Benefits of Ariba Catalog Management

Why Use Digital Catalogs?

In SAP Ariba Catalog Management: An Overview, we discussed the most common types of catalogs. . Now we want to explore 4 specific benefits of Ariba Catalog Management.

A robust catalog management system enables easy access to accurate and up-to-date product information. It also empowers buyers with the ability to make informed decisions, negotiate better contracts, and foster strong supplier relationships.

Good catalog management reduces maverick spend and improve compliance. But the advantages of good catalog management extend throughout the procurement lifecycle. Ultimately it paves the way for optimized procurement practices and strategic business growth.

Four Benefits of Effective Catalog Management

1. Standardize and Consolidate Purchases

Every company has consistent purchases. These are things that all, or at least most, of their employees must have that the company provides.

Some, like office suppliers or MRO supplies, are high-volume, low-cost items. Other things, like laptops, are lower volume, higher cost items.

Catalogs that are delivered through the SAP Business Network (formerly the Ariba Network), allow your company, to do a couple of things.

One is to limit purchases to one or two items that you have negotiated specific discounts for based upon volume. Instead of an employee going to the local electronics store and buying a $1,000 laptop, they are given a choice of 2 corporate approved and supported laptops. Those cost your company significantly less because the price has been negotiated in advance.

In the case of higher volume products, items are standardized so you have consistent data about what’s being purchased.

For example, with non-catalog buying, users buying in the MRO category might put their orders in as wooden hammer, 12-inch hammer, and in another order just hammer. When, in fact, they’re all buying 12-inch wooden hammers. All of the descriptions are different, but it’s the same hammer. In a digital catalog, they search for a hammer and they buy that one hammer. And you have the data to show how many hammers your company buys in a year.

2. Track Spend and Volume

So now you know how many hammers you buy every year and how much you spend on hammers. This hard data gives the category manager leverage for long-term negotiations. 

If you’re currently doing business with Office Supply Store One, you can gather up all the catalog orders that’s happened over the last two years, take it to Office Store Two or Three, or even a minority supplier, and see if you can get a price reduction. And the same with laptops or hammers or whatever.

When a category manager has the most accurate data on high volume, low dollar transactions they can better manage the supply base and the budget.

3. Better Supplier Relationships

Catalog management and supplier management are closely linked. A well-maintained catalog relies on accurate and up-to-date information provided by suppliers.

Suppliers play a critical role in providing product data. That includes specifications, pricing, and availability, which are essential for creating and maintaining an accurate catalog.

This naturally creates an environment of cooperation and coordination with suppliers. That helps ensure that any changes in product offerings or specifications are promptly reflected in the catalog. That regular communication helps resolve discrepancies, updated product information, and align catalog content with the current inventory.

Conversely, suppliers benefit from having a comprehensive and accurate catalog. When suppliers have clear visibility into the catalog, they can better understand the organization’s requirements, offer suitable products or services, and align their offerings with the organization’s needs. This leads to improved supplier performance, reduced procurement cycle times, and enhanced collaboration.

4. Increased User Adoption

Needless to say, none of the above things are going to happen, and you won’t have a high level of accurate data if your employees are walking down the street to buy hammers, office supplies or laptops.

You need them to use the system.

The beauty of digital catalogs is that they are becoming easier and more intuitive to use. More like the consumer buying experience we’re all used to on sites like Amazon.

Not that using catalogs, even great catalogs, always leads to perfect user adoption. At CCP Global we work with many companies that constantly struggle with this issue. Particularly in companies or departments where things were done a certain way for a long time and the employees are resistant to making changes.

There are all sorts of ways you can encourage user adoption. We discuss these strategies in great detail in our Change Management series. But if you make purchasing easy and targeted so that the person doesn’t even have to think about what kind of laptop or hammer they want, that is a step in the right direction.

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