Ariba upgrades software for managing corporate spending

Ariba Inc. this week will unveil upgrades to eight of its spending management software products, with a focus on helping companies better manage spending on services ranging from snow removal to legal help, marketing and travel.

The new releases, which are being announced at Ariba's annual user conference in Hollywood, Fla., will all be available in June, according to officials at the Sunnyvale, Calif.-based company. Martin Boyd, Ariba's director of marketing, said the products are aimed at services that typically account for one-third to one-half of all expenditures within companies.

Such services "are a big chunk of spending and are growing faster than other expenses," Boyd said. But, he added, "a lot of companies have no idea what they're spending on services."

Ariba's upgraded applications can manage spending in 16 categories, including travel, marketing, utilities, insurance and health benefits, Boyd said. The software can also be used to track staffing costs, such as expenses for temporary workers and the use of recruiters.

Consumer electronics retailer Best Buy Inc. last week announced that it's expanding a deployment of Ariba's products and said it wants to begin using the software to automate the management of contracted services.

Best Buy, which has been an Ariba customer since late 2000, currently has about 80,000 employees using the vendor's purchasing and travel expense management tools, a spokeswoman for the Richfield, Minn.-based retailer said. In addition to broadening the types of spending that it manages with the software, Best Buy is adding Ariba's contracting and invoicing products.

The retailer has already saved money in the procurement of some services, such as snow removal, the spokeswoman said. For example, providers of services can send Best Buy electronic invoices, which allows for automatic reconciliation and settlement of payments.

The new rollout by Ariba includes upgrades of the purchasing, contracting and invoicing software, plus revised versions of tools such as the company's sourcing and spending analysis products.

"The 'wow factor' of this announcement is that Ariba is putting more functionality around services," said Christa Degnan, an analyst at Aberdeen Group Inc. in Boston. "If a company has done any e-procurement, this is the next level."

The services components are "relatively unique" to Ariba, Degnan said, citing PeopleSoft Inc. in Pleasanton, Calif., as its closest competitor. Smaller companies that specialize in spending management software include Elance Inc. in Sunnyvale, Calif., Fieldglass Inc. in Naperville, Ill., and IQ Navigator Inc. in Denver.

Ariba was one of the pioneers of online procurement software but has struggled since the business-to-business bubble burst. Two weeks ago, the company reported a US$51.6 million net loss on revenue of US$59.3 million for its second quarter, which ended March 31. The loss included a US$49 million write-down of goodwill and other intangible assets, plus US$7 million in expenses related to a recently completed review of past accounting practices.

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