Managing Purchasing Categories

Category management involves grouping goods and services into categories based on similar traits—such as type, value, supplier, risk, location, or department. This approach helps identify the total cost for each category and develop strategies for additional savings. Using category management, companies can make procurement more efficient, build stronger supplier relationships, improve spend analysis, reduce risk, and more. To start, the category manager is responsible for creating purchasing categories to classify the procurement of goods and services within an organization for use in the SAP Ariba Category Management solution. Purchasing categories enable you to strategically manage key organizational purchases by grouping multiple categories or material assignments based on the organization’s business needs.

As a category manager administrator, you will develop a structure for the purchasing category by organizing similar categories and creating multiple levels of subcategories within it. This structure is called the taxonomy. Examples of purchasing categories include office supplies, IT services, and professional services. You will use the Manage Taxonomy application to create or import purchasing categories, assign product classifications such as UNSPSC (United Nations Standard Products and Services Code), ACT (Ariba Category Taxonomy), and Material Groups. You can activate, inactivate, edit, and delete these categories. Then, these purchasing categories can be published to the SAP Master Data Integration service.

To create a new purchase category:

1. Open the Manage Taxonomy application.
2. On this page, you will see the Purchasing Categories table, which shows purchasing categories along with the category name, category code, the name and email address of the lead category manager assigned to each category, and the category status. If you are signing in for the first time, the table will be empty. Choose Create.
3. Fill out the following attributes:
   • Category Name: The name of the purchasing category, as defined by the user.
   • Parent Category: Leave this field blank when creating a parent purchasing category.
   • Code: A unique code, either customer-defined or system-assigned.
   • Lead Category Manager: The email of the category manager responsible for this purchasing category.
   • Category Strategy Approver: The name of the lead category strategy approver, who is responsible for approving the category’s strategy and plan documents.
4. Choose Save to save the purchasing category or Save and Publish to save and publish it to the SAP Master Data Integration service.

A Category Management Administrator can create subcategories (also known as child categories) to organize products and services in SAP Ariba Category Management. Creating subgroups offers clearer visibility into spending for the parent category. All subcategories are linked to a parent category.

In this simulation, you’ll learn how to create a subcategory:

A Category Management Administrator can edit any category or subcategory listed in the purchasing categories table. All changes will be recorded in the Change History, which includes the name of the person who made the change, the nature of the change, and the timestamp.

You can view a list of changes to a category from the Change History section of the purchase category.

To do this:

1. Select the purchasing category or a subcategory you want to edit. A panel will appear on the right-hand side of your screen; you may need to choose the full-screen option to see all the sections.
2. Choose Edit in the General Information section.
3. Make your modifications to the category. Notice that the Apply to All Subcategories checkboxes are displayed for the Lead Category Manager and the Category Strategy Approver fields. Check these boxes, if you want the changes to apply to all subcategories of the selected category.
4. After saving your modifications, choose Save to save all changes or Publish to immediately save and publish the new changes.

In this lesson, you learned about the fundamentals of category management in SAP Ariba Category Management. Category management involves grouping goods and services into categories based on similar traits, which helps companies achieve efficient procurement, build strong supplier relationships, improve spend analysis, and reduce risk. We explored how to create purchasing categories and subcategories, organize them into a structured taxonomy, and manage classifications using the Manage Taxonomy application. You also discovered how to edit categories and subcategories and track changes using the Change History feature. By effectively using these tools, you can strategically manage key organizational purchases and enhance the overall procurement process.