SAP Community - SAP Ariba Supplier Risk

Simplify spend management with the best solutions from SAP

2023-06-26T13:55:45+02:00

Company spending is always a hot topic. Businesses are careful to guard their cash, and with good reason. As the saying goes, “when you are out of cash, you are out of business”. If you want to better track and control business expenses and wondering which spend management solutions from SAP can help you achieve that, you’re in the right place! We have been busy transforming our SAP Enterprise Support value map for SAP Ariba solutions and the enhanced version is NOW LIVE!  

Value maps provide self-paced learnings, expert-led live sessions, collaborative forums, and access to SAP experts; all included as part of your SAP Cloud subscription contract.

The concept of intelligent spend management brings together the best from SAP: SAP Ariba, SAP Fieldglass and SAP Concur solutions in the areas of finance, sourcing, and procurement. Embracing this holistic view of all types of spend for intelligent enterprises, our Spend Management and Business Network value map supports these solutions under the following sub-solution areas: Procurement; Travel & Expense; External Workforce; and Business Network.  

What's new?

Customers want procurement made as easy and frustration-free as possible. The re-engineered value map delivers an expanded catalogue of enablement content including new Learning Journeys on topics such as SAP Ariba Supplier Lifecycle and Performance; SAP Ariba Supplier Risk; SAP Strategic Sourcing Suite; SAP Ariba Spend Analysis; SAP Ariba Contracts; SAP Ariba Buying; SAP Ariba Buying & Invoicing; SAP Ariba Guided Buying; and SAP Ariba Catalogs. 

The value map empowers customers to adopt spend management solutions from SAP to maximum potential, paving the way to simple successful digitized procurement.

Watch this space!

This is just the first phase and the value map will eventually incorporate a swath of further enablement assets covering SAP Ariba product releases, and SAP Business Network for Procurement - a cloud-based collaboration offering that gives buyers and suppliers a way to find each other and do business within a single, networked platform.  Ernestine Cosper, Global Topic Owner for the Spend Management and Business Network value map anticipates a busy time ahead:

We are so pleased to share the fresh new look and feel of our value map. With over 16,000 members, SAP Enterprise Support value maps act as a gateway to spend management for so many customers, and our value map gives them the means to achieve and boost adoption from the onset. We look forward to providing more enablement content in the coming months.

Where to access

3 Easy Steps:

One-time sign-up for SAP Learning Hub, edition for SAP Enterprise Support, is required

Access value maps

Navigate to the SAP Enterprise Support value map for Spend Management and Business Network

Once in the value map, we welcome you to collaborate in our forums, ask questions or “Request a Call” to speak with one of our experts for further help. Value maps are easy to navigate but an on-boarding call allows us to tailor the conversation to suit your needs and highlight specific content for you.

Don’t wait! Discover how SAP technology can transform your procurement operation or make your existing software work harder for you by visiting the value map today.  

Got a question about the value maps, or our content?
Leverage the “ask questions” feature in the value map or contact us:
sapesvaluemaps@sap.com

Risk Aware Decisions

2023-07-10T15:28:43+02:00

When managing third-party risk there is a need to determine the risk profile of that supplier and highlight where the third-party is either not in an acceptable state or is trending negatively. Many solutions will offer that information through dashboards, reporting, and alerts. However, the limitation of that approach is that it requires a savvy business user to check this information and make an individual determination of what to do with that information depending on the context which is challenging to proactively enforce to the corporate risk policy.

"Risk Aware decisions" is a label for embedding the risk knowledge naturally into the source to pay decision process. For example, when selecting which suppliers should be included into a RFx, the solution can naturally look at the risk profile of suppliers and exclude those suppliers that do not meet the minimum risk threshold for inclusion. The business user is no longer making individual decisions that would increase the risk for the company, nor wasting resources by including suppliers that would ultimately get eliminated through further resource intensive due diligence activity.

A few examples of Risk Aware decisions:

Supplier Onboarding - the automatic classification of a supplier at time of onboarding to exclude or reject a supplier on a sanction/watchlist, send a supplier for additional review for financial risk, etc.

Supplier Qualification - the automatic inclusion of risk scoring to drive additional relevant due diligence in the supplier qualification process.

Supplier Performance - the automatic inclusion of risk scoring into the supplier scorecard to support Quarterly Business Reviews (QBRs)

Sourcing: Supplier Selection - the automatic exclusion or warning when selecting suppliers that are outside the acceptable risk threshold determined by the customer's corporate risk standards.

Sourcing: Award - the automatic award scenario creation to look beyond cost savings into the lowest risk that might suggest dual sourcing, regional selections, or other recommendations for award that represent the lowest risk to the customer.

Contract: Authoring - the systematic reference to risk scoring that would automatically adjust contract clause inclusion based on the customer's risk standards, for example requiring more buffer inventory or insurance minimums if the third-party is determined to be higher risk

Contract Signature - the "final" automated review of the third-party's risk profile prior to allowing signature to catch situations where the risk score has deteriorated below the corporate acceptable standard.

Buying: the automatic inclusion of a risk team in purchase requisition workflow if the risk score drops below an acceptable standard or the automated rejection in the workflow based on a customer configured risk process.

Invoicing: similar to the buying process allowing for the coverage of risk score influence for non-PO invoices

In order to trust the risk aware decision automation, there needs to be trust and relevance in the scoring. The risk scores can be classified and weighted according to customer standards and data is sourced from adverse media alerts, corporate data, country risk profiles, customer preferred content providers, as well as full risk engagement assessments to tie the activity of the third-party to the appropriate risk categorization of commodity, location, and business unit.

As well, SAP Ariba is working to natively include risk aware decisions throughout the solution portfolio. In addition, for any risk aware decision need there are apis available for a customer to include risk information in that decision workflow not yet natively covered in the solution portfolio or to extend the capability into applications not part of the SAP Ariba suite.

For more information on the Risk Exposure api, click here.

For more information on the approval flow api, click here.

2308 Early Release Series

2023-07-24T21:14:07+02:00

2308 Early Release Series for SAP Procurement and SAP Business Network releases

Sign up now for the 2308 Early Release Series

Follow this blog to receive notification of new series as soon as registration opens.

SAP strives to equip our customers and partners with valuable release readiness resources for each SAP Procurement and SAP Business Network quarterly release.

Early Release Series

The SAP Procurement and SAP Business Network Early Release series of webcasts cover features planned for the upcoming quarterly release. This platform, available to customers and partners, has a clear mission: deliver an interactive forum to engage with SAP product experts providing simple, direct answers to your most pressing questions. There is a different session for each product area with content tailored for the specific audience:

Procure-to-Pay

Source-to-Contract

Supplier Management & Risk

Business Network & Supply Chain

Category Management

If you want to learn more and actively engage with SAP subject matter experts, we encourage you to participate in these informative sessions. Register now!

Quarterly Release Communications

The release calendar for SAP Business Network and release calendar SAP Ariba Applications, on SAP Ariba Connect, identify release timing several quarters in advance.

Notice of upcoming quarterly releases will be communicated to Buyer customers three weeks prior to the release date. Suppliers receive notice two weeks prior. Releases are communicated via email notification (look for subject line starting with: Advance Release Notice).

Designated Support Contacts (DSC) and anyone from your organization that have chosen to subscribe to product notifications will receive these announcements.

Where to find out more details?

On demand replays of webcasts from completed quarterly releases can be consumed from SAP Ariba Connect.

2311 Early Release Series for SAP Ariba and SAP Business Network releases

2023-10-11T02:07:03+02:00

Sign up now for the 2311 Early Release Series

Follow this blog to receive notification of new series as soon as registration opens.

SAP strives to equip our customers and partners with valuable release readiness resources for each SAP Ariba and SAP Business Network quarterly release.

Early Release Series

The SAP Ariba and SAP Business Network Early Release series of webcasts cover features planned for the upcoming quarterly release. This platform, available to customers and partners, has a clear mission: deliver an interactive forum to engage with SAP product experts providing simple, direct answers to your most pressing questions. There is a different session for each product area with content tailored for the specific audience:

Procure-to-Pay

Source-to-Contract

Supplier Management & Risk

Business Network

The Human Face to Sustainability

2023-11-16T19:34:33+01:00

Did you know:

High-income countries leave a larger environmental footprint compared to low-income countries.

In fact, the material footprint per capita in high-income countries is 10 times that of low- income countries. Despite calls for a phase-out, fossil fuel subsidies return and nearly doubled, triggered by global crises.

More than 600 million people worldwide are projected to face hunger in 2030, and 1 in 3 people, worldwide, struggle with moderate to severe food insecurity.

In addition, malnutrition persists worldwide, jeopardizing children’s well-being and future development.

The world will exceed 1.5° C by 2035 and faces a 2.5° C warming by 2100.

As a result, highly vulnerable regions experience 15x higher mortality rates from disasters compared to very low vulnerability regions.

While each of these statistics are staggering, they are directly correlated to one of the 17 UN Sustainable Development goals – Responsible Consumption and Production, Zero Hunger, and Climate Action, respectively.

As these goals are being pushed through targets, events, publications, and actions, we’ve come to realize that there is an unbalanced scale, in terms of sustainability. The sheer demand for social responsibility by corporations is exponentially growing as investors, consumers, and regulators are eagerly pushing for reformed change. In today’s world, sustainability isn’t just about going green. People – like the environment – are affected by business decisions, and there is more than what meets the eye with sustainability; in fact, there’s a human face.

The Unbalanced Scale of Sustainability

Unbeknownst to most, there is a deep-rooted connection between sustainability efforts and systemic inequality, as inequality has a direct impact on business performance, limiting productivity and innovation, constraining consumer spending and growth, destabilizing supply chains, and triggering political instability. While the outcomes seem daunting, fortunately, inequality is not a fact of nature, but a product of our systems, which is within our control.

To reduce inequality and provide an even playing ground for companies and consumers, alike, businesses need to take ownership of their essential role. But, the biggest question is… how do they begin?

At this year’s SAP Sapphire event, Alicia Lenze, SAP’s Global Head of Sustainability Marketing, mentions that “leveling the playing field for all leading companies is a major first step to correcting the imbalance of the scale. They can continue and maximize on these efforts by ensuring there are equal opportunities and better outcomes available for all. But, in addition, businesses must push for a more holistic and interconnected agenda, thus ensuring responsible business conduct and mitigating systemic and business risks. Through their Environmental, Social, and Governance (ESG) goals, companies now have the power to become the driver for long-term, sustainable economic growth.”

Social’s Growing Dominance in ESG Goals

As companies continue to shift and focus on their environmental and ecological footprint, the rise of the ESG agenda within companies’ business strategies is seeing exponential growth. However, as much as there is an imbalance in sustainability, there’s just as much of an imbalance in the focus on its three major pillars – Environmental, Social, and Governance. In many cases, Environmental and Governance often take center stage, due to their tangible business benefits, however, we are now seeing an increasing focus from consumers, employees, and investors on the reinforced action for the S, or ‘Social’, pillar within ESG goals.

Courtney Holm, Vice President of Sustainable Future at Capgemini, along with Lanze, mention that “companies can begin this journey by respecting human rights throughout their business value chain and putting respect for human dignity at the center of how business gets done. From inhumane working conditions to child labor to lack of supply chain transparency, businesses have a responsibility to conduct due diligence to identify, mitigate, and account for how they address their adverse human rights impacts. The responsibility goes beyond the company’s four walls, and, for example, includes your suppliers and their workers in the entire value chain.”

With much at stake with their strategic decisions, companies are investing in more than just their people, their investing in their technology.

Sustainability and Software’s Connection

Technology is a forceful enabler of scale and impact and must be part of the equation to succeed. It’s become critical that our business systems can deliver the processes and functionality to manage the increasing requirements around ethical sourcing and comply with human rights due diligence to ensure decent work, reduce inequalities, and mitigate risks. In a recent Capgemini video, Holm states that ‘technology and software is an enabling ecosystem for driving sustainable change inside organizations.’ She’s right – technology can deliver more than just business results, it delivers:

the needed trust and business accountability,

enhance an organizations' ability to identify, prevent, and mitigate human rights risks,

connect stakeholders across an integrated value chain, and

enable transparency and accessibility across the complexity of global human- and labor rights regulations and standards.

Through solutions like SAP Business Network Supply Chain Collaboration, SAP Sustainability Data Exchange, SAP Sustainability Control Tower, and Ariba Supplier Risk Management, businesses now have the same flow of accountability, visibility, and traceability to conduct responsible business.

Sustainability’s Bright Future

While embarking on a sustainability journey can seem daunting, there is a sense of optimism, as companies can now be well-equipped to not only change how they conduct business but do it in a way that is beneficial to the livelihood of our society. The push for accountability, transparency, and visibility into a company’s value chain has opened doors for a digitalized way of operating – one that embraces open dialogue and supports the evolution of social sustainability. It’s a future I, for one, am excited to see.

To learn more about how to get on the path to a Risk Resilient and Sustainable supply chain, download the Oxford Economics Research.

Managing Supplier Risk with SAP Ariba

2023-12-28T12:46:59+01:00

Are you interested in understanding the ins and outs of SAP Ariba Supplier Risk, but the complex jargon feels overwhelming? Don’t worry- we are here to demystify this product in straightforward terms through this blog.

Table of Contents

Introduction

What is Supplier risk? Different types of Supplier Risks

What is Supplier risk management?

What are risk controls, Risk Assessments & Due diligence?

Inherent Risk Vs Residual Risk

What does SAP Ariba Supplier risk offer? How can SAP Ariba help with Supplier risk management?

Sustainability in Supply chains & the role of SAP Ariba Supplier risk

1.Introduction

First things first! Let’s talk about the premise of the problem that we are trying to solve through SAP Ariba Supplier risk.

Remember when the world seemed to come to a halt at the start of the COVID-19 pandemic? Our lives got affected in various ways and different industries struggled to survive. Specific to Automotive industry, there was a huge problem with car prices, there were delays in production and delivery of cars. Major culprit behind this chaos for automative industry is semi-conductor shortage.

Without an adequate supply of semiconductors, car manufacturers struggled to meet the demand, and it resulted in production delays and increased prices.

This shortage of semiconductors is a prime example of the importance of supply chain risk management. It highlights the need for businesses to identify and mitigate potential disruptions in their supply chains. When a single component shortage can wreak havoc on an entire industry, it highlights the importance of building a resilient supply chain and managing potential risks. Let`s deep dive into understanding the details of supply chain risks and how SAP Ariba can help in managing Supplier risk.

2. What is Supplier Risk?

Supplier risk, also known as supply risk, refers to the potential risks that arise from a supplier's actions and choices, which could have adverse effects on your company. These risks can arise from various factors, such as a supplier's policies, financial stability, and data security measures. Additionally, relying on a limited number of suppliers or lacking adequate visibility into your supplier network can also lead to supply risk.

Different types of Supplier risks

Here are some of the common categories of supplier risks.

Financial risk: The risk of your supplier`s financial conditions impacting your business

Operational risk: The risks that can arise from everyday operations such as logistics, procedures and systems followed by your supplier

Environmental and Sustainability risk: The risk of your supplier`s environmental events and social impacting your business. Examples - manufacturer is in an earth quake zone or supplier` factory location is reported use of child labor or the likelihood of foreign invasion in a supplier’s country of operation.

Regulatory and legal risk: The risk of government regulations in your suppliers’ countries of operation impacting your business

Cyber security risk: This risk of potential negative consequences that can arise from uncertainties in information technology such as data breach

Now that we briefly talked about some types of risks, lets understand the process of managing supplier risks.

3. What is Supplier risk management?

Supplier risk management is the process of identifying, assessing, mitigating, and monitoring risks throughout the supplier lifecycle and procurement processes. This process helps your business ensure that the right checks and protocols are in place to keep your business resilient and safe from supplier risk.

With a clear understanding of the basics, lets now zoom into some key terms and hot topics in Supplier risk.

4. What are risk controls?

Risk controls specify the methods that a company uses to evaluate risk in a particular area when considering an engagement with a supplier or third party.

What is a risk assessment?

Assessments are associated with risk controls and are a set of questions designed to better understand the risks of working with a supplier or third party in particular area(s), relevant to a control.

What is Due diligence?

The investigative process by which a supplier or other third party is reviewed to determine their suitability for a given task.

Due diligence is an ongoing activity, including review of risks, addressing issues, and monitoring throughout the entire vendor lifecycle.

AI Generated image of a home owner trying to work with a contractor for home renovations

🪜To put this in layman`s terms, let`s say you want to hire a contractor to renovate your house. Before deciding, you would have certain rules or methods in place to evaluate the risks involved, such as checking their references, looking at their past work, and considering their reputation. These rules are your risk controls.

As part of the risk controls, you would also ask the contractor a series of questions to better understand the potential risks, like whether they have the necessary licenses and insurance, or if they have experience with similar projects. These questions are your assessments.

And throughout the renovation process, you would continue to monitor the contractor, address any issues that arise, and make sure they are doing the job properly. This ongoing activity of reviewing, addressing, and monitoring is your due diligence.

5. Inherent Risk Vs Residual Risk

What is Inherent risk?

Inherent risk refers to the level of risk that exists before any risk controls or mitigation measures are put in place. It represents the natural level of risk associated with each supplier.

In our example of hiring a contractor for home renovation, inherent risk would include factors such as the complexity of the project, the contractor's level of expertise, and the potential for any unforeseen issues to arise during the renovation process. Inherent risk is the risk that is inherent or inherent to a particular situation.

What is Residual risk?

Residual risk refers to the level of risk that remains after risk controls and mitigation measures have been implemented. It considers the effectiveness of the risk controls in reducing the overall level of risk. In the case of hiring a contractor, residual risk would be the remaining level of risk after you have conducted your due diligence, implemented risk controls, and monitored the contractor's work.

Now that we have set the stage on the nuances in Supplier risk, it’s time to understand how SAP Ariba helps in Supplier risk management.

6. What does SAP Ariba Supplier risk offer?

Clear visualizations that provide valuable risk due diligence insights - Risk profile provides a concise picture of a supplier’s exposure to risk categories such as regulatory and legal, environmental, social, financial, operational, and custom risk categories defined by the customers

Comprehensive risk data from an extensive monitoring network - insights from numerous sources including those reported in global and regional news sites, government and private databases, corporate information, natural disaster monitoring, and third-party data providers of financial data, environmental and social and the ability to bring compliance data and custom data via an API

Comprehensive process for supplier engagement risk assessments – Comprehensive risk engagement process with context-specific screening questions, supplier recommendations, data gathering, and review, findings management, and task tracking make for a quick and thorough risk due diligence process.

How can SAP Ariba help with Supplier risk management?

Assessment

Conduct control assessments based on suppliers’ inherent risk

Calculate exposure to risks based on your relationships, with due diligence based on your supplier engagement

Identify suppliers of greatest concern by applying filters to data from more than 600,000 public and private sources

Mitigation

Generate and execute corrective actions plans to proactively mitigate risks while working with team members on risk-disposition workflow actions

Connect the supplier risk solution to your source-to-pay process to improve compliance

Identify where forced labor may exist in your supply chain

Monitoring

Receive personalized risk alerts through automatic tracking of more than 200 risk incidents

Monitor financial, operational, environmental, social, regulatory, legal risks and other categories of risks proactively

Track special handling needs or problems that require remediation or exceptions through Findings management

7. Sustainability in Supply chains & the role of SAP Ariba Supplier risk

Many companies are now considering supporting sustainability and human rights as a key aspect of their mission. Businesses are striving to make a positive impact on the society and environment. This ethical foundation is quickly becoming a requirement for customers and consumers. Businesses need to create an actionable social responsibility strategy. While there are many commodity- and region-specific sustainability supplier networks, a single point of truth across the entire supply base can support risk-aware core processes while allowing for targeted reporting and transparent audit trails.

Also, there have been several supply chain due diligence acts being passed by governments across the world to enforce sustainability to be embedded into supply chains. For example, German Supply Chain Due Diligence Act aims to increase supply chain transparency, boost human rights, and foster legal certainty and fair competition. Companies that fail to comply face high penalties.

SAP Ariba Supplier risk can help build digital bridges and facilitate compliance by:

Providing up-to-date supplier risk scores within supplier selection activities in the spend management process, so companies can easily select suppliers with low-risk profiles.

Incorporating internal and external data sources to provide comprehensive supplier risk profiles across all immediate suppliers.

Helping to identify, document, and reduce risks in close collaboration with suppliers

In conclusion, SAP Ariba Supplier risk software offers a comprehensive solution to mitigate and manage risks across the supply chain. Its capabilities empower organizations to proactively identify, assess, and respond to potential disruptions, ensuring business continuity and resilience.

References

Understanding systemic disruption from the Covid-19-induced semiconductor shortage for the auto industry https://www.sciencedirect.com/science/article/abs/pii/S030504832200127X?via%3Dihub

A grounded definition of supply risk https://www.sciencedirect.com/science/article/abs/pii/S1478409203000451?via%3Dihub

10 Supply chain risks, and ways to mitigate them https://www.sap.com/insights/supply-chain-risks.html

Measuring Geopolitical Risk. International Finance Discussion Papers https://doi.org/10.17016/IFDP.2018.1222

German Supply Chain Due Diligence Act: Why Due Diligence Is No Reason to Panic https://news.sap.com/2022/08/german-supply-chain-due-diligence-act-why-due-diligence-is-no-reason-to-panic/

Supply Chain Due Diligence Acts: What You Should Know https://news.sap.com/2023/01/lksg-supply-chain-due-diligence-acts-what-to-know/

Authors - Nandita Ghosh & Yashaswi Peesapati , SAP Ariba Supplier Risk Product Management.

2402 Early Release Series for SAP Procurement and SAP Business Network releases

2024-01-26T19:21:48.669000+01:00

SAP strives to equip our customers and partners with valuable release readiness resources for each SAP Procurement and SAP Business Network quarterly release.

Early Release Series

The SAP Procurement and SAP Business Network Early Release series of webcasts cover features planned for the upcoming quarterly release. This platform, available to customers and partners, has a clear mission: deliver an interactive forum to engage with SAP product experts providing simple, direct answers to your most pressing questions. There is a different session for each product area with content tailored for the specific audience:

Source-to-Contract
Procure-to-Pay
Supplier Management & Risk
Business Network

If you want to learn more and actively engage with SAP subject matter experts, we encourage you to participate in these informative sessions. Register now!

Quarterly Release Communications

The release calendar for SAP Business Network and release calendar SAP Ariba Applications, on SAP Ariba Connect, identify release timing several quarters in advance.

Notice of upcoming quarterly releases will be communicated to Buyer customers three weeks prior to the release date. Suppliers receive notice two weeks prior. Releases are communicated via email notification (look for subject line starting with: Advance Release Notice).

Designated Support Contacts (DSC) and anyone from your organization that have chosen to subscribe to product notifications will receive these announcements.

Where to find out more details?

On demand replays of webcasts from completed quarterly releases can be consumed from SAP Ariba Connect.

SAP Ariba 2402 Release Key Innovations Preview

2024-01-29T02:51:45.188000+01:00

Hello SAP Ariba community!

We're thrilled to introduce you to the new features found in our 2402 release for SAP Ariba. These enhancements aim to provide advancements including artificial intelligence, cutting edge user experience enhancements and advanced collaboration to help elevate your procurement processes and strengthen your strategic standing in the evolving business environment. Let's dive right in!

Accelerating enterprise category strategy development with generative AI-enhanced content recommendations in SAP Ariba Category Management

Say goodbye to data entry hassles with our new dynamic content recommendations. This feature is set to revolutionize your strategy planning in SAP Ariba Category Management by providing context-aware insights. This means more efficiency and a strategic edge for your category managers. Watch for our detailed blog for the 2402 source to contract release blog coming soon.

Market dynamics using generative AI in SAP Ariba Category Management

Scoutbee Supplier Discovery™ integration with guided sourcing in SAP Ariba Sourcing

We've integrated Scoutbee Supplier Discovery™ capabilities with guided sourcing, a strategic move to enhance your sourcing process. Keep an eye out for our detailed blog for the 2402 source to contract release coming soon.

New supplier profile summary in SAP Ariba Supplier Lifecycle and Performance

Our new Supplier Profile Summary feature enhances user experience by leveraging the latest SAP capabilities. It offers a new Operational Score panel with data from integrated S/4 HANA operational KPIs, providing a comprehensive view of your suppliers.

New supplier profile summary

The new supplier profile summary is enabled through our new provisioning process using your s-user ID and SAP for me. You can find out more at Learn All About S-User IDs! and SAP for Me – More for You! as well as the SAP Ariba Supplier Management 2402 release key innovations preview for more details and additional features

Bulk engagement request creation and corresponding actions in SAP Ariba Supplier Risk

Imagine being able to create and work with multiple supplier risk engagement requests, all at once. This feature allows you to do just that. Enter your business details once, specify a list of suppliers, and voila! You have a new engagement request for each supplier. This feature is a game-changer for streamlining your supplier risk engagement process and accelerating your business operations. Stay tuned for more details in the SAP Ariba Supplier Management 2402 release key innovations preview as well as additional new features.

Assigning multiple suppliers to an engagement request in SAP Ariba Supplier Risk

Multi-line RFQ tiles support "allowSubcategory" in SAP Ariba guided buying capability

We're giving you more control over your RFQs. The new RFQ tiles now support the allowSubcategory attribute, enabling you to select a more specific product or service. This gives you finer control over your policies, better management of RFQs, and more detailed reporting. Please take a look at our SAP Ariba Procure to Order 2402 Release Key Innovations for further details and additional features.

Ability to configure SAML authentication settings in intelligent configuration manager

Customer administrators can now enable and update SAML authentication for their site without having to request assistance from SAP Ariba representatives. This feature promotes autonomy and efficiency in managing your site's authentication settings.

Request for information workflow in SAP Ariba Central Invoice Management

The new Request for Information Workflow feature empowers the Accounts Payable Accountant to ask questions or clarify any information from any user in their organization before an Invoice can be Submitted and Processed. This promotes transparency and accuracy in your invoicing process. Get the full picture in our SAP Ariba Central Invoice Management - Key Innovations 2402 Release blog.

We're excited about these new features and hope you find them as beneficial as we do. We look forward to continually innovating and providing our customers with the best procurement solutions.

Stay tuned and subscribe for more updates!

Register for our 2402 early release series webcasts Early Release Series - 2402 release
Feature information portal (SAP Ariba Connect) available here
Help Portal Product Page for Procurement and Network
SAP Procurement Community: here
What’s New here
Revisit prior release blogs from 2023: Q2 – 2305 / Q3 – 2308 / Q4 - 2311

SAP Ariba Supplier Management 2402 Release Key Innovations Preview

2024-01-29T03:43:26.885000+01:00

Hello SAP Ariba Community!

We're delighted to announce the exciting new features in our 2402 release for SAP Ariba Supplier Management. Our primary objective is to enhance your supplier management processes and give the best experience possible for your users, and we believe our latest updates do just that!

Let's delve into the new features:

New supplier profile summary

Our new Supplier Profile Summary feature introduces an enhanced user experience including enhanced visuals with clearer highlighted information, improved overall user experience readability and a new operational score panel with data from integrated S/4 HANA operational KPIs if available. This provides a comprehensive view of your suppliers, leading to informed decision-making.

New supplier profile summary

In line with our commitment to continuous improvement, we have moved to s-user ID & SAP4Me to enable the new supplier profile and the enablement of finding and event collaboration in SAP Ariba Supplier Risk. This change allows us to leverage the SAP standard provisioning processes and simplifies the process of enabling finding and event collaboration, making it more user-friendly and efficient. You can find out more at Learn All About S-User IDs! and SAP for Me – More for You! as well as our upcoming 2402 SAP Ariba Supplier Management blog post.

Bulk Engagement Request Creation and Corresponding Actions in SAP Ariba Supplier Risk

Many of our customers love the ability to manage suppliers and engagements for risk however sometimes this detailed management can apply across multiple suppliers at once such as when evaluating supplier's human rights compliance. This new feature is a game-changer for improving the efficiency of this. Enter your business details once, specify a list of suppliers, and voila! You have a new engagement request created for each supplier. This feature also provides the capabilities to approve the engagements and send the assessments in bulk. This not only streamlines the engagement process but also expedites your business operations.

Creating a human rights due diligence engagement request for multiple suppliers

Ability to Download SAP Region Code Data

With this feature, you can download current SAP region code data, ensuring that address answers in supplier management questionnaires include region codes that are valid in an integrated ERP system. If you are integrated with non-SAP ERP systems you can then download and customize these files to create and upload their own region code data with the correct formatting. This feature provides an added layer of data compatibility and standardization.

Prepopulate Matrix Values from Intake Form Into Modular Questionnaires

This feature allows you to prepopulate matrix values in modular questionnaires with entries from the intake form, improving the efficiency of the qualification process and preventing user errors when completing the modular questionnaire.

Improvements to the Automatic Start of Supplier Registration Feature

This enhancement ensures that supplier registrations are started automatically under additional conditions, reducing manual effort and increasing process efficiency and ensuring more comprehensive automatic start scenarios to include:

- When primary supplier contacts are added or imported for the very first time into SAP Ariba Supplier Lifecycle and Performance, and
- When supplier requests are externally approved in an integrated SAP Master Data Governance - Suppliers (MDG-S) system, and confirmed in SAP Ariba Supplier Lifecycle and Performance

We're thrilled about these improvements and hope you find them as beneficial as we do. We look forward to continually innovating to provide our customers with the best procurement solutions.

Stay tuned and subscribe for more updates!

Register for our 2402 early release series webcasts Early Release Series - 2402 release
Feature information portal (SAP Ariba Connect) available here
Help Portal Product Page for Procurement and Network
SAP Procurement Community: here
What’s New here
Revisit prior release blogs from 2023: Q2 – 2305 / Q3 – 2308 / Q4 - 2311

Why Procurement (still) matters

2024-02-01T15:59:05.196000+01:00

Within every B2B structure, procurement is far more than just a business necessity. It's a strategic function that holds much sway on the performance, profitability, and competitiveness of both buyers and suppliers.

As someone who's been deeply involved in the procurement landscape, I've resonated with several key aspects that underline its importance. In this blog, I share five of these, coalescing my insights with real-world examples. I also go beyond these to encompass some additional elements that make procurement indispensable in B2B operations.

Procurement as a Tool for Cost Reduction and Savings Maximization

If you've been following discussions on procurement strategy in recent years, you'll know that cost reduction and savings maximization are never far from the conversation. This point has been reiterated so frequently that, for many of us in the field, it's become something of an adage. It's not new, but it remains, undeniably, crucial.

Through its ability to source goods and services from suitable and cost-effective suppliers, procurement has proven its worth in achieving these timeless business objectives.

An informative study by the Aberdeen Group throwing more light on this: top-run procurement organizations, it says, can save as much as 12% on their capital spend, amounting to thrice the savings of their average counterparts (Aberdeen Group, 2014).

Procurement: The Stimulus for Innovation and Value Creation

In today's fast-paced, competitive world, innovation and value creation serve as the lifeblood for business success. Procurement functions can collaborate intricately with suppliers, fostering an environment of innovation and co-creation in B2B transactions.

This concept is exemplified by a case study by the Chartered Institute of Procurement and Supply (CIPS) showcasing Rolls-Royce's partnership with its suppliers. Their collective procurement strategies co-created value, leading to improved engine performance, reduced emissions and, consequently, increased customer satisfaction (CIPS, 2016).

Mitigating Risk through Proactive Procurement Strategies

In light of the prominent conflicts and political uncertainties we see in many parts of the world today, risk mitigation has risen to be an utmost crucial factor to consider. The global business environment harbors numerous unpredictable risks. These potential issues could be anything - from environmental, social, and governance issues to cyber threats and geopolitical uncertainties. Smart procurement functions help businesses identify, assess and manage these potential threats.

The World Economic Forum (WEF) has emphasized the role procurement can play, citing how it helps address the complex risks and challenges prevalent in global supply chains. These risks include widely-discussed environmental, social, and governance issues, cyber threats, and geopolitical uncertainties (WEF, 2020).

Fostering Long-Term Relationships and Trust: A Key Procurement Function

Strong, trust-based relationships serve as pillars for B2B transactions. Procurement can foster these relationships, facilitating communication, aligning goals and expectations, and amicably resolving conflicts or disputes.

The Institute for Supply Management (ISM) survey substantiates this, indicating that 83% of procurement professionals consider supplier relationship management (SRM) a strategic priority, attributing positive outcomes such as increased efficiency, quality, and product innovation to effective SRM implementation (ISM, 2017).

Procurement’s Role in Supporting Sustainability and Social Responsibility

In a world grappling with climate change and social justice issues, the role of procurement in tackling these challenges cannot be overstated. On a personal level, the possibility that procurement can genuinely contribute towards better environmental policies, climate initiatives, and social justice not only gives me hope, but also strengthens my own engagement in this field.

I believe that businesses can make a significant societal and environmental impact by integrating their procurement functions with sustainable practices and social responsibility initiatives.

This is further backed by an International Trade Centre (ITC) study showing that over 90% of consumers prefer companies that take their social and environmental responsibilities seriously (ITC, 2019).

It's clear that far from being a mere business necessity, procurement has power and purpose. The potential to influence change is not just a reason for businesses to align their procurement strategies with sustainability and social justice, but a compelling cause for all of us in this industry to commit passionately to what we do. It's a fight worth fighting and an endeavor worth every ounce of our efforts.

Beyond these reasons, procurement further uplifts B2B transactions by granting diversity, inclusion, and fostering digital transformation and data-driven decision making. It also aligns with the strategic goals and priorities of organizations, acting as a catalyst for growth and competitiveness.

To conclude, procurement's role extends far beyond conventional business operations, impacting performance, profitability, and competitiveness. Moreover, well-executed procurement strategies have the potential to contribute positively to society and the environment.

Considering these insights, any modern B2B environment must acknowledge procurement’s potential and realign its strategies to unlock further value. It is more than a process - procurement can be a game-changer in business-to-business transactions.

Have a wonderful day, I hope you find this useful, and if you have any thoughts about it, please don't hesitate to share in the comment section.

Lars

Uncovering The Critical Role of Adverse Media Monitoring in Risk Management Solutions

2024-02-07T03:53:11.944000+01:00

Adverse Media Monitoring: A Silent Guardian

In the continuously evolving digital age, businesses are continually exposed to diverse risks which can be internally triggered or influenced by external factors. One such external influence that can tilt a company's reputation and profitability scale either way is adverse media. Therefore, it has become a quintessential aspect of risk management solutions, which we aim to take a more in-depth look at in this blog post.

Adverse media monitoring refers to the process of analyzing and keeping track of negative news or unfavorable information about a business or individual. It plays a salient role as an early warning system, helping companies stay abreast of potential risks proactively react appropriately.

The Crucial Role of Adverse Media Monitoring in Risk Management

Adverse media monitoring serves multiple purposes. It aids businesses in spotting red flags before they morph into substantial issues, helping organizations make informed decisions to eliminate or manage vulnerabilities. Additionally, it enables businesses to maintain their reputation, a significant asset in the current competitive market space.

With a robust adverse media monitoring system in place, businesses can be proactive and not reactive in dealing with potential threats. Consequently, it leads to the continuous improvement of risk mitigation strategies.

Furthermore, adverse media monitoring can significantly contribute to enhanced customer service. By effective tracking and swift response to negative feedback or reports, companies can rectify customer concerns swiftly. Not only does this serve in retaining existing clients, but it also fosters a positive image for potential customers.

How Adverse Media Monitoring Influences Risk Management Solutions

In this series, we will cover the effective utilization of SAP Ariba Supplier Risk Management through the utilization of Semantic Visions’ technology and data, specifically focusing on its capabilities in addressing adverse media monitoring.

The 5 Pitfalls to Avoid in Adverse Media Monitoring – this post will highlight the challenges facing clients in their efforts to manage supply chain risk and the methods applied by Semantic Visions to ensure the comprehensiveness, accuracy, and reliability of the data and how this process is crucial for Supplier Risk, Credit Risk, Compliance in general, Anti-money Laundering (AML) and Know Your Client (KYC) regulations, helping organizations make informed decisions and proactively mitigate risks in their business relationships.
The Benefits of Applying Semantic Visions’ Screening & Monitoring Services - using a practical example this post will demonstrate what a client can gain from the analysis of historical data to get the most relevant insights
Uncover Hidden Threats: The Essential Role of Adverse Media Monitoring in Compliance and Risk Management – this post will help explain how Adverse Media Monitoring is leveraged to identify and evaluate potential financial, legal, or reputational risks that may arise from associations with individuals or entities involved in questionable or illicit activities.
Adverse Media Monitoring: How to improve overall Supply Chain Management - This article delves into the pivotal role of Open Source Intelligence (OSINT) and how Semantic Visions is at the forefront of leveraging its power to address these challenges. OSINT, in conjunction with SV's cutting-edge technology, serves as a critical tool for organizations seeking to navigate the intricacies of today's supply chain landscape, marked by complexity, global connectivity, and potential disruptions.
Top 3 future trends to watch in data analysis - this article is to show that Semantic Visions works with trends and evolves to ensure that clients receive the most relevant information with a focus on Geopolitical risk, ESG, and Supply Chain risk

Risk management isn't just about minimizing losses; it's also about seizing opportunities. Therefore, a well-functioning adverse media monitoring system plays a pivotal role in risk management solutions, by providing a comprehensive view of potential hazards and growth opportunities.

Moreover, adverse media monitoring can help businesses stay compliant. Especially for businesses in heavily regulated industries, keeping an eye on negative media can signal when operations or certain practices may be at risk of non-compliance.

In conclusion, adverse media monitoring is a mission-critical tool within risk management solutions. It enables businesses to prevent potential risks, grab opportunities, stay compliant and maintain a strong market reputation. By harnessing the power of adverse media monitoring, companies can remain a step ahead on the path to success, reinforcing their resilience in the face of risks.

SAP Ariba Supplier Management: Ten strategies to boost your program effectiveness

2024-02-15T17:09:01.345000+01:00

In today’s volatile business environment, companies need to be innovative and efficient while navigating disruption and risk. Effective and collaborative supplier relationships are essential in achieving these objectives, and business leaders recognize that digital solutions can greatly improve their ability to manage supplier-centric processes. According to ‘Building Bridges: How to strengthen procurement/supplier relationships’, a 2023 Economist Impact survey sponsored by SAP, supplier relationship management is the second-highest C-suite priority for managing organizational risk over the next 12 to 18 months. This comes right behind supply chain visibility, where effective supplier management is also critical.

The good news is SAP Ariba Supplier Management solutions can help. With that said, at SAP, we understand leveraging technology for effective supplier management is a journey. Therefore, if you have implemented SAP Ariba Supplier Lifecycle and Performance and/or SAP Ariba Supplier Risk or are considering doing so, we’ve created ‘SAP Ariba Supplier Management: Ten strategies to boost your program effectiveness’. The document consists of the best practices, innovations, and solution capabilities we’ve identified by listening to you. Check it out today and stay updated on the latest innovations and developments by visiting the SAP Road Map Explorer web site and SAP Community.

If you have questions about how SAP can help you better collaborate with your suppliers, talk to your SAP account executive or Customer Success organization contact.

Uncertainty and Volatility in B2B Procurement

2024-03-04T14:18:25.522000+01:00

In this complex network of industrious aspects such as manufacturing, sales, and distribution, procurement often remains under-emphasized, even though it is an essential part of business operations.

This fundamental element is significant in various sectors, including manufacturing, retail, construction, and healthcare. For businesses to thrive, it's vital to grasp a solid understanding of the multifaceted nature of procurement.

One of the most captivating aspects of procurement lies in how uncertainty and volatility play defining roles in its mechanisms. While procurement occurs in a market defined by its unpredictability, it's not completely random. It unveils a range of remarkable opportunities and concrete risks. For both buyers and suppliers, comprehending how these dimensions can impact their operations is vital to their survival and could potentially deliver a competitive edge.

External and internal factors

The factors contributing to uncertainty and volatility in procurement are multilayered. Interestingly, these aspects are constantly evolving, influenced by several external and internal elements. For example, the decisions of one buyer could significantly reverberate throughout the supply chain, setting off an unexpected chain of reactions.

Or, a sudden external shock like a pandemic, natural disaster, or geopolitical upheaval could rapidly pivot the landscape.

Internally, the capabilities of buyers and suppliers could evolve over time, molded by their experiences, resource investments, and advancements in their processes. Thus, market participants must not only understand the nature and origins of uncertainty and volatility in procurement but also formulate suitable strategies and tools to skillfully manage risks or harness potential opportunities.

Demand uncertainty and supply uncertainty

Classifying uncertainty in procurement primarily splits it into two categories: demand uncertainty and supply uncertainty. Both types can significantly impact the performance and actions of buyers and suppliers, though in different ways.

Demand uncertainty influences procurement in several ways. It can pose challenges to demand forecasting, complicate inventory management, and lead to poor ordering behaviors. On the other hand, supply uncertainty can make the supplier selection process daunting, complexify contract design, and affect supplier relationship management.

Interestingly, the impact of uncertainty and volatility is not a one-way street; procurement, in turn, may also impact these elements. Just as procurement strategies can bolster demand forecasting and enhance inventory management, choosing reliable and diversified suppliers can help mitigate supply issues. Therefore, an optimized procurement strategy can add value and not just reduce uncertainty and volatility.

While dealing with uncertainty and volatility may initially appear intimidating, it can also be an avenue for growth and advantage. By employing appropriate strategies and leveraging the right tools, buyers and suppliers can effectively manipulate market uncertainties and turn them into invaluable opportunities.

Keep in mind

To navigate the unpredictable and volatile procurement landscape, a few important aspects should be kept in mind. Thoroughly examining the sources and types of uncertainty, leveraging digital innovations, and fostering a cooperative supplier relationship is crucial. It is equally significant to be cautious about the use of outdated or erroneous data, maintaining a balance in the procurement strategy, and handling the supplier relationship correctly.

Buyers and suppliers who wish to navigate the uncertain and volatile procurement landscape successfully must regularly check the sources and types of uncertainty in procurement, create a flexible procurement strategy that adapts to changing market situations, leverage technology to expedite and optimize procurement, and maintain a healthy supplier relationship.

It is worth mentioning that businesses must anticipate and avoid common pitfalls that could negatively impact efficiency and satisfaction levels. In conclusion, uncertainty and volatility form an integral part of every procurement process, but with the right strategies, buyers and suppliers can effectively handle these elements and leverage them to their advantage. The success lies in astute planning, adaptability, technological leverage, and a harmonious relationship.

The technical solution

SAP and SAP Ariba Procurement are technological solutions that help businesses navigate through uncertainties and volatility in procurement processes. They offer tools for better forecasting, supplier selection, contract design, and supplier relationship management, turning these challenges into opportunities for growth and competitive advantage.

Consume Ariba APIs using Postman

2024-04-15T22:31:24.149000+02:00

What is an API?

API stands for Application Programming Interface. It's groups a set of rules, protocols, and tools that allows different software applications to communicate with each other.

APIs disposes of methods and data formats that developers can use to interact with a particular software component or service.

APIs can be seen as messengers that can get or set data and, in the process, takes, process and return information.

APIs are used extensively in software development to enable different systems to work together, access each other's functionality, and share data securely and efficiently.

SAP Ariba APIs

Ariba REST APIs are constantly being developed and improved by SAP Solution Team, available for consumers and developers in https://developer.ariba.com/api.

In this portal, it's possible to identify all available APIs based on their respective fronts of operation, which vary depending on the SAP Ariba solution:

Business Network
Catalog
General
Procurement
Strategic Sourcing
Supplier Management

The portal also provides information regarding each API: the description of its purpose, mandatory and optional parameters, call URLs, Standard Rate Limits, as well as all necessary documentation for its consumption. Besides, all the documents and information can also be found in: SAP Ariba APIs | SAP Help Portal.

It's also important to mention that while many Ariba APIs are currently available for consumption, it doesn't guarantee that all the necessary information will be readily accessible. Some fields and data may not be included in the available APIs, so it's crucial to conduct an analysis before implementing the API in a real-world scenario (in ABAP, BTP, CPI, etc.).

In such cases, leveraging Postman calls can be beneficial for this initial check as a complement to the documentation.

Consuming Ariba API using Postman

Prerequisites:

Postman app installed;
Customer must have "OAuth Client Id", "OAuth Secret", "Base64 Encoded Client and Secret" and "Application Key" related to the API to be consumed – since this data is crucial for the process since they control the security of each call.

That information must be provided to you by the Customer’s Administrator.

But, in the case where a customer hasn’t requested or has never used this API before, some steps are needed:

Admin must create an Application for the API in Ariba Developer Portal (https://developer.ariba.com/api)

Click in Submit button.
The application will be created (the Application Key will be already generated by the system):

In the upper menu button, click in Actions > Ask your admin to request API access

Choose:

The API you want to consume (for this example, Master Data)
The tenant it’s applied for (for this example, Procurement)
The customer realm

Click in Submit button and this step will be completed:

When the entire process and approvals are completed, you should have all the necessary information for consuming the API. This is how the workflow should look like:

Steps to call API using Postman

Enter in the Ariba Develop Portal and access the API to be consumed.

Along with the provided documentation, you can also download the Swagger* for this API.

(*Swagger simplifies the process consuming RESTful APIs, making it easier for developers to understand and work with APIs effectively, working with a pre-built expected project that can be simply imported in Postman, for example)

Download the API Spec (Swagger).

Open Postman app and import the Swagger

A popup will be opened. Click in Upload Files:

Search for the downloaded Swagger in your local directory and click in Import:

The project will be imported in Postman:

Check the Collection in the left side of Postman:

Authorization / Access Token
1. What is Access Token

Before consuming the API, it’s necessary to get the Access Token for it.

Basically, it’s a credential that represents the authorization of a specific user/call to access resources on a specific server. When a user or application wants to access an API, they typically need to authenticate themselves to ensure that they have the authorization to get/change any data related to the process encoded by the API.

Access tokens usually have a limited lifespan and may need to be refreshed periodically to maintain the access available.

There are several methods for generating this token, each demonstrating a different approach. There's no difference between them in terms of results, but the choice will depend on personal criteria for usage.

If you want to generate the token with:
1. ClientID and ClientSecret > Then use grant_type = client_credentials
2. oAuthbase64 > Then use grant_type = openapi_2lo

This difference will be demonstrated visually in the next steps

Creating “Access Token” call in Postman

Create a New Folder in your API Collection. Name it as “Authorization”:

Create a “Request” inside the Authorization folder:

Now, add the token URL available in the Ariba Develop Portal and complement it with /v2/oauth/token

Postman Request must look like:

Now, here is where it should be decided which token option is going to be used (1-By Client ID and Secret or 2-By oAuthBase64)

OPTION 1 = By Client ID and Client Secret

In Postman, select “Params” tab and set:

grant_type = client_credentials

client_id = <your client ID>

client_secret = <your client secret>

OPTION 2 = By oAuth64

In Postman, select “Params” tab and set:

grant_type = openapi_2lo

In “Headers” tab, set:

Content-Type = application/json

Authorization = Basic XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (your oAuthbase64)

For both options the result must be the same: the token must be returned

Consume API

It is possible for an API to contain multiple endpoints, each performing different actions. For example, within a "Customers API," you might find one endpoint for querying data, another for retrieving addresses, and yet another for updating values for a specific customer.

The same applies to Ariba APIs. Both in the portal and in the imported Swagger, various consumption possibilities of the API are available. It is up to the analyst and the client to determine what best fits the business needs.

In this example of Master Data API, notice that three different endpoints are available:

For demonstration purpose only, we are going to consume the first endpoint: GET ENTITY TYPES

Open the folder related to the endpoint and click in the request

Click in “Auth” tab and select the option “Bearer Token”

Insert the token retrieved in the previous step

In Ariba Develop Portal, check all the obligatory fields expected for this endpoint:

If needed, complement the Postman project with any parameter missing. Also, insert the Application Key (API Key) and the customer realm:

After, click in “Send” button. This action will trigger the request to the server.
If all the information is provided correctly, the API will return the response in the Body along with the data:

I hope it helps everyone!

Regards

2405 Early Release Series for SAP Procurement and SAP Business Network releases

2024-04-16T01:41:44.382000+02:00

Sign up now for the 2405 Early Release Series

Follow this blog to receive notification of new series as soon as registration opens.

SAP strives to equip our customers and partners with valuable release readiness resources for each SAP Procurement and SAP Business Network quarterly release.

Early Release Series

Supplier Management & Risk
Procure-to-Pay
Source-to-Contract
Business Network

If you want to learn more and actively engage with SAP subject matter experts, we encourage you to participate in these informative sessions. Register now!

Quarterly Release Communications

The release calendar for SAP Business Network and release calendar SAP Ariba Applications, on SAP Ariba Connect, identify release timing several quarters in advance.

Designated Support Contacts (DSC) and anyone from your organization that have chosen to subscribe to product notifications will receive these announcements.

Where to find out more details?

On demand replays of webcasts from completed quarterly releases can be consumed from SAP Ariba Connect.

How strikes affect the supply chain

2024-04-16T12:09:00.773000+02:00

There have rarely been as many long strikes in Germany as there have recently, especially by employees in the transport sector - train drivers, airport security staff, flight attendants, ground staff and public transport workers, bus drivers. All employees from the so-called critical infrastructure sectors, which are indispensable not only for the everyday person, but also for businesses.

A strike in the transport sector not only affects the many commuters, travelers, and schoolchildren, but also the supply chains that make the world run. If employees or the goods required for pre-production, e.g. for car manufacturers, chemical plants or refineries arrive too late or not at all, this can lead to unplanned production losses and can trigger a chain reaction which, in the worst case, can bring the supply chain to a standstill.

Impact of the strikes on the economy and the supply chain

Alongside truck transport, rail is one of the most important transport pillars in the German economy's supply chain.

According to the German Federal Statistical Office, the transport volume moved via rail in 2022 was around 140 billion tonne-kilometres, which corresponds to a market share of 19.8%, low compared to road transport, which has a market share of 71.3%. Nevertheless, rail is an important and indispensable mode of transport for, for example, the transportation of hazardous goods required by the chemical industry, or parts and finished vehicles in the automotive industry. And according to the Federal Ministry for Digital and Transport Affairs, six of the eleven freight corridors in Europe run through Germany.

The recent increase in strikes in the transport sector has therefore not only led to supply bottlenecks and unintentional production losses in the country directly affected by a strike, but also in neighboring European countries, as the required goods arrive there late.

Dealing with risks in the supply chain

Similar to the current Suez Canal crisis, strikes require swift action to identify risks and take appropriate measures to maintain business operations and minimize revenue losses.

However, for proactive supply chain risk management, companies need absolute transparency, flexibility and collaboration across organizational boundaries to take targeted actions that make the supply chain more resilient.

So wouldn't it be cool to have an AI-supported tool in place that uses weather data, traffic data or geopolitical data to formulate possible scenarios that can be used to assess risks and take measures to optimize them, such as switching to other means of transport in the event of a rail strike?

Flexibility to react to the unexpected

To be able to react quickly to change, flexibility is one of the most important factors in maintaining a company's ability to do business. Ideally, this flexibility extends throughout the supply chain so that all companies involved can adapt to new circumstances.

In order to achieve this flexibility, risk strategies need to be designed into supply chain processes in advance. For example, alternative modes of transport should be identified, and rates negotiated for key components, products, and parts, despite possible additional costs, which in turn also reduces the risk of a delivery bottleneck or delivery delay for production and stabilizes the supply chain.

In addition to creating redundancies in logistics, more flexible production can also minimize the risks in production planning itself by using an ERP system with integrated production capabilities. This allows planners to optimize the entire operation, gain insight into all production processes through real-time data access and gain more transparency to make informed decisions.

Collaboration across company boundaries

In addition to transparency and flexibility, a good network of partners along the entire supply chain also helps to minimize risks. In this way, companies can work with their network of partners to find a quick solution for all parties involved in terms of alternative transportation modes or suppliers of critical components.

Even though the strikes have ended for the time being, strikes could still occur again in the coming weeks, especially on the railroads, if the parties do not reach an agreement.

To be prepared for this situation, companies should take proactive measures now to make the supply chain more resilient and thus avoid potential supply bottlenecks or even production stops.

For more information on how to proactively manage risk, download the latest Oxford Economics Research.

Why Financial Health Reviews are Crucial in Supplier Evaluation

2024-04-23T14:44:40.171000+02:00

In the intricate dance of sourcing, contracts, purchasing, and managing the supply chain, there's a vital step that often gets overlooked: evaluating the financial health of your suppliers. It's akin to checking the pulse of your business partners, ensuring they're not just alive but thriving. This seemingly mundane task holds the key to safeguarding your organization against potential risks and fostering long-term, fruitful relationships. Let's dive into why financial health reviews should be a non-negotiable part of your procurement strategy.

First and foremost, financial stability serves as a solid indicator of a supplier's reliability. Just like a shaky foundation compromises the stability of a building, a supplier struggling with financial woes can jeopardize your operations. By scrutinizing their financial statements, you gain insights into their liquidity, profitability, and overall financial health. Are they consistently profitable? Do they have manageable debt levels? These are questions that need answers to ensure your supply chain remains robust and uninterrupted.

Moreover, financial health reviews act as a safeguard against unforeseen disruptions. Picture this: you've forged a partnership with a supplier, only to find out later that they're on the brink of bankruptcy. Suddenly, your supply chain is thrown into disarray, deadlines are missed, and costs skyrocket as you scramble to find alternative solutions. Conducting regular financial assessments allows you to identify red flags early on, giving you ample time to mitigate risks and implement contingency plans. It's akin to having a safety net beneath the tightrope of business operations.

This blog series with RapidRatings will dig into these topics to help you build a better understanding of supplier financial health as it relates to risk.

#1: Use financial health to reveal and predict supplier risk

Understanding the financial health of suppliers is foundational to understanding supply chain exposure across all risk domains. Better risk assessment decisions result from accurate, trusted data. Supplier financial statements are the most accurate measure of financial health and an excellent predictor of supply chain disruption.

#2: Analyze Global Trends in Frequency of Supply Chain Disruptions

Analysis of the current macro environment and the forces driving increased incidence in supply chain disruption. Looking at using supplier financial health to forecast potential disruption or points of weakness in supply chains. Deep dive into the data across key manufacturing sectors to see where risk concentrations lie.

#3: Collaborate Transparently with Suppliers

Cultivating trust and transparency with suppliers is essential to strong business relationships and reliability. Clients can pull several levers to help critical suppliers with financial challenges including adjusting payment terms or using an escrow. Openness also surfaces opportunities to expand contracts with suppliers who have additional capacity. Financial Dialogue Report is a discussion framework that helps clients hold constructive conversations with their suppliers to deepen their understanding of financial challenges or explore contract expansion opportunities.

#4: Understand the cost and of supply chain disruption

Focus on the cost of disruption as it relates to specific industries in the manufacturing sector. The data analyzed will cover sectors including automotive, aerospace, tech and defense. This data will be paired with frequency trend data to provide comprehensive insights.

#5: Enact End-to-End Due Diligence in Supply Chain

End-to-end due diligence is crucial for supply chain risk management from selection to segmentation and management. This blog explores the benefits of incorporating assessment criteria such as financial health and ratings from the supplier evaluation stage right through the entire lifecycle of the supplier relationship.

Integrating financial health reviews into your supplier evaluation and source to pay processes is not just prudent; it's imperative for long-term success.

SAP Ariba Supplier Management 2405 Release Key Innovations Preview

2024-04-25T06:26:59.337000+02:00

Hello SAP Ariba Supplier Management Community and welcome to our 2405 key innovations blog for supplier management. We have some great new features coming out this quarter with enhancements to our extensibility, advanced integration with D&B Direct+ as well as a new way to monitor and report on finding and event collaboration. Let’s drive right in!

New Endpoint in Supplier Data API with Pagination to Extract Inactive Suppliers

We have enhanced our Supplier Data API to include a new endpoint, inactiveVendorDataRequests, which allows users to extract data of all inactive suppliers in your site. This addition will empower your organization to retrieve comprehensive details of inactive suppliers, such as supplier names, addresses, registration status, qualification status, and more.

Monitor Findings for Finding and Event Collaboration

Our new Monitor Findings app simplifies the tracking of actions initiated with suppliers during finding and event collaboration. This application enables users to view and download reports based on their involvement and contributions to specific findings. Users can also customize reports to reflect specific findings and export the data to a spreadsheet for further analysis. This application not only enhances the visibility of actions but also promotes informed decision-making and easier regulatory reporting.Monitor Findings for Finding and Event Collaboration

Dun & Bradstreet Integration Using D&B Direct+

This feature adds the option for using the newer D&B Direct+ product to retrieve data for selected fields in supplier requests and registration questionnaires. We recommend customers upgrade their D&B integrations to use D&B Direct+ as it provides continued business usage with minimal configuration. This feature ensures customers stay updated with the latest offerings from D&B.

We are confident these new features in the SAP Ariba 2405 release will provide our customers with an improved experience and more streamlined processes. As always, we are dedicated to continuous improvement and innovation in our solutions to serve you better.

We invite you to explore these features in more detail in our SAP Ariba 2405 Release Key Innovations Preview. Also, stay tuned for our additional upcoming blog posts and follow me to stay informed on upcoming feature releases across SAP Ariba.

Thank you for being a part of the SAP Ariba community and we look forward to continuing our journey of innovation together!

Register for the Early Release Series for 2405 release
Resources:
- Feature related materials
  - SAP Ariba Connect - Release Readiness (Customers except CIM)
  - Readiness Community page (For CIM customers)
  - SAP Community for Intelligent Spend Management page
  - SAP Help Portal pages - Procurement and Network
  - What’s New
    Want to see more? Take a look at our SAP Products and Services YouTube channel and our Spend Management and Business Network playlist.

SAP Ariba 2405 Release Key Innovations Preview

2024-04-25T06:39:44.708000+02:00

Hello SAP Ariba community!

We're excited to share with you the new features of our SAP Ariba 2405 release. This release brings a host of enhancements designed to improve your procurement processes, and give you more control and insights into your operations. Let's take a closer look!

Two-Level Cost Structure Components in SAP Ariba Category Management

Our new two-level cost structure component feature offers a granular perspective on cost distribution and cost drivers related to your category. As a category manager, you can now define the cost structure for your category using first-level (parent) and second-level (child) cost structure components. This feature allows category management administrators to create these two-level cost structure components, further enriching your strategic planning in SAP Ariba Category Management.

Support for Two-Level Cost Structure Components in SAP Ariba Category Management

This feature means more in-depth insights and better control over cost structures, ultimately leading to smarter, data-driven decisions. Look out for our detailed SAP Ariba Source to Contract 2405 Key Innovations blog for more on this.

New Endpoint in Supplier Data API with Pagination to Extract Inactive Suppliers

Our 2405 release introduces a new endpoint in the Supplier Data API with Pagination. This feature allows you to retrieve data of all the inactive suppliers in your site, providing you with valuable insights and ensuring you have all the necessary information at your fingertips. Take a look at the SAP Ariba Supplier Management 2405 release key innovations preview for a closer look at this feature.

Copy Non-PO Invoices in Guided Buying

We're making it easier for you to create new invoices with our new copy non-PO invoices feature in guided buying. This feature allows users to quickly create new invoices using information from an existing invoice, improving efficiency and reducing the time spent on repetitive tasks. More details on this feature can be found in our SAP Ariba Procure to Order 2405 Release Key Innovations blog.

SAP Ariba Sourcing Integration with SAP Sustainability Footprint Management

In our ongoing commitment to sustainability, we're pleased to announce that SAP Ariba Sourcing now integrates with SAP Sustainability Footprint Management. This feature enables buyers to collect carbon footprint data from supplier responses and send that data to SAP Sustainability Footprint Management. This ensures supplier responses are accurate, consistent, and compliant with the relevant industry standards and environmental regulations.

Retrieving the Last Modified Timestamp for Sourcing Events by Using the Operational Reporting API for Strategic Sourcing

Our new feature provides you with the ability to retrieve the last modified timestamp for sourcing events using the Operational Reporting API for Strategic Sourcing. This feature ensures makes it easier to implement extensibility with more reliable straightforward identification of changes.

We're confident these new features will help elevate your procurement processes and strengthen your strategic standing in the evolving business environment. Keep an eye out for our upcoming blogs for a more detailed look at these new features:

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Resources:
- Feature related materials

Want to see more? Take a look at our SAP Products and Services YouTube channel and our Spend Management and Business Network playlist.

We're thrilled about these new features and we hope you find them as beneficial as we do. Stay tuned and subscribe for more updates!

Underneath the Surface: How Financial Health Assessments Can Strengthen Your Supply Chain

2024-05-10T10:23:08.676000+02:00

Using Financial Health Assessments to Reveal and Predict Supplier Risk

What is financial health?

Financial Health, at its core, is a pulse of a company’s well-being. Every decision a company makes - how they are engaging with their counterparties, managing their finances, funding their business, whether they are making investments or cost cuts, or burning through cash, is reflected in their financial statements.

Why is measuring Financial Health important?

Companies don’t fail overnight. Telltales are visible on their financial statements. A disciplined approach in assessing the financial health of your supplier provides you with advance warning into those telltales. It uncovers your suppliers’ strengths and weaknesses and provides insights into the actions your suppliers are undertaking to navigate through any opportunities or challenges. The outcome of the analysis helps you address any impending risks to your supply chain in a timely manner.

Companies continue to face internal and external pressures in doing business. Some of these are idiosyncratic and the outcome of their own choices, while others are market or macro driven.

The current economic environment with persistent inflation and high interest rates has aggravated the financial challenges for your suppliers. It has added to the costs of doing business and created additional strain on companies. Companies with good financial health can withstand price and capital fluctuations, manage regulatory requirements, and maintain standards. However, those with poor financial health lack the resilience to navigate these challenges. These companies spend more time fixing their financial woes at the cost of investments in quality, R&D, cyber, safety, and more.

Bankruptcies have also surged over the last few years. You continue to read about how companies are trying to strategically trim costs as a response to the current macroeconomic landscape, while others are struggling to stay afloat. Are your suppliers well positioned?

Per RapidRatings data, companies globally are seeing a decline in financial health. Average FHR has weakened from 62 (Low Risk) in 2021 to 59 (Medium Risk) in 2023. Moreover, the level of risk differs across various sectors. For eg, In the Computer Services sector, both public and private companies have deteriorated financial health between 2021 and 2023, but the private companies have deteriorated more rapidly than publics. Public companies deteriorate by 5% to FHR of 58 (Medium Risk) in 2023, while privates deteriorated by 8% to FHR of 56 (Medium Risk).

Financial health monitoring tools, such as RapidRatings’ FHR, give organizations a direct pulse on the risk of their suppliers. The FHR is not only an indicator of the default risk of a company, but a measure of the firm’s efficiency, competitiveness, and operational resilience. The risk insights enable meaningful discussions with suppliers about how they are navigating through challenges.

What is an example of financial health

Data-Driven Insights: Predicting Defaults

RapidRatings’ Annual Default Review showcases the undeniable link between financial health and default. A staggering 95% of companies that defaulted (rated High Risk or Very High Risk by FHR, score below 40) had exhibited financial weakness for three years prior. This data highlights the effectiveness of this approach for long-term risk prediction.

By prioritizing financial health analysis, risk managers can make informed risk assessment decisions based on the most accurate data on the market. This proactive approach safeguards your supply chain and prevents million-dollar blind spots.

Learn more about RapidRatings and SAP integrated financial health solution.

Discover the ways financial health reviews can help organization boost supply chain resilience.