British Airways Saves GBP 500 Million with Ariba

21/08/2007 - 16:08

Ariba, Inc. (NASDAQ:ARBA), the leading spend management solutions
provider, today announced that its technology has enabled British
Airways (BA), Europe's largest airline, to deliver significant cost
savings over the past six years. An early adopter of spend management,
BA has successfully implemented Ariba technologies and best practice
processes to streamline its procurement function and gain the
visibility into and control over its spend needed to deliver
measurable and sustainable results.

"BA recognized before many companies that spend management is the
fastest, most efficient way to reduce costs, improve profits and gain
competitive advantage," said Mike Arenth, General Manager, EMEA,
Ariba. "BA didn't hesitate in starting on the journey to spend
management and has quickly moved toward excellence."

Getting on the path

At the end of 1999, BA was spending more than GBP 4 billion a year
with suppliers. The company urgently needed to re-examine its
procurement function to achieve an overall savings target of GBP 1.4
billion by 2006. "Back in 2000, procurement in BA was well
established, but buying procedures were inconsistent, staffing levels
were high and around a quarter of spend was with non-preferred
suppliers," said Tim Richardson, General Manager of Procurement
Operations, BA.

Manual strategic sourcing was introduced in 2001 which started the
change process, and progress accelerated with the introduction of new
technology in 2003 that enabled a systematic closed-loop approach to
sourcing and procurement. BA selected Ariba as its partner on this
task and began a full implementation of Ariba's spend management
solutions, including Ariba Buyer(TM), Ariba Analysis(TM) and Ariba
Contract Compliance(TM).

Navigating Roadblocks

Use of Ariba was not immediately welcomed at BA. Maverick buying
continued until procurement began contacting staff members who
attempted to order goods without using the new system. "This was all
part of a systematic compliance program that started sending a signal
to people that this is how things would be done from now on,"
Richardson said. And it worked. By 2005 compliance to the ordering
systems was virtually 100 percent.

Moving forward

Not happy with simply streamlining processes, BA again raised the
bar. The company announced three 'golden rules' that would allow it to
better manage its spend and transform procurement from a tactical
process to a strategic one. First, all orders must be raised and
registered through Ariba Buyer. Second, only preferred suppliers can
be used. And third, for any purchase over GBP 100,000 the full
strategic sourcing process must be followed.

Whereas BA had used technology in the past to tackle areas of
direct spend, it had never looked at using technology to improve
indirect procurement, despite the fact that it accounted for up to GBP
1 billion in spend. Since implementing Ariba's solutions, BA has
changed and has seen impressive results beyond just savings:

-- Reduction in UK preferred supplier base from 14,000 to 2,500

-- 80 percent of purchases now processed electronically

"Procurement is now less about processing orders and more about
strategic sourcing and finding the best quality products at the best
price. And Ariba Spend Management is the best solution in the market
for helping us to achieve our goals," said Silla Maizey, Procurement
Director, BA.

About Ariba, Inc.

Ariba, Inc. is the leading provider of Spend Management solutions
to help companies realize rapid and sustainable bottom line results.
Successful companies around the world in every industry use Ariba
Spend Management software and services. Ariba can be contacted in the
U.S. at 1.650.390.1000 or at www.ariba.com.

Ariba, the Ariba logo, AribaLIVE and SupplyWatch are registered
trademarks of Ariba, Inc. Ariba Spend Management, Ariba Spend
Management. Find it. Get it. Keep it., Ariba. This is Spend
Management, Ariba Solutions Delivery, Ariba Analysis, Ariba Buyer,
Ariba Category Management, Ariba Category Procurement, Ariba Contract
Compliance, Ariba Contracts, Ariba Contract Management, Ariba Contract
Workbench, Ariba Data Enrichment, Ariba eForms, Ariba Sourcing, Ariba
Spend Visibility, Ariba Invoice, Ariba Travel & Expense, Ariba
Workforce, Ariba Supplier Network, Ariba Supplier Connectivity, Ariba
Supplier Performance Management, Ariba PunchOut, Ariba QuickSource,
PO-Flip, Ariba Settlement and Ariba Spend Management Knowledge Base,
Ariba Ready, Ariba Supply Lines, Ariba Supply Manager, and It's Time
for Spend Management are trademarks or service marks of Ariba, Inc.
Ariba Proprietary and Confidential. All rights reserved. Patents
pending. All other trademarks are property of their respective owners.

Ariba Safe Harbor

Safe Harbor Statement under the Private Securities Litigation
Reform Act 1995: Information and announcements in this release involve
Ariba's expectations, beliefs, hopes, plans, intentions or strategies
regarding the future and are forward-looking statements that involve
risks and uncertainties. All forward-looking statements included in
this release are based upon information available to Ariba as of the
date of the release, and we assume no obligation to update any such
forward-looking statements. These statements are not guarantees of
future performance and actual results could differ materially from our
current expectations. Factors that could cause or contribute to
Ariba's operating and financial results to differ materially from its
current expectations include, but are not limited to: delays in
development or shipment of new versions of Ariba's products and
services; lack of market acceptance of Ariba's existing or future
products or services; inability to continue to develop competitive new
products and services on a timely basis; introduction of new products
or services by major competitors; the ability to attract and retain
qualified employees; difficulties in assimilating acquired companies;
long and unpredictable sales cycles and the deferrals of anticipated
orders; declining economic conditions; inability to control costs;
changes in the company's pricing or compensation policies; significant
fluctuations in our stock price; the outcome of and costs associated
with pending or potential future regulatory or legal proceedings; the
impact of our acquisitions, including the disruption or loss of
customer, business partner, supplier or employee relationships; and
the level of costs and expenses incurred by Ariba as a result of such
transactions. Factors and risks associated with its business,
including a number of the factors and risks described above, are
discussed in Ariba's Form 10-Q filed August 8, 2007.