The BMW Group realized that manual procurement processes were costly and inefficient. It decided to implement a B2B eCommerce solution to streamline purchasing. BMW selected the Ariba commerce platform to automate its global indirect material purchases. The Ariba solution provided an easy-to-use interface and integrated with BMW's systems. This reduced procurement times by up to 70% and lowered costs. BMW was able to efficiently manage its strategic supplier relationships and gain analytical insights through the Ariba platform.

1. In many companies, procurement has recently grown in strategic importance. The BMW
Group is no exception to this trend. The company realized that manual, labor-intensive
purchasing processes were no longer economically viable and that B2B eCommerce would
both streamline purchasing processes and reduce the overall costs of the goods and
services the company purchased. Essentially, the BMW Group believed that implementing
B2B eCommerce would reduce manual intervention in the purchase of standard items and
give procurement professionals more time for value-added activities, including sourcing
supplier relationship management.
In April 2000, the BMW Group decided to undertake a strategic project to completely
rationalize its technical purchases worldwide. Dubbed the MeRCUR (MMarketplace for
eelectronic PRROCCUURREMENT) technical purchasing project, the initiative automates all of the
BMW Group's indirect material purchasing throughout the world. "As one of the
undisputed technological leaders in the automotive market, the BMW Group sets extremely
high standards for our technical purchases," according to Robert Bauer, Head of Technical
Purchasing Strategies, Methods and Processes at the BMW Group. "We are not interested
in half measures. Our MeRCUR project does not just encompass a few sub-divisions; it will
be used to process all purchases for indirect materials."
NEW PROCUREMENT PROCESS
The BMW Group's goal was to implement an Internet-based system that allows individual
buyers to order indirect goods and services directly from their own PC, thereby lightening
the load on its purchasing departments. To achieve its objective, the company required an
easy-to-use, yet robust, browser-based system that did not require specialized knowledge
on the part of the end-user. They also needed a solution that supported access to
multimedia catalogs and incorporated a straightforward, yet powerful, search function. In
addition, a technology leader itself, the BMW Group required the solution to be based on
leading-edge marketplace technology.
BMW GROUP SELECTS ARIBA B2B COMMERCE PLATFORM
After a comprehensive analysis of the options available, BMW selected the Ariba B2B
Commerce Platform, Ariba Commerce Services Network (Ariba CSN), and Ariba Buyer to
provide a comprehensive Internet-based eProcurement solution. The Ariba solution allows
end-users to purchase indirect goods and services with little or no training; integrates with the
BMW Group's existing ERP systems; and provides frictionless access to its suppliers, as well
as a host of commerce services. "We chose Ariba because of the seamless integration of the
entire Ariba global platform, its proven performance, and its high level of reliability," says
Bauer.
Specifically, the BMW Group relies on the Ariba Buyer WalkUpTM User Interface to guide
less experienced end-users through the order process, while providing a "power-user"
“We chose Ariba because of the seamless integration of the entire Ariba
global platform, its proven performance, and its high level of reliability.”
– Robert Bauer, Head of Technical Purchasing Strategies, Methods and Processes, BMW Group
ariba@work
SOLUTION OVERVIEW
Business Profile
With more than 110,000 employees, the BMW Group is
one of the most popular quality vehicle manufacturers in
the world. BMW cars and motorcycles satisfy even the
most demanding customers — customers who appreciate
technical innovation.
Hardware and Software
Hardware: Sun
Database: Oracle
Networking: Cisco
Storage: EMC²
Application Server: WebLogic
Business Benefit
The BMW Group uses the Ariba® B2B Commerce
Platform™, including Ariba Buyer™ and the Ariba
Commerce Services Network™, to streamline its
procurement of indirect goods and services throughout
its worldwide operations. Ariba Buyer provides an easy-
to-use eProcurement solution that allows the BMW
Group to channel routine purchases of standard goods
and services to preferred suppliers, reducing costs and
leveraging purchasing professionals for other value-
added tasks. The Ariba Commerce Services Network
provides the BMW Group with access to supplier
catalogs, transaction routing, and other valuable
commerce services.

2. Copyright © 2001 Ariba, Inc. All rights reserved. Ariba and the Ariba logo are registered
trademarks of Ariba, Inc. Ariba B2B Commerce Platform, Ariba Commerce Services Network,
Ariba Buyer, Ariba Walkup User Interface, and Ariba Global Solutions Delivery are trademarks of
Ariba, Inc. All other products or company names mentioned are used for identification purposes
only, and may be trademarks of their respective owners.
Part Number 03.01.29
“As a result of our Ariba project, the BMW Group
has gone to the top of the league of global players
in the use of B2B eCommerce.”
Ariba, Inc.
Worldwide Headquarters
1565 Charleston Road, Mountain View, CA 94043 USA
TEL: +1.650.930.6200 | FAX: +1.650.930.6300
www.ariba.com
interface for more experienced employees. The company
also depends on the ability of the Ariba solution to support
XML and seamless integration with multiple ERP systems.
"Our end-users appreciate Ariba's simple and extended
search functions, context-sensitive help, order and delivery
tracking," says Bauer, "while our technical project team is
pleased with the ease of integration with our existing
systems."
The company also chose to use the Ariba CSN to directly
access supplier catalogs, transmit and manage orders, and
connect to a variety of commerce services via the Internet.
The Ariba CSN provides the BMW Group with connections to
its myriad suppliers throughout the world and access to
numerous commerce services, such as auctions, reverse
auctions, and electronic payments. "The Ariba CSN provides
us with a formidable number of services through one, single
connection," says Bauer. "Reducing the number of external
connections drastically increases system security. Before, we
had to maintain a multitude of point-to-point connections to
exchange data using EDI. Now, we have just one. Plus, the
Ariba CSN encodes its communications with 128-bit SSL — so
it is absolutely secure."
ARIBA DRIVES EFFICIENCY AND
LOWERS COSTS
With the Ariba solution, the BMW Group can process
orders, deliveries, and payments in a completely paperless
manner. The easy-to-operate user interface of Ariba Buyer
allows end-users to select goods and services from
preferred suppliers, thereby leveraging economies of scale
and lowering the costs of the items the company
purchases. Essentially, Ariba Buyer allows end-users to
create a requisition, choosing approved items from a
multimedia catalog, then electronically routes the
requisition through the BMW Group's approval process,
communicates the requisition to the Group's ERP system,
and transmits it directly to the supplier.
At the BMW Group, the Ariba solution delivers significant
business benefits to all departments in the organization. The
company has calculated that the Ariba solution will reduce
procurement processing times — from requisition and order
to confirmation of delivery and payment — by up to 70 percent,
resulting in greatly reduced costs.
In addition to speeding requisition times, the Ariba solution
provides procurement professionals with numerous reporting
and analytical tools to assist in supplier selection and
contract negotiations. The BMW Group also leverages the
purchasing card functionality of Ariba Buyer to cut down on
reconciliation expenses. "Since Ariba Buyer automates all the
workflows — from end-users to central purchasing to
accounting — we can track all requisitions and orders, ensure
compliance with corporate procurement policies, and reduce
our costs," says Bauer. "Our Ariba project has allowed us to
integrate everyone involved, from end-user through supplier."
TIMELY, EFFICIENT IMPLEMENTATION
With KPMG, an Ariba systems integration partner, participating
on the implementation team, the BMW Group's Ariba
implementation has been on schedule and within budget. The
initial phase of the project consisted of 100 end-users and five
suppliers. Now, the company intends to roll out the system to
its entire worldwide operation.
The Ariba implementation at the BMW Group was facilitated
by the ease-of-use of the Ariba solution. "Electronic
procurement affects the whole company," says Bauer. "For
end-users, it meant breaking with old procedures and tackling
something new. Ariba's WalkUp user interface makes it quite
easy for them to use the new solution."
The BWM Group is pleased with the results of its Ariba-
powered MeRCUR project. "All the people and companies
involved in MeRCUR have done a first-class job," Bauer
concludes. "As a result of our Ariba project, the BMW
Group has gone to the top of the league of global players in
the use of B2B eCommerce."