I'm still getting through most of my notes from Ariba LIVE last week, having only shared a few of the highlights on Spend Matters already (Click: here, here, here, here, here, here, here and here to see the details thus far). Continuing in this series of LIVE dispatches, I'll provide a quick corporate update from Ariba LIVE based on my notes from the analyst presentation at the event. I'll first share some of the information that Kent Parker, Ariba's COO, provided at the event. I've known Kent since we brought him in at FreeMarkets to standardize and improve our loosely-structured market making process around ten years ago, and he ran with the operations ball so to speak, eventually interjecting his process expertise into the entire Ariba business.
Kent noted in his presentation that Ariba has "methodologically transformed operational capability" focusing on four key areas: technology and innovation management, knowledge-based services, community support and relationship management. The Ariba operations organization, which consists of a range of customer-facing (e.g., professional services delivery resources, commodity experts) and non-customer facing (e.g., supplier management) types, now stands at over 1,000 team members, according to Kent. 200 are based in Sunnyvale, 300 in Pittsburgh, 75 in Prague and 300 in Bangalore. And India is the "largest location of growth" in the operations area for Ariba.
Much of the regional operations growth has come from significant restructuring and investment in R&D. Kent noted that Ariba has been able to reduce R&D costs by more than 24% in recent years, yet has maintained the same level of innovation capacity. It is now "expanding and promoting" top talent, and has hired 70 people in India recently as a result of these efforts.
In my book, Ariba's overall operations organization still represents one of the tightest ships when it comes to services and solution delivery in the procurement space. Owing to the eventual operations excellence of Kent's FreeMarkets market making legacy -- which is even more remarkable given how unstructured the process was before he took it over -- Ariba inherited a Lean and Six Sigma-led group of process experts who continue to lead and innovate. But from a customer perspective, I just hope that this innovation investment soon translates into core product leadership (e.g., sourcing, spend visibility, supply risk management, etc.) outside of the new cloud positioning banner.
- Jason Busch