Ariba Launches Spend Management Suite

Adds spend analysis, contracts and invoicing apps to procurement, sourcing

Ariba Logo 2

Sunnyvale, CA  February 26, 2002  Software company and e-procurement specialist Ariba today rolled out the latest version of its enterprise procurement solution, adding spend analysis, contracts and invoicing applications to its spend management suite.

The new applications, combined with enhancements to other components of the suite, give Ariba a software offering that spans the purchasing process from start to finish, according to an analysis of the Ariba suite by technology consultancy AMR Research. "By filling the gaps in its product suite, Ariba can now help customers address the entire plan-to-pay procurement process, from spend analysis right through to the release of a payment instruction," AMR wrote in a research alert.

The new suite introduces Ariba Analysis, Contracts and Invoice, as well as updates to the provider's Enterprise Sourcing and Workforce applications. The suite also includes the latest version of Ariba's flagship Buyer solution for e-procurement.

Analysis, currently in Beta testing and due out at the end of March, is designed to enable procurement professionals to collect and analyze spend data so that they can make informed purchasing decisions and develop purchasing plans to reduce spend in all areas throughout the enterprise. The Analysis application gathers data from the Buyer application and from third-party systems to provide spend coverage across categories. It also provides a personalized dashboard that will provide executives with access to frequently used charts, tables and other data sources, along with pre-defined templates for data output and report writing.

Contracts, a new application that integrates with Buyer and Enterprise Sourcing, automatically creates a contract from a completed sourcing event, stores contract terms and activity in a central repository for contract visibility, assists with contract renewals and extensions, and monitors contract usage and price compliance. The goal of this component of the suite is to ensure that the savings identified from strategic sourcing activities are continuously realized throughout the enterprise, Ariba said.

The Invoice application, which also integrates with Buyer, automates the invoicing process with the goal of helping companies reduce reconciliation cycle times and improve exception handling. Ariba said electronic reconciliation capabilities let buyers match invoices to purchase orders and receipts as well as automatically match and route exceptions for user reconciliation. Ariba believes Invoice can reduce a company's invoice processing costs from the current average $10 to $20 per invoice.

Upgrades to Enterprise Sourcing include an enhanced multi-dimensional bid graph for visibility of bid progression and sourcing savings, sourcing cycle approval workflow for engaging stakeholders in the sourcing process and automatic creation of multiple supplier contracts from a single sourcing project, which Ariba said will lead to further cycle time reductions. Additionally the application now handles English, French, German, Italian, Spanish and Japanese currency and language localization.

The Workforce application, based on CascadeWorks Clarity solution for professional services e-procurement and management, features deeper integration with Buyer and Invoice, detailed tracking and management of workforce capabilities and enhanced workflow capabilities to manage suppliers and contractors interactions, according to Ariba.

Ariba's Buyer application now integrates with the new Ariba Contracts application, for managing end-user contract compliance, and with the new Ariba Invoice application, for the automation and streamlining of the invoice reconciliation process. Buyer also integrates with Workforce to offer requisition and management capabilities of contingent labor and project-based services. The Ariba suite also provides for connections to the provider's Supplier Network, which links buyers to some 32,000 suppliers.

With the release of the new suite, Ariba is continuing to promote its vision of enterprise spend management (ESM), a strategy that focuses on providing chief financial and procurement officers with the tools necessary to control and manage the enterprise's spend. In implementing its ESM strategy over the four months since the appointment of ex-chief financial officer Robert Calderoni to head the solution provider, Ariba has sought to break out of its typecasting as a niche provider of an e-procurement platform by introducing the e-sourcing and professional services spend management applications.

The strategy seems to have struck a chord in at least certain corners of the analyst community. "Spend management is about managing the most important resource a company has  the money it earns," said Lisa Williams, a director at research firm The Yankee Group. "The Ariba Spend Management Suite enables companies to take control of corporate spending by pinpointing how their money is used and increasing the leverage and reach of their resources."

For its part, AMR Research highlighted the analysis component of the suite. "The Analysis piece in particular should prove valuable to customers in terms of their ability to understand and review current spending levels put through the Ariba Buyer application," the consultancy wrote in its alert. "This is a fundamental prerequisite to improving supply strategy, of which the aggregation of purchasing spend and renegotiation of contracts with a consolidated supply base are primary examples." (AMR noted, however, that analysis of spend not channeled through the Buyer application is now subject to integration by consultants.)

Customers, too, expressed support for Ariba's strategy. "Automating our requisition to pay process with Ariba is one of Unilever's first global e-business initiatives, and one that is expected to save Unilever tens of millions of dollars," said David Lapish, vice president for Unilever's Global Ariba Center of Excellence.

The first Ariba Contracts customer is NS Group (Dutch Railways), which also uses Ariba's procurement and sourcing solutions. "It's critically important for us to link our sourcing and contracts applications so that the benefits of contract negotiation with preferred suppliers can be leveraged throughout the company, resulting in compliance and ongoing cost savings," said Gijs van Rooijen, a program manager at NS Group. "We want a complete spend overview and need to know where our money is going."

All applications in the new Ariba suite, with the exception of Analysis, will be generally available at the end of February.