Understanding SAP Ariba Benefits and Integration Options

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Increased computing power, internet-based procurement (i.e. Amazon), and advanced analytics are driving a revolution in speed, magnitude, and efficacy in the procurement process. Procurement processes are moving to cloud-based solutions to enable continuous interactions between buyers and suppliers reducing the need for inefficient phone calls or emails.

A few key benefits that SAP Ariba brings to your Procurement practice:  

• Create an easy cloud-based, business-to-business (B2B) sourcing and procurement marketplace with a catalogue procurement process synchronized with SAP SRM and ECC.
• The cloud software solutions includes financials, purchase orders, and payments.
• Your internal customers will experience a simpler procurement process with advanced supply chain transactions creating a Digital Transformation experience that enhances the user, supplier, and customer experience. Have your internal customers focus on value-added activities versus process problems, corrections, repetitive or wasteful tasks.
• With the Ariba cloud, the system is always current without the need for a full implementation that disrupts the system. You can choose which functionality should be updated to ensure that it doesn’t impact your Supply Chain environment.
• Ariba can be a driver to perform a comprehensive data and vendor clean-up. Review and reduce your vendor base eventually lowering electronic transmissions to suppliers, as well as, procurement functionality and execution problems.
• SAP Ariba Procurement Content solution can create a single, unified catalogue solution for both Buyers and Suppliers. The catalogue now duplicates an Internet search, similar to the Amazon purchasing experience.
• Many suppliers are already familiar with Ariba, reducing required training. The Ariba process is standardized if a supplier already uses it, with few exceptions.

There are 2 main scenarios for Integration with ECC

Procure-to-Pay

“The procure-to-pay systems enable the integration of the purchasing department with the accounts payable (AP) department”.

The process flow begins in Ariba with the requisition and purchase order for both catalog and non-catalog items. The process continues with goods receipts, invoice remittance, approvals to issue a purchase order to suppliers, as well as, returning the processing of invoices.

Purchasing documents are replicated in SAP ERP, and the release of outgoing payments in SAP ERP closes the process. The integration scenario has total transparency on the status of the transaction through change requests and adjustments required by the business, reflected in SAP ERP and Ariba.

Extend the Procure-to-Order process with goods receipt and invoice handling in Ariba.  After invoice reconciliation, Ariba triggers the creation of an invoice receipt in SAP ERP for payment.

Electronic automation with Ariba and business rules in SAP ERP allows for a substantial increase in order accuracy, clarity on exceptions, and drastically improves process efficiency overall.

Procure-to-Order

Non-stock materials in the Ariba Procure-to-Pay or Procure-to-Order process can be ordered by creating a shopping cart for catalog or non-catalog items.

Shopping carts are administered using pre-defined business rules. If the cart is approved, a purchase order is automatically created in Ariba and the integration automatically triggers a purchase order in SAP ERP.  A PO is then sent to the supplier from Ariba.  From Ariba, the purchase order can be communicated to the supplier by fax, email, electronic data interchange (EDI), or optionally via the Ariba Network.

Integration Options connect the systems in the most optimal way.

• Master Data includes supplier, purchase organization, accounting, units of measure, categories, and general ledger.
• Transactional Data includes business objects such as purchase order, goods receipt, invoice, ASN (CSC – Collaborative Supply Chain), Outline Agreements (CSC) and remittance.
• Use an integration toolkit to link ERP with Ariba
• Web services include checking of validity / availability of items and cost items.
• OK2Pay – messages from Ariba to ERP endorsing invoice payment.

Setting up the interface

Use options like point-to-point integration without the need of middleware using the Ariba ITK, or by leveraging SAP Process Orchestration.

1. Batch asynchronous integration with Ariba Integration Toolkit (ITK) via a comma-separated (CSV) file – used by customers who have not implemented integration middleware/process integration (PI) and prefer to have no additional costs by leveraging an SAP provided integration option.
2. Real-time synchronous integration with SAP Process Orchestration – Integration via SAP Process Orchestration is streamlined with best practices to assist customers who have already selected SAP Process Integration as their middleware.
3. Connectivity via Ariba Direct Connect – Connectivity via Ariba Direct Connect has no additional licensing cost and zero additional IT footprint due to no middleware component to deploy. Direct connect is best for replicating master data from SAP ERP to Ariba to support the Procure-to-Pay process for indirect procurement.

Procurement Document processing integration includes

1. PO and SAP Ariba Invoice Automation
2. Discount Management (early payment, sliding scales etc.…) (optional)
3. Procurement Content (supplier catalogues) (optional)

Technical Connectivity for Procurement Document processing includes

1. Web service based connectivity without middleware
2. Web service based connectivity with SAP HANA Cloud Integration
3. Web service based connectivity with SAP Process Orchestration (SAP PO)
4. iDoc based connectivity with SAP Process Orchestration (SAP PO)

Leveraging the more than two-million suppliers on the SAP Ariba web – based network, along with multiple SAP Ariba solutions optimizes spend analysis, sourcing, contracts, supplier performance, quality, delivery and prices. This provides a comprehensive Digital Transformation solution for users, suppliers, and customers while using the simplicity of web based procurement.

As well as being an IT and Supply Chain consultant Terry Vermeylen is the founder of Mylifechanges.com  and Worldclasssupplychain.com and President of Terry Vermeylen Enterprises Inc.