Strategic sourcing is a systematic process that aligns purchasing decisions with an organization's strategic objectives to optimize the contribution of suppliers. It involves evaluating current and potential sourcing relationships, assessing their value according to long-term goals, and formulating action plans for critical commodities. Selection decisions are based on factors like a supplier's capabilities and ability to share information, rather than lowest price alone. Effective strategic sourcing requires understanding the supplier landscape by knowing who the suppliers are, how they relate, what customers buy from them, and related risks and spending amounts.

1. Sourcing— Art or Science?
Ariba Knowledge Nuggets Although strategic sourcing can be defined in a number of ways, a good start to
understanding it is to first identify what it is not. Strategic sourcing is not the
purchase of materials and services on an as-needed, day-to-day, hand-to-
mouth basis. This is largely transactional buying. Instead, strategic buying is the
opposite: A systematic process that directs purchasing and supply managers to
plan, manage, and develop the supply base in line with the organization’s
strategic objectives—and in a manner, that optimizes the contribution of the
supply base to the organization.
Strategic sourcing is a process driven by an identified goal or need and
consists of:
• Evaluating current and potential sourcing opportunities and
relationships.
• Assessing their value and relevance according to long-term goals
and overall business and supply management objectives.
• Formulating and applying actions plans and processes for critical
commodities or supply networks.
Ultimately, strategic sourcing is knowing what kind of relationship to develop
based on market knowledge, the commodity, and the long-term business
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objectives. It is a sourcing process whereby organizations choose suppliers in a
deliberate, calculated fashion. Selection decisions are determined based on
factors such as a supplier’s new product development capabilities and capacity
to share information electronically, or the ability for a supplier’s component to
differentiate the final product. With strategic sourcing, organizations analyze and
decide on suppliers based on the strategic impact of potential suppliers and
commodities on the organization or supply chain, instead of simply awarding
supply contracts to suppliers with a narrow focus on lowest bid.
Key to strategic sourcing is gaining an Ariba Discovery
understanding regarding the supplier
Buyer Value for New Supplier Discovery
landscape in order to determine the
following: •Achieve incremental product and service cost
savings of 15% on average by making
• Who are the suppliers? purchasing events more competitive
• How are they related?
• What is the customer buying?
• Who are they buying from?
•Reduce the process cost of seller identification
and qualification of up to 50-75%
• What are the risks?
• How much is spent with each supplier?
• What is the quality of goods purchased?
•Access to rich seller information to make better,
informed decisions
•Save time (up to 90%) with an easy 3-step
discovery process

2. Secrets to Using the Supplier Profile Questionnaire
What the Profile Questionnaire is:
• The profile questionnaire is a document that contains sections and questions. Ariba provides one master copy of
the profile questionnaire. You can also add your own questions to the default questionnaire to collect information that
can help you choose appropriate suppliers.
• The profile questionnaire is a type of document that is contained in a knowledge project.
• The profile questionnaire is a draft document until you publish it. Once published, the updated profile question-
naire is available to organizations the next time they edit their profiles.
• Ariba recommends that you publish updates to the profile questionnaire during a period of low activity for
your site, such as a weeknight or a weekend, to allow the system to update supplier records with new profile
questionnaire data in a regulated way. If you publish the profile questionnaire during a time of high activity
and a user creates a supplier search that includes profile questionnaire answers and returns a large number
of results, the system must update all of the supplier records for those results at once, which can impact the
performance of your site.
• The profile questionnaire is a great way to obtain additional information from Suppliers. Suppliers might request
to provide information on their capabilities and commodities, or you might encounter a supplier whose data you need.
Suppliers can update their profile, or you can provide a URL that allows suppliers to directly access the supplier pro-
file.
• Configurable profile with predefined
out- of-the-box fields
• Ability to search on extended supplier
profile fields
• Supplier Self-Registration
• Supplier Organizational Hierarchy
• Ability to score profile elements
• Supplier Discovery Postings
• Questions from the SPQ can be added to
events, and the supplier’s answers from
the SPQ will be pre-populated, and if they
modify the answer, they SPQ is updated.
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3. Secrets to Using the Supplier Profile Questionnaire
You need information about your suppliers in order to know what capabilities and characteristics they have, and what
commodities they can provide. You use a profile questionnaire to collect this data. You can also use the profile question-
naire to collect information internally from other users in your company.
Profile questionnaire responses might come any or all of the following sources:
• Internal users in the Supplier/Customer Manager or Supplier/Customer Agent group creating a supplier organization.
• Suppliers providing profile information when they self-register using the Register as New Supplier link.
• Suppliers filling out the profile questionnaire from the My Profile link when they log into Ariba Spend Management.
• Suppliers or internal users providing responses to profile questionnaire content that has been included in Ariba
Sourcing events, quick surveys, or Supplier Performance Management surveys. Responses to profile questionnaire
content are automatically moved to the supplier’s profile questionnaire when the event or survey closes. For details
on adding profile questionnaire or library content to Ariba Sourcing events, see the Ariba Event Management Guide;
for details on adding library content to quick surveys and SPM surveys, see the Ariba Sourcing Process Manage-
ment Guide or the Ariba Supplier Management Guide.
• Import of extended supplier profile data, including data from third-party Enterprise Resource Planning (ERP) sys-
tems.
A Word About Supplier Self-Registration
Ariba allows suppliers to register themselves for consideration as participants in future Ariba Sourcing events. This self
registration enables buyers to collect supplier information with minimal effort, and gives them a place to refer new suppli-
ers that are asking for consideration as approved suppliers. Administrators configure supplier self-registration at the site
level, and it must be enabled to allow suppliers to register. The Register as New Supplier link is available to a supplier
on the login page if supplier self registration is enabled. When the supplier clicks the Register as New Supplier link, the
Supplier Registration page displays. On this page, the supplier provides organization information, supplier user informa-
tion, and can fill out the profile questionnaire. Upon completing the Supplier Registration page, the supplier receives con-
firmation that the request has been sent to the Supplier/Customer Manager for approval, and that login information is
provided upon approval. Suppliers sometimes request to register. You can send them a URL to give them access to the
supplier self registration page.
Searching for Suppliers on Ariba Discovery
You can search for suppliers before creating a posting or to increase your supplier base. For example, you can search accord-
ing to commodities or location, such as a state or country. While you are searching for suppliers in Ariba Sourcing, you access
the Ariba Discovery directory. You can add suppliers to your favorites and also import them into Ariba Sourcing.
To search for suppliers, mark suppliers as favorites, and import profile data into Ariba Sourcing:
Click the Home tab.
Choose Suppliers and Customers from the
Search menu. The Search Suppliers and Customers
page appears.
Click Search Network Discovery to access Ariba
Discovery
Click Preview Suppliers
* Note —Ariba has close to 600K+ suppliers currently on the Ariba Network.
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4. SAMPLE Letter for Supplier Registration Using Ariba Discovery
Potential Supplier,
Thank you for your interest in becoming a strategic partner in helping support <Insert Company Name> supply chain
management needs.
<Company> aligns itself with best-in-class organizations to help drive the success of our sourcing needs through
dynamic partnerships that focus on driving process and cost excellence while delivering flawless service and
performance from our supply chain. To successfully align partners with the right need, <Company> utilizes Ariba
Discovery as our pool of potential suppliers. If your organization has an interest in being considered as a potential
supplier, you’ll need to self register with Ariba as follows:
Please direct your browser to http://discovery.ariba.com. As a supplier you must first click on the “I’m Selling” tab and
then complete the “Register Now” section as shown below. You will need to be registered in Ariba Discovery to be
considered for our business.
Ariba Assistance:
If you have any questions or difficulties with registering in the Ariba system, please contact the Ariba
Customer Service team at (866) 218-2155 for all technical assistance.
Based on the accuracy of your self registration, we will be able to search and identify potential suppliers
for new opportunities. There is no need for you to follow up with <Company Name> after you’ve completed
your registration as will proactively reach out to you as we see a potential fit for a specific opportunity.
Thank you again for your interest and registering with <Company Name> Strategic Sourcing Team.,
Sincerely,
<Insert Company Name>
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