Supplier Networks Content

Ariba, SAP, OB10, IBX, Hubwoo and Basware: Are Supplier Networks Addressing Supplier Risk, Performance and Compliance? [PRO]

Even in just providing basic infrastructure plumbing, supplier networks can provide significant value in areas like supplier enablement, catalog management and electronic invoicing. Moreover, networks can help organizations save time and money not only through avoiding manual steps and touch points (e.g., when on-boarding new suppliers as part of an AP/procurement eProcurement and payment initiative) but by leveraging a many-to-many approach in which suppliers only need to update basic information such as banking details, contact information, etc. in a single place (i.e., the network) which is then broadcast to all participating customers using it on the buy-side.

The Future of the Ariba Network with SAP (Part 3) [Plus+]

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 in 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 a very limited network capability today and no experience with network commercial models in the procurement area.

The Future of the Ariba Network with SAP (Part 2) [Plus+]

A major element of Ariba’s turnaround, furthered by the acquisition of Quadrem, was shifting the cost equation from buyers to suppliers for transactional procurement activity. By making suppliers pay more for transactional network fees, Ariba could effectively charge less for buyers and still maintain an attractive gross margin that was in line with smaller, best of breed competitors (like Coupa, that would often cost more than Ariba in subscription-fees after changing the business model).

The Future of the Ariba Network with SAP (Part 1) [Plus+]

SAP values the Ariba network not just in what it can deliver in connecting buyer and supplier indirect procurement transactions today, but for what it will be able to do in the future. For example, a next generation version of the Ariba network could be used to drive “inventory visibility, product design/engineering, vendor managed inventory (VMI) programs,” and related areas, SAP told Spend Matters.

What happens when you increase a supplier’s costs? [Plus+]

The genius of Ariba’s model has been to shift the costs of e-Procurement from the buyer to the sales side, with fees that don’t need to be a lot in percentage of spend terms in order to generate very healthy revenue for Ariba. It’s easy to see the attraction of that model to most buying organisations. Asking the supplier to pay a relatively small amount for the privilege of doing business with me seems to be a very good idea – and it happens in other ways of course, such as the “marketing fees” charged by retailers to suppliers.

Ariba and SAP…Exploring the Network Elephant in the Cloudy Room [Plus+]

The fact Ariba has many suppliers paying thousands – sometimes tens of thousands or more, per year – to transact with multiple trading partners has helped offset the cost of Ariba’s P2P application for buyers, allowing it to compete on price as well as product. Yet many procurement professionals believe that suppliers will factor any additional transaction costs they may incur into their pricing. Still, Ariba has had the upper hand in this area because their SaaS-based P2P deals require companies to only work with companies through the network (Ariba CD customers have options to take suppliers off the network, something providers such as Vinimaya, Hubwoo, WALLMEDIEN, OB10, Transcepta and others can theoretically enable – and have, in certain cases).