Ariba's "Should Cost" Adventure Begins …

I was surfing Ariba's Spend Management learning center last night looking for useful material, and came across this piece that they recently published highlighting what appears to be a "should cost" analysis services offering. It is not entirely clear what part of this direct materials solution is services and what part is software -- which reminds me of the old FreeMarkets hybrid days. Regardless, I believe that Ariba is onto something here. But for now, according to the whitepaper, their efforts appear based around a consulting-driven approach that looks at such factors as "supplier operations and cost structure" rather than the actual engineering cost drivers of the parts themselves (i.e., how specific CAD specifications impact cost). If Ariba is serious about targeting this market, they will need to get into this area as well, building, licensing or acquiring technology to support an engineering-centric view of cost in addition to a market and supplier one. Still, their offering marks an interesting first step.

Jason Busch

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