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2016 SAP SE or an SAP affiliate company. All rights reserved.SAP Ariba Business Transformation Study Automotive Al-Futtaim Automotive GroupAl-Futtaim Automotive Group:Saving US 16 Million with Ariba Procure-to-Pay and Ariba SourcingAl-Futtaim Automotive group saw an opportunity to transform its procurementprocess into a more strategic function. Representing more than 25 global autobrands in 14 countries, this rapidly growing company sought to automate moreof its operations and control spending. Al-Futtaim Automotive group chose SAP Ariba solutions for game-changing e-procurement.
SAP Ariba Business Transformation Study Automotive Al-Futtaim Automotive GroupExecutive overviewCompanyAl-Futtaim Automotive GroupHeadquartersDubai, United Arab EmiratesIndustryAutomotiveProducts and ServicesPassenger cars, commercialvehicles, constructionequipment, auto logistics,used cars, auto leasing andrentalsEmployees12,800Web Sitewww.al-futtaimauto.comBUSINESS TRANSFORMATIONObjectives Reduce costs and improve efficiency by establishing a simple, transparente-procurement solution Evolve tactical purchasing functions into a strategic sourcing department Improve decision making by enhancing spend visibility organization-wideUS 16 MillionIn annual savingsResolution Deployment of the Ariba Sourcing solution to address the high cost baseand renegotiate long-term contracts Implementation of the Ariba Procure-to-Pay solution integrated with theSAP ERP application for an easy and transparent procure-to-pay process Hands-on training to encourage supplier participation in the Ariba Network Organizational change management and user training to optimize thecapability of the systemBenefits Reduced turnaround time from sourcing to payment by eliminating manualprocesses Negotiated supplier pricing and introduced online bidding Increased efficiency by fast-tracking spend through 168 catalogs Developed a robust source-to-settle process to enforce invoices againstorders, contract compliance, and monitor supplier performance33%Reduction in averagePO processing time97%Of invoices paid withoutany manual interventionRead more“SAP Ariba solutions offer flexibility and ease of use while still supporting robust policies. We wereable to emphasize transparency and fairness, which is very much appreciated by our vendors.”Asad Zaidi, Director, Procurement and Performance Improvement, Al-Futtaim Automotive Group2/6 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP Ariba Business Transformation Study Automotive Al-Futtaim Automotive GroupExecutive overviewCompany objectivesResolutionBusiness transformationFuture plansBig efficiency gain thanks to intuitiveuse and transparencyEstablished in 2010, Al-Futtaim Automotive groupoperates more than 170 showrooms, service centersand warehouses and sells more than 250,000vehicles annually. It reaches across 14 countries inthe Middle East, Africa, and Asia, and its workforcecomprises 70 nationalities.This multibillion-dollar organization needed toreshape its vendor relationships to gain betterpricing. Thus, it renegotiated long-term contractsand deployed the Ariba Sourcing solution to bringtransparency to spending and encouragecompetitive pricing through online bidding. Theresult was significant savings.Focusing on growth, the company wanted to furtheroptimize its procurement operation and sought asolution to simplify procure-to-pay processes byimplementing online ordering, automating approvalsand payments, and streamlining reporting.Al-Futtaim Automotive group selected the AribaProcure-to-Pay solution to integrate with its backendSAP ERP application to control maverick buyingand leverage central rate contracts. A procurementteam that was originally tasked to move transactionsalong the purchasing process has grown into astrategic sourcing unit that has realized savings ofUS 16 million to date through Ariba Sourcing.“Change management was essential. It’s key that both internal employeesand external suppliers understand the benefits of a closed-loop valuechain. They need to know what’s in it for them.”Asad Zaidi, Director, Procurement and Performance Improvement, Al-Futtaim Automotive Group3/6 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP Ariba Business Transformation Study Automotive Al-Futtaim Automotive GroupExecutive overviewCompany objectivesResolutionBusiness transformationFuture plansA good choice for a successfulprocure-to-pay launchThe selection of SAP Ariba solutions was a fairly easydecision for the group. “I worked with SAP Aribasoftware earlier in my career, so I know how good itis,” says Asad Zaidi, director of procurement andperformance improvement at Al-Futtaim Automotivegroup. “And just as important, SAP Ariba solutionscompared favorably to other solutions in all theratings by external consultants that I read. Anestablished track record of delivering savings andvalue to customers was key.”Automotive group required. Through detailed spendanalysis, the group defined approval limits andclearly outlined processing exceptions.Al-Futtaim Automotive group wanted to maximizethe power of a procure-to-pay (P2P) solution andknew that Ariba Procure-to-Pay could be integratedwith its existing SAP ERP application. The SAP Aribasolution was customized to manage the complexpricing conditions and procurement scenarios forin-scope trade purchases that Al-FuttaimWith a cloud-based P2P solution in place, users nowenjoy an intuitive and user-friendly interface. Addingeven more value, with visibility among catalogs, POs,and invoicing, the P2P process has becometouchless, with nearly all transactions free fromreworks and intervention.As a key element in the P2P deployment, Al-FuttaimAutomotive group engaged stakeholders well inadvance so they could understand the full solutionbenefits. These stakeholders included centralprocurement, finance, senior management,suppliers, and business users.“We achieved amazing results because we identified suppliers who accounted for 95% of ourspend, trained them to transact online with the Ariba Network, and negotiated favorable pricing.”Asad Zaidi, Director, Procurement and Performance Improvement, Al-Futtaim Automotive Group4/6 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP Ariba Business Transformation Study Automotive Al-Futtaim Automotive GroupExecutive overviewCompany objectivesResolutionBusiness transformationFuture plansBoosting usage with easy-to-usefeatures and robust catalogsSince Ariba Procure-to-Pay has been deployed atAl-Futtaim Automotive group, its accounts payable,purchasing, and finance professionals – as well as itssuppliers – no longer work as disconnected entities.Now these functions are integrated with exceptionaltransparency. Transparency has proved to be acritical aspect of awarding contracts, with vendorscompeting in online auctions. As a result, thecompany has realized cost savings through moreeffective volume sourcing.With customized catalogs developed by categoryexperts, business users across all regions atAl-Futtaim Automotive group have adopted thisstructured and simplified strategy towardprocurement. Negotiated pricing has drivensignificant savings through coordinated spendmanagement.62%Of transactions fast-trackedthrough catalogsThe ease of approving purchase orders throughe-mail and flipping them to create online invoiceshas been a game changer. These features weanedusers off the well-entrenched “as-is” process andaccelerated user adoption of the Ariba Procure-toPay solution.“We implemented state-of-the-art technology to runour online auctions as a first step,” explains Zaidi.“This put our transformation program on the righttrack by delivering quick savings that got theattention of management.”Len Hunt, president of Al-Futtaim Automotive group,adds, “With online catalogs, electronic invoicing, andmobile PO approval, our P2P solution makesprocesses simple. Now, our parent company looks tothe automotive group as a leader in sourcinginitiatives.”168Catalogs uploaded,covering 6,000 line items5/6400Auctions run 2016 SAP SE or an SAP affiliate company. All rights reserved.
Al-Futtaim Automotive GroupExecutive overviewCompany objectivesResolutionBusiness transformationFuture plansDriving greater costsavings, improvingsupplier performanceWith procurement experts now serving as strategicbusiness partners, they are currently collaboratingwith product development to find alternative globalsuppliers and identify new goods for resale. Lookingahead, Al-Futtaim Automotive group is activelyconsidering the Ariba Spend Visibility solution to geta consolidated view of its spend and help driveactionable decisions for the managing directors.The structured procurement approach that AlFuttaim Automotive group has developed has notgone unnoticed by its parent company, Al-Futtaim.With the retail and real estate divisions admiring theautomotive group’s operational advances, andtremendous savings secured since the deploymentof Ariba Sourcing and Ariba Procure-to-Pay, all otheroperations are evaluating these SAP Ariba solutions.42719 (16/02) 2016 SAP SE or an SAP affiliate company. All rights reserved.6/6
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considering the Ariba Spend Visibility solution to get a consolidated view of its spend and help drive actionable decisions for the managing directors. The structured procurement approach that Al-Futtaim Automotive group has developed has not gone unnoticed by its parent company, Al-Futtaim. With the retail and real estate divisions admiring the
