1. eSourcing Part X: Key Activities / Steps
Collect Cost Breakdowns
Awarding the Business Analyze results & present
Proposals to Stakeholders
There are many factors to consider when awarding
Select suppliers to implement
suppliers. You might decide to select a single supplier
Send thank you notes/emails to
for all lots, or you might want to mitigate risk and award all participants
the business to two or more suppliers. This can be a Start implementation process
difficult decision for a large event with numerous lots and
line items, and with multiple suppliers bidding for the Key Deliverables
business. Only project owners can create scenarios. AS Master Report
Using award scenarios, you can create alternative Cost breakdown summary
winner scenarios and retain them in the event. You can
name each scenario, award lots to suppliers in the Tools
context of the scenario, co pare among scenarios, and AS - Master Report
Cost Breakdown Summary
export the scenarios to Microsoft Excel to perform
Bid Day Presentation
additional analysis. You award business to suppliers
based on one or several of your scenarios. The Team
Scenarios Report displays the various award scenarios Project Manager & Category Expert
for your review.
Scenarios Report
The Scenarios Report allows you to compare award scenarios side-by-side, and to determine savings on various
lots and line items in the event.
To create the Scenarios Report:
1. While monitoring an event, or viewing a completed event, go to the Reports tab and click
Download Reports.
2. Select Scenarios Report.
Ariba Sourcing exports the data to Microsoft Excel. The Scenarios Report includes these sheets:
• Pivot
• Scenarios - Items
• Scenarios - Suppliers
Awarding Scenarios
Manual -
The manual scenario allows you to award specific lots to individual suppliers, and split the awarding of a lot by per-
centage among multiple suppliers. This scenario is useful if your awarding decision is fairly obvious. For large and
complex events where the awarding is not easy to determine, use an optimization scenario.
To use a manual scenario:
1 On the Scenario tab, select Create > Manual Scenario. Or, from the Award tab, click Award.
2 Enter a scenario name.
3 In the pull-down menu for each item or lot, select the participant to whom you are awarding the item. If
you select Split Award, you can specify the percentage for each participant.
4 View the prices and savings for this scenario on the Summary tab.
5 You can click Save As to save a copy of the scenario you are working on.
6 Click Done to save and exit the scenario. The scenario is listed on the Scenarios tab. You can update
the scenario and submit it when you are ready.
7 When you are finished with the scenario, click Submit for award. This triggers the award approval task if
approvals are required.
8 After you click Submit for award, you can send email to the awarded and non-awarded participants. When
this task is complete, the awards display in the Award tab.

2. Using Optimization Scenarios to Award to Suppliers
The optimization scenario allows you to analyze the award decision for a large or complex event. The optimization
helps you make the award decision by allowing you to create and compare hypothetical awarding models with
specific constraints to determine the potential awarding results. You do not have to accept any of the scenarios.
When you are done with your analysis, you can accept the award scenario or scenarios that makes sense to you.
Optimization can be a useful decision-making tool, however you must know your baseline first to understand the
scenarios that optimization can provide. To get the most out of the optimizations, run a first scenario without
constraints to determine what Ariba Sourcing offers as the optimal choice without the influence of the constraints.
After obtaining that result, create scenarios with constraints to see how they vary from the unconstrained result.
When creating optimization scenarios, keep in mind:
• Use optimization to help you make the best (optimal) decisions for your business.
• Think about the goal of your optimization. Often this will be to minimize total price. It could also be
something like maximize total score or minimize total cost.
• Use care as you add constraints to scenarios. The optimal value will not get better (and often gets worse)
as you add more constraints.
• You can use scenarios to model different constraints and to see the costs are of imposing those
constraints on the possible award.
To use an optimization scenario:
1. On the Scenario tab, select Create > Optimization Scenario.
2. On the Goals and Constraints tab, enter a name for this scenario.
3. Select the goal for the scenario. The goals you can choose from vary with the event. Examples of goals
include minimizing extended price or total cost or maximizing savings. The goals are controlled by the
terms you defined when you added content.
4. Specify whether to have minimum coverage. This means the smallest group of suppliers that can supply
everything you need. The minimum coverage specification does not take price into account. The mini-
mum coverage goal takes precedence over the price goals you select, and is calculated first by the opti-
mization.
So, when you select the Minimize Total Cost goal, and the Minimum Coverage goal is Yes, you get the
smallest number of suppliers that can provide the lowest total cost. You might have to choose certain line
items. For example, your optimization of lowest total cost and minimum suppliers offers you Supplier A and
Supplier B, for line items 1 though 7. You find that Supplier A can supply line items 1 though 4, and Supplier
B can supply line items 4 through 7. Your choice is clear for items 1 through 3, and also for items 5 through
7. You will have to make a choice about item 4 however, because both suppliers can provide you with that
item.
5. Click Add Item Group to create an item group. An item group is a group of lots or line items that you
select and then apply specific constraints to the group. You can have multiple item groups, with
constraints for each item group. For example, if you were purchasing computers and their various
components, you could have an item group that focused on printers, another that you used to deter
mine pricing on peripherals such as keyboards, and yet another item group to use for software
purchases.
6. If you choose All Items, the item group definition is complete.
7. If you choose Selected Items, click Add Items to add lots or line items to the group. You can use item
groups. to create various scenarios that focus on specific groups of goods.
8. Select the items to add to the group and click OK.
9. Click Add Constraints next to the item group to add constraints.
Constraints include:
• Total Amount: Allows you to specify that the total amount of the business be awarded according to the
constraints you specify.
• Supplier Count: Allows you to specify a finite number of suppliers to receive the award.
• Per-Item Quantity: Allows you to specify the business to be awarded at the line item level for quantities.
For example, you can specify to award 30% of a specified quantity to a specific supplier.

3. Post Project follow-up, award steps, and best practices
1. Shortly after the project, send a thank you email to suppliers and let them know that you will notify them
soon about next steps.
2. Within AS platform, generate relevant project reports and distribute to project stakeholders for review.
3. Conduct a meeting with your internal stakeholders to determine the award decision
4. Contact the selected suppliers to request cost breakdowns/pricing worksheets.
5. Send a notification email to suppliers who are no longer being considered.
6. As Cost Breakdowns Worksheets are received, track submissions on MM sheet if the submitted pricing
would change the supplier’s position/rank in the lot or the overall outcome ask the supplier to re-submit their
pricing.
7. Deal with any suppliers who are not willing to stand by their bids.
8. Once you have obtained all of the Cost Breakdowns, analyze the results and begin to determine your award
scenario:
• Review RFI and/or RFP submissions, technical/design proposals,
• Consider total cost of ownership, not just the pricing received online
• Switching costs (including new supplier qualification)
• Transportation / Packaging costs (if suppliers did not include this online)
• Maintenance costs
9. Determine supplier you would like to award each lot. Consider Site visits & Audits
10. Notify the selected supplier(s) first that they are being awarded the business.
11. Notify the unsuccessful suppliers that they are not being awarded the business.
• It is important to let them know why they were not selected and what they can do to improve their
chances of being considered in the future.
Tips:
• Only use automatic award messages from system when rules are clear and online bidding results are final
(i.e. commodities / office supplies, etc..)
• Award messages can be customized or not activated (if desired)
• Always close pending selection projects