Setting up SAP ARIBA Supplier Risk

There is not much information available on how to setup ARIBA Supplier Risk in your organization. Below is a user friendly version on steps for setting up the Supplier Risk in your organization.

Setting up SAP ARIBA Supplier Risk involves the following steps:

1. Determine your organization’s risk management requirements: You need to identify the risk management requirements of your organization before setting up SAP ARIBA Supplier Risk. You should consider the types of risks your organization is exposed to and the level of risk tolerance.
2. Configure Supplier Risk Management in SAP ARIBA: You can configure Supplier Risk Management in SAP ARIBA by defining risk categories, risk scores, and risk templates. You can also configure notifications and alerts to be sent to relevant stakeholders in case of a risk event.
3. Define Risk Scenarios: You need to define the risk scenarios that your organization wants to monitor. Risk scenarios could include financial risks, compliance risks, environmental risks, and social risks.
4. Define Risk Assessments: You can define risk assessments to evaluate suppliers against the risk scenarios that you have defined. Risk assessments can be configured to include questions, weightings, and thresholds.
5. Assign Risk Assessments to Suppliers: Once you have defined risk assessments, you can assign them to suppliers. Suppliers can be assigned risk assessments individually or in bulk.
6. Evaluate Supplier Risk: After suppliers complete their risk assessments, SAP ARIBA Supplier Risk evaluates their risk score against the defined risk thresholds. Suppliers can be flagged as high risk, medium risk, or low risk based on their risk scores.
7. Take Action: Based on the risk score, you can take appropriate actions such as conducting additional due diligence, engaging with the supplier to mitigate risk, or terminating the relationship.

You can create your first Supplier Risk Project following the steps as detailed below:

1. Create a supplier risk project:
   • Log in to your SAP Ariba account and select the “Supplier Risk” tab.
   • Click on “Create Project” and enter the required details, such as project name, project type, and the start and end dates.
2. Define project scope and criteria:
   • Define the scope of the project and the criteria that you will use to evaluate supplier risk.
   • This can include factors such as financial stability, legal compliance, and operational risks.
3. Identify suppliers:
   • Identify the suppliers you want to evaluate for risk.
   • This can be done by uploading a spreadsheet of supplier data or by selecting suppliers from your Ariba network.
4. Assess supplier risk:
   • Use the criteria defined in step 2 to assess the risk level of each supplier.
   • This can be done using surveys, questionnaires, or other evaluation tools.
5. Monitor supplier risk:
   • Set up alerts to monitor changes in supplier risk over time.
   • This can be done using automated notifications or by regularly reviewing supplier risk reports.
6. Take action to mitigate risk:
   • If a supplier is identified as high risk, take action to mitigate the risk.
   • This can include renegotiating contracts, limiting the scope of work, or finding alternative suppliers.
7. Review and refine the process:
   • Regularly review and refine your supplier risk management process to ensure it remains effective and relevant.

Overall, setting up SAP ARIBA Supplier Risk involves a structured approach to identify, assess, and manage supplier risks. By implementing Supplier Risk Management, your organization can not only  proactively manage supplier risks and enhance supplier performance but also can reduce their exposure to risk and ensure the long-term success of their supply chain.

Original Article:
https://blogs.sap.com/2023/06/09/setting-up-sap-ariba-supplier-risk/