Ariba was founded in 1996 by Keith Krach, who created the idea of using the Internet to enable companies to facilitate and improve the procurement process. The typical procurement process was labor intensive and often costly for large corporations. Krach developed the idea of purchasing staff buying items from vendors who provided their catalogs online. Ariba supplied the software to create and host the vendor catalogs as well as the enabling software to purchase the items. In 1999 the company was one of the first business-to-business Internet companies to go public. At the time Ariba was challenged by a number of other players in the e-procurement area, such as Commerce One and Metiom.
Ariba offers a spend management solution for company’s purchasing requirements. Customers are offered a large number of supplier catalogs to purchase from. The number of vendors with catalogs on the Ariba Supplier Network is now over 160,000 with in excess of 80 million items. Two million purchase orders are sent to these vendors each month at a value of over $8 billion.
The Ariba software allows a company to automate, monitor, and control the complete purchasing life cycle from requisition to payment. Users can create requisitions that are approved according to pre-configured business rules that each company decides upon. Purchase orders can be automatically generated and sent directly to suppliers, while order acknowledgements and ship notices are sent back to the original requestor.
The invoicing process is simple for the suppliers who can create an invoice directly from the requestors purchase order. The invoices are pre-matched with the purchase order line items and any receiving information, so that the requestor reconcile and pay without delay.
For those companies that use an ERP solution, Ariba can be fully integrated. However, Ariba offers its product as an on-demand solution. The “Software as a Service” (SaaS) model has been available from Ariba since 1999 and they offer a fully hosted, pay-as-you-go solution for those companies who require a fast implementation with low upfront costs and a low cost of ownership.