Defining the Collaboration Process

Collaborative requisitioning allows buyers to negotiate the details of a requisition with one or more suppliers before ordering.

To create a collaborative requisition, users create a standard PR and select enable collaboration on one or more-line items.

Next, suppliers are invited to submit proposals for the items and the collaborative requisition gets sent to them via the Ariba network.

Suppliers can submit proposals for the items with their own part numbers, pricing, and other details along with comments or attachments.

Buyers then select a winning proposal, rejecting all other proposals. The proposal item details get incorporated into the final requisition, which gets submitted for final approvals and sent to the supplier as a PR.

A collaborative requisition is a requisition in which a buying organization negotiates with one or more suppliers before placing an order. The process is outlined below:

1. Pre-Collaboration Phase
   • Requisition is created with one or more item selected for collaboration.
   • Suppliers are invited to submit a proposal on the selected items.
   • Collaborative request is sent to the supplier(s) through Ariba Network.
2. Collaboration Phase
   • Supplier(s) receive the collaboration request, review the collaboration details, and responds to the buying organization.
     • Decline to participate.
     • Accept to participate and submit a proposal with the details of how they will fill the request.
   • The buying organization reviews the proposal(s), negotiates and sends questions to the supplier(s). The supplier can send messages back and respond with additional or amended proposals.
   • The buying organization accepts the proposal and merges the updated information into the requisition. All remaining proposals are automatically rejected.
3. Post Collaboration
   • Requisition is sent for final approvals and the purchase order is generated and sent to the supplier.

Collaborative requisitions allow invited suppliers to submit proposals to fill buyers’ unique requests for goods or services.

During collaboration, messages can be sent back and forth to negotiate the request.

Suppliers can submit proposals with items added or removed and with custom pricing.

Use collaborative requisitioning when you want suppliers to develop creative solutions to your need. During collaborative requisitioning, you specify a good or a service that you want to purchase. Then you invite one or more suppliers to submit proposals to fit the specified need. Each suppliers can delete existing items, add new items, or change prices when they submit their proposals.

Your collaboration team then begins a dialog with these suppliers, sending messages for clarification, changes, or other requests. Then, your collaboration team selects the winning proposal from one supplier, which automatically rejects remaining proposals. The completed requisition proceeds to final approval, a purchase order is generated, and it is sent to the winning supplier.

After inviting suppliers to a collaborative requisition, bidding transparency can be set to choose what information other suppliers can see during the collaboration process.

Choosing none means that no bidding information will be visible by suppliers.

Choosing new will let users create a one-time temporary custom bidding type.

Otherwise, choosing system will give access to the default configuration list of bidding types.

System bidding types include closed, where no fields are visible.

Open by amount, which makes the lowest total bid and lowest line item price visible to all invited suppliers.

Open by amount and rank, makes the amount price and propose a ranking visible to all invited suppliers.

The ranking includes the proposal rank, among other proposals and the suppliers rank among the other invited suppliers.

Open by amount rank insulin supplier will make them of the supplier with the lowest bid visible along with the lowest amount price and ranking.

Bidding transparency – Determines how much information is made visible to the supplier(s).

• System – The default configuration; select from available options
• New – Configured per collaborative instance; used on a one-time basis
• None – No bidding information configured

Configured for your SAP Ariba Solution.

The collaboration is a bidding process: a collaboration request sent to a supplier is an invitation to submit a bid, and the proposal a supplier submits is the actual bid, thus, initiating the bidding process.

You can set up an open bidding process in which competing suppliers see certain information about each other’s proposals, helping you to obtain the best terms and conditions for your order.

Following bidding scenarios can be set-up in the bidding process:

• Closed
  • No bidding fields are open.

• Open - Amount
  • The lowest amount (sum of all line items) and lowest line item price is visible for all bids in the same bidding session. If more than one bid has the same low amount or price, the one that was submitted first is considered the lowest.

• Open – Amount, Rank
  • Amount, price and proposed rank are visible
    • Proposal Rank: The relative position of a bid among all others in the same session.
    • Supplier Rank: The relative position of a supplier among all others in the same session.

• Open – Amount, Rank, Supplier
  • The name of the supplier with the lowest bid including lowest amount, price and ranking.

The collaborative requisitioning feature works with catalog and non-catalog items and work similar to spot by in that it enables organizations to make requests for items that may not be currently sourced in the company catalog.

Collaboration can only be used for goods, not services. Enables negotiation and configuration of complex items.

• Works with both catalog and non-catalog items
• Supports a "spot buy"-like functionality.
• Enables collaborative configuration of complex items
• ONLY applicable to goods items.

Buying organizations can enable a number of bids and a buy policy to enforce a minimum number of suppliers that must be invited, and proposals that must be received before a purchase can be made.

The policy can be based on specific fields like total requisition price and there are settings to configure how violations of the policy are handled, like whether or not users who fail to invite the required number of suppliers can still submit the requisition.

• Some organizations require purchasing agents to collaborate with a minimum number of suppliers and receive their bids before completing the purchasing process.
• To enforce this rule, your organization can define an N Bids and a Buy policy where you specify the minimum number of suppliers that need to be invited for collaboration, the fields that the policy is based on, and the terms of the policy. For example, your organization can create a policy specifying that all purchasing agents must collaborate with a minimum of three suppliers if the requisition amount exceeds $1,000 for an item of commodity code 8012. The N Bids and a Buy policy can be enforced when procuring both goods and services items.
• Your organization can also specify whether violations of the policy are allowed. For example, you can specify whether purchasing agents can still submit requisitions when they do not invite the minimum number of suppliers or not.
• Require collaboration with a minimum number of suppliers
• Enforce through N Bids and a Buy policy
  • Set minimum number of suppliers
  • Set fields used in the requisition
  • Set terms and conditions
  • Set violation handling

• Use for both goods and services

Collaborative requisitions have three phases to the approval flow identified by the begin and end collaboration nodes that are added.

Pre collaboration is the first phase when a new collaborative requisition gets sent for initial approvals.

After the pre collaboration phase the PR goes into the collaboration phase and gets sent to the suppliers via the Ariba network. Beginning the negotiation and proposal process.

After a winning proposal was selected, the PR enters the post collaboration phase and may require additional approvals before generating and sending appeal.

• A collaborative requisition has three phases: pre-collaboration, collaboration and post-collaboration. These phases are identified in the approval graph by the begin collaboration and the end collaboration nodes. The collaboration team is added to the collaboration phase.
• A collaborative requisition can have approvers during pre-collaboration and post-collaboration. If you are authorized to add approvers to the approval flow between the Begin Collaboration node and the End Collaboration node, those approvers will be added as watchers, because all approval nodes between those nodes are always treated as watcher nodes.
• After approvers in the pre-collaboration phase have approved the requisition, the Begin Collaboration node is activated and collaboration starts automatically. The request to collaborate is sent by Ariba Network to invited suppliers, who then submit bids. After a member of the collaboration team selects the proposal from a specific supplier, the End Collaboration node is activated and post-collaboration approvals start automatically.