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SAP Runs Ariba: How SAP is Extending Our Own SRM Deployment by Leveraging the Ariba Cloud Portfolio & Network


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Did you know that SAP runs Ariba? Come listen as we share our story of our own Ariba implementation. From solution selection, to on-premise/on-demand orchestration leveraging a Rapid Deployment …

Did you know that SAP runs Ariba? Come listen as we share our story of our own Ariba implementation. From solution selection, to on-premise/on-demand orchestration leveraging a Rapid Deployment Solution package, to global rollout, we'll discuss how SAP adopted the Ariba Network and other Ariba solutions while maintaining our existing investments in on- premise SRM and invoice management solutions.

Discover how SAP now reaps the benefits of increased user satisfaction, supplier collaboration and electronic invoicing, and transforming the global procurement team into a more highly value-added organization.

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  • Von den 420 FTE sind ca. 200 in Procurement 150 in GFSSO und nochmal 70 in local Finance14 k aktiveLieferanten, in unsererDatenbanksinddeutlichmehr, die wirgeradeaufräumen
  • 1,000 SAP-suppliers enabled for transacting on the Ariba Network                     More than 39 k purchase orders have been transmitted and more than 26 k invoices have been received via the Network already in 2013 We have seen a flow of more than 403 m US$ in purchase order value and 69  m US$ in invoice value via the Network - correspondingly over 300 k US$ in Ariba Supplier Membership Program fees have been generated with SAP as a buyer on the Ariba Network
  • Ariba Sourcing provides the following features: Specific tailored dashboards to search and access the information quickly A tool the manage the entire sourcing process from requirement gathering, to sourcing planning, RFX execution and Awarding Custom templates for your RFX that pre-populate the RFX content according to specific criteria like region or commodity A tool to invite suppliers (registered in the Ariba Network) to RFX and monitor their participation and support the awarding decision process by identifying best offers or different awarding scenarios Possibility to pass the Awarded information to Contract or P2P modules in a closed loop scenarioAriba provides also the Support for suppliers who participate to RFX and to the customers during RFX preparation
  • Ariba Catalog ManagementInternally managed catalogs~ 400 Suppliers267 Catalogs 1)>200.000 Catalog Items 2)Externally managed catalogs24 Suppliers32 Catalogs 1)>300.000 catalog Items 2)Ariba Catalog Management provides catalog content for more than 100 company codes globally
  • Integration supplier (invoice count)Office Depot: 65Office Max: 560Grainger: 201Fujitsu Technology Solutions GmbH: 364Summe: 1.190
  • Volume 2 times higher than ebay
  • Although initial overall percentages were not extremely high (at 12%), we found that over one third of our invoices are received from those vendors (to capture a high volume of our transactions) and 45% of our top 100 suppliers were already registered. If we only went electronic with those suppliers, that equates to 1.5 tons of CO2 emission avoided. (of course our goals are greater than this over time – compared with Ariba world class of 75% our goal is at least more than 50%) what are the actual goals in terms of # or percentage of our suppliers / invoices on the network?)
  • Transcript

    • 1. How SAP Is Extending Our Own ERP and SRM Deployment by Leveraging the Ariba Cloud Portfolio and Network Dr. Steffen Klewitz, Vice President, Procure-to-Pay Strategy Group, SAP Tuesday, March 18, 2014 #AribaLIVE @ariba © 2014 Ariba – an SAP company. All rights reserved.
    • 2. What We’ll Cover Agenda for this Session: • Introducing SAP’s Global Procurement Organization and its Vision • Elaborating on the SAP P2P Strategy • Presenting the P2P IT Strategy incl. Innovations Driven by SAP runs SAP • Explaining the Architecture of the Hybrid Deployment • Revealing Details of the Solutions and Impact to the Business 3 © 2014 Ariba – an SAP company. All rights reserved.
    • 3. Executive Summary • • However, we face the same challenges like many P2P organizations (e.g. cost pressure, volatility in the supplier markets, demanding business partners) • The need to leverage intelligent ways to utilize IT resources and automate processes is further growing • 4 SAP’s Global Procurement Organization is a professional state-of-the-art procure-to-pay (P2P) business organization We have found a way to use the best of both worlds: Combine the existing SAP on-premise implementation with deep integration into ERP and leveraging the advantages of an Ariba cloud solution with collaborative, scaling, and networking effects © 2014 Ariba – an SAP company. All rights reserved.
    • 4. Procure-to-Pay @ SAP – A Valuable Partner Structure Goals CPO and Procure-to-Pay Business Owner Category Procurement strategic and tactical sourcing Procurement Shared Services operational procurement Operational Shared Service* accounts payable 44 Locations Worldwide • Cover all units of SAP centrally with prioritized geographies • Leverage purchasing power and driving sustainable savings • Deliver best-in-class procurement processes and highest possible service levels to internal customers • Mitigate risk to SAP • Be a fair partner to our suppliers • Be a fair partner to to suppliers GPO vision is to help SAP buy better and be a valuable business partnerour the business for all procurement related activities, globally *reports solid line into Global Finance Shared Services Organization 5 © 2014 Ariba – an SAP company. All rights reserved.
    • 5. Procure-to-Pay @ SAP Key Facts and Spend Distribution Key Facts 65,000+ Annual invoices 2013 16.9€ billion >460,000 Revenue 2013 PO Line Items 2013 3.6€ billion >780,000 Spend 2013 Trip Entries 2013 14,000+ 420 Global suppliers 6 >730,000 Global SAP employees FTE in P2P Spend by Region © 2014 Ariba – an SAP company. All rights reserved. AMERICAS 33% EMEA 54% ASIA PACIFIC 13%
    • 6. SAP’s Corporate Objectives for 2015 1 Billion People Using our Software 82% Employee Engagement Index Customer Success Employee Motivation 20 Billion Euro Revenue Growth 35% Operating Margin Margin Global Procure-to-Pay at SAP Contributes to All of These Goals 7 © 2014 Ariba – an SAP company. All rights reserved.
    • 7. 2015 SAP P2P Strategy: World-Class Procure-to-Pay 2020 GPO Strategy World Class Procure-to-Pay Customer Success Best in class procurement services for our customers as innovative frontrunner and exemplar. Strategic Excellence Commodity & Sourcing Strategy Supplier Management Accounts Payable Strategy Frontrunner, Innovation & Sustainability Leadership Margin Operational Excellence Generation of sustainable savings using global procurement SSC with lean and standardized processes Growth Customer Centricity Be volume ready for 2015 with customer centric operations and PMI support Processes and Tools People High GPO workforce engagement through leadership, empowerment, trainings and promotion of inclusion People Excellence Development Governance & Compliance 8 © 2014 Ariba – an SAP company. All rights reserved. Organization Standardization & Automation Inclusion
    • 8. One of the Key Challenges to Achieve our Goals: Inefficient B2B collaboration Non-standardized processes Manual paper-based collaboration Mail, Phone, Face-to-Face Wasted time and resources Higher operating and supply chain costs Delayed payments, overpayments and missed documents, slow cash flows EDI (Electronic Data Interchange) Enterprise and Supplier Portals Poor compliance 9 © 2014 Ariba – an SAP company. All rights reserved. Objective: Increase overall efficiency and effectiveness of the team Suppliers
    • 9. The Innovation Portfolio in Procure-to-Pay 1 Mobile Approvals 2 Improved manager effectiveness 3 Analytics Procurement Dashboards are key to manage the Procure-to-Pay Process 10 © 2014 Ariba – an SAP company. All rights reserved. Cloud for Travel & Expenses Reduced time with faster reimbursement and increased employee satisfaction 4 Ariba Cloud Hybrid Implementation Reduced process costs and faster cycle times
    • 10. 1. Mobile Easy Order Simplified shopping experience: Shopping in three clicks 1. 2. Full integration  Integration to online SRM system  Detailed information of articles on item level 3. 11 Mobile and flexible  Mobile apps for iPad, iPhone, available  Easy ordering of preferred end-use consumable articles (online/offline)  Using of non productive waiting time to process shopping carts User-friendly User-Interface  Simple and intuitive © 2014 Ariba – an SAP company. All rights reserved. 1
    • 11. 1. Mobile Shopping Cart Approval Simplified approval: improved manager effectiveness 1. 2. Full integration  Integration to online SRM system  Submission of the receipts via mobile app or email 3. 12 Mobile and flexible  Mobile apps for iPad, iPhone, Android smartphones and Blackberry available  Approval and rejection of shopping carts with mobile apps (online/offline)  Using of non-productive waiting time to process shopping carts User-friendly User-Interface  Simple and intuitive © 2014 Ariba – an SAP company. All rights reserved. 1
    • 12. 3. Procurement and HANA Dashboards Key to Manage the Procure-to-Pay Process 1. 2. 3. 14 Mobile and flexible  Flexible filter criteria to customize reports to individual needs  Extracts can easily be send via e-mail  HANA and Supplier Dashboard accessible on iPad Real time  Real time data available in the HANA Dashboard  Fast access to information allows immediate reaction on any kind of change incl. crisis User-friendly User-Interface  Simple and intuitive  Full end-to-end process transparency © 2014 Ariba – an SAP company. All rights reserved. P2P Dashboard Supplier Dashboard HANA P2P Dashboard Procurement KPIs for Global Procurement, all Categories All Spend and Accounts Payable Data per Supplier 3
    • 13. SAP Runs SAP (Ariba) – P2P Hybrid Model Architecture of the Hybrid deployment 4 SAP„s end-to-end “Sourcing and Procure-to-Pay” process Ariba Spend Visibility Ariba Supplier Information& Performance Management Ariba Collaborative Sourcing Calloff Ariba Contract Management Ariba Procurement Content (Catalog) Ariba Contingent Workforce & Services Procurement SRM@ERP Self -Service Procurement ERP ECC 6.0 Purchasing / Invoicing Proc ERP on HANA Vendor Invoice Management (VIM) Purchase Order, Invoice status Ariba Discount Mgmt Invoices, Order Conf., ASN Supplier Supplier Supplier Master Data Governance (MDG) – Supplier Mgmt On Premise Strategic Procurement 15 © 2014 Ariba – an SAP company. All rights reserved. Operational Procurement Operational Shared Service
    • 14. Ariba Network: Purchase Order Invoice Automation Solution Business Impact  Transmission of purchase orders and receipt of invoices using the Ariba network:  Reduction of efforts on Accounts Payable with regards to incoming invoice processing – touchless postings based on defined business rules for invoice validation ERP PI Internal IDOC ORDER S05 Purchase Orders cXML Purchase Orders DocSet* Ariba NW Adapter cXML Invoices / Credit Memos (PO/non-PO) Invoices Purchase Orders Invoices VIM 5.2 Invoices Invoice status *DocumentSet containing base64-encoded INVOIC02 Idoc, PDF invoice, invoice attachments 16 © 2014 Ariba – an SAP company. All rights reserved. Invoices  Simplicity & Transparency: Self-service supplier portal for real-time invoice/payment status  Elimination of business risks and delays with maximum degree of process automation  Reduction of paper through fully electronic documentation incl. archiving of e-invoices  Fully integrated with SAP ERP ensuring document traceability at all times
    • 15. Ariba Collaborative Sourcing Solution Business Impact Tailored dashboards Event Execution and Decision Support Award mgmt (Contract / P2P) 17 © 2014 Ariba – an SAP company. All rights reserved. Ariba Network = ~1.2M Suppliers RFx Templates / Events Ariba Support and Services Project management  Transparency and centralized documented sourcing activities at global level  Optimized processes and resource efforts among the sourcing practices  Speed-up and reduction of the lifecycle of the sourcing activities  Global harmonization and concentration of sourcing knowledge and best practices (ground a sustainable sourcing)  Granting an improved and standard sourcing documentation quality
    • 16. Ariba Procurement Content (Catalog) Solution Business Impact Ariba Catalog 18 © 2014 Ariba – an SAP company. All rights reserved.  Several benefits for SAP employees: Significant shopping experience improvement Intuitive shopping flow, Clearly structured and transparent user interface Enhanced search via powerful web 2.0 search engine with fuzzy logic Flexible navigation structure based on commodity requirements Key features include the filtering of search results, comparison of catalog items, saved shopping carts, favorites, and recently viewed articles function  Additional catalogs have been merged into the one “multi-supplier" catalog (One Click, one view)  Harmonized administration of all supplier catalogs in one administrative view with full integration into the Ariba network to enable better collaboration
    • 17. Ariba Supplier Information & Performance Management Solution Business Impact MDG*, ISP PRM* Automatic Supplier Transfer to SIPM* • Supplier Selection, Creation & Phase Out • Synchronization with Supplier as Partner BiDirectional Interface (in-progress) Real Time Check with 3rd Party Provider • External Service Provider for Bank, Address data & D&B Family Tree • Supplier Master Data Record (in progress) Web Services and XML Automatic Update of SAP ERP (ISP) * SIPM: Supplier Information and Performance Management, MDG: Master Data Governance, PRM: Partner Relationship Management 19 © 2014 Ariba – an SAP company. All rights reserved. • Supplier Qualification, • Due Diligence, • Classification, Evaluation & Performance Management • Supplier Master Data Self Maintenance • Changes of Supplier Master Data Record  Enables E2E transparent and optimized Supplier Lifecycle Management  Secures maximum compliance and sustainability within supplier management and prevents related compliance costs  Supporting a 360° single point of view to manage suppliers and tighten partnership  Provides full transparency of processes, roles and critical data in a combined On Premise and Cloud environment  Increased and optimized automation reduces significant manual workload  Increased transparency of valuable active supplier base of SAP reduces efforts of ongoing new supplier onboarding  Supplier Data Self-Maintenance increases supplier data quality and reduces significant data quality efforts of SAP
    • 18. Ariba Spend Visibility Solution Ariba Analysis (Dashboards, Drag & Drop Reporting) Business Impact Data Extract (Source Data) SAP ERP Commodity Classification (Classified to UNSPSC via best practice combination of Knowledgebase, Databases & Services) 20 © 2014 Ariba – an SAP company. All rights reserved. Supplier Enrichment (Normalization/ Rationalization, DUNS Parentage)  SAP uses Ariba Spend Visibility to improve the reporting capabilities for all PO-related and non PO-related spend  Simple and highly “customizable” solution enabling the end-user to build own reports/charts/drill-downs  Provides accurate spend figures via Ariba Spend Visibility and secure availability of reports  Provision of an easy-to-use solution/design reports and dashboards
    • 19. SAP Runs Ariba: Benefits since Go-Live in June 2013 Ambitious objectives defined: 7% annual savings, 50% increase in automation by 2014 and overall 20% productivity gain in end-to-end P2P process by 2015 3 months implementation time using an SAP rapid-deployment solution to connect to the Ariba Network (record time) eAuction led to First Ariba significant savings 1,100 top suppliers of SAP are already live on Ariba More than (target: 1,000) €200m sourced via Ariba More than 403 m€ PO Value More than already transmitted via Ariba More than via Ariba 69 m€ invoiced
    • 20. 1,000 Suppliers On-Boarded to Ariba Network in Six Months • 28,019 invoices were posted (target: 28,600) • Capacity actuals increased compared to previous week • 1,145 suppliers enabled Processed invoices December 19 Thousands/ Week 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1-Jun-13 1-Jul-13 Invoice planned 22 1-Aug-13 1-Sep-13 Invoice actuals 1-Oct-13 1-Nov-13 Capacity planned © 2014 Ariba – an SAP company. All rights reserved. 1-Dec-13 1-Jan-14 Capacity actuals Business Impact  Weekly reporting created huge momentum for the teams  1,145 top-suppliers enabled using pre-defined enablement and communication process  Increase of the overall automation rate by 28% (160k invoices out of 560k invoices)  Automation leading to error and effort reduction
    • 21. A Powerful Combination 220,000+ 65million >1.2 million Customers 2013 total SAP revenue 34 Invoices processed annually Companies in 190 countries 63% Of the world’s transaction revenues touch an SAP system 23 €16.9B+ Languages © 2014 Ariba – an SAP company. All rights reserved. 1,200 $650B+ New network suppliers weekly Commerce conducted annually
    • 22. Conclusion • SAP’s Global Procurement Organization faces the same challenges as any other Procurement organization in the world • However, the degree of automation and transparency we gained from implementing Ariba together with our SAP ERP and SAP SRM systems gave us a lot of efficiency • We could leverage our investments in existing systems, but at the same time take advantage from innovations like HANA and Mobile • The biggest effect we expect is from supplier collaboration and the growing networking effects 24 © 2014 Ariba – an SAP company. All rights reserved.
    • 23. Where to Find More Information? eWorld_Presentations_March2013/ AribaandSAP.pdf welcome © 2014 SAP AG or an SAP affiliate company. All rights reserved. Customer 25
    • 24. Questions? Contact information: Dr. Steffen Klewitz Vice President, Procure-to-Pay Strategy Group 26 © 2014 Ariba – an SAP company. All rights reserved.