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SAP Business Suite for Spend Management
SAP Business Suite for Spend Management Public Se ublic Secto Sector Public Sect INTERNAL ONLY
ector or tor
Public Sector Industry at a Glance
In the public sector, particularly across APAC, sourcing and procurement are critical in addressing unprecedented challenges while balancing budget constraints. Public sector leaders must develop policies and regulations that support citizen-centric services, ensuring transparency, fairness, efficiency, and auditability. Disruptions in supply chains have highlighted structural weaknesses, necessitating agile and collaborative procurement processes. Public organizations in APAC are leveraging digital technologies to enhance transparency and flexibility in procurement, aligning with regional initiatives for e-government and digital transformation. Collaboration among public entities and with private partners is essential for filling service gaps and improving outcomes. By adopting innovative procurement strategies, public sector organizations can better meet evolving citizen needs and maintain trust through transparent and efficient service delivery.
Opportunities
Digital Transformation and Innovation: Leveraging digital technologies can enhance procurement transparency, efficiency, and collaboration, aligning with broader e-government initiatives in APAC Collaborative Procurement Models: Implementing collaborative procurement models can foster partnerships, improve outcomes, and reduce costs by leveraging shared resources and expertise Citizen-Centric Services: By focusing on citizen-centric services, public sector organizations can improve service delivery, enhance citizen satisfaction, and build trust through transparent and responsive governance.
Sourcing Savings Rate
Invoices without Exceptions
Best in Class Metrics*
PO Spend associated with Catalog and Contract
92.2%
15.7%
98.8%
*SAP Customer Benchmarking program
State of Public Service Organizations*
of public sector executives say that gaining visibility into vendor performance is challenging
45%
44% 41% 12% 49% Only
say that gaining real-time visibility into transactions is challenging
Of public sector procurement functions that use data to inform decision-making
are sharing their supply chain and logistics data with outside partners
say that most or all of their procurement processes are manual
Only
of public sector executives can gain a clear view of overall spend automatically, in real time
15%
*Agile Procurement Insights
Spend Management Solutions
The integration of SAP Strategic Procurement package with Icertis Contract Intelligence (ICI) provides Public Sector organizations with a powerful, end-to-end digital procurement and contract management platform. It helps governments and public institutions achieve compliance, transparency, speed, and accountability across the entire sourcing and contracting lifecycle—while ensuring responsible stewardship of public funds. 1. Full Lifecycle Digital Procurement with Contract Intelligence SAP Ariba enables structured, auditable sourcing processes—from supplier discovery and RFPs to award decisions—while Icertis enhances the contract lifecycle with AI-driven contract creation, clause management, and compliance tracking. This provides a seamless Source-to-Contract flow that’s compliant with public procurement laws and policies. 2. Improved Compliance and Regulatory Adherence Public sector procurement is governed by strict local, national, and international regulations (e.g., FAR, EU directives, public tender rules). The integration ensures contracts adhere to mandated clauses, approval hierarchies, and thresholds, with full audit trails and compliance reporting built in. 3. Transparency and Accountability in Public Spending Combined SAP Ariba and Icertis solutions provide end-to-end visibility into sourcing events, contract terms, supplier obligations, and performance. This helps public agencies demonstrate transparency to oversight bodies and the public, while ensuring funds are spent as intended. 4. Standardization with Flexibility Across Departments Public organizations often struggle with fragmented procurement and contract processes. This integrated solution standardizes sourcing and contracting templates, workflows, and governance—while allowing customization to meet specific agency, ministry, or jurisdictional needs. 5. Enhanced Risk and Obligation Management With Icertis, contracts are continuously monitored for risks, milestones, renewals, and non-compliance. Paired with SAP Ariba’s supplier risk insights and performance data, this enables proactive governance of third-party obligations and early identification of risks in critical contracts. 6. Accelerated Time-to-Award and Contract Execution Manual procurement cycles in government can be lengthy. Ariba + Icertis integration speeds up the process by automating RFx execution, e-auctions, contract creation, and digital approvals—helping agencies respond
more quickly to public needs or emergency procurements. 7. Support for Sustainability and Socioeconomic Goals
Public sector organizations often have mandates to work with small businesses, diverse suppliers, or sustainable vendors. The integrated solution supports supplier prequalification, scoring, and contract terms aligned to these goals—ensuring procurement supports broader policy objectives.
Digitize high value contracts and purchasing processes for better compliance, cost savings and less audit costs
Top Spend Categories
TRAVEL EXPENSE
CATALOG
2%
9%
TACTICAL SOURCING
15%
49%
EXTERNAL LABOR
25%
RECURRING SERVICES
Spend Management Solutions SAP Ariba Buying and Invoicing offers Public Sector organizations a comprehensive, end-to-end solution that simplifies and automates the procurement, purchase order management, and invoicing processes —ensuring compliance, enhancing transparency, and driving efficiency while maintaining full control over public funds. 1. Streamlined Procurement and Purchase Order Management SAP Ariba Buying and Invoicing streamlines the entire procurement process, from requisition to payment. Public sector organizations can easily create and approve purchase orders, manage approvals, receive goods and services, and process invoices—all within a single, integrated platform. This automation reduces manual errors, accelerates workflows, and ensures compliance with procurement policies. 2. Improved Contract Compliance The solution ensures that all procurement transactions, including purchases and invoices, are linked to pre-existing contracts, ensuring adherence to negotiated terms such as pricing, payment terms, delivery schedules, and service level agreements. This promotes consistent contract compliance and mitigates the risk of unauthorized spending or contractual breaches. 3. Increased Transparency and Accountability Public sector agencies must adhere to strict transparency standards in order to maintain public trust. SAP Ariba provides full visibility into procurement activities and transactions, including purchase orders, receipts, and invoices. This enables auditors, regulators, and internal stakeholders to track spending, ensure accountability, and demonstrate that public funds are being used responsibly. 4. Enhanced Control Over Public Spending With SAP Ariba Buying and Invoicing, public sector organizations can enforce budgetary control mechanisms at every stage of the procurement process. Predefined approval workflows and automated budget checks prevent over-spending and ensure that purchases are made according to established budget limits and approved contract terms. 5. Faster Invoice Processing and Payment SAP Ariba reduces the administrative burden associated with invoice processing. By automatically matching purchase orders with received goods/services and invoicing, it accelerates the invoice approval process, reduces errors, and ensures timely payments to suppliers. This contributes to smoother relationships with vendors and avoids payment delays that can affect project delivery. 6. Risk Mitigation and Issue Resolution The solution helps mitigate risks by enforcing standardized processes across all procurement and invoicing activities. Automated workflows and approval processes help identify issues early, such as discrepancies between purchase orders, receipts, and invoices, ensuring that any discrepancies are addressed before they escalate. 7. Simplified Supplier Collaboration SAP Ariba Buying and Invoicing facilitates seamless collaboration between public sector organizations and their suppliers. Suppliers can easily submit invoices, track payment status, and receive real-time updates on order changes, reducing friction and fostering strong, transparent relationships that contribute to smoother project execution. 8. Support for Sustainability and Diversity Goals Public procurement in many regions is driven by mandates for sustainability, social responsibility, and supplier diversity. SAP Ariba allows public sector organizations to engage with suppliers that meet these criteria, ensuring that procurement decisions align with broader public policy goals such as environmental sustainability, diversity, and inclusion.
Digitize high value contracts and purchasing processes for better compliance, cost savings and less audit costs
Top Spend Categories
TRAVEL EXPENSE
CATALOG
2%
9%
TACTICAL SOURCING
15%
49%
EXTERNAL LABOR
25%
RECURRING SERVICES
Spend Management Solutions SAP Fieldglass provides Public Sector organizations with a comprehensive solution to manage and optimize their external workforce, including contingent workers , contractors, and service providers. It enhances efficiency, compliance, and transparency, ensuring that public institutions can manage their workforce needs while adhering to regulatory requirements and responsible use of public funds. 1. Efficient Management of External Workforce Public sector agencies often rely on external resources, such as contractors, consultants, and temporary staff, to meet fluctuating demands. SAP Fieldglass enables streamlined management of these external workers—from requisitioning, onboarding, and timesheet management to invoicing and payment—ensuring that the process is efficient and transparent. 2. Improved Compliance and Risk Management SAP Fieldglass helps public sector organizations maintain compliance with regulations such as labor laws and procurement rules. It provides up-to-date worker classifications, appropriate contract management, and audit trails for all external workforce transactions, reducing legal risks and ensuring policy alignment. 3. Enhanced Visibility and Control Over External Labor Costs With SAP Fieldglass, public sector organizations gain full visibility into their external labor spend. Real-time reporting and analytics help track worker usage, hours worked, and costs—enabling better financial control, the identification of cost-saving opportunities, and ensuring that budgets are adhered to. 4. Optimized Workforce Planning and Allocation By leveraging SAP Fieldglass’ analytics and reporting tools, public sector organizations can better forecast and plan their external workforce needs. This leads to more strategic workforce allocation, ensuring that the right talent is deployed to the right projects at the right time—helping meet critical goals without overextending resources. 5. Seamless Integration with Other Public Sector Systems SAP Fieldglass can integrate with existing public sector systems, including HR, procurement, and finance systems. This integration ensures that external workforce management is aligned with broader organizational processes, enabling a cohesive, streamlined
workflow across departments and reducing the administrative burden. 6. Transparency and Accountability in External Labor Practices
Public sector agencies are held to high standards of accountability and transparency. SAP Fieldglass offers full auditability of external workforce transactions, from hiring through to invoicing. This helps agencies demonstrate that external labor is being sourced, managed, and compensated fairly, in accordance with public sector policies. 7. Faster Onboarding and Time-to-Productivity SAP Fieldglass accelerates the onboarding process for external workers by automating and standardizing workflows. This reduces administrative delays and allows external workers to become productive more quickly, helping agencies respond faster to project needs and public demands. 8. Support for Diversity and Inclusion Goals Public sector organizations often have mandates to work with diverse suppliers and service providers. SAP Fieldglass allows agencies to easily track and manage their relationships with diverse suppliers and ensure that external labor providers meet the necessary diversity and inclusion standards
Digitize high value contracts and purchasing processes for better compliance, cost savings and less audit costs
Top Spend Categories
TRAVEL EXPENSE
CATALOG
2%
9%
TACTICAL SOURCING
15%
49%
EXTERNAL LABOR
25%
RECURRING SERVICES
Streamlining suppliers for efficiency with SAP Ariba solutions and SAP Business Network
Before: Challenges and opportunities Navantia 5.0 program aiming to standardize and integrate systems and increase visibility Ine cient manual operational interactions with a large number of business partners Slow onboarding process for new business partners Why SAP Provide embedded best-practice workflows to standardize processes with SAP Ariba solutions Capture cost, delivery, and payment information automatically via integration with SAP S/4HANA Improve efficiency with data-informed decisions through access to fully digital supplier interactions Enable access to integrated AI capabilities as soon as they are available After: Value-driven results Increased compliance by buying against pre-defined contracts through Ariba 360-degree view of business partner interactions, such as the number of orders, which groups within Navantia are placing those orders, and the aggregate value Successful transfer to completely paperless operation
NAVANTIA, S.A. S.M.E. Madrid, Spain www.navantia.es
Industry Aerospace and Defense
Products and services Shipbuilding
Employees 4,000
“Navantia has achieved a 15% reduction in purchase order management lifecycle time, from issue to invoice receipt, enabling the team to focus on higher value processes to support the business.”
José Manuel Saldaña, Supply Chain IT Manager, NAVANTIA, S.A. S.M.E.
>20% 50% Productivity gains for all purchase-to-pay processes
Cut in complexity and time spent on creating Purchase Requisitions
Revenue €1.34 billion (as of 2022)
Featured Solutions and Services SAP Ariba and SAP Business Network
ThankYou
* Research documentation has been used from work commissioned by SAP Ariba and produced by Economist Impact
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