SAP Ariba Solutions, industry-leading procurement solutions, will be implemented by Konica Minolta, Inc. to increase the company’s efficiencies in the procurement of indirect materials.

Since 2016, Konica Minolta, a global technology company leading in various fields such as office services, professional printing, healthcare and industrial, has been working to achieve greater efficiencies in its procurement and purchasing functions for indirect materials to the extent of forming a dedicated indirect materials procurement unit. Now, aside from optimizing external purchasing costs, the company aims to improve compliance through greater transparency in its expenditure processes starting with more assessable goods.

SAP Ariba is anticipated to bring the company closer to its goal of attaining strategic and highly efficient procurement. Leveraging SAP Ariba solutions, as a cloud-based procurement solution that allows suppliers and buyers to connect on a single platform, Konica Minolta will be able to consolidate data across its global operating sites at maximum capacity. At a time when the company is rapidly transforming within its home country Japan and overseas, having SAP Ariba in its ecosystem is the next natural strategy to support its business’ continual growth.

In 2018, Konica Minolta kicked-off a cross-organization change management project. By mid-2019, the company started running the full suite of SAP Ariba solutions digitalizing an end-to-end procurement and purchasing operations. It includes sourcing functions as a procurement solution, billing and payment notification functions as a purchasing solution and Ariba Network for managing relationships with the suppliers. Ariba Network is a dynamic, digital marketplace operating in over 190 countries.

The company plans to deploy SAP Ariba solutions in its overseas operations after its implementation in Konica Minolta’s Japan.

True to its vision of being an innovative global company that is robust and constantly evolving while remaining vital to society, Konica Minolta aims to become a digital company with insight into implicit challenges faced by its customers all over the world. In doing so, the company will be able to resolve issues alongside its customers and society.

Konica Minolta Legacy

Since 1873, Konica Minolta has been an industry leader exemplifying its corporate philosophy of “The Creation of New Value” shared by over 40,000 members worldwide.  Having a brand proposition of “Giving Shape to Ideas”, the innovative company continues to expand its business by pairing cutting-edge digital technologies to its core technologies in materials, optics, nanofabrication, and imaging.

Konica Minolta continues to explore new business opportunities while simultaneously diversifying its business lines from office services to healthcare products and industrial materials and equipment. To date, the tech giant conducts sales and services in approximately 150 countries across the globe contributing to about 80{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22} of the company’s revenue.

The company has a total net sales of 1059.1 billion JPY with contributions coming from Europe (30{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22}), US (28{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22}), China, Asia and other (24{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22}), and Japan (19{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22}).

Konica Minolta Named Industry Leader on the Dow Jones Sustainability World Index, for Two Consecutive Years

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Increased Visibility on SMB Procurement

“Small and medium-sized businesses have long wanted to take advantage of enterprise-class procurement, but they haven’t had the means,” said Marisol Buczynski Buchanan, CEO of Premikati. “Using the Premikati Marketplace, they can access millions of vetted suppliers and enterprise-class procurement tools that provide greater visibility into their spend and procurement process from end to end – all at a cost they can afford.”

As an SAP Ariba partner, Premikati has created the marketplace specifically geared to SMBs in just six weeks, from delivery to cutover to production. It provides them with critical elements they need in driving a simple, efficient source-to-settle process that quickly delivers results. Their customers can manage spending, connect with suppliers, improve cash flow, and drive compliance – all without adding complexity.

Why Premikati and SAP Ariba?

SAP Ariba is how companies connect to get business done. On the Ariba Network, buyers and suppliers from more than 3.6 million companies and 190 countries discover new opportunities, collaborate on transactions and grow their relationships. Buyers can manage the entire purchasing process, while controlling spending, finding new sources of savings and building a healthy supply chain. And suppliers can connect with profitable customers and efficiently scale existing relationships – simplifying sales cycles and improving cash control along the way. The result is a dynamic, digital marketplace, where over $2.28 trillion in commerce gets done every year.

“The Sanders Group has been transacting over the Ariba Network for many years as a media technology and communications supplier to some of the largest companies in the United States,” said Mike Sanders, president of The Sanders Group. “With the Premikati Marketplace, we can now use the same SAP Ariba solution to purchase products and services we need to run our business. Premikati was able to get our team enabled and completing transactions within one hour of receiving our information.”

“The Premikati Marketplace illustrates how the power of SAP Ariba solutions can benefit companies of all sizes,” said Will Caseber, vice president, Global BPO Channel, SAP Ariba. “With minimal investment, Premikati customers can get up and running quickly, and take advantage of enterprise-class technology and services that propel their businesses to the next level.”

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Companies in the park will have access to a digital procurement platform and applications which will support efficient spend management in the source-to-settle process across all categories of spend, from indirect goods and services to direct materials.

As well as connecting to the Ariba Network, the People’s Government will utilise SAP Ariba Strategic Sourcing Suite, SAP Ariba Buying and Invoicing, SAP Ariba Commerce Automation, SAP Ariba Spend Analysis and SAP Ariba Supplier Risk.

“We are on a mission to grow the furniture industry in China and become the world’s largest furniture innovation hub,” said People’s Government of Ganzhou Nankang. “Our ability to execute depends directly on a platform to help us expand business globally and to manage the sourcing, procurement and payment of goods and services with maximum efficiency and speed. It is therefore essential that we have a holistic, automated source-to-settle system that is smart, reliable and easy to use. So we chose SAP Ariba.”

With the Belt and Road initiative driving global business in China, there is more focus than ever on establishing seamless, sustainable supply chains. A number of major home furnishing brands such as Huiming Group, Tuantuanyuan Furniture and Huirui Cross-border Commerce have established themselves in Nankang district. The first internet-enabled furniture manufacturing industry cloud platform in China, kj.casicloud.com, has also been established here.

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As a large organisation, Lenovo has traditionally suffered from decentralised purchasing, with purchases being made in many locations by many groups using many different systems and processes. They decided to harness cloud-based applications to create a collaborative integrated digital process for sourcing goods and services.

“We needed a standard way to manage procurement that would allow us to not only manage our costs, but minimise risks, and an integrated system to drive it,” said Sophie Zhu, procurement director, Lenovo. “Working with SAP Ariba and Deloitte, we proposed new functional requirements and developed a financial management solution that could accommodate our unique needs,” she said. “And they delivered.”

Deloitte helps organisations use SAP Ariba to optimise their procurement processes, manage their customer and supplier relationships and improve their bottom line.

“SAP Ariba provides a powerful platform to drive simpler, smarter sourcing,” said Lai Youyou, SAP consulting partner, Deloitte. He said that there is a very aggressive timeframe for a new transparent and collaborative negotiation process involving functional and technical experts from China and the US. The end result will enrich Deloitte’s experience in SAP Ariba’s applications and assist both companies to take advantage of emerging business opportunities in the rapidly growing local market.

“The world has gone digital and procurement has gone with it,” said Gareth Bowen, head of SAP Ariba, Greater China. “Innovative organisations like Lenovo that are embracing the trend can power new ways of thinking and operating that go beyond savings and efficiencies to create long-term, sustainable advantage for their business.”

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“Green Cross has decided to deploy an integrated procurement strategy in order to accomplish process improvement and innovation,” said Ryu Man-Kyu, associate director, purchasing, Green Cross.

“With SAP Ariba’s innovative technology and business network, we can fuel a simple, transparent procurement process that delivers savings, efficiencies and market advantage,” said Man-Kyu.

The source-to-settle SAP Ariba solutions Green Cross will use include SAP Ariba Spend Analysis, SAP Ariba Sourcing, SAP Ariba Contract Management, and SAP Ariba Buying.

Green Cross will implement the SAP Ariba solutions alongside its existing SAP ERP system to extend its simplicity, power and speed beyond the corporation, enabling new and innovative levels of collaboration with customers, partners and suppliers to improve their supply chain.

“The digitisation of business is taking hold among companies around the world and Green Cross is leading the way in Korea,” said Ben Redwine, general manager, SAP Ariba, Asia Pacific Japan.

“In embracing solutions from SAP Ariba, the company can drive an innovative, digital procurement process that, beyond savings and efficiencies, delivers broad business value.”

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The solutions, which will leverage SAP Leonardo, IBM Watson technologies and SAP Ariba, will bring intelligence from procurement data together with predictive insights from unstructured information to enable improved decision-making across supplier management, contracts and sourcing activities.

IBM Global Business Services will provide consulting and services to build, implement and operate the new offerings using tailored roadmaps, and working with SAP Ariba to bring new and existing IBM customers to the platform.

The companies also plan to launch a Cognitive Procurement hub to further the development of intelligent procurement solutions and services, working together to explore applications of emerging technologies, including blockchain.

“We’ve built a cognitive procurement platform trained specifically to understand procurement transactions and unstructured data such as weather, non-standard part numbers in contracts and complex pricing structures,” said Jesus Mantas, general manager, Cognitive Process Transformation, IBM Global Business Services.

SAP Ariba and IBM hope to together use data insights to impact the entire procurement process, from improving spend visibility to assisting buyers and enriching content management. For example, a digital assistant combined with IBM Watson services, will transform sourcing events by helping with tasks such as defining the correct Request for Proposal type, identifying appropriate suppliers to participate based on commodity category, region or industry and delivering intelligence on market signals and pricing pressures to optimise results.

“Today marks a major milestone for procurement,” said Alex Atzberger, president, SAP Ariba. “With the deep horizontal integration capabilities native within SAP Ariba’s mature platform and the innovative capabilities of SAP Leonardo and IBM Watson delivered by the industry’s most experienced and trusted providers, companies can realise an even more intelligent source-to-settle process for managing all categories of spend that creates value across the entire business.”

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The announcement was made at SAP Ariba Live this week in Las Vegas.

“Intelligent bots are facilitating a whole new paradigm of interactions that allow people to be more efficient and smarter in what they do,” said Dinesh Shahane, chief technology officer, SAP Ariba. “We are investing in these types of applications and technologies such as artificial intelligence and machine learning to deliver a next-generation user experience for our customers that promises to transform procurement as we know it.”

The bot is designed to remove issues such as errors in supplier invoices or mismatches with business rules which can slow down the procurement process.

Through the bot, the company plans to enable buyers and suppliers to converse with their SAP Ariba applications as they would with Siri or Alexa. Using machine learning, the bot will be able to train and learn about a user’s preferences and a company’s policies and procedures, and guide actions in line with them to reduce errors and speed processing.

SAP Ariba plans to make this procurement bot as part of a portfolio of bot applications that SAP is developing by the end of the year.

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ISAP: What is your integration strategy, and what is driving that strategy for SAP Ariba?

Sanjay Almeida: We think about it in terms of how to start to simplify integration among all the applications that we have and create a ‘plug and play’ model. It’s not just point-to-point integration; we’re very proud of the 100 points that we have integrated among various business processes, but we think more holistically in terms of how we simplify end-to-end business process. Integration plays a huge role in realising the product benefit as well as faster ROI and simplification. So we want to make sure that we have a plug and play approach, we have a cloud approach, and it needs to be flexible. As you know, there’s no standard ERP implementation – there’s always tweaks and customisations that customers have to do to maximise their opportunity. So all integration has to be flexible to accommodate not only the standard business processes but also the custom business processes that customers have adopted.

We also want to make sure that the investment that our customers are making to this integration is future-proof, so as we add new functionality from both sides, it’s more a matter of turning on a few switches, versus reimplementing the integration. So these are core tenets that we operate under.

ISAP: Why is integration so important in the procurement space, and what benefits does full integration yield for companies around procurement activities?

SA: Procurement has a two-sided model – we have a buyer and a supplier. With the Ariba Business Network, we have 2 million suppliers connected to the network, and just last year, we had over US$1 trillion going through the network. When you think about the integration, it has to work for both sides – for suppliers and the way they manage their systems, as well as for the buyers and how they manage their systems. So this is supercritical; it’s truly bidirectional integration for two sets of parties – buyers and suppliers – to integrate with ERP. So it’s more multipoint integration than traditional integration.

ISAP: A lot of other players are relying on open API structures at this stage. Why have you decided to go a different way with your integration approach?

SA: We have two modes at play – for SAP, we have a huge on-premise install base, and then we have S/4HANA, which is our cloud-based solution. Our integration is flexible – we have integration to both on-premise as well as cloud, and the infrastructure that we are building is on the cloud. So we have created what we call the Cloud Integration Gateway (CIG), which is a cloud-based product that can integrate with SAP and for that matter, other ERPs through the cloud, as well as through the on-premise side as well. So we wanted to have a very flexible approach in terms of where the investment exists today from the customer perspective, and where the investment is going to be in the future, and how that seamlessly transitions from on-premise to cloud. We wanted to make sure that customers don’t have to reinvent the wheel as they make that move. That’s why we have this hybrid strategy, and created the CIG that fulfils the promise of seamless integration.

ISAP: What do you see as the key challenges businesses are facing in terms of bringing together a host of cloud solutions as many are now, and making them all work together for the business?

SA: When we started talking to customers, what came up all the time at the top of the list is “We have made investments today, we are continuing to invest for tomorrow, we have all these different protocols and different systems; we don’t want to keep investing into integration every year or every time we want to avail ourselves of new functionality”.

The other thing is that especially on the cloud side, the innovation curve is much faster. We release software every month, every quarter; we add new functionality, and customers are very excited to avail themselves of this functionality. But the real problem in the past was that integration doesn’t catch up with the innovation. So what we have done is we have synchronised our release cycles with SAP, S/4HANA and Ariba, both from an application and network perspective, so that when new innovation is available, it’s automatically added to our integration. So there is no waiting for customers to absorb that innovation.

That’s the beauty of having early access to SAP products: we have the ability to synchronise releases across various products because we own a whole lot of those. So the absorption of innovation from the customer point of view is much sooner than it had been in the past with other vendors.

ISAP: That’s helpful for customers who are pretty much wall-to-wall SAP, but what about other customers – how does the integration work for them?

SA: We have over 100 integration points and we have over 5000 feeds that we integrate. With the Cloud Integration Gateway, that integration is available for other ERPs as well – for Oracle, for Peoplesoft and for Quickbooks, because we know there are some customers, especially on the SME side, and some suppliers with smaller supply base, that use lower-end ERPs. Having a cloud-based integration gateway means it’s not file-based. We go with the industry standard that Ariba actually pioneered 20 years ago, called CXML, which is a commerce standard which is adopted in the industry. That common standard helps us in exposing those integration points, in the procurement products as well as some of the newer innovations that we’ve done in supply chain, payments, supply chain financing – all those business processes are available as part of that integration story.

ISAP: What’s ahead from here for SAP Ariba?

SA: There will definitely be more business processes that we want to integrate more tightly. I think supply chain is a huge opportunity for us. Managing that whole supply chain end-to-end all the way from demand and forecasting to building the products, delivery and quality is a big opportunity for us, and we have invested quite a bit and we’ll continue to do that.

We have a fantastic B2B payment system that’s been adopted across SAP. This is making sure that wherever the payment is initiated, we have an end-to-end process covered in this payment process. We also want to extend it into the financing side, so today we have multisource financing companies that finance our suppliers and buyers – we want to have integration for those and will continue to take that global. Asia, Europe and South America have different requirements in terms of how to handle taxes and legalisation, so we want to accommodate business processes which are local to specific regions.

We also want to continue to expose our Cloud Integration Gateway as a platform for all kinds of integration, whether it’s the Internet of Things, blockchain, logistics, supply chain payments, finance – that’s where you will see a lot of innovation coming out, both from the product side as well as the integration side.

We want to make sure that both buyers and suppliers are realising the value by having this seamless integration. We want to connect various networks – whether they are pharma networks or healthcare or banking – seamlessly through our integration gateway as well. So the strategy and vision around integration is not just limited to ERP integration, it’s going beyond connecting the world and commerce across the globe for various trading partners in the industry.

SAP Ariba’s Cloud Integration Gateway, powered by SAP HANA Cloud Integration, is now available for all customers.

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As an SAP Ariba BPO partner, Premikati will use SAP Ariba’s technology to provide contract management services to both large enterprises and companies under $500 million in annual revenue.

“We have seen clients of all sizes and industries struggle with contract management,” said Marisol Buczynski Buchanan, CEO, Premikati. “Lack of tracking with respect to items such as expiration dates, renewal terms/price increases, service level agreements, notice provisions, and even counter signatures is all too common. With SAP Ariba, we can help them overcome these issues.”

Companies can be up and running in two to three weeks, according to Buchanan.

According to Premikati, the offering will enable businesses to automate and accelerate the entire contract lifecycle; standardise and control contract development; collaborate with all stakeholders; and strengthen operational, contractual and regulatory compliance.

“Contracts are the lifeblood of any organisation and managing them effectively can deliver strategic advantage,” said David Johnston, senior vice president, partner ecosystem, SAP Ariba.

“With SAP Ariba’s technology and Premikati’s contract management expertise, companies of all sizes can get on the road to automation and drive an efficient process that lowers both their costs and risk.”

Premikati is also a SAP silver partner.

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Published on The Briefings Direct Network, The Secrets of Highly Effective Procurement will cover the best practices that define source-to-pay excellence.

“Procurement today is a different game,” said Dana Gardner, principal analyst with Interarbor Solutions and host of the Briefings Direct series. “Once viewed as a back-office task, it has emerged as a key differentiator and driver of business value. And to execute it well requires totally new ways of thinking and acting.”

And there do seem to be some common practices among procurement top performers. According to a survey conducted as part of SAP Ariba’s Benchmark Program, which analysed more than US$350 billion in spend data across 3500 categories for companies connected to the Ariba Network, these top performers:

• Manage source-to-pay as an end-to-end process, not a series of discrete tasks;
• Have an integrated platform from which they manage all of their spend, not disparate point solutions;
• Leverage technology to fuel greater collaboration, not just to automate tasks; and
• Connect to networks to access intelligence, rather than just transact.

“As a result of their willingness to think outside the box and enable a technology-enabled, data-driven approach to procurement, these best-in-class outfits have more spend under management, drive greater savings and efficiencies, and are transforming their operations,” said Kay Ray Lee, director, value realisation, SAP Ariba.

The podcast is now online here.

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