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RapidRatings adds supplier risk management options to SAP Ariba
RapidRatings' financial analysis data can now be integrated directly into SAP Ariba, providing customers with financial health information from one source.
Understanding a company's financial viability is a critical part of supplier risk management. SAP Ariba aims to make this easier by integrating RapidRatings' Financial Health System into the SAP Ariba Supplier Risk module.
The integration is meant to help SAP Ariba customers get the most up-to-date information about a potential supplier's financial health profile, according to Eric Evans, managing director of business development at RapidRatings, based in New York. Once a supplier is onboarded in SAP Ariba, customers can use the system to continuously monitor it.
The integration of RapidRatings into SAP Ariba was introduced at the SAP Ariba Live conference in Austin, Texas.
Getting an inside look at the financial strengths of suppliers
"RapidRatings provides data around the financial viability [of suppliers] -- how weak or strong they are, are they trending down or up, do they look good in the short or long term," Evans said.
The Financial Health System (FHS) analyzes the financial health of companies and provides a numerical Financial Health Rating (FHR). RapidRatings measures public and privately held companies against their global industry peers to create the FHR. It relies on quantitative data, such as income statements, balance sheets and cash flow, to "drive the insights," Evans said.
"We want to look forward, rather than backward, as you would if you were just using payments history," he said "You want to know ahead of time where that company's trending, where have they been and where are they going. So, it's more predictive."
Integrating RapidRatings directly into SAP Ariba
The concept of serving up financial risk data about suppliers in the Ariba platform makes sense to Marc Moreau, vice president of procurement excellence at Fresenius Medical Care, a healthcare provider in Waltham, Mass. Fresenius Medical Care has been running SAP Ariba for a few years. Separately, it has subscribed to RapidRatings for financial data about its suppliers, Moreau said.
Moreau said he is already using the SAP Ariba Supplier Risk module, a risk management feature, but said some of it was too basic to meet the healthcare provider's needs.
"That's why we signed up for a subscription with RapidRatings to get deeper financial metrics," he said.
Moreau said he's looking forward to the integration.
"Rather than having to go outside to RapidRatings for financial review or go to another site for metrics on suppliers, we want it all through a single point of entry in the [SAP Ariba] Supplier Risk module," he said.
This is important to Fresenius Medical Care, because it's in the highly regulated healthcare industry.
"We want it to be all integrated, so when we onboard or potentially onboard a new supplier, we want to immediately do a supplier financial rating," Moreau said. "Because we're a healthcare entity, we need to do background checks on every supplier to make sure they're not barred from doing business because of the federal Medicare and Medicaid programs. So, we want all of that vendor onboard information upfront and validation to happen before we even consider adding that vendor to [SAP Ariba]."
Open APIs extend SAP Ariba platform
RapidRatings is the latest supplier risk management data provider to integrate with SAP Ariba using open APIs, which enables machines to communicate with each other and helps to extend the value of the SAP Ariba platform, according to Kristen Jordeth, SAP Ariba's go-to-market director for North America. RapidRatings focuses on financial risk, but there are other supplier risk management focus areas, such as information security.
"We're a technology; we're not data. So, we continuously need to partner with third parties that our customers are already using and create that direct link with APIs," Jordeth said. "All they have to do is turn a subscription code on, key it in, and they're connected. It eliminates the setup, makes it easier on the customer side, and they can take advantage of subscriptions they already have and access them in one view throughout that whole process."
Other supplier risk management data sources will be made available via the open APIs, according to Jordeth.
"Next, you'll see sustainability, diversity, cybersecurity, more compliance, because there are a lot of partners that customers are already using and have a subscription for. So, it makes sense to turn on within the system."
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