Touchless, error-free transactions. Closer collaboration with strategic suppliers. Faster source-to-settle cycles through end-to-end automation. A better and more customized buying experience.
To achieve benefits like these, countless companies launch plans to integrate with their suppliers through Ariba Network. And for most the decision pays off big, helping them cut costs, boost efficiency, and maximize returns from their SAP Ariba and ERP investments. Yet for others these gains fail to materialize, with integrations bogged down by constant snags, delays, and distress.
So what’s the secret to achieving integration success? The key lies in a proactive approach – and adherence to the 8 best practices below.
Best practice #1: Engage an executive sponsor. Having an executive sponsor – someone who understands the value of integration and will champion your project from beginning to end – is crucial to win buy-in and ensure success. Ideally, this person should hold a director-level position (such as managing director or financial officer) and have visibility into procurement, accounts payable (AP), and information technology (IT), since they’ll need to advocate for the right degree of involvement across functions and demonstrate how integration benefits each area as well as the organization overall.
Best practice #2: Allocate appropriate resources. Integrations often founder because buying organizations underestimate the resources required. “The most important thing is you have to focus on it; you cannot do this in half an hour in the evening,” notes Martin Meyer of Bechtle AG in this commentary on optimizing integration. “You have to build up a small group of people who take care of it.” As a rule of thumb, plan to devote a total of 1.5 full-time equivalent (FTE) in resources annually to support every 45 supplier integrations. You’ll need participants in multiple departments (typically procurement, AP, and IT) who can be consistently available and responsive on a day-to-day basis to cover key tasks and roles, including:
Project lead coordinates the project, enforces the timeline, and serves as a single point of contact to negotiate any escalations that arise using a balanced, fair perspective
Supplier enablement lead/testing contact reviews and confirms the test plan, attends supplier calls, generates test orders, responds to and manages test transactions, and coordinates go-live
Best practice #3: Establish requirements up front, then keep them consistent. “Knowing what you want to achieve when you first set out on the project is probably the number one priority,” says Insight’s Tom Barney in an overview of integration tips for buyers. Take the time to fully assess what’s involved before you begin, then define and share your requirements, policies, and expectations with all suppliers and internal stakeholders. And be sure to maintain these throughout the project, since nothing is more frustrating to suppliers – or more detrimental to meeting your timelines – than having requirements change in the middle of the integration.
Best practice #4: Develop a data-driven roadmap. It’s crucial to analyze data at the outset to gain an accurate understanding of supplier categorization, catalog strategy, regional distinctions – such as countries where you only automate purchase orders since e-invoicing isn’t supported – processes you want to cover, and other essential concerns. This gives you a solid foundation to develop an effective plan based on facts, not guesswork.
Best practice #5: Qualify suppliers carefully. Just choosing a list of suppliers you want to integrate won’t work. Instead, study the data to document the nature of your business with each supplier – including any unique cases – and determine which processes and test documents you’ll need to cover. Prioritize first-wave candidates by identifying suppliers with whom you have the largest spend volume as well as those with significant strategic value to your organization based on region or commodity. It’s also smart to start with experienced suppliers who have already integrated with other customers, since they can share best practices and complete the process quickly so you achieve faster time to value.
Best practice #6: Collaborate and communicate. As Tom Barney points out, there’s “no such thing as over-communication” when it comes to integration. Musya Brod of B&H Photo, Video, and Pro Audio sees it as number one among the top three drivers for integration success. “Communication is key,” she says. “It’s important for buyers to communicate to suppliers what their needs are, and it’s important for suppliers to communicate to buyers what their capacities are.” Regular meetings and continuous collaboration are essential to keep tasks and timelines on track. For example, you’ll need to give suppliers your validation rules and requirements, provide exact samples of relevant document types to ensure accurate mapping, follow up about meaningful test-case scenarios they should include, and respond quickly when they’re ready to test.
Best practice #7: Keep it clean and simple. Having clean master data is essential to a smooth integration process. Shirking this step – a common error for companies moving to the cloud – can significantly stall progress when disparities arise between the measures, conditions, and formats you use versus those your suppliers can support. By cleaning data up front, you’ll be equipped to sidestep such snafus. You can also simplify and streamline by using standardized processes. This helps maximize cost savings and efficiency for you and your suppliers, especially on integration projects conducted across different countries, currencies, and cultures.
Best practice #8: Drive compliance with a carrot, not a stick. Rather than trying to push suppliers to integrate, use a pull approach by explaining how the process will benefit them. This approach lets you kill two birds with one stone: achieving higher compliance while building better business relationships. Identify a value proposition you can offer and then communicate it clearly. For example, you could:
Offer 10-day invoice payment terms rather than your standard 30-day terms
Provide credit memos at year end based on the supplier’s level of participation
Guarantee 100% order and invoice compliance through automation, eliminating the heavy fines and legal risk suppliers may face for invoices that don’t meet regional requirements
Incentives like these demonstrate how integration will save money and time for suppliers, making it easier to justify the expense and effort of participation.
For additional information about integration best practices or to learn how SAP Ariba can help, contact your customer engagement executive