out. It enables companies to streamline the procurement process by reducing manual tasks, delays, and errors. 

SAP Ariba provides greater visibility into supplier performance and spending, while helping companies identify opportunities for process improvements and cost savings. Additional features include:

• Access to the SAP Business Network to engage in collaborative commerce with a global community, now with added AI capabilities that help navigate market dynamics and engage with suppliers.
• Invoice and payment management with automated receipt, processing, payment, and 3-way matching.
• SAP Ariba sourcing (e-sourcing) includes RFX construction, e-auctions, and spend analysis.
• Supplier management, including discovery (via Ariba Discovery), qualification, lifecycle, risk management, and performance analytics.
• Content management tools to define, validate, and enrich catalog content giving employees a simple way to buy.
• Guided Buying to support stakeholder self-service shopping, ordering, and purchase of common goods and services
• Spot Buy to enable cost-saving sources for indirect goods, simplifying one-off purchases (too time-consuming to source).
• Contract management to ensure compliance with agreed-upon terms, identify opportunities for savings, and improve processes.

SAP Ariba also features a robust suite of procurement analytics and reporting tools, allowing teams to gain insight into spending patterns, supplier performance, and procurement efficiency.

‍

Why businesses choose SAP Ariba

‍

Companies choose SAP Ariba because it is a comprehensive source-to-pay solution that helps to increase efficiency, reduce costs, and achieve procurement goals. It’s also cloud-based, meaning business processes can be performed at any time, anywhere on the planet.

Here are some of the reasons business might choose SAP Ariba:

• Comprehensive Source-to-Pay solution: Helps to increase efficiency, reduce costs, and achieve procurement goals.
• Cloud-based: Allows business processes to be performed anytime, anywhere on the planet.
• Integration Capabilities: Easily integrates with other SAP solutions (like SAP ERP S/4HANA, SAP Fieldglass, and SAP Concur) and many third-party applications like Zip.
• SAP Business Network: Features a growing number of suppliers to help organizations connect with and engage the best vendors.
• Sustainability and automation: Promotes sustainability and allows companies to automate and streamline the entire procurement process.
• Spend management tools: Provides powerful reporting and analytics capabilities, offering greater insight into supplier performance, spending patterns, and procurement team efficiency.
• Universal user experience: Designed to integrate with legacy systems and provide access to a greater pool of suppliers.
• User ratings: Has a score of 4.1 out of 5 (560+ reviews) on G2.

‍

Top challenges of SAP Ariba

‍

While SAP Ariba is a powerful procurement solution that’s popular worldwide, it may not be enough to fully optimize procurement intake for every business. Here are some of the reasons why:

Limited customization

While SAP Ariba provides a comprehensive set of procurement management solutions, some companies may have niche requirements that cannot be met using the platform. They may require additional customization or integration with other systems.

Wrong suppliers

While SAP Ariba has a growing network of suppliers, it may not include the exact ones you need to do the job. This may require additional supplier discovery and management efforts outside of the platform.

Complex onboarding

Supplier onboarding can get complex, with multiple departments and stakeholders (as well as legal and compliance) having an influence. While SAP Ariba provides robust supplier management tools, it may not be enough to streamline the entire process for a business.

Depending on a company’s specific requirements, additional tools or apps may be needed to fully optimize the supplier intake and procurement process. 

For example, a company may require extensive supplier risk assessments, business spend analysis, or AI-powered tools at intake to better guide employees. 

Therefore, it’s important for organizations to carefully evaluate their requirements and fully consider everything needed to modernize procurement. Take the time upfront to research before diving in.

‍

Zip and SAP Ariba

Zip has developed a universal Intake-to-Pay solution that seamlessly integrates with SAP Ariba, orchestrating the entire procurement process. It offers a single front door for any team member initiating a purchase request, simplifying adoption across the organization. Key features include:

• Intake Management: Zip simplifies intake with AI automations, document management, templates, and dynamic workflows, enabling non-specialists to easily start the intake process. This addresses SAP Ariba's adoption challenges by providing a user-friendly experience.
• Workflow Engine: The workflow engine shortens cycle times and facilitates complex approval routing, streamlining procurement processes.
• AI-Driven Sourcing: Zip augments SAP Ariba’s sourcing functionality with simple scoring, compliance, and autonomous AI-driven sourcing and RFx events, enhancing procurement efficiency.

Integrating Zip with SAP Ariba helps companies streamline procurement processes, enhance supplier relationships, improve cash flow, reduce costs, and attract more suppliers to their platform.

‍

Summary

As procurement grows more complex, line of business requesters are confused about what tools to use, leading to risky and rogue spending. This puts pressure on procurement teams and approvers to better control spend and risk. 

SAP Ariba is an excellent solution for a company looking to modernize their procurement process. However, it may not have everything you need to accomplish the task. 

Zip boasts an efficient procurement intake process like nothing else on the market. It also has efficient tools for procurement orchestration and advanced approval workflows. It’s an excellent complementary solution for companies that use SAP Ariba and wish to modernize their Intake-to-Pay process. 

Ready to get started? Request a free demo today.