Fulfilling the Promise of Supplier Networks — An Opinion from a Former P2P Implementer

Over on the Aberdeen site, Constanine Limberakis, a former systems implementation expert with experience with both SAP and Ariba P2P systems, was recently questioned about whether the promise of supplier networks is finally here. We've found some rich fodder to mine and explore in this subject at Spend Matters ( see here and here), and it's great to hear an expert like Constantine chime in on the topic. In the column, Constantine suggests that based on his recent interactions at Ariba LIVE, that what the vendor is "building today is reminiscent of ideals and goals of the Ariba Network and other networks that emerged ten years ago." In other words, we're getting closer to the original vision of these things.

Though I disagree with Constantine that "Ariba exemplifies the concept of the value of the network buyer-supplier evolutions" because there is so much more they could be doing around deploying a true many-to-many architecture focused more on the B2B house and less on the transactional plumbing, I concur that the volume of transactions that Constantine cites, "$173B [representing] over 130 countries in 70 currencies," is quite impressive. Moreover, I think Constantine accurately suggests that "over time, proprietary connection points may also become less important with the focus on the value of the network driving the interest ... it will be interesting to see what oligopolies evolve with Ariba Network competitors through mergers, acquisitions or partner alliances that will consolidate these market places."

Where are organizations getting value from networks today? Constantine suggests that according to Aberdeen's recent research, "76% stated identifying new suppliers and market opportunities as the main reason for using a supplier network." Following this are Enablement, Connectivity and Registration (56%), Payment Management (56%), Catalog Management (52%), Order Management (52%) and peer networking (20%). Perhaps not so curiously, the accurate management, collection and policing of supplier profile information, certifications, etc. doesn't even make the list not to mention networks as a conduit to new types of financing activity. After all, these are areas that aren't yet popular today, despite the potential gigantic benefits they could bring to users on both sides of the buying and supply equation.

Jason Busch

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