The future of the Ariba Network is arguably the future of SAP Ariba. As more content, intelligence and capability shifts into not just the cloud but the space between companies, network and platform-based connectivity will become increasingly important for procurement and suppliers alike. Connectivity is even now forming the basis of competition in the procure-to-pay market, with SAP Ariba competitors like Tradeshift making the argument to potential customers that the platform matters as much — or more — than application capability alone. In a series of posts this week, we’ll tackle the past, present and future of the Ariba Network, as well as the SAP Ariba platform.
The supplier networks Category
In this last installment, I will focus on the risks of insufficient connectivity, the benefits of doing it properly and why it is worthwhile for suppliers to invest time and resources to stay connected in the most automated means possible.
For organizations that still use their ERP as their only (or primary) system to process all procurement, invoicing and payments activities, typical document exchange and communication methods are done either by paper, fax or email (some firms may also have EDI technologies or web services in place — to interact with select suppliers). Although these forms of communication have been used for years, they are insufficient today, as they introduce significant risks to the buyer/supplier connectivity process.
What is a network? What is a platform? Technology providers often confuse customers with these terms. But it is important that procurement and AP organizations become comfortable with the terminology.
A network concept centers on supplier connectivity that joins buyers with suppliers. It can provide value in areas such as supplier management, catalog management, e-invoicing automation, payment automation, financing options and sourcing effectiveness while also offering value-add services for enhancing or simplifying these processes.
Evaluating a comprehensive business solution can be tricky, especially when the organization is evaluating just software capabilities — which is to say “features and functionalities” — but the provider brings more than this alone. For example, it can be difficult to do apples-to-apples sourcing comparisons when considering the types of value-added services that a solution provider can offer (by itself or a third party) to complement or strengthen its own technological solution.
When discussing procurement processes and strategy, it’s hard not to mention procure-to-pay (P2P) or the enabling technologies that go along with it. E-procurement, one of the original technology segments to center on automating and improving procurement, has led to numerous internal improvements for procurement groups; e-invoicing automation has led to substantial cost and efficiency gains for both companies and public sector organizations.
And while both these technologies that form the core of P2P have been around for a while, they’re both far from done innovating. To see why, check out our top five posts on P2P from 2016.
Supplier networks have dramatically altered the way procurement handles supplier data. The ERP system, long the home of any company’s supplier master data, is ceding dominance to new technologies. Emerging sourcing and procure-to-pay (P2P) solutions now offer compelling alternatives to old processes and systems, and procurement organizations are looking to supplier networks both to enhance collaboration with suppliers and to serve as the central repository for data related to business partners. In this three-part series, we examine e-invoicing practices in Latin America, beginning with the basics of onboarding. The next two installments cover unique compliance requirements for organizations operating in Latin America and how to evaluate supplier readiness in the region.
Over the past few days at BravoConnect 2016, I’ve had the chance to talk to dozens of employees, customers and partners (and potential partners). But […]
Yesterday at BravoConnect 2016, BravoSolution shared a vision for its product strategy, product development and network-based initiatives (see our initial coverage on these areas here: […]
As I hinted at yesterday, the notion of a truly open supplier network doesn’t exist today. My first contribution – and request of you – has to deal with the best ways of overcoming the notion of closed supplier search, ratings, rankings and connectivity. Instead of pointing fingers at the effect of closed systems (e.g., supplier network fees for transactions, business credit rating agencies “double-dipping” on fees, etc.), let’s together come up with solutions. Together. This is the first installment of a crowdsourcing series where Spend Matters analysts will offer up an “open call” to the market for a B2B problem that exists in the value chain. It’s easy to complain generically about broad problems, but we thought we’d provide a more granular specification for a crowdsourced solution that we feel is needed in the market. There’s no cash prizes here other than bragging rights…and world domination (maybe).
Imagine a new world, where the concept of a ‘supplier network’ becomes a set of discoverable and available web services and associated data that has persisted in trusted/distributed registries that buyers can access directly or through authorized channel providers. The data is written once by the supplier and accessed flexibly by the buyers and other value chain participants as needed. Let me say I’m certain Ariba, Basware and D&B will continue to provide value to customers. The ROI of e-procurement and P2P is undeniable. They won’t die — but Blockchain does have the potential to be a revolutionary disruptor in supplier networks, procurement technology, and supply risk ratings.
From a contingent workforce and services procurement perspective, work intermediation platforms (WIPs) represent new sources and ways of engaging contingent talent and services. To raise awareness and help to educate our contingent workforce and services procurement audience on this topic, we will be starting a series we are dubbing “A WIP a Week.” Every week, we will select and briefly profile a different WIP on our site. In addition, from time to time, we may also do deeper-dives, for our Plus and PRO subscribers.
The term “supplier network” or “business network” can mean many things to many people. Ariba offers its supplier network as a cloud-based set of services and has been very successful at that. Think about car dealers. They don’t make all their money on the cars themselves but on all the downstream services. And if you have a bigger fleet of older, complex vehicles, you’ll make more money from your customers over the lifecycle. It’s good business and a good strategy — unless you’re the customer. As such, I’m writing to the customers about how to best approach supplier networks.