What is the Best Way to Control Vendor Management?

If you are a business owner that wants more control over vendor management one of the best things you could do is hire an SAP Ariba consultant. The reason for this is that the SAP Ariba platform is a comprehensive digital solution that has the ability to maximize every aspect of the procurement process from sourcing to payment – and everything in between.

Digital Transformation

When the pandemic hit in 2020 millions of businesses were forced to either convert the way they did business from in-person to digital or go out of business. Plain and simple facts. The world had to shut down while the virus did its thing.

Although the entire time during the pandemic was ugly and full of chaos, the world proved that it could go along without normal functionality with the help of the internet and technology.

SAP Ariba was around before the pandemic, but since companies learned that they could have more control over many of the aspects of their business if they allowed technology to help, more and more companies made the decision to implement a complete digital transformation.

Gone were the old days of keeping track of business finances and procurement management with pen and paper.

What is Vendor Management?

The procurement process of many businesses is based on the entire operation of the buying and paying strategy of a company. From sourcing the best vendors, establishing contracts, making orders, then ultimately paying for the goods or services that were ordered every step of the process is crucial for the health of the company.

  • Planning
  • Sourcing
  • Buying
  • Paying
  • Managing

Vendor management has to do with finding sustainable sources that will be most beneficial for the company, getting the vendors into contracts, managing the contracts, and reducing risks.

At the end of the day, many businesses are only as strong as their sources. If the sources are weak and faulty, the business will be weak and faulty as well.

One of the most powerful functions of the SAP Ariba platform is that it has the ability to locate optimal sources from anywhere in the world. Each of the sources that it can bring to the table will match up with a specific type of criteria that is input to the platform.

For example, if a company has the need for a certain type of shoe to be available at all times and has to be under a certain price, the platform can locate vendors for that shoe and find prices that match the specifications that have been established for the query.

In addition to locating the sources, the platform has the ability to seek out price deals for items for bulk prices, or time-restricted prices.

Once the vendors are located, the software can either choose to move forward and acquire the vendors or notify the administrator of the program of the sources and allow them to contact them in person.

Contract Management

Keeping up with hundreds, if not thousands, of contracts can be a challenging feat. Each vendor will have its own characteristics within every contract. Time restrictions, prices for amounts or time limits, renewal options, contract expiration, and contract term enforcement.

Some of the major details that constantly need to be updated are:

  • Time constraints
  • Prices for bulk items
  • Limit of items for a certain price
  • Differences of items
  • Sizes items along with price rates

Depending on the agreement that solidified the contract there are millions of variables that can shift or change over the course of time.

Another phenomenal function of the SAP Ariba platform is that it has the ability to keep track of every contract that is put into effect and make sure that the agreements are kept.

How Vendor Management Portal help companies work Competent

It is a common occurrence for a member of the procurement department to make a deal with a person that works for the vendor. When it comes time to pay for the goods or services the price does not reflect the deal because the vendor company is not aware of it. This can lead to a huge loss of efficiency because, most likely, the good or service could be found somewhere else at a much lower price.

In any event, when the SAP Ariba platform manages the contracts it will look out for issues such as this. With a quick message to the vendor letting them know that the price was different than the one that was negotiated most of the time the situation is addressed and the price is granted and given for the product or service.

Smart Spend Management

Another valuable function of the SAP Ariba platform is the ability to manage the spending practices and strategies for the company. Effective spend management can maximize value for the company while decreasing costs of goods, services, and other varying details that can be optimized.

The entire source-to-pay process must be analyzed and evaluated in order to get the most out of every penny that is spent. Regardless of the type of business, when there is the variable of spending habits present in an equation that holds the balance of the efficiency of the company in place, there is always room for improvement.

Spending management can:

  • Cut costs
  • Maximize returns
  • Capitalize on opportunities
  • Increase overall efficiency
  • Save the company lots of money

With the help of a skilled consultant, an organization can use the SAP Ariba platform to take a closer look at the way it spends money and see ways to improve every transaction in a way that is most beneficial to the company.

Being able to decipher potential risks between potential gains is key in the element of success for any business. The software can use information that the company puts into it to gather varying data from the outside sources that is available to it in order to provide lists of possible significant opportunities to find goods and services for better prices, and opportunities to resell these goods and services for a maximum return.

Depending on the structure and the needs of the business, a consultant can show the procurement team how to use the application to its fullest extent and get the most value from the investment.

Education and Training

Every establishment that invests in the SAP Ariba platform will have to learn how to use the software and show the rest of the teams how to use it as well. When a consultant comes into the picture they will take the time to educate every person that is going to be part of the application and show them how to correctly use the platform.

In the administration phase of the platform implementation, an expert will construct an environment that is designed specifically to the details of the company. Administrators, groups, users, and permissions for groups and users will be set into action and put to work.

The more that every person that uses the platform knows about how it all works, the better it will be for the company. Although implementing a powerful solution such as SAP Ariba to carry out management tasks is a great way to get things done, if nobody knows how to use it, things will be rocky.

Conclusion

As with any company, when everybody is on the same page things seem to flow the right way most of the time. When it comes to sophisticated structures it is always best to get as much support as you can from smart platforms that help to keep track of millions of details. Vendor management is not an easy process. The best way to stay on top of it, and get the most control over it is to simplify it and allow it to run from one localized hub.