Ariba Managed Procurement Services
Procurement has enormous potential to help companies achieve strategic objectives and accelerate bottom-line results. Yet most procurement functions influence only a small proportion of total corporate spend and do not have the expertise, processes, or resources to actively manage all spend categories and processes. Senior financial, supply chain and procurement executives are re-assessing their spend management strategies in light of current business pressures to deliver more year-over-year savings with limited internal expertise and resources.
A number of companies have already taken a portfolio approach to spend management-focusing internal resources on strategic categories, while leveraging external Procurement Service Providers (PSPs) to manage non-strategic categories, processes and procurement infrastructure. To capture additional savings these companies have turned to Managed Procurement Services, which involves a PSP taking on exclusive responsibility for managing in-scope, non-strategic spend and delivering verifiable, realized savings and service levels in an outcomes-based relationship over a sustained period of time.
Ariba Managed Procurement Services provide tailored services to reduce total spend by managing non-strategic spend categories, processes and procurement infrastructure. In partnership with Ariba, companies can deploy this business solution to rapidly realize spend management value on their non-strategic spend, while simultaneously refocusing their internal resources to deliver even better results on their strategic spend.
Ariba Managed Procurement Services deliver the following benefits:
Financial Benefits
- Material increase in net income through realized savings on non-strategic expenses such as SG&A. A 5-8% year-over-year realized savings on 50-60% of SG&A can significantly increase client net income.
- Greatly reduced timeline for generating savings.
- Improved visibility, control and predictability of non-strategic expenses, particularly during rapid sales growth and mergers and acquisitions.
- Improved compliance to contracts, policies and regulations such as Sarbanes Oxley via standardized processes (like ISO compliance and Lean) accessed through the provider.
- Freed-up cash flows through improved payment terms, invoicing and reconciliation.
- Lower total cost than a comparable in-house spend management program.
Supply Chain and Procurement Benefits
- Increased value delivered through the supply chain through management of non-strategic, low-priority spend that internal Supply Chain and Procurement rarely address.
- More internal focus by taking low-priority, non-strategic spend areas "off the plate"-thus improving business performance in strategic spend areas.
- Leveraged spend across multiple, autonomous divisions, business units, and regions to realize additional savings opportunities.
- Significant unit price and total cost reductions through improved contract sourcing, tactical sourcing and spot market arbitrage.
- Enhanced contract compliance through requisition validation, redirection to preferred suppliers and billing error corrections.
- Better demand management and cost avoidance through detailed spend visibility, spend aggregation, specs rationalization and trade-off analyses.
- Improved capabilities for managing spend through enhanced category expertise, spend management processes and technology.
- Improved experience and service levels for divisional management and end users through better reporting and analytics and more flexible supplier contract terms and SLAs.
- Analyze-to-Pay Program. Management of spend within in-scope, non-strategic spend categories across all analyze-to-pay processes.
- Analyze-to-Contract Program. Management of analysis, sourcing, and contract establishment processes for a broad range of non-strategic spend categories.
- Procure-to-Pay Program. Management of the compliance, ordering, spot buying and reconciliation processes for a broad range of non-strategic spend categories.
