This commentary is based on the Spend Matters PRO analysis following SAP's (then-announced) acquisition of Ariba in the summer of 2012.
Looking ahead, Spend Matters believes that the basis of business network competition will shift toward technology (versus focusing on enabling functionality) as a means of differentiation. We believe that SAP and Ariba have a unique opportunity based on HANA and other architectural components, not to mention their ability to rapidly prototype and develop highly advanced mobile applications (consider their SuccessFactors platform and its elegant UI). So much of the emphasis on competitive advantage for procurement solutions in recent years has come from either focusing first on usability (e.g., the Coupa approach) or going deep on feature/function, often for highly specific environments (what SciQuest, Emptoris and others have focused on). To date, the underlying technology has really played a secondary role.
This will start to change as procurement organizations learn what technologies such as in-memory databases can bring. As my colleague Thomas Kase remarked recently:
"As spend analytics tools start to reach into the full PO detail level, covering multiple years across numerous ERP and other solutions ... technologies like this become critical and should help enable new levels of visibility and analysis. Similarly, supply chain risk management (early warning) solutions that aggregate and analyze data across more or less all publicly available information globally will likely be other adopters of this level of performance."
The future of the Ariba network under SAP is clearly dependent on taking advantage of the fundamental shift in scale, speed, data, and analytics that SAP already has in their technology arsenal. If SAP gets the future of the Ariba network business right, the only provider they'll have to worry about on the near-term horizon is Oracle, which has similar underlying assets they can exploit. But the good news for SAP in this regard is that Oracle has very limited network capability, and no experience with commercial business network models in the procurement area.
Spend Matters Prediction: By 2015, supplier networks based on older architectures (e.g., Basware, OB10, Hubwoo, Perfect, Transcepta) will still be focused on enabling basic transactional connectivity, financing, supplier management and related areas, but will be unable to keep pace with SAP by adding new capabilities focused on business network intelligence, predictive analytics, dynamic offers and truly information-based business network offerings – unless they, too, rebuild upon a new underlying business network architecture.
The future likely holds grist for SAP's mill, but at the same time it is likely that most large organizations will be as far behind the technological capability curve in 2015 as they are today, so there should still be opportunities to sell less-than-cutting-edge solutions in the future. It will depend on procurement leadership among clients whether or not these solutions get deployed – at Spend Matters we will continue to provide you with awareness and insights.