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SAP Ariba gaining ground in APAC

Companies like Woolworths and DuluxGroup in Australia are using the cloud-based service to reduce procurement costs and risks

SAP’s Ariba cloud-based service is making headway in the Asia-Pacific region, with 750,000 local suppliers now using it to handle procurement processes and streamline supply chains.

Acquired by SAP for $4.3bn five years ago, Ariba brings together buyers and suppliers from over 2.8 million companies in 190 countries.

Ariba was a significant contributor to SAP’s 33% cloud revenue hike recorded in the second quarter of 2017, boasting a user base of 14.5 million and a procurement funnel worth 1.2 trillion euros.

Earlier this year, SAP tied up with IBM to harness the latter’s Watson artificial intelligence (AI) in procurement. IBM will also move its clients on its Emptoris platform across to Ariba.

Speaking at Ariba Live, held in Australia for the first time this week, Cameron Art, IBM’s managing partner for enterprise cloud applications, said IBM itself was moving its procurement to SAP Ariba.

Art noted that with procurement being “a very large denominator of business”, an incremental improvement in procurement processes could save hundreds of millions of dollars.

Australian companies such as Woolworths and DuluxGroup are also adopting SAP Ariba.

Spending visibility

Visna Wrightman, Woolworths’ general manager of group procurement, said the company needed to manage a 25,000-strong supplier base for its 3,000 stores. She said it was important to have spending visibility and to be able to mitigate procurement risks.

Woolworths is currently developing two additional capabilities with SAP Ariba – one harnessing AI to classify spending and bring it into limits, and an app that will let team members place orders from the store floor.

Ian Griffith, head of procurement at DuluxGroup, has also been leading an SAP Ariba deployment to replace a cumbersome process that involved sending PDFs of purchase orders to suppliers and repeating the process for invoices on delivery.

DuluxGroup had already started to streamline procurement with an Electronic Data Interchange (EDI) network for 14 of its suppliers that make up about a third of its A$350m annual direct procurement.

It has now deployed SAP Ariba, which has been integrated with its SAP backend enterprise resource planning (ERP) platform, and is also gradually bringing its other suppliers into Ariba to improve efficiency and streamline processes.

During a keynote presentation, Alex Atzberger, president of SAP Ariba, said procurement is moving from being a “traffic cop” to an enabler of the supply chain.

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The continued integration of SAP Ariba with SAP ERP platforms, including SAP Fieldglass and SAP Concur, meant that 76% of all electronic transactions now touched an SAP platform, he said.

The procurement platform also delivers a much higher degree of supplier transparency, said Atzberger.

Besides aggregating supplier intelligence to share among all its users, SAP Ariba also connects to news reports about environmental or financial problems that suppliers are facing.

Businesses can also make more informed decisions about procurement choices, through the Made in a Free World service available in SAP Ariba that tracks slave labour in supply chains.

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