Factoring Risk into Procurement Decisions

Understanding a supplier's risk is crucial for making informed procurement decisions. SAP Ariba Supplier Risk provides alerts highlighting critical incidents, such as natural disasters or regulatory issues, which might require immediate action. This information allows you to react promptly, such as searching for alternative suppliers or suspending purchase orders to avoid legal consequences.

However, SAP Ariba Supplier Risk is not just about reacting to emergencies. It offers a proactive approach to supplier management by enabling you to:

• Segment suppliers by risk levels
• Use risk as a factor in designating preferred suppliers
• Detect signs of future trouble and monitor suppliers more closely
• Conduct detailed research to assess the impact of incident alerts
• Follow up with suppliers to address compliance issues
• Request certifications
• Assess the risk of potential engagements with new suppliers
• Offboard suppliers deemed too risky

SAP Ariba Supplier Risk is seamlessly integrated into various procurement processes within SAP Ariba, providing risk information at crucial stages:

• In guided buying, risk exposure scores are displayed when selecting suppliers. You can quickly assess a supplier’s risk level to make informed purchase decisions. This helps you to avoid suppliers with high-risk practices or negative impacts on your organization's buying strategies.
• When conducting guided sourcing events, you can search for suppliers based on their risk levels, ensuring you invite those with acceptable risk levels to participate. Additionally, you can view supplier risk information from the event monitoring page during the monitor and review responses phases.
• When creating contract projects, you can view supplier risk exposure through custom risk categories. This helps you make well-informed decisions during the contract lifecycle.
  Note

  This feature does not apply to Contract Workspace (Internal) projects.

• Supplier risk management is crucial for informed procurement decisions and prompt reaction to critical incidents.
• SAP Ariba Supplier Risk enables proactive supplier management, including segmentation, compliance follow-up, and risk assessment.
• Risk information integrates seamlessly with procurement processes, aiding guided buying, sourcing events, and contract projects.
• Risk exposure scores help assess suppliers quickly to make informed purchase decisions and avoid high-risk suppliers.