Analyzing the Value of SAP Ariba for Industries

American Eagle Outfitters (AEO), a global specialty retailer, faced critical procurement challenges that impacted efficiency and compliance. These challenges stemmed from decentralized purchasing processes, difficulties in managing a vast supplier network, and the need for enhanced spend visibility. By implementing SAP Ariba solutions, AEO transformed its procurement operations, achieving remarkable improvements in compliance, efficiency, and supplier relationships.

1. Decentralized Procurement:

   AEO’s procurement processes were distributed across multiple departments, resulting in inefficiencies and inconsistent purchasing practices.

2. Supplier Management Complexity:

   Managing a vast network of suppliers without a centralized platform led to difficulties in tracking purchase orders, reconciling invoices, and maintaining accurate supplier records.

3. Limited Spend Visibility:

   Outcome: Without comprehensive analytics, identifying cost-saving opportunities and ensuring budget adherence was a significant challenge.

AEO implemented SAP Ariba Contracts to centralize and streamline contract management. This solution enabled AEO to:

• Store and manage all contracts in a single, secure location.
• Enforce compliance with negotiated terms across the organization.
• Minimize risks associated with manual contract handling.

Outcome: Improved contract governance reduced inconsistencies and ensured that all procurement activities adhered to corporate policies.

SAP Ariba Sourcing empowered AEO to conduct strategic sourcing events with suppliers, enhancing supplier selection and negotiation processes. Through dynamic RFPs and e-auctions, AEO achieved:

• Competitive pricing and better terms with suppliers.
• Enhanced supplier collaboration, fostering innovation and trust.

Outcome: Streamlined sourcing processes improved supplier relationships and contributed to significant cost savings.

AEO utilized SAP Spend Control Tower to gain visibility into its procurement activities. This solution provided:

• Comprehensive insights into spending patterns and supplier performance.
• Data-driven decision-making capabilities to identify savings opportunities.

Enhanced visibility enabled AEO to optimize budgets and allocate resources effectively.

SAP Ariba’s Guided Buying feature simplified the purchasing process for employees, embedding compliance into everyday operations. Employees could:

• Access a user-friendly interface to find approved suppliers and products.
• Ensure all purchases aligned with corporate policies without requiring heavy oversight.

Outcome: Guided Buying increased compliance rates, reduced maverick spend, and improved user adoption of procurement policies.

By transacting through the SAP Business Network, AEO extended its supplier collaboration capabilities. This enabled:

• Real-time communication with suppliers.
• Seamless exchange of purchase orders, invoices, and payment statuses.

Outcome: Improved operational efficiency and strengthened supplier relationships across the value chain.

1. Improved Compliance:
   • Achieved 85% purchase order compliance, surpassing their target by 5%.
   • Reached 75% invoice compliance for 48,000 annual invoices.
2. Increased Spend Visibility:
   • Transacted over $780 million in spend through the SAP Business Network.
3. Operational Efficiency:
   • Centralized procurement processes led to streamlined operations, maximized cost savings, optimized working capital, and stronger vendor relationships.

American Eagle Outfitters' journey with SAP Ariba showcases the value of adopting a comprehensive, integrated procurement platform. By leveraging SAP Ariba Contracts, Sourcing, SAP Spend Control Tower, Guided Buying, and the SAP Business Network, AEO addressed its procurement challenges head-on, transforming inefficiencies into strategic opportunities. Their success exemplifies how SAP Ariba solutions enable businesses to achieve compliance, operational excellence, and sustainable growth.