As little as two years ago, procurement in the Middle East could be summed up in two words: administrative task. But a transformation is underway. Procurement is fast becoming a strategic capability that beyond costs savings and efficiencies, can deliver business innovation and outcomes.
And with increasing frequency, companies across the region are turning to SAP and Ariba to drive it. According to a recent survey conducted by Informa, SAP and Ariba’s cloud-based applications and business network are the most-used procurement solutions in the Gulf Cooperation Community (GCC), as forward-thinking organizations embrace them to fuel a more collaborative and integrated process that can advance their business goals.
Changing the Game
The value of procurement in the GCC remains in its ability to deliver cost savings and process efficiencies. According to the Informa survey, 41 percent of businesses in member countries reported savings of over $2 million through procurement in 2013/2014. Informa also found that:
- 94 percent of respondents see a role for strategic, sustainable procurement in spurring regional growth.
- 95 percent believe procurement can play a part in the region’s new developments and projects.
- 45 percent are integrating sustainability into their procurement practices to help drive corporate responsibility initiatives.
Removing Barriers
While the vision for and status of procurement has clearly been elevated, participants in the survey say they still struggle to shift from tactical to strategic activities (78 percent) and to align their objectives with business strategy due to a lack of standard processes and integrated solutions to drive them (76 percent).
“The challenge of finding the right procurement system has grown,” said Informa survey author Hoda Abdelhay. “There are a lot of solutions that can sharpen one aspect of the process, but very few that can tie everything together.”
As procurement professionals seek to achieve their top three objectives over the next two years – managing supplier relations, automating procurement and balancing quality with profit – demand for such solutions will only grow.
Simplifying Business Commerce
Companies need to buy lots of different products and services. And to do so effectively, they need to support different types of buying processes and connect and collaborate with many different suppliers of all shapes and sizes – and technical capabilities – in different parts of the world.
With SAP, companies can manage all of their spend, suppliers, and processes in the simplest way possible – through the Ariba® Network™. Used by more than 1.5 million companies in 190 countries to transact over half a trillion in commerce on an annual basis, the Ariba Network is the world’s largest, most global business-to-business trading community.
“Social networks have made it easier than ever to drive conversations, gather intelligence and manage relationships,” Vitzthum said. “The Ariba Network and the cloud-based applications delivered on it make it just as easy for companies to manage all of their spend, trading relationships and commerce activities.”
As a truly open business network, the Ariba Network provides a single integration point that companies – regardless of the backend 
systems them may be using – can use to:
- Connect to customers, suppliers, and partners anywhere, at any time, using any device to facilitate collaborative commerce processes like sales, procurement, and finance.
- Drive new levels of efficiency and transparency by digitizing key business processes like procurement, invoicing, payment, and staff augmentation and talent management.
- Enable new processes that are only possible in a networked environment such as dynamic discounting, contingent workforce management, spot buying and electronic payments and deliver innovation.
- Make more informed, real-time decisions through network-derived intelligence and community insights.
Delivering Results
And in the process, they can enable a new, more connected way of operating that delivers measurable and sustainable results, including:
- Lower costs – One percent to eight percent reduction in supply chain costs and 60 percent reduction in operating costs, on average.
- Greater efficiency – 50 percent to 75 percent faster transaction cycles.
- Real-time process transparency and greater data accuracy – 60 percent improvements in order accuracy, reducing risks for stockouts or the need to stockpile excess inventory.
- Improved working capital performance – 50 percent improvements in discount capture with suppliers and 20 percent faster payment cycles with customers.
- Increased sales – Five percent to 20 percent revenue increase with new customers and upwards of 30 percent greater share of wallet with existing customers.
- Better customer retention – 15 percent improvements in customer retention rates.
To learn more about the business networks, cloud-based applications and the transformation they are driving across industries and companies, visit www.ariba.com.
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