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Meeting the Spend

Analytics Challenge
How the SAP® Ariba® Spend Analysis
Solution Leverages Dun & Bradstreet
Data to Optimize Procurement ROI
Meeting the Spend Analytics Challenge

Big Data has the power to transform business. Companies that embrace the data innovations now
occurring are gaining insights and creating competitive advantage. Used wisely, these remarkable
tools can lead to new opportunities for savings, efficiencies, and growth.

Nowhere is this more true than in the management of a company’s external spending. Over time,
as companies grow and become increasingly successful, their size creates new challenges. Lurking
inside even the most robust companies can be an unruly array of suppliers and disjointed spend
data that create inefficiencies and conflicts that are practically invisible.

Taming and rationalizing this network of partnerships and suppliers has long been one of the
biggest problems facing businesses as they scale. And yet, the increasing complexity triggered by
disparate data sources and the accelerated pace of business means the size of the problem and the
potential risks involved are growing at an exponential clip.

Sourcing and procurement managers are confronted with a difficult balancing act: How can
they weigh costs, manage savings, and risks? The SAP® Ariba® Spend Analysis solution,
powered by Dun & Bradstreet’s industry-leading business data, solves that riddle by offering
an aggregated and enriched view of an organization’s spend and supplier data. It delivers the
insights needed to drive higher ROI from the web of supply chain relationships while mitigating
risks and meeting compliance requirements.

“The supply chain has become a competitive differentiator,” says Eric Dowdell, leader
of Dun & Bradstreet’s Global Supply Solutions. “But it’s also more complicated than just
saying, ‘Get me what I need at the lowest cost.’”

The Spend Management Challenge


Imagine you’re the chief procurement officer, and the chief financial officer walks into your office
with this directive: Cut supplier costs by 10%.

The first impulse is to ask your team some hard questions:


• How can we gain greater insight into our suppliers?
• How much do we spend with each supplier at every level?
• Are we purchasing from multiple vendors that are subsidiaries of a common parent organization?

And, if the team can find these answers and identify opportunities for cost reductions, a new round
of questions comes to mind:
• Do we have the right balance of supplier dependencies and risk diversification?
• Can we leverage our relationship with suppliers for better prices as well as payment and
credit terms?
• How can our supply chain give us a competitive advantage?

“Getting your arms around your spend data is essential,” says Eric Nelson, D&B’s senior
channel manager of Strategic Alliances. “Many businesses think this is a one-and-done
job and approach it that way. But the supply chain is always evolving and organizations
need to make sure the suppliers can evolve with them as their needs change. Above all,
they need to know who they are doing business with.”

© 2017 SAP SE or an SAP affiliate company. All rights reserved.


Meeting the Spend Analytics Challenge

The Dun & Bradstreet and SAP Ariba Solutions Advantage


Traditional business intelligence and analytical tools have been mostly about aggregating spend
data and presenting it in dashboards. But to drive long-term sustainability and adoption, you require
that data be turned into actionable intelligence. SAP Ariba Spend Analysis achieves that through
in-depth commodity classification, supplier data enrichment, and market data insights.

Dun & Bradstreet amplifies the power of SAP Ariba Spend Analysis by providing it unified access
to the world’s largest aggregation of commercial intelligence. The Dun & Bradstreet database
pulls information from over 30,000 data sources to acquire up to five million updates per day to
provide insights into over 240 million business entities worldwide.

This information is organized around Dun & Bradstreet’s DUNS number, a proprietary, government-
sanctioned, global business identifier that provides a universal, persistent key to entity identity
resolution. This unique tool set allows SAP Ariba Spend Analysis to deliver five key advantages
for procurement managers:
1. Organizational linkage awareness: As your business expands and relies upon an expanding
network of suppliers, identifying and understanding the relationships those partners have to each
other and to you is a growing challenge. You may not realize that five of your suppliers are all part
of the same parent corporation. The power of the DUNS number enables SAP Ariba Spend Analysis
to reveal those relationships, providing a 360-degree view of your total spend with each parent
company. This insight gives the team greater leverage in pricing and fulfillment negotiations,
and a basis for improved payment and credit terms.

2. Spend rationalization: Is the organization using 10 different suppliers for office supplies?
Or three different telecom providers for smartphones? Are essential components of your
manufacturing processes coming from a supplier in a region that’s vulnerable to floods or
geopolitical risk? By getting a single, verified, integrated view of your supply chain, sorted
by the commodities that come into the business, managers can identify and assess the risks
that need to be mitigated – or savings to be gained – by cutting maverick spending, reducing
suppliers, and inviting vendors to compete on pricing terms.
3. Elimination of redundant and misleading supplier data: For even the most modest of businesses,
there are costs for vendor onboarding and data maintenance. And, as the business grows, it’s
likely that there will be multiple entries for suppliers that have been identified under multiple
business names or at multiple locations, leading to redundant processing and billing costs,
unreliable audits, and conflicts and blind spots among procurement managers. The inclusion of
Dun & Bradstreet’s business intelligence in SAP Ariba Spend Analysis cleanses and validates
vendor information, eliminating and rationalizing duplicated or redundant records, streamlining
accounting and audits, and helping ensure effective vendor relationship management.

4. Risk awareness and mitigation: More suppliers in more regions means increased supply
chain risks. Ariba’s partnership with Dun & Bradstreet provides metrics and alerts that help
to monitor a supplier’s upstream payment behaviors and to flag emerging legal events,
debarments, and/or regulatory issues.

© 2017 SAP SE or an SAP affiliate company. All rights reserved.


Meeting the Spend Analytics Challenge

5. Supplier vetting and onboarding: Every business must manage the change necessary to remain
competitive, from entering new markets or operating in new regions to changing product and
vendor requirements. That all means working with new suppliers on a regular basis. With the
insight and supplier intelligence provided by Dun & Bradstreet, SAP Ariba Spend Analysis reduces
the time needed to monitor existing suppliers, assess new candidate vendors, and onboard
qualified suppliers.

The impact for the procurement team is easy to see: One SAP Ariba Spend Analysis customer
not only achieved 18% savings for the commodities that were managed but also increased
the corporate spend managed under contracts by 25%. Yet another customer realized
sourcing savings of 15% by identifying overlapping suppliers and commodities and
negotiating consolidated agreements with the supplier groups.

“It’s very easy for a lot of this information to be siloed or hard to get your arms around,”
says Jon Ball, director of Global Data Insights & Analytics at D&B. “Now it can be shared
across the whole company.”

The Key to Spend Management Excellence: Actionable Insight


If ever there were an example of how knowledge is power, it’s in the correlation between spend
analysis and spend management. The insights made available by Ariba’s partnership with Dun and
Bradstreet can build upon the capacities of the procurement team to manage costs, mitigate risks,
improve compliance adherence, and deliver competitive advantage.

About Ariba
Ariba is the world’s business commerce network. Ariba combines industry-leading cloud-based applications
with the world’s largest Internet-based trading community to help companies discover and collaborate with
a global network of partners. Using Ariba® Network, businesses of all sizes can connect to their trading
partners anywhere, at any time from any application or device to buy, sell and manage their cash more
efficiently and effectively than ever before. Companies around the world use Ariba Network to simplify
inter-enterprise commerce and enhance the results that they deliver. Join them at: www.ariba.com

Partnering with Dun & Bradstreet


Dun & Bradstreet (NYSE: DNB) provides organizations the business intelligence they need to grow their most
valuable relationships. By enabling enterprises to verify and enrich the data they depend on, we enable them
to connect with the prospects, suppliers, clients, and partners that matter most. Nearly ninety percent of the
Fortune 500, and companies of every size around the world, rely on Dun & Bradstreet’s data, insights, and
analytics. For more information about Dun & Bradstreet, visit DNB.com. Twitter: @DnBus

© 2017 SAP SE or an SAP affiliate company. All rights reserved.


Information herein subject to change without notice.