“My Two Cents” on Ariba Integration with SAP
With my recent experience in procurement transformation project i take the opportunity to provide my opinion and feedback about the Ariba integration with SAP ECC.
Ariba Procurement solution is an enabler of cost reduction which can enhance decision making with great user experience . It can bring efficiency in processes of Supplier on-boarding, Contracts management and Spend analyses.Though It seamlessly integrates with SAP on most of areas like Supplier replication and PO replication it has many gaps in Invoice replication and Asset procurement. Ariba may work as a stand alone sourcing tool, however integration in to an operation systems is somewhat problematic, especially for Invoice postings and tax codes handling it need modification of Ariba adapter programs.
Some of the best offerings of Ariba include:
- SLP Module for Supplier On-Boarding:
- This requires Business partner activation in ECC. The supplier gets on boarded from Ariba .Supplier submits all the minimum required information (Bank details,address,etc)in Ariba portal. After the qualification process, the supplier get created in SAP ECC automatically in the form of business partner. It is recommended to extend the supplier to relevant company code and purchase org manually. Once this is extended it becomes a transactional suppliers and gets replicated in P2P module of Ariba.
- Dynamic discounting:
- This is one of the powerful features of Ariba. Gone are the days where the negotiations about discounts and are done on telephones and mails.With Dynamic discounting these negotiations are click away. Both Suppliers and Buyers can initiate there discount terms for invoices and after the acceptance of terms, the supplier gets paid accordingly .Dynamic discounting is the powerful working capital management tool, it helps maintain the healthy working capital cycles.
- Supplier or Buyer creates terms of discount. In our example , Lets consider Buyer initiates discounting terms on portal and demands for discount if supplier wants an early payment for his invoice.
- All the invoices are sent to Ariba Supplier portal for suppliers acceptance.
- Supplier out of all the invoices , he accepts one of the invoice for early payments with discount.
- The discount percentage and days to pay get updated in ECC and supplier gets paid.
- Intelligent Spend analytics:
- Spend analytics in Ariba is intuitive and graphical. You can slice and dice the spend in different categories and generate many views of data, which helps you take faster and smarter spend decisions.The transactional data from SAP is loaded in Ariba for spend reporting.
- Contract management :
- Great place to manage contracts. Its feature of contract based invoices where suppliers can initiate invoice directly on contracts is a life saver.
Some of the areas where Ariba can make things easy :
Make error messages more meaningful: I wish the ERP Push errors were more clear. Sometimes they make no sense to the common user, forcing the business to rely on technical support teams.
Ariba Support : Most of the requests on integration issues take lot of time to resolve. The biggest problem is to identify the point of occurrence of problem, furthermore there seems to be limited tribal knowledge from Ariba implementation team about SAP Functional areas . As Saas Application it lacks flexibility .
Better Understanding of SAP finance postings structure : This area clearly requires lot of customizing in adapter programs like tax rounding,Asset invoice postings and goods receipts.
Other operational problem that might come up is ,chasing up with Suppliers for signing up for Ariba network .Their model regarding supplier network fees can cause issues with vendors at times.
- End user training should be done as soon as possible and should be done as much as possible
- Key Stake holders should be involved right from the beginning of the project and they should be part of all the milestones of the project.
- Strong SAP team who understand SAP landscape better .
Overall it is a great application for sourcing and procurement.