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Annie VaseekaranCreated by Annie Vaseekaran on Sep 23, 2015 in Spend Analysis

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Previously in Ariba Spend Visibility, only one custom taxonomy was possible.  With the introduction of our latest feature, Additional Custom Category Taxonomies, you can have two or more.  Perhaps you need a different procurement taxonomy to help drive savings for your organization.  Or maybe you need an industry-specific perspective such as retail, energy, telecom, and so on.  Whatever you choose, you have the flexibility to analyze your organization's spend with as many as five taxonomies in parallel:  The United Nations Standard Products and Services Code (UNSPSC), the Ariba Classification Taxonomy (ACT) and up to three user-defined custom taxonomies. 

 

What does it take to implement a custom taxonomy?  Three components are necessary - a taxonomy, a crosswalk and administrative support.  Each of these is explained in more detail below.

 

  • A taxonomy is an outline of how your categories will be arranged; it can be as many as six levels in Ariba Spend Visibility.  If you already have one in mind, be sure you have the rights to use it.  If you want to develop a new taxonomy or augment an existing one, consider leveraging your Best Practice Center (BPC) project for help.
  • A crosswalk is a mapping from one set of codes to another.  In this case, you will need to map relevant codes from the ACT taxonomy to categories in your custom taxonomy.  If you are implementing our first custom taxonomy in Spend Visibility, you must engage with Ariba Services to support building this crosswalk to ensure its integrity.  Once your first custom taxonomy has been implemented, adding an additional custom taxonomy is a matter of mapping the same ACT codes in your original crosswalk to categories in your new taxonomy.  Your Spend Visibility Project Manager can get you started with the layout for your crosswalk, but you will be primarily responsible for mapping additional taxonomies.
  • You will need administrative support to load your custom taxonomy.  Your Spend Visibility Project Manager will coordinate this task for you by loading the crosswalk into the system and changing generic "custom category" field names into meaningful names that you provide.

 

For more information about Additional Custom Category Taxonomies, see the Ariba Applications Q3 2016 Release Guide, which will be published on Help@Ariba with the general availability of this release.

Albea no longer finds it a head ache  to aggregate ,classify and enrich its Global Spend Data ,with Ariba Spend Visibility now they have the right information at the right time to make informed procurement decisions.

We have it for you on SlideShare

 

Hear Arnold Bynum and Rachel McGuire from Abbie, Prashant Agrawal from Southern California Edison and Ben Landis from Oldcastle Materials, Inc share their data to analytics journey.

 

You don’t want to miss it again!

JM Family Enterprises:Driving Procurement Efficiency With Ariba Solutions

The supplier hierarchy in Spend Visibility contains five levels.  The lowest level represents the ERP Supplier that was originally loaded into Spend Visibility.  For enriched suppliers, the remaining levels are the Supplier, Intermediate Parent, Domestic Ultimate Parent, and Global Ultimate Parent.  How these levels are related depends on the percentage of financial and legal responsibility between them.  In some cases there is no "linkage" or relationship between these levels because the supplier is a stand-alone business entity.  In other cases the suppliers are linked by majority ownership (>50% stock), either as a Subsidiary to Parent linkage or as a Branch / Division to Headquarter linkage.

 

The different types of suppliers are described below:

 

  • Parent - a corporation that owns more than 50% of another corporation's capital stock.
  • Subsidiary - a corporation whose capital stock is more than 50% owned by another corporation and has a different legal business name from its owning parent.
  • Headquarters - a business establishment that has branches or divisions reporting to it, and is financially responsible for those branches or divisions.
  • Branch (or division) - a secondary location of a business.  It is not a separate corporation, and therefore, has no legal responsibility for its debts.  A branch has the same legal business name as its headquarters, but usually operates under a different trade style.  A branch may be located at the same headquarters if it has a unique trade style and unique operations.  A division has a specific divisional name and operates like a separate, unique entity.
  • Stand-alone - a business entity that doesn't have any linkage relationships, it is the only location.

 

By examining the Location Status Code and Subsidiary Indicator on the enriched supplier, you can tell which type of supplier you have, as well as its relationship to other suppliers in the corporate hierarchy.

 

Location Source Code

Subsidiary IndicatorSupplier Type
Single LocationNoStand-alone.  The only location of the business.  No linkage upward or downward.
Single LocationYesSingle location subsidiary.  Stock is held upward by a parent.  No downward linkage.
HeadquarterNoGlobal Ultimate.  No linkage upward.  Linkage downward can be either branches or subsidiaries.
HeadquarterYesHeadquarters.  Stock is held upward by a parent.  Linkage downward can be either branches or subsidiaries.
BranchNoBranch / Division.  Secondary location of a headquarters.  Upward linkage to a headquarters.  No downward linkage.

 

If the enriched supplier is a stand-alone entity, then the remaining levels in the hierarchy will be populated with the supplier itself, otherwise they will be populated according to the supplier type as follows:

 

  • Intermediate Parent - the immediate entity above the supplier.  If the supplier is a subsidiary, then this is a parent.  If the supplier is a branch or division, then this is a headquarters.
  • Domestic Ultimate - the highest member of the corporate family within the same country as the supplier.
  • Global Ultimate - the highest member of the entire corporate family.

 

Although not directly related to linkage, there are some additional indicators that provide insight into the supplier's legal structure:

 

  • Legal Status Code - indicates the legal structure of the business as registered with government authorities.  Sole Proprietor, Partnership, Corporation, or Unknown.
  • Public Owned ID - indicates whether the establishment is a publicly held corporation or not.
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