Category management is the process of purchasing goods and services by grouping them into categories based on similar characteristics – such as type, value, supplier, risk, location, or department. This is an effective process to realize your total cost for a category and to devise a plan for more cost savings. Using category management, companies can streamline the procurement process, strengthen supplier relationships, improve spend analysis, mitigate risk, and more.
SAP Ariba Category Management simplifies external spend and supplier management for businesses. Built on the SAP Business Technology Platform, this extensible and integrated solution provides valuable market intelligence and category insights to category managers and procurement professionals. By seamlessly integrating with source-to-pay processes, SAP Ariba Category Management facilitates the development, execution, and monitoring of category strategies, ensuring long-term performance.
Key Category Management Benefits
Using SAP Ariba Category Management, your company benefits in three significant ways:
- Enhanced Decision-Making and Cost Savings: Leverage in-depth, actionable insights to develop a cohesive category management strategy, leading to increased savings on both direct and indirect spending.
- Increased Focus on Strategy and Value Creation: Automate and streamline category strategy creation and management, freeing up resources previously tied to manual, offline, and inconsistent processes.
- Consistent Category Management Frameworks: Implement a unified, enterprise-wide framework for classifying goods and services using a consolidated category taxonomy, ensuring consistency across all purchasing activities.
SAP Ariba Category Management Process Flow
In end-to-end procurement, defining and creating the category strategy, or category management, serves as the initial phase preceding sourcing, contracting, and operational buying. The category strategy outlines the subsequent steps and directs the activities of sourcing, contracting, and operational buying.
Using SAP Ariba Category Management, your organization can improve its procurement processes by following a clear approach: analyzing data, creating strategies, and executing approved plans for better performance. To learn more, watch the following video: