SAP Ariba announced a partnership Wednesday with PrimeRevenue to add “a multifunder supply chain financing platform” to its integrated source-to-pay (S2P) process. SAP Ariba said the partnership will combine transaction and financial supply chain data to better link procurement and finance organizations.
PrimeRevenue provides a cloud-based supply chain finance solution. The Atlanta, Georgia-based company reportedly manages $120 billion in transactions annually and has more than 20,000 clients in more than 70 countries.
“In joining forces, SAP Ariba and PrimeRevenue can create a closed-loop system that links all of the data companies need to manage transactions and supply chain financing events with greater insight, speed and simplicity than ever,” Alex Atzberger, president of SAP Ariba, said in a press release.
The partnership is also one Jason Busch, founder and head of strategy at Spend Matters, predicted back in August. Busch said PrimeRevenue was a company SAP Ariba could consider to ramp up supply chain finance capabilities.
“A partnership with PrimeRevenue could significantly round-out SAP and Ariba’s offering and go-to-market approach already plugging a number of holes today in the sector, including supply chain finance,” Busch wrote.
“If PrimeRevenue could break out from a revenue perspective in the next year as Fieldglass emerged in the vendor management system (VMS) space, an acquisition could also eventually cement SAP’s play in the broader trade financing market. As SAP has already proven its willingness to pay premiums, we don’t suspect valuation would be an issue, provided the top-line and growth numbers match up.”
Commenting on the new partnership, Busch suggested it still makes sense on multiple levels.
“The data coming out of Ariba and SAP systems is invaluable in the broader context of trade financing — not to mention extending the period over which an approved invoice can be discounted given P2P process improvements,” he said. “But the bigger challenge, which is common across the market, will be going to Ariba and SAP customers, many of whom can make sole decisions on source-to-pay applications, but individually have less influence within an organization when it comes to committing to invoice discounting facilities or third-party funded supply chain finance programs alone.”
Technology integration is the easy part, Busch said. In addition to relationships with bank and non-bank sources of capital and origination capability, PrimeRevenue has a best-in-class platform spanning traditional SCF enablement, invoice discounting and analytics capabilities.
But the bigger challenge is organizational commitment and alignment within procurement, operations and finance teams — which is the Achilles’ heel of programs that stall.