SAP offers three different software solutions designed to manage business expenses. SAP Ariba and SAP Fieldglass are both procurement solutions in which procurement process costs play an important role, while SAP Concur provides a platform for processing travel and expense management. But what if you integrate the activities of the SAP subsidiaries into an overall entity? The management of business expenses must then run more smoothly. With this in mind, SAP recently launched the Intelligent Spend Group, of which the three SAP solutions are a part.
We recently attended SAP Ariba Live in Barcelona, the annual event where users are updated on the latest developments in procurement. Just before the event, the SAP Intelligent Spend Group was launched, which focused a lot of attention on the direction Ariba, Fieldglass and Concur are heading in. The chosen path is aimed at ‘Intelligent Spend Management’, as it is often described. The three SAP subsidiaries play an important role in this, of course, but the link with the S/4HANA ERP system should not be underestimated either.
The role of the procurement solutions
Initially, Ariba and Fieldglass seem to have the biggest role within the new group. Both solutions focus on procurement, which means that the software provides support in attracting all the goods and services for an organization. This involves various suppliers and processes. All the related components, whether it concerns contract negotiations with a supplier or the actual purchase of materials at a given moment, can be quite complex and extensive. Transport and stock management must also be considered.
SAP bought Ariba about seven years ago, while Fieldglass has been part of the SAP family since 2014. The companies continued to operate independently, although they grew closer together both in front of and behind the scenes. It seemed only logical that they could have a lot in common. Both solutions are cloud-based, the integrations between the products became more and more visible, and joint roadmaps followed. This is to address procurement tasks in the broadest sense of the word, because the two solutions ultimately address other procurement issues.
Ariba is of particular interest to organizations because of its marketplace, Ariba Network. It brings together millions of suppliers and buyers for trading in goods and services. According to Ariba itself, this means that it has the largest B2B network in the world in its hands. This year, the Ariba solutions are expected to handle $3 quintillion, one quintillion being a billion times a billion. Fieldglass covers a completely different procurement component by offering a so-called vendor management system (VMS). A VMS is not so much about purchasing goods for the supply chain as it is about hiring external workers. This mainly concerns the service issue that companies face, such as finding a contractor or managing a freelancer digitally.
Concur’s expense software addresses something else
The situation of the third member of the Intelligent Spend Group is significantly different, given the focus of Concur. This software focuses primarily on expense management and business travel expenses. This has been made as simple as possible for the employee, e.g. by integrating Concur functionality into a car’s navigation system. If the employee pays for a parking ticket via the navigation system after a business appointment, the Concur link can immediately designate it as a business transaction.
Many organizations also have regulations for sending such transactions through the administration, starting from a certain amount of money. For such administrative tasks, Concur has a dashboard that shows how and where expenditure takes place. At this central location, you can go into more detail, such as seeing which employee spends the most or to which type of transaction the most budget goes. By having insight into these statistics, savings can be made on certain expenses. It is the first step to start a conversation with the employee who spends too much. Or, perhaps the expenses for hotel accommodation are now far too high. Cheaper hotels can then offer a solution.
Bringing all the individual data together leads to a better strategy
Within the Intelligent Spend Group, Ariba, Fieldglass and Concur continue to be offered as independent solutions. However, SAP wants to bring all expenditure categories together more, as in the ideal scenario, this would lead to an overall expenditure strategy. This is because an algorithm can analyze the data from the three SAP solutions mentioned above in order to come up with an accurate forecast. Based on the results of this algorithm, it will be much easier for an organization to determine what the expenditures will look like. SAP will, therefore, focus on applying extra analytics to business expenses in order to achieve truly Intelligent Spend Management.
S/4HANA also has a role to play in this. SAP also calls the ERP system the ‘digital core’ of the new group. S/4HANA contains options and data on releases. Organizations can process certain expenditures in an ERP system and gain insight into them. In addition, it is also the case that, for example, the operational data that S/4HANA contains about the supply chain can be valuable in establishing links with Ariba data. It would, therefore, be a shame if the ERP system were not somehow linked to the Intelligent Spend Group. SAP is therefore firmly committed to the further integration of Ariba, Fieldglass and Concur with S/4HANA. There is still room for improvement in this mutual cooperation. Of course, the integration has already received attention in recent years, but S/4HANA is still a relatively new ERP system, and the three release solutions have been part of the SAP family for less than ten years.
Interesting steps are now really going to be taken
In our view, the Intelligent Spend Group is a smart move that users can certainly benefit from. It gives them more options for managing expenses, while at the same time creating a more uniform approach. SAP has a very broad software portfolio, which is why we welcome just about every step to achieve tighter integrations. By focusing on integrations, the ERP giant works directly on simplifying its software.
It must be said, however, that especially customers who use the four SAP solutions seem to benefit from the Intelligent Spend Group. When a company uses S/4HANA, Concur and a competitor’s procurement solution, they benefit less from the new unified approach than customers who use everything. This also applies to organizations that use Ariba, Fieldglass, Concur and another vendor’s ERP system. Such situations occur more than once because there are plenty of alternatives.
Nevertheless, SAP is making a smart move with this, which will immediately create some uniformity. We are therefore curious as to what else the new direction will mean for SAP software.
58 minutes ago
