James Lee, Chief Operating Officer at SAP Ariba and SAP Fieldglass, discusses how the function of procurement has reworked provide chain methods in the trade over the previous few years.
Recognised as the chief in spend management and the go-to place for organisations to attach and get enterprise accomplished, SAP Ariba is taken into account considered one of the largest software program organisations worldwide and ranked first in Supply Chain Digital’s Top 10 Largest Software Companies Worldwide in November.
James Lee, Chief Operating Officer (COO) at SAP Ariba and SAP Fieldglass, believes the organisation is actually considered one of a sort. “SAP Ariba is the only true procure, source-to-settle, end-to-end solution provider, that also addresses all of the expense categories. We also possess the largest B2B network in the world,” he explains. “We have more than 4mn suppliers and buyers in over 190 countries connected to our network and nearly US$3trn in commerce is flowing through it annually. Based on commerce value, we’re larger than eBay, Alibaba, and Amazon combined — that’s a pretty incredible number.”
The success of its Ariba Network is unrivalled. With its platform reaching such vital development, Lee places it all the way down to a number of key causes. “When you’re the market leader, both buyers and suppliers recognise that this is where you’re more or less a de facto standard,” says Lee. “Our network is for suppliers who are looking to expand their business and find more buyers, while it’s also for buyers who are looking to upscale their supplier network too. We make it very seamless and adaptable for our suppliers and buyers to transact over our network. If you think about all the different communication mediums, there’s a lot of thought and investment that has gone into ensuring our platform is as streamlined as possible for both buyers and suppliers.”
Managing spend efficiently is vital. In order to realize this, it takes extra than simply growing compliance and lowering prices. SAP Ariba has leveraged Intelligent Spend Management (ISM) to allow spend knowledge to return collectively from throughout all sources and classes and permit for smarter, quicker spending choices. “Our customers expect to see a unified strategy, product roadmap and go-to-market interface that addresses all of the spend categories,” says Lee. “We don’t want to deal with one team that looks at indirect, another at services and one that deals with travel expenses. You’re one company, so it’s important to have one space and one product. Under ISM, we have Ariba, Fieldglass and Concur as one family. Combining these three organisations together is the best way to serve our customers.”
Procurement has reworked considerably over the previous few years. Traditionally recognised as a again workplace perform, firms are starting to unlock the true worth of the procurement perform. Lee believes that the provide chain trade is waking as much as the requirement for a devoted CPO place. “I’m a strong believer in the importance of a procurement organisation. In the past, it was rare to see a company with a CPO role,” explains Lee. “Usually procurement was a function that was under the COO or CFO’s remit and was primarily considered a cost-cutting department. They were essentially there just to ensure that they were getting the best deals and squeezing every dollar and cent out of the negotiation process.” However, Lee recognises that on account of the development of expertise, procurement professionals are actually freer to give attention to making relationships with suppliers extra strategic. “Technology is having a major influence. Now, all of a sudden, procurement is helping factories minimise stock outs and allowing supply chains to run more efficiently,” he says. “I’ve been talking to lots of customers recently and there’s an increasing number of organisations beginning to understand that you need a CPO function separate from the CEO. The scope is much broader than just cost-cutting.” With digital transformation shaking the provide chain trade up significantly, Lee believes digitalisation is centered round insights. “Digital transformation goes beyond automation or processes moving from paper to online transactions,” explains Lee. “It’s important to question: how can I rely on a platform like Ariba to provide information to me from all over the world? This could be from regulators, suppliers, my users or trade partners. Finding out how to harness all that information to ultimately make better decisions is vital.”
Lee additionally believes in “procuring with a purpose” and maintains that firms akin to SAP Ariba ought to drive duty in the provide chain. “We believe procurement isn’t just dollars and cents,” affirms Lee. “Organisations need to use third party data and intelligence to proactively identify risks and then respond to protect their brand and minimise disruption. Profitability is only one aspect. Sustainability is also in our spectrum as a supplier, so it’s important to adopt ways to manufacture the goods in a sustainable manner, in terms of energy efficiency, greenhouse gas emissions and so on.”
With the provide chain trade in a state of flux on account of the influential impression digitalisation is having on firms’ operations worldwide, organisations should stay lean and agile in a bid to realize sustained success in the house. With customer-centricity at the coronary heart of many companies’ methods, Lee affirms that listening to the altering demand of consumers and observing how you can exhibit the most worth for them is the central focus. “The only way to achieve long-term success is to provide solutions that are meaningful and better serve customers,” summarises Lee. “We will continue to work with our own customers to better improve our solutions offering and see how we can further engage with them in a bid to upscale.”
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