Back in 2019, US-based dairy company and member-owned agricultural cooperative Land O’Lakes was facing the massive challenge of adopting a radical change strategy to its indirect procurement platform. The company’s legacy system—a hosted version of the Oracle Fusion applications—was about to get decommissioned. To resolve this, Sr. IT Manager Debbie Olson and Sr. Director for IT Delivery Joe Dabat pushed for the move to SaaS platform, SAP Ariba.
The company’s IT team was running on a tight schedule to set up an enterprise-ready platform to replace the Oracle Fusion environment and that integrated well with their JD Edwards ERP environments.
With their legacy system, Land O’Lakes’ contract management process was done on a highly manual and on a case-to-case basis. They were losing track of all the RFIs (request for information) and RFPs (request for proposal). Operational, functional, and business objectives required by contracts were not being met efficiently. With a looming deadline, cost-effectiveness was the main priority.
Olson and Dabat considered their hosted version of the Oracle Fusion a burning platform because of the push coming from Oracle to move to the cloud. The company attempted to do the necessary process for the move but was acquiring very costly and time-consuming upgrades in the meantime. So the two decided to build a business case to integrate with SAP Ariba solutions which they determined had an internal rate of return of about 21%.
Running on a tight schedule—and with phased-approach implementation not a logical option—Olson together with the SAP Ariba team started to establish their “rolling-wave plan.” Enablement activities occurred over several months, and the team successfully communicated a consistent message to all of their 10,000 plus suppliers despite the massive coordination efforts needed. It also helped that SAP Ariba shared services had a defined timeline for each module in the integration process. Ultimately, Olson said that the decision to implement a “rolling-wave plan” was the right decision for the company.
Indeed, with the digital transformation from SAP Ariba Network, Land O’Lakes was able to achieve a rate of 69% of automation with straight-through invoice processing in the first six months. This has allowed the company to increase administrative productivity and enabled resources to focus more on targeted, high-value tasks, and strategic initiatives.
Moreover, by consolidating its contract management process online in the SAP Ariba platform, the company can reinforce competitive bidding activities and pricing, and provide profitable interactions with its suppliers.
Olson said that SAP Ariba solutions on procurement transformation and simplified sales cycle have provided many benefits to Land O’Lakes:
“We are pleased with the adoption and ease of use with SAP Ariba. It streamlines interactions with technology through one integrated system. We have simplified the handoff between functions and minimized waiting times throughout the process. We have improved the user interface with robust dashboards and intuitive navigation. For example, the guided buying tiles drive users to preferred suppliers and catalogs. Lastly, there are now mobile capabilities.”
The dairy company is also achieving significant cost-saving goals with SAP Ariba sourcing solutions. Having an automated and consistent approach to sourcing events has allowed Land O’Lakes to negotiate best-value agreements and drive sustainable savings.
With SAP Ariba, Olson said that they plan on further automating and streamlining contract collaboration and compliance with SAP Ariba contract management and software solutions.
Dabat also adds that the company has intentions of implementing the move to SAP S4/HANA in the next few years:
“There is a desire to continue to deploy the SAP model. We stood up SAP Ariba by itself just because it was the most financially expedient thing to do at the time. But we still have overall enterprise goals of implementing SAP S/4HANA. As we get it up and running, we’re going to bring more invoice processing to the SAP Ariba and SAP S/4HANA platforms to continue our automation push.”
To learn more about SAP Ariba solutions, visit their website.