PALO ALTO, Calif.--Managing spot buys – those unplanned, time-sensitive and often mission-critical purchases that every company must make – can be a difficult, expensive and risky process. But it’s gotten a lot easier thanks to Ariba® Spot Buy, a market-leading solution from SAP Ariba that enables companies to find and immediately purchase specialty items needed to run their business in a simple, yet compliant manner.
As a consumer, if you need a new phone, you get online and order it and in three days, it arrives on your doorstep. Or if you’re willing to pay, you can have it overnight. But what do you do as a business when you need an ergonomic chair for an employee who is starting tomorrow or imprinted items for a trade show in two days?
“You can’t afford to have a category manager take this kind of spend through a strategic sourcing process, which can take anywhere from six to 30 weeks. You need a solution through which employees can buy them now, and do it in compliance with your procurement processes and policies,” says Kurt Albertson, Associate Principal Advisor at The Hackett Group and co-author of “Spot Buy Software: A Modern Approach to Managing Tail Spend”. “And if there isn’t a solution in place, they will go off and do their own thing without involving procurement or applying any spend management rigor.”
Simple is Good. Compliant is Better.
Herein lies the problem. In today’s digital economy, buying things at work has to be as simple as buying things at home. But it also needs to follow rules.
“Spot buys are a huge category of indirect spend, which account for more than 20 percent of the purchases made by the average company. And they are largely undermanaged because procurement lacks effective tools to facilitate the time-sensitive supplier identification, qualification, and bidding necessary to secure them,” says Tony Alvarez, General Manager, Ariba Spot Buy. “That means many companies are leaving significant savings on the table. And suppliers are missing opportunities to expand and win new business.”
Consumer Simple. Business Strong.
Plenty of marketplaces can create a consumer-like experience for buying indirect goods and services. With Ariba Spot Buy, SAP Ariba goes beyond simple catalogs to deliver the technology, content and expertise organizations need to gain greater visibility into their tail spend and fuel the compliance needed to get unplanned buys under control.
And more important, it provides an open and transparent marketplace through which suppliers can deal directly with customers and open doors to opportunities that had previously been closed to them.
Anne Kramer is head of Ergo Works a small, woman-owned company that provides a complete line of ergonomic furniture, accessories and computer peripherals.
“Ergonomics by definition is designing for the individual, and the products are often unique and off-catalog,” says Kramer. “Companies have the need for these specialized products, but it can be challenging to get an audience with them. Ariba Spot Buy gives us direct access to large corporations and provides a vehicle through which they can purchase specialty products from us while staying compliant within their procurement guidelines.”
Pairing SAP Ariba’s global network and cloud-based procurement applications with expansive catalogs for indirect goods from the likes of eBay, Ariba Spot Buy combines the convenience of a consumer-like shopping experience with business controls, enabling even the most casual users to quickly find and immediately buy thousands contracted and non-contracted items in accordance with their company’s procurement policies and procedures. Here’s how it works:
Find: When an item cannot be found in the company catalog, users can search the Ariba Spot Buy catalog and filter results by category, brand, and price.
Approve: Configurable business rules and spot buy-specific workflow automatically align purchases with corporate policies and route through necessary approvals.
Buy: Approved purchases trigger checkout, secure payment, and shipment of goods.
A Win-Win Solution
“When it comes to managing tail spend, procurement needs to take a different approach,” Albertson says. “Spot buying software solutions offer a convenient way to search for suppliers and shop for goods in external B2B catalogs and procurement organizations can use them to increase visibility and control over a large category of spend that has until now been very difficult to manage.”
But there are benefits for selling organizations as well. With Ariba Spot Buy, suppliers can offer their goods when and where buyers need them and not only boost sales to existing customers, but forge new opportunities and gain additional market share.
“One of the best things about Ariba Spot Buy is that it gives us the ability to interact with our customer and sell our custom products and then open the door to more project-based opportunities,” Kramer says.
To hear more from Kramer about her experience with Ariba Spot Buy, tune in to the Briefings Direct Network. To learn more about the solution and the value it can deliver to your organization, visit: www.ariba.com
About SAP Ariba
SAP® Ariba® is the marketplace for digital business, creating frictionless exchanges between millions of buyers and suppliers across the entire source-to-pay process. Our market-leading solutions enable companies to simplify collaboration with their trading partners, make smarter business decisions and extend their collaborative business processes with an open technology platform. More than two million companies use SAP Ariba solutions to connect and collaborate around nearly one trillion in commerce on an annual basis. To learn more about the company’s offerings and the transformation they are driving, visit www.ariba.com
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable approximately 300,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
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