KayReephoto.jpg    KayRee Lee, Director, Value Realization, SAP Ariba


Satchel Paige said it best: “Don’t look back. Something might be gaining on you.” The truth is, plenty of companies could be threatening your market position—but without accurate data to tell you the real story, you might not know till it’s too late.

 

So what’s the best way to evaluate where you stand, and what steps should you take to get ahead? Benchmarking. And while tracking progress against your own internal goals is important, knowing how you’re performing compared to competitors is even more crucial in today’s fast-moving global economy. That’s where the SAP® Ariba® Benchmark Program comes in.


Support on a world-class level

Each year, we conduct an extensive benchmarking survey designed to help customers understand the performance landscape and identify key opportunities for improvement. Participation is free and delivers a broad array of benefits for your business. By analyzing transaction data collected from you and other SAP Ariba customers—along with data from more than 18,000 SAP customers worldwide—we can provide a clear, objective picture of your current position, helping you to:


  • Accurately assess your company’s technology and process performance
  • Measure and compare solution adoption rates
  • Gauge how your business stacks up to leaders, competitors, and peers
  • Identify best practices and key opportunities for improvement
  • Quantify the savings you can achieve through targeted strategies
  • Build success plans based on facts, not speculation


This year’s survey launches in September, and participant data will be gathered, extracted, and analyzed over a period of two months. Once the results have been tallied, you’ll receive a customized benchmark report with aggregate statistics and insights that show where you stand in relation to your peers. Your account manager will also work with you directly to create a strategic plan based on the findings, helping you enhance effectiveness in the areas most critical to your success.

 

Intelligence-based insights

So what sort of feedback and information can you expect? Though your results will be customized, here are two examples of benchmarking-driven insights and recommendations drawn from previous surveys.

 

Benchmarking insight #1: Organizations that use online catalogs with rules-based checks enabled to support self-service requisitioning for material and service items have 2.8X more touchless invoices and a 55% lower requisition-to-order cycle time (just 4.8 hours for organizations in the top quartile).


  • Recommendation
    • Increase your company’s self-service purchasing by enabling more electronic catalogs and contracts.
  • Strategies
    • Identify ad-hoc POs created against suppliers that have catalogs, and then migrate those to catalog POs
    • Negotiate discounts on a broader list of items to expand catalog content
    • Prominently feature supplier catalogs on your buying home page
    • Identify frequent purchasing requestors and convert them to self-service requestors
    • Create a marketplace environment with intuitive tools to help guide users through the experience
    • Provide support so users don’t feel deserted, such as an easy-to-access link to professional buyers via help desk support
  • Benefits
    • Provides users with 24x7 access to a guided buying experience
    • Encourages users to purchase from approved suppliers, minimizing the use of ad-hoc POs and maximizing compliance with negotiated pricing
    • Frees up procurement staff to focus on more strategic, value-added activities
    • Enhances spend visibility via standardized catalog information
    • Cuts costs and reduces cycle times required to process transactions
    • Eliminates invoice errors, leading to a greater number of touchless supplier invoices


Benchmarking insight #2: Organizations with a resolute focus on sourcing optimization realize significant financial gains: top-quartile organizations achieve savings of 7.8% per sourced spend, driving 70% higher savings per 1B USD in spend compared to average performers, which translates to 32M USD per 1B USD in spend.


  • Recommendation
    • Develop a best-in-class program utilizing e-sourcing tools to identify and implement sourcing savings opportunities.
  • Strategies
    • Conduct frequent spend reviews with stakeholders to find new areas of consolidation or contract review
    • Focus on large global categories, but employ rigor in geographic markets to drive local competitiveness
    • Formalize a comprehensive category strategy that includes all savings levers, engage key stakeholders, optimize specifications, and measure total cost of ownership and outcomes
    • Consider a demand management strategy to reduce volume through formal category buying policies
    • Create a tactical sourcing strategy to more effectively manage one-off buys (e.g., using the Ariba® Spot Buy solution) where spend is not formally sourced
    • Evaluate length/term of contracts to drive better cost outcomes (e.g., short-term contracts are best used for commoditized/volatile products, while long-term contracts are more appropriate for strategic partnerships to incent innovation and cost reductions)
  • Benefits
    • Encourages competitive pricing from more suppliers, leading to higher savings
    • Reduces sourcing cycle times through communication and workflow functionality that enable categories to be sourced more quickly and efficiently
    • Drives a more consistent and scalable sourcing process through standardized usage of tools and templates
    • Allows you to conduct sourcing events more frequently, leading to fewer longer-term contracts and sole sources of supply
    • Supports better collaboration and communication with suppliers through interactive functionality that the tools provide

 

Get started today

The 2016 SAP Ariba Benchmark Program will be open for enrollment in early September, so be sure to take advantage of this unique opportunity to enhance your business performance. To get additional information, go to the SAP Ariba Benchmark Program web page or contact your account manager.