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1. Contract Management

Contract management modules helps buyer in creating scheduling agreements or outline agreements operating on latest policies, controls, and conditions. The outline agreements can be either quality contracts or value contracts whereas the scheduling agreements can be created with release or without release. It can be used as a platform for negotiating the prices for services or for goods that are required to be procured by the organization and then sign a legally binding contract with the supplier. It also helps in executing and maintaining internal agreements which strengthen regulatory compliances.

Advantages of Using Contract Management

• Organizations can standardize and control the type of contracts created by the buyers.
• It provides end-to-end reporting to optimize the value of the contract throughout the lifecycle.
• It automates and accelerates the labour-intensive contract lifecycle by minimizing effort for the administration and tracking of these contracts.
• All the contracts are stored in a centralised virtual repository which can be accessed any time which helps in better projections and easy contract renewals.

Restrictions while Using Contract Management

• SAP Ariba Contracts does not support any kind of attachments while creation of a contract.
• If a contract is transferred for SAP Ariba Contracts to S4 HANA, there is no workflow for manual approval. All such approvals are done automatically in S4 HANA.
• Contracts can be created only in one currency. The functionality of multi-currency contracts is unavailable.
• If the supplier is changed in a contract, the change will not be reflected in S4 HANA.

Process Steps while creating a contract

• A contract (Outline Agreement or Scheduling Agreement) will be created by the strategic buyer with the appropriate document type in SAP Ariba Contracts.
• The buyer will set up the terms and conditions of the contract and review them.
• This contract will be reviewed and then approved by an approver. Upon approval of the contract, it is sent to S4 HANA.
• Depending upon the document type in SAP Ariba, a purchase contract is created in SAP S4 HANA.
• This purchase contract is automatically approved in S4 HANA.
• Purchase orders can be created against the purchase contracts and delivery schedules can be maintained.

2. Supplier Lifecycle and Performance

In SAP Ariba, the Supplier Lifecycle and Performance feature allows buyers to manage and track the performance of their suppliers. This includes onboarding new suppliers, monitoring and evaluating their performance, and addressing any issues that may arise. The Supplier Lifecycle and Performance feature includes a range of tools and functions to help buyers manage their relationships with suppliers. Overall, the Supplier Lifecycle and Performance feature in SAP Ariba helps buyers to improve the efficiency and effectiveness of their supply chain by allowing them to manage their relationships more effectively with suppliers. With the use of APIs, the standard functionality of this module can be extended to provide services such as GST & PAN validation through government portals, penny validation for confirming bank accounts, etc.

Features of Supplier Lifecycle and Performance

• Organisations can onboard new suppliers by creating a supplier profile and verifying their information.
• The platform can be used to monitor supplier performance using metrics such as on-time delivery, quality, and cost.
• Buyers can communicate with suppliers and resolve any issues that may arise.
• Supplier can be evaluated and rated based on their performance.
• Organizations can identify and manage risks associated with specific suppliers.
• It provides the organisations with customizable segmentation workflow which helps in evaluation and management of suppliers based on specific parameters.
• It helps in reducing the qualification and onboarding cycle time.

Process Steps in Supplier Lifecycle and Performance

• Invitations are sent to different suppliers to fill out a registration questionnaire. They also need to upload the necessary documentation.
• The information provided by the suppliers is evaluated. They are onboarded based on factors such as quality, cost of doing business, amongst others.
• Once the supplier is onboarded, the organization tracks its updates on supplier information and performance.
• The performance of the supplier is constantly monitored in order to identify any risk that could cause disruptions.
• The organisation gets a supplier centric view of procurement and supply chain which helps in lowering costs, increasing efficiency, and better quality.

3. Strategic Sourcing

Strategic sourcing is the process of identifying and evaluating suppliers, negotiating contracts, and selecting the most suitable suppliers for an organization. SAP Ariba is a cloud-based procurement software that helps organizations automate and manage their procurement process, including strategic sourcing. With SAP Ariba, organizations can identify and evaluate potential suppliers, negotiate contracts, and select the best suppliers based on various criteria, such as cost, quality, and delivery performance. The software also provides tools for managing the entire lifecycle of a procurement process, including requisitioning, order placement, invoice management, auctions and payment processing. By automating and streamlining the procurement process, SAP Ariba can help organizations reduce costs and improve efficiency.

Key Features

• RFx Event: An RFx (request for proposal, request for quotation, or request for information) event is a process in which an organization solicits proposals, quotations, or information from suppliers in order to make a purchasing decision.
• Reverse Auctions: SAP Ariba allows organizations to conduct reverse auctions, where suppliers bid to provide goods or services at the lowest price.
• Sourcing Analytics: SAP Ariba provides analytics and reporting tools to help procurement professionals make informed decisions about suppliers and the procurement process.

Sourcing Event Process

• When the buyer creates an event, it is a draft. The buyer publishes the event where the invited suppliers can place their bids.
• The buyer can decide if suppliers have certain time period before the event is open bidding in order to preview the event, answer questions or prepare their bids for submission.
• The bids are visible live. The event can be modified, cancelled or closed as per the requirements of the business.
• After the event is closed, it's status changes to completed and it cannot be edited or reopened. However, the cancellation of an event can be reversed.
• At the end of the event, the organization selects the winning bid and awards the contract to the supplier who submitted it. Auctions can be an effective way to negotiate the best price for a particular good or service and can help organizations save time and money in the procurement process.

Types of Events

• Request for Information: RFI (Request for Information) is a type of event that is used to gather information from suppliers about their capabilities and capacity to meet the needs of an organization. An RFI is typically used early in the sourcing process when an organization is trying to identify potential suppliers and gather information about their products or services. During an RFI event, an organization will send out a request for information to a group of suppliers and ask them to respond with detailed information about their capabilities, capacity, and experience. This information is used to help the organization narrow down the list of potential suppliers and make a decision about which suppliers to engage in further negotiations or sourcing activities.
• Request for Proposal: During an RFP event, an organization will send out a request for proposal to a group of suppliers and ask them to submit a detailed proposal outlining how they would meet the organization's needs and requirements. The proposal should include information about the supplier's products or services, pricing, delivery, and any other relevant information. The organization will review the proposals and use them to make a decision about which supplier to select. RFP events are commonly used for the procurement of goods and services that are more complex or require a higher level of customization, such as consulting services or software development.
• Reverse Auction: Reverse auctions in SAP Ariba are a type of event in which suppliers bid against each other in real time. The organization specifies the goods or services it is looking to purchase and sets the terms of the auction, such as the start and end time, the minimum and maximum bid amounts, and any other relevant details. Suppliers then submit bids to the organization through the SAP Ariba platform. The bids are displayed in real time, and the organization can see the current lowest bid and the names of the suppliers who have submitted it. The organization can also communicate with the suppliers through the platform to ask questions or make comments.

4. Commerce Automation

SAP Ariba Digital Supplier Network is an online platform that connects buyers and suppliers. It enables buyers to find, engage, and manage a global network of suppliers, while providing suppliers with the tools and resources they need to streamline their process and make informed decisions. Buyers can send purchase orders, goods receipt notifications, and payment confirmation to suppliers through DSN. Supplier can create order confirmation, advance shipping notices, service entry sheets, and invoices through their account on supplier network. It provides both buyers and suppliers an interactive dashboard with separate tiles in order to easily track different kind of documents.

Based on the number of documents exchanged in an organisation, they can opt for Digital Supplier Network (low volume of transaction, fixed scope, and rapid deployment) or Commerce Automation (high volume of transaction, complex requirement and higher level of service).

Key Features of Commerce Automation

• Schedule Lines: In commerce automation, schedule lines refer to the details of an individual item or service that is being procured within a purchase order. They are used to specify the quantities, prices, and delivery dates of the items or services being purchased. Schedule lines may include information such as the item number, description, unit of measure, quantity, unit price, and delivery date. They may also include any special instructions or requirements for the item or service, such as packaging or handling instructions. Schedule lines are typically used in conjunction with purchase orders to help buyers and suppliers manage their procurement processes more efficiently. This feature is provided in Supply Chain Collaboration version of Commerce Automation.
• Electronic Invoicing: Ariba supports electronic invoicing, which enables buyers and suppliers to exchange invoices and other documents digitally, rather than through paper-based processes. Buyers can set default transaction rules through the suppliers would be able to create invoices as per the quantities approved in service entry sheets/goods receipt notifications.
• Operational Efficiency: Purchase Orders can be matched with invoices with the help of rule-based workflows. Helps organisations in reducing operational costs and greatly reducing transaction cycle time. Suppliers and buyers can share documents electronically while automatically applying compliance policies.

Process Steps for Commerce Automation:

• The buyer releases purchase order from S4HANA. The supplier can see the details of the purchase order on the supplier portal and also receives an email with a copy of the purchase order.
• The supplier creates an order confirmation either fully or partially confirming the quantity. Following this, they create an advance shipping notification which enlists the shipping and estimated delivery date.
• Once the material reaches the organisation, the buyer creates a good receipt notification. The line-item details are then sent to the supplier.
• Based on the GRN, the supplier creates an invoice which is sent to the buyer and is parked in S4HANA.
• The invoice is checked by the buying organisation, and payment is cleared. The supplier then receives a payment confirmation.

5. Buying and Invoicing

The buying and invoicing features in SAP Ariba allow businesses to streamline and automate their purchasing and invoice processing processes. With the buying feature, businesses can search for and purchase goods and services from suppliers, track orders, and receive and pay invoices electronically. The invoicing feature allows businesses to create, send, and receive invoices electronically, as well as automate the matching, approval, and payment process. By using SAP Ariba's buying and invoicing features, businesses can save time and reduce the risk of errors in their purchasing and invoice processing processes.

Process Steps for Buying and Invoicing

1. Procurement:

• The requester creates a purchase requisition for the goods or services needed.
• The requisition is reviewed and approved by the appropriate approver.
• The requisition is converted into a purchase order and sent to the supplier.

2. Order Tracking:

• The status of the order can be tracked in SAP Ariba.
• Any changes or updates to the order can be made and communicated to the supplier through SAP Ariba.

3. Receiving Goods:

• The goods are received and the supplier's invoice is matched to the purchase order.
• Any discrepancies or issues with the goods or invoice can be addressed through SAP Ariba.

4. Invoice Processing:

• The invoice is reviewed and approved by the appropriate approver.
• The invoice is paid electronically through SAP Ariba.