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IBM, SAP Ariba bring together Leonardo and Watson for cognitive procurement

Deal billed as a major milestone for procurement.

By Ellie Burns

SAP Ariba and IBM have entered into a global strategic alliance to make procurement smarter, faster and more efficient across the supply chain.

Aiming to redefine the source-to-settle process, SAP Leonardo will be combined with IBM Watson and SAP Ariba to deliver intelligence from procurement data. The tie-up between the companies will also look to deliver predictive insights from unstructured information to enable improved decision making across supplier management, contracts and sourcing activities.

As per the alliance, IBM Global Business will be charged with providing consulting and services to build, implement and operate the new offerings. Big Blue will also work with SAP Ariba to bring new and existing IBM customers to the SAP Ariba platform.

A Cognitive Procurement hub is also in the works, with both companies looking to use the hub to further develop intelligent procurement solutions and services. The two tech giants will explore applications of emerging technologies, including blockchain.

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“We’ve built a cognitive procurement platform trained specifically to understand procurement transactions and unstructured data such as weather, non-standard part numbers in contracts and complex pricing structures,” said Jesus Mantas, General Manager, Cognitive Process Transformation, IBM Global Business Services.

“By combining the power of IBM Watson on the IBM Cloud with SAP Ariba, we are leaping existing procurement benchmarks and delivering unprecedented value to our joint clients.”

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It is hoped that the new applications resulting from the tie-up will impact the entire procurement process from improving spend visibility to assisting buyers and enriching content management.

For example, a digital assistant combined with IBM Watson services, will transform sourcing events by helping with tasks such as defining the correct Request for Proposal type, identifying appropriate suppliers to participate based on commodity category, region or industry and delivering intelligence on market signals and pricing pressures to optimise results.

Leveraging the power of SAP Leonardo and Watson, contracting will become smarter and more comprehensive. Applications will be able to automatically identify relevant terms and conditions matched to legal library and taxonomy, uncover similar contract terms for a specific commodity by industry or region based on benchmarking data and suggest optimal prices to target based on expected volume and contractual discounts.

READ MORE: SAP goes multicloud with Azure, AWS & Google

SAP Ariba and IBM will also explore automating the extraction of contract terms and summaries to help customers ensure compliance in next-generation procurement.

“Today marks a major milestone for procurement,” said Alex Atzberger, President, SAP Ariba.

“With the deep horizontal integration capabilities native within SAP Ariba’s mature platform and the innovative capabilities of SAP Leonardo and IBM Watson delivered by the industry’s most experienced and trusted providers, companies can realise an even more intelligent source-to-settle process for managing all categories of spend that creates value across the entire business.”


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