Address these pitfalls pro-actively to have a successful Ariba procurement transformation

Although Ariba is a cloud solution, its deployment involves lot of efforts from the customer’s business and IT teams. I have seen many engagements where customer’s team struggles to proactively address and prioritize its tasks and thereby creating a risk on project scope, timelines and user adoption of the deployed solution.

The intention of my blog is to highlight key areas which need to be focused on, for a successful Ariba procurement transformation engagement. Here are the top four:

1. Master Data: Ensure that master data management is an integral part of your procurement transformation initiative. Following guidelines can be followed:

  • Supplier master data in the ERP system(s) should be standardized, de-duplicated and enriched before loading into Ariba.
  • Ariba provides 21K commodity codes as default for users to choose from during the supplier on-boarding, sourcing & contracts process. Invest efforts to come-up with a curtailed list of commodity codes based on your business needs so that your team has a better user experience.
  • Design a material group structure for your ERP and Ariba solution that addresses direct as well as indirect procurement. This will ensure that appropriate material groups are available in Ariba during creation of transaction data (requisition, PO, etc.) and they are synced seamlessly with backend ERP systems(s).
  • Design a custom classification taxonomy as per your industry vertical and company-specific procurement (direct & indirect) to categorize your spend rather than adopting industry standards like – UNSPSC, eCl@ss, etc.
  • Spend classification is an ever-improving process and 100% accuracy in this process is a dream. Invest time in creating business rules to classify spend as accurately as possible. Keep reviewing and revising these business rules on a periodic-basis to reflect the change in your business over-time.

2. Legacy Contracts Data Migration: It is recommended to use Ariba as the single repository for all your contracts – procurement as well as sales. To ensure that all legacy contracts are loaded into Ariba, business team should invest time in locating all the contracts (residing in legacy solutions, SharePoint and people’s desk drawers) that need to be loaded into Ariba. Use following guidelines to ensure that legacy contracts are loaded correctly in Ariba:

  • Check the contract validity
  • Check past invoice data to see if the contract is still active
  • Ensure that hierarchy (master and sub agreements) of the contracts are established appropriately in the legacy contracts data load template
  • Follow a naming convention for the legacy contracts
  • Create a legacy repository template to load one-off missed contracts
  • Assign accurate commodity code, department and owner to the contracts

3. Supplier Enablement: Enablement of key suppliers is critical to achieve the benefits factored-in the Ariba business case. In a typical Ariba deployment, Ariba team takes care of on-boarding the suppliers onto the Ariba Network, however the customer is responsible for selecting the suppliers that need to be on-boarded and create waves/phases for the on-boarding. This takes a significant amount of efforts from the customer’s IT and business team. It is recommended to initiate building supplier flight plan early during deployment project to provide adequate time for Ariba Supplier Enablement team to on-board suppliers. Key considerations for prioritizing suppliers in flight plan are:

  • Exclude spend categories that will not be transacted in Ariba. Example: donations/charitable contributions, medical care, intercompany purchases, legal & litigation, gifts & grants, etc.
  • Analyze suppliers with high transaction count – high number of POs and invoices
  • Analyze suppliers with high spend value
  • Analyze strategic suppliers
  • Exclude suppliers that have been either marked for deletion or blocked in the ERP system(s)

4. Catalog Enablement: Catalog enablement is an integral part of Ariba deployments. Ariba supports local and punch-out catalogs, however, the onus of selecting which items/services should be part of each of these catalog types, lies with the consumer. If proper thought is not given to this process, organizations end up under utilizing the catalog’s capability and thus not being able to enforce their user community to procure goods/services from contracted suppliers. Use following guidelines to choose between a local and punch-out catalog:

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In addition to the above pitfalls, customers should also focus on – stakeholder involvement, identifying top 5 goals that need to be met by the deployment, measuring progress against these identified goals, comprehensive user training and support mechanism post go-live.

My intention with this blog was to bring to your focus some key Ariba deployment-specific pitfalls that in my experience are typically overlooked by organizations – only to realize it too late.

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