Ariba Rolls out Category Management

Beefs up spend management offering with tool to improve sourcing visibility, collaboration, knowledge sharing

Ariba Logo 2

New York  November 12, 2002  Software company Ariba this week rolled out a new application intended to help companies improve their sourcing processes, adding further meat to the e-procurement pioneer's offering even as it upgraded its entire lineup of solutions.

The new application, Category Management, is intended to connect an enterprise's sourcing professionals with each other and suppliers for improved sourcing visibility, process management and knowledge sharing. One new customer has already lined up to use the new application, with Southwest Airlines expanding its use of Ariba to include Category Management and other solutions.

The software company also took the wraps off new versions of several applications and point upgrades to its contracts and invoice solutions.

Ariba has spent the past year broadening its horizons beyond the scope of its original e-procurement platform to attack various new areas of spend management, including spend analysis, contract management, services procurement and strategic sourcing.

The software company's focus is on what it has dubbed "enterprise spend management" in a not-so-subtle bid to win supporters among chief financial officers in addition to procurement and sourcing executives. For the latest release, Ariba is promoting the theme "Engage Your Spend," asserting that customers are looking to buy-side solutions to capture increasing amounts of spend and apply best practices and processes to generate savings.

Ariba said its latest solution offerings address a move among enterprises to take a more holistic or strategic approach to controlling their spend. "In the current macroeconomic environment, there's renewed emphasis on looking at expenses in order to maintain a good bottom line, and more and more companies are coming to us and saying they want to treat this as a core competence of their business," said Martin Boyd, director of product marketing at Ariba.

"It's not efficient for companies to have lots of Band-Aid solutions here and there," Boyd continued. "They need to get together all the fragmented information and processes that they have across the organization and make this into a professional discipline."

The new Channel Management solution specifically focuses on the sourcing side, offering tools and capabilities that Ariba said can help companies improve the efficiency and effectiveness of their strategic sourcing efforts.

Typically strategic sourcing teams typically follow many steps when conducting sourcing activities, and key constituents need to be able to access, track and assess these processes. However, historically companies have not centrally captured, structured or management these processes and the associated knowledge in a consistent manner, making it difficult to effectively manage sourcing resources or to leverage an organization's knowledge capital in an ongoing manner.

Ariba said it designed Category Management to meet the needs of all stakeholders in the sourcing process, including finance, engineering, purchasing and manufacturing professionals, as well as suppliers and third parties, allowing them to leverage information and knowledge across all corporate functions from the desktop.

Specifically, the new solution includes tools that let sourcing professionals model and map sourcing processes for standard and consistent procedures; quickly create new projects by utilizing pre-configured templates or modifying past projects; assign category teams to a project including permissions, roles and user profiles for activity management; and create and edit documents and requests for quote or information (RFX) in a collaborative environment with comments and version control, and discuss project-related issues in a secure, dedicated environment.

In addition, the solution allows companies to capture, store, search and retrieve category-related knowledge, such as third-party data, Web site links, research reports and industry studies in a central repository, and also track initiatives by employee, category or other attribute to support effective resource alignment.

Ariba said that Category Management is going to be in limited availability at the end of December 2002 along with the latest version of its Enterprise Sourcing solution, also released today. Category Management is expected to be generally available by the end of the first calendar quarter, 2003.

The upgraded version of Enterprise Sourcing adds new features to help companies source more categories of spend, improve supplier management and make better sourcing decisions, Ariba says. Sourcing professionals will now be able to create and manage multilevel groups of line items, also known as bill of materials (BOM), and upload the BOM via integration with Excel. Another new feature enables buyers to evaluate suppliers on a total cost basis, making it easier to assess and compare different supplier scenarios. Category team members can now use the solution to rank and analyze suppliers and send and receive updates to all stakeholders. Additionally, enhanced integration to Microsoft Excel enables buyers to automatically create an RFX from Excel and assemble responses and manage price lists in Excel before uploading to the sourcing application.

Ariba upgraded its flagship Buyer product to provide wider spend compliance through enhanced global extensibility, broad spend capture and improved ability for rapid deployment. Features that Ariba is touting include faster and more intuitive user interface and catalog search capabilities, enabling users to more easily find and buy catalog items from preferred suppliers. An improved multi-server architecture provides greater scalability for handling a large number of simultaneous users.

Other upgrades include Ariba's Analysis solution, which now features two-way contextual linking the application with Buyer and Ariba's Contracts, Invoice and Travel & Expense software.

The Invoice solution now enables companies to better manage taxes and reduce overpayments and better leverages Ariba's Supplier Network to reduce resources, time and costs in managing non-purchase order-based invoices, according to the solution provider. New features in Workforce improve the ability to handle complex services management, including both fixed fee-based and time and material based projects.

Travel & Expense adds an enhanced user interface designed to improve usability and process efficiency.

Among the first customers to tap into the new Ariba solutions is airline industry star-of-the-moment Southwest Airlines. Southwest, already an Ariba Buyer user since June 2000, is adding the provider's Analysis, Contracts, Enterprise Sourcing, Invoice and Travel & Expense applications, in addition to the new Category Management.

Finally, Ariba joined with IBM to announce a series of five spend management solutions collectively dubbed Spend Management Advantage and comprised of IBM offerings integrated with Ariba applications.

The two companies said they will work with customers to help define their spend management vision and develop a strategy that aligns the initiatives and resources essential for a successful spend management implementation. Savings are expected to be derived from enterprisewide participation, improved deployment speed and effectiveness, and crucial procurement and sourcing education of key stakeholders, the partners said.

"Spend Management Advantage will provide companies who are interested in ESM but don't have the resources to plan and deploy an ESM solution, all the expertise, software, and consulting services they need to get them up and running quickly and economically," said Gary Bullard, general manager for global solutions at IBM.