A Guide to SAP Ariba Catalog Enablement
Introduction
The SAP Ariba Catalog Enablement process is a critical component of the procurement lifecycle. It allows organizations to streamline their procurement processes, ensure compliance, and improve supplier relationships by leveraging digital catalogs. This white paper provides an in-depth overview of the SAP Ariba Catalog Enablement process, including its benefits, types of catalogs, and best practices for implementation.
Benefits of SAP Ariba Catalog Enablement
SAP Ariba Catalog Enablement offers several benefits to organizations:Enhanced Procurement Efficiency: By digitizing the catalog process,
organizations can reduce manual effort, minimize errors, and speed up the procurement cycle.
Cost Savings: Automated catalogs help in identifying the best suppliers and prices, leading to significant cost savings.
Compliance and Control: Ensure compliance with procurement policies and gain better control over spending.
Improved Supplier Relationships: Facilitates better communication and collaboration with suppliers.
What is an SAP Ariba Catalog?
The SAP Ariba catalog is an organized, descriptive list of goods and services available to potential buyers. It includes information such as description and price and can optionally include product images or illustrations.
Some features of the catalog include:
ü Aggregated content
o The catalog has items from all the buyers’ suppliers in a single database
o The catalog can also be tied into the SAP Ariba contracts module to allow searching of contract items
ü Hierarchical Structure
o Users can browse through grouping of like-items and nested categories and subcategories
o Ability to search the catalog using keywords, or filter by parameters such as supplier, manufacturer, or price.
ü Unified Interface
o Provides access to all goods and services with a common interface
The SAP Ariba catalog serves buyer’s needs in three ways:
Sourced items:
o Use a standard catalog where the buyers control the suppliers and the Items.
o Static content or leveraging your supplier’s web catalog
Non-sourced items or “Spot Buys”:
o SAP Ariba Spot Buy gives users an easy way to buy one-offs or low volume items that don’t make sense to source – but still gives the buyer the visibility, control and reporting
o Buyer maintains control of suppliers and/or commodities
Guided Buying:
o For the user who uses the system infrequently or just does not know where to go – the system asks them what they want and guides them to the proper catalog or other buying method.
Benefits of using SAP Ariba Catalog
Ease of Use: Since we all know how to shop online, a catalog simplifies shopping and is a natural tool that does not need a lot of training.
Curb rouge spending: If it is easy, and I can get on with my job – why would I go around the system?
Leverage your Strategic supplier relationships: You display the suppliers that are preferred
Leverage your Negotiated content: You show the items that you want Users to buy
Self-service purchasing: I don’t have to call Purchasing
Speed and Efficiency gains: – Robust search capabilities as well as the ability to
save searches makes locating items quick. Goods and services can be saved for
repeated buying in the future.
By enabling spend using catalogs, organizations can increase leverage many ways. Here are a couple of important ones:
Compliance: Consolidating purchases to preferred suppliers not only saves money but increases negotiating power.
Increased operating efficiencies: Additional cost savings as well as reducing order cycle times, produce happier users giving purchasing more internal influence.
Key considerations when leveraging catalog functionality
Ø How many transactions do we do with the supplier annually?
Ø Is it greater than 50?
Ø Do the suppliers already provide catalogues on Ariba Network?
Ø Do the contracted items have a part number-to-price relationship?Ø Many times, suppliers with IT, MRO and office supplies are
“Catalogue ready’
Types of Catalogs
SAP Ariba supports various types of catalogs to meet different business needs:
A. Static Catalogs
- Description: Simple text files maintained by the supplier.
- Use Case: Suitable for suppliers new to the Ariba Network or with less frequent updates.
- Advantages: Easy setup, maximum control, and audit capability.
- Disadvantages: No real-time inventory or pricing updates.
B. PunchOut Catalogs
Level1 Punchout Catalogs
- Description: Uses a supplier’s website to display products.
- Use Case: Suitable for large catalogs or those requiring real-time updates and configurations.
- Advantages: Dynamic quotes, real-time information, and item configuration.
- Disadvantages: Requires users to learn different interfaces and know which supplier to buy from.
Level2 Punchout Catalogs
· Description: The catalog interface shows search results like a static catalog, then Users click a Buy from Supplier button, and punch out of SAP Ariba to the supplier’s site directly to the specific item or category they chose.
o Supplier uploads a CIF-like, static index file, with a line for each SKU, to Ariba Network.
o Catalogs are maintained by suppliers on their website, and they maintain the index file sent to SAP Ariba (can be automated).
· Use Case: Level 2 PunchOut allows searching in the SAP Ariba application for items – results are returned for both static and PunchOut catalogs – you don’t have to know who the supplier is before you start the purchase.
· Advantages: Real time pricing and availability (if provided by the supplier).
Punching in at Aisle level, Shelf level or Product level (for example: Aisle – Optical Media, Shelf –DVD-R, Product – Maxell DVD-R Part 5435.
- Disadvantages:
o More complicated to set up – must make modifications to a Level 1 site
o Supplier must maintain PunchOut Index file for each SKU, upload to Customer to keep current (can be automated)
· If pricing is required in the Index file, when the User punches out to the site, the current price of the item may be different.
C. Spot-Buy Catalogs
Seamlessly integrated into the SAP Ariba catalog user interface, Spot Buy allows users a catalog buying experience to search pre-qualified sources of supply to “find and buy” non-sourced goods or one-time buys. e.g. eBay, Amazon
- When Spot Buy is enabled, it shows in the catalog as a new tab.
- All Spot Buy items show as coming from a single vendor called “Spot Buy”
Note: While Spot Buy is a free feature, it does require Buyer Agreement inexisting or amended contract.
D. Contract as Catalogs
We can configure your system to generate catalog subscriptions for items from contracts
The system must be configured for the SAP Ariba Contract Compliance module. The buyer (requester) sees those items as regular internal catalog items and can “Add to cart”. The item appears in Requisition line item with C-XXX (Contract Number) associated with it.
Best Practices for Catalog Enablement
- Plan Thoroughly: Develop a comprehensive catalog strategy that aligns with business goals.
- Engage Suppliers Early: Communicate the benefits and requirements of catalog enablement to suppliers early in the process.
- Use Available Tools: Leverage SAP Ariba’s tools and resources for catalog creation, validation, and management.
- Monitor and Improve: Continuously monitor catalog performance and make necessary improvements.
Challenges and Solutions
- Supplier Resistance: Address concerns by highlighting the benefits and providing adequate support and training.
- Data Accuracy: Ensure accurate and up-to-date data through regular validation and audits.
- Integration Issues: Work closely with IT and suppliers to resolve any technical challenges.
Conclusion
The SAP Ariba Catalog Enablement process is a powerful tool for enhancing procurement efficiency, reducing costs, and improving supplier relationships. By following best practices and leveraging SAP Ariba’s capabilities, organizations can achieve significant benefits and drive procurement excellence.
