SAP Ariba Training i Noida
SAP Ariba Overcomes These Buying Challenges
Like any process, the complexity of procurement arises in the steps and details. Key considerations and challenges to the procurement process include the following: principal-agent problem, demand planning, suppliers, purchase agreements, consumption of goods, invoicing and analysis.
In the following sections, we will discuss the SAP Ariba tools that help businesses overcome these challenges.
SAP Ariba (overcoming the principal-agent problem)
Also known as an agency problem, the principal-agent problem refers to a conflict of interest that can occur when an agent acts on behalf of an organization. Purchase transactions typically operate as a zero-sum game, whereby a supplier either wins the deal and does business with the purchasing company or not. Under this pressure to win, suppliers are tempted to make an “edge” wherever possible to win the bid. Thus, the purchasing agent has a powerful position in this negotiation, as the purchasing agent can influence or even decide the outcome of this position in favor of a particular supplier. The purchasing agent’s interests may not always align with the principal’s behavior.
As a result, a conflict of interest scenario may arise in which the agent colludes with the supplier to accept bribes or less direct forms of payment to drive the deal to the preferred supplier. To counter this conflict of interest, organizations may seek to establish a system of checks and balances in procurement operations and systems. SAP Ariba provides a rigorous set of controls, processes and workflows across all solution areas to avoid the principal-agent problem.
SAP Ariba Supply Chain Support for Buyers (Overcoming Demand Plan)
Responding to needs that arose yesterday and which the organization needs to fill tomorrow puts the organization in a difficult negotiating position against suppliers and creates inefficiencies as divisions and actors in the organization have to deal with supplies and services. Must wait to come. Some form of demand planning, based on known goals, targets, historical needs and external factors, can help reduce the last-minute, reactive nature of strategic procurement. SAP Ariba Supply Chain Support for Buyers and the comprehensive reporting capabilities available in SAP Ariba allow buyers to make sense of purchase needs and subsequently create a buying strategy to meet these needs.
SAP Ariba Discovery (overcoming suppliers)
After a demand is defined and/or raised, suitable suppliers need to be identified, and a procurement plan should be made. How do you define a group of qualified suppliers, create urgency and competition around your needs, and reach the best prices, products and suppliers? SAP Ariba Discovery allows you to identify new suppliers in the Ariba network of suppliers, which in turn enriches the sourcing events and activities offered at SAP Ariba Sourcing. Finally, using SAP Ariba Supplier Lifecycle and Performance, your organization can iteratively improve supplier interaction and management processes.
SAP Ariba contract (overcoming purchase agreements)
After negotiating with potential suppliers and selecting the most suitable one, a contract or PO should be defined for the purchase of the particular item/service. This agreement should clearly define payment terms and other items when it is usable at the operating level to allow for contract consumption. SAP Ariba Contracts provides a platform for creating and managing contracts, acting as a linchpin connecting the various procurement solutions available in the digital core of SAP Ariba and SAP S/4HANA.
SAP Ariba Buying and SAP Ariba Catalog (Overcoming Consumption of Goods)
With an order/contract, the goods or services must be prepared for consumption/deployment by your organization. How do employees find and consume this item within proper approvals and procedures? The key is to make the “discovery” part of the process intuitive for your employees, while still being compliant with company approval processes and financial regulations. SAP Ariba Buying and SAP Ariba Catalog provide a platform for expert and casual users alike to find and consume goods and services verified and negotiated by the organization’s purchasing department.
SAP Ariba Invoice Management and SAP Pay (Invoice Handling)
As a company consumes goods following the previous steps, the supplier begins to collect bills for the goods consumed, unless the agreement requires an advance payment. Either way, a company needs an approach to processing invoices: a process that matches invoices to actual requests, thus ensuring that payments made to suppliers meet the terms of the agreement and Reflect the quantity actually ordered and delivered by the supplier. SAP Ariba Invoice Management and SAP Pay Invoice