Configuring Assessments

In Category Management, the lead category manager can respond to assessments in the Category Segmentation and Market Dynamics cards. The category management administrator creates or modifies these assessments on the Assessment page. They can choose a preconfigured assessment or click Create or Edit to define new assessments.

Category managers can perform the following tasks:

• Change the name of the assessments
• Create and modify assessments
• Create, edit, and delete question sets
• Select either Mandatory (default) or Optional as the response type
• Choose the calculation method as either Direct (default 0-100) or Inverse (100-0)
• Adjust weight percentages so the total equals 100%
• Activate or deactivate assessments

Weight indicates the relative importance of a question. It's used to help calculate each response's score and influences the overall average for each respondent.

Weights are required in the question set from the following assessments:

• Category segmentation assessments
• Business impact questions
• Supply risk questions
• Market dynamics
• Competitive rivalry questions
• Buyer power questions
• Supplier power questions
• Scope for new entrants questions
• Scope for substitutes questions

Category management administrators can assign an importance level to each question. The total for a set of questions must equal 100%.

A calculation method is necessary to determine the recommended strategy based on the category's business impact and supply market complexity. Category management administrators can select either the Direct or Inverse calculation method to compute scores, which are then used to update the category's position on the Kraljic matrix. Managers review the Category Segmentation assessments in their strategy and plan documents, considering the business impact and supply market scores when updating the category's placement on the Kraljic matrix.

When calculating the score for a set of questions, the lead category manager’s responses are determined by the response type. For Direct questions, the response matches the slider value.

For the set of inverse questions, SAP Ariba Category Management computes an adjusted value. For inverse questions, the category manager's response (slider value of 0 to 100) is subtracted from 100, resulting in the adjusted value:

In a set of questions, the final score is calculated by:

• Determining a weighted value for each direct question in the group as follows: (response * (weight/100))
• Calculating a weighted value for each inverse question in the group as: ((100 - response) * (weight/100))
• Adding all the weighted responses together
• Dividing the total sum by the combined weight of the relevant questions
• If the category manager chooses to omit their response from an optional question, the weight assigned to that question is ignored

When a set of questions is marked as Mandatory and already has a total weight of 100%, dividing by the number of questions isn’t necessary to calculate the average. Instead, the values are divided by the sum of all weights.

((question1 * question1Weight) + (question2 * question2Weight) …. (questionN * questionNWeight)) / (sum of all weights)

If a question is set to Optional, the formula is divided by the sum of all weights while ignoring the optional questions.

In SAP Ariba Category Management, segmentation is used to evaluate business impact and supply market risk. Category segmentation is a vital part of analysis because strategies differ depending on the category's nature. Since category managers oversee multiple purchasing categories and manage large spending volumes, segmentation helps them become more efficient in their spending by customizing different strategies.

The category segmentation employs the Kraljic matrix to show the business impact relative to supplier risk. Based on how the category manager or AI responds to the assessment, the position within the Kraljic matrix will be identified as strategic, bottleneck, leverage, or routine. The Market Dynamics tool allows the category manager to analyze the market from the buyer's perspective using various methods, including Beroe (a market intelligence provider), generative AI, or manual data entry.

The insights are presented within Porter's Five Forces framework, which emphasizes market dynamics. The five forces are competitive rivalry, supplier power, buyer power, threat of new entrants, and threat of substitutes. Category management administrators can create new category segmentation assessments and market dynamic evaluations by adding questions, assigning weights, designing calculation methods, and choosing response types.

In this simulation, you’ll learn how to configure new Category Segmentation and Market Dynamics assessments:

Category Management in SAP Ariba involves creating and modifying assessments to evaluate business impact and supply market risk. Category management administrators can create these assessments by selecting or defining new ones, assigning weights, and choosing response types. These assessments help determine the category's position in the Kraljic matrix and analyze market dynamics using Porter's Five Forces framework. Lead category managers can then respond to these assessments, and their responses are computed based on the calculation method chosen. The weighted scores provide a clear picture of each category's strategic importance and risks, aiding in improved decision-making and strategy formulation.