How SAP Ariba intends to digitize procurement

From June 12-14, 2017, SAP Ariba held its annual conference dedicated to European customers. The conference reunited the entire Ariba ecosystem (which, according to SAP, has developed significantly over the past), customers, partners, press and analysts. 

Ariba Network, the world’s largest business-to-business trading platform

Source: SAP

Apart from new capabilities and solutions – some of which I will comment on below – SAP sent out a clear message about integration with the SAP core system, a move that should strengthen SAP and non-SAP users’ added value. The increased integration level of Ariba functionalities with the SAP backend systems will more and more digitize procurement processes. Besides, the solution takes advantage of the large amounts of procurement-related data generated. The latter aspect will help companies benefit from automated procurement processes, not only at an operational level but also when it comes to decision-making.

At the conference, a few novelties were presented and announcements made, one of the most important concerning the launch of SAP Ariba® Spot Buy capability for European customers with Mercateo as the primary partner. Mercateo has been running Europe’s largest B2B marketplace since 1999 and in early 2017 launched Mercateo Unite – the B2B networking platform. Mercateo Unite has a multi-supplier infrastructure that provides a wide range of products to enterprise buyers.

The Spot Buy capability eases corporate buying and renders it close to a consumer-like shopping experience while being in full compliance with the company’s procurement policies and procedures. The partnership with Marcateo will enable Ariba customers to access the Mercateo Unite marketplace.

Another major announcement was the release of Light Account, which allows suppliers to connect to the Ariba network for free. Ariba thus facilitates access to its network and procurement model for smaller suppliers that cannot afford nor need the entire functionality of the Ariba platform, while buyers benefit from an enlarged network of partners, especially for smaller-scale purchases.

Cognitive and machine learning are the key concepts for future procurement. Against this background, the announced partnership between SAP Ariba and IBM has drawn a lot of attention. It is meant to bring cognitive, machine learning and artificial intelligence into the field of procurement, usher in the next generation of applications for source-to-settle processes, develop "Cognitive Procurement" and enable improved decision-making using predictive insights from unstructured information. The partnership between Ariba and IBM is in fact a partnership between the capabilities of IBM Watson and SAP Leonardo, which will bring innovative solutions to the procurement processes managed by Ariba. According to the SAP executives, Ariba will learn from Watson and Leonardo procurement to augment "human intelligence" and support buyers' day-to-day operational efforts.

What is next?

SAP Ariba’s goal is to automate all that can be automated in procurement. New technologies such as blockchain will be integrated to ensure traceability, transparency and fraud prevention. In future, it is planned to set up an open platform with API integration capabilities as well as a cloud integration gateway to the buy side.

The next release is expected for the end of 2017 and will include smart contract management capabilities. Procurement staff will thus be able to define contracts based on previous interactions and company histories through simple requests adressed in natural language to the intelligent assistant embedded in the Ariba module.