It’s Monday morning and your warehouse foreman just told you the motor in the customized hydraulic lift your company uses to move goods from the loading dock to your delivery vehicles is making strange noises—and a service call has revealed that repair can’t fix the problem. You need a replacement fast, but the original manufacturer is no longer in business.
You’re faced with a dilemma: do you take the extra time to conduct a sourcing event so you can find the best bid from a qualified new supplier—and risk having the motor fail before you can get a new one? Or do you start making calls and conducting online searches to dig up a new supplier who might be able to deliver what you need right away?
It’s a tough question, yet scenarios like this play out across thousands of organizations every day. In addition to emergency buys, about 30% of what companies purchase fall into the category of hybrid tactical spend,1 which can include:
- Non-repetitive buys requiring quick turnaround
- Low-complexity buys
- Low- to medium-sized buys ranging from €5K to €1M
- Buys in unmanaged, underserved, or hard-to-source categories
The problem is that even though they pack a sizable financial wallop, hybrid tactical spend purchases are difficult for most companies to source effectively. That means they’re often made outside your procurement system, leaving close to a third of your spend unmanaged—resulting in lower visibility, reduced compliance and control, and higher costs.
If all this sounds painfully familiar, there’s good news. With the right spend management approach you can turn the situation around, gaining control and compliance over this category and realizing up to 7% greater savings.2 And Ariba Quote Automation delivers exactly what you need to get there.
Transform your approach to hybrid tactical spend
Ariba Quote Automation gives you a powerful new way to efficiently manage your hybrid tactical spend. Recently added as a document type in the Document Automation solution suite, this unique RFQ automation tool lets you identify and invite known or new suppliers and execute bids for non-contracted buying quickly and easily.
Ariba Quote Automation operates directly through your ERP system and Ariba® Network, so users can access it in a convenient, familiar environment. Your procurement rules are automatically built into the process, ensuring compliance with all your internal purchasing requirements. Ariba Quote Automation makes it simple to:
- Source new commodities
- Find secondary sources of supply for particular products
- Adhere to three-bids-and-a-buy requirements
- Meet specialized diversity or customization needs
- Fulfill low-cost country requirements
- Complete rush orders
What’s more, you can do all these tasks without relying on email, phone, online searches, and other manual methods. You benefit in a wide range of areas, including:
- Immediate identification of the best suppliers to meet your needs
- Increased savings through an automated quoting process
- Rapid discovery of new and better suppliers that you might not have known about previously
- Greater visibility and control across all your spend, not just strategic purchases
The solution offers out-of-the-box, release-independent integration with SAP ERP as well as Oracle E-Business Suite. And since minimal configuration and user training are required, you can get up and running with it quickly, ensuring fast time to value.
How it works
With Ariba Quote Automation, you can find qualified suppliers, award business, and get the products and services you need in just a few simple steps.
- You create a purchase requisition listing the project requirements and parameters within your ERP system, generating an automated RFQ that initiates the quote automation event on Ariba Network. For each event, you can choose one of several ways to identify suppliers:
- Direct invite: You specify the suppliers you wish to invite to the Ariba Quote Automation event when you create the RFQ in your company’s ERP system.
- Vendor match: Based on category, location, and other criteria you select, the system adds appropriate suppliers from your uploaded vendor master to the Ariba Quote Automation event.
- Open market: The Ariba Quote Automation event is open to all suppliers registered on the Ariba Discovery® service.
- The system sends an email notification of your RFQ to invited or matched suppliers through Ariba Discovery.
- Suppliers create and submit their bids to you electronically using the regular Ariba Discovery process.
- All supplier bids appear on your dashboard, where you can review them, select the one you like best, and submit your response back to the winning supplier in the form of a purchase order.
To get additional information on Ariba Quote Automation, check out this brief solution video for an overview and live demonstration, or watch this 30-minute webinar for more details. If you have specific questions or want to activate Ariba Quote Automation for your business, contact your Customer Engagement Executive.
1 Estimate based on combined data from “Using Technology to Streamline Tactical Sourcing,” The Hackett Group, 2013, and SAP Ariba Customer Council research, 2014.
2 “Spot Buy Software: A Modern Approach to Managing Tail Spend,” The Hackett Group, 26 April 2016.