SAP Spend Connect Live has been an exciting opportunity to see old friends, meet new ones, and talk about the many exciting innovations in procurement we’re rolling out in the coming months. I was so excited to be on the main stage this year after having missed last year’s event.
Muhammad Alam’s opening keynote supercharged SAP Spend Connect Live with the announcement of SAP Spend Control Tower and how it can help businesses see and analyze their spend across all categories. We also saw how SAP is using artificial intelligence (AI) to drive scope 3 carbon reporting within total spend management.
On the procurement side, we’ve had so much news to share. This includes demos of SAP Ariba Category Management; the buying 360 capability; and Joule, the embedded AI copilot in SAP Ariba Sourcing. We also provided a sneak peek at the future of supplier management – a feature we’re referring to as “the new supplier 360” that can deliver instant access to risk data, AI-powered sustainability information, and operational evaluation to help track metrics like price variance.
We put the world on notice that SAP Ariba solutions are the future of procurement, and that future is already a reality. We’ve taken the investment, innovation, and integration across our product lineup – successes we relived together in this video – to deliver a complete portfolio. Everything procurement at SAP is now SAP Ariba.
Eliminate the Mundane. Elevate the Strategic.
You may have noticed that while others in the market were making noise about AI, SAP has been relatively quiet. But we’ve been very busy, with many use cases in production today and more on the way.
Our goal is to streamline procurement processes to remove mundane, manual interventions, elevate strategic activities, and accelerate decision-making and approvals. At SAP Spend Connect Live, we announced a series of procurement innovations focused on this goal.
Enhancing SAP Ariba Category Management with the Power of Generative AI and Joule
In August, the new SAP Ariba Category Management solution became generally available to our customers. It helps empower category managers to use data insights strategically to help identify trends, develop and implement strategies, and evaluate success relative to tangible business metrics.
Now, we are pleased to announce the integration of SAP Ariba Category Management with large language models through SAP Business AI. This can empower procurement professionals to jump-start category strategy development and planning.
By harnessing generative AI, we are enhancing our market analysis tool, offering valuable, visual insights into supply and demand, risk, opportunity, and top suppliers. Additionally, we will be simplifying category segmentation, powering up cost structure analysis.
These innovations help streamline content creation, saving category managers weeks of time and expediting strategy development. General availability is planned by the end of 2023, representing a substantial leap in enterprise-level category management efficiency.
Embedding Spend Analysis Capabilities in SAP Ariba Solutions for More Informed Decisions
To make it easier for procurement professionals to make timely, informed decisions, new dashboards in SAP Ariba Sourcing and SAP Ariba Buying embed near real-time insights where they’re most useful – within key process workflows.
These capabilities are available today and built on a new architecture that helps create the foundation for future innovation. Advanced AI features and the ability to see across all spend – in SAP cloud ERP solutions, SAP Ariba solutions, SAP Fieldglass solutions, and SAP Concur solutions – can help uncover cost-saving opportunities in the new SAP Spend Control Tower solution beginning in the first quarter 2024.
Delivering Risk-Aware Procurement by Embedding AI-Infused Risk Assessment in Source-to-Settle Solutions
Successfully managing third-party supplier risk often comes down to the ability to answer basic questions accurately. Does the supplier have the ongoing capacity to satisfy the needs of the business? Do they meet environmental, social, and governance (ESG) standards? Are their risk scores in danger of slipping below the acceptable corporate risk standard?
There are software solutions that offer information to answer these questions via dashboards, reporting, and alerts. But this approach can be risky, requiring savvy business users to check the information and assess the risk profiles of suppliers within a specific context. This approach can also waste resources because it allows unqualified suppliers to slip into RFx events, even though they’ll ultimately be eliminated through resource-intensive due diligence.
“Risk-aware procurement” refers to the embedding of risk knowledge into source-to-pay decision processes via software solutions. SAP has embedded AI-powered supplier risk assessment capabilities into its source-to-settle solutions to help business users make smarter decisions faster.
This can make it possible to assess risk profiles within the sourcing, contracting, and buying solutions as an integral part of these processes to determine third-party risk. Supplier risk assessment capabilities are available today in SAP Ariba Sourcing, SAP Ariba Contracts, and SAP Ariba Buying.
AI-powered supplier risk assessment capabilities within SAP solutions can offer numerous benefits across the procurement process:
- Supplier management: Improved user decision-making throughout supplier lifecycle processes
- Sourcing: Exclusion or warnings when high-risk suppliers are included in sourcing decision-making
- Contracting: Systematic reference risk scoring to include mitigation clauses and activities in authoring and contract signature as needed
- Buying and invoicing: The inclusion of risk workflow if the risk score drops below an acceptable standard
A great example of this activity in action is Lieferkettensorgfaltspflichtengesetz (LkSG), the German supply chain act focused on human rights due diligence. With this, information is not only available to support the due diligence activities with suppliers, it also helps business users make natural decisions that help prevent non-compliant activities from occurring systematically.
Continuing to Lead in Procurement Innovation
Of course, the innovations and use cases we demonstrated at SAP Spend Connect Live are just the tip of the iceberg. The coming year promises to be just as exciting, as we continue to roll out new features and capabilities to enhance our comprehensive set of procurement solutions.
We hope you will be along for the ride!
Salvatore Lombardo is senior vice president, chief product officer, and head of Engineering for SAP Procurement.
