Ariba Inc. this week unveiled software aimed at making it easier for companies to gain control of what they spend on business services, such as IT consulting, facilities management, temporary labor and legal services.
The vendor announced upgrades to its Ariba Spend Management suite at LIVE 2003, Ariba’s customer conference held in Hollywood, Fla. Ariba’s latest tools are aimed at reining in companies’ spending on services, which often is fragmented and uncontrolled, Ariba says. Its goal is to help companies keep track of what is being spent on services, make sure employees comply with spending rules and monitor service suppliers’ performance.
Business services currently account for 30 percent to 50 percent of every purchasing dollar that companies spend – and as much as 80 percent of expenditures in professional services industries – according to research firm Aberdeen Group.
However companies tend not to procure services in the same way they source and purchase indirect goods. Typically between 25 percent and 40 percent of services spending is not controlled by the purchasing department, Aberdeen says. One reason is that few companies have developed standard procedures and disciplined strategies for acquiring and managing services, the firm says.
Aiming to fill that gap, Ariba unveiled new features for managing services spend. For example, in its suite, Ariba provides support for buying processes that aren’t based on purchase orders. The software also gives suppliers access to contractual terms, such as negotiated goods and services and pricing, to expedite the buying process.
Tracking and monitoring features are designed to make sure service providers fulfill contractual deliverables before companies make payments. On the analytic side, new modeling tools capture and monitor spending activities so companies can identify savings opportunities.
The Ariba Spend Management suite includes upgrades to the vendor’s Analysis, Buyer, Category Management, Contracts, eForms, Enterprise Sourcing, Invoice, and Travel & Expense modules. The upgraded modules are due to become available in June.