Ariba Live Dispatch 2: Reading Into the Numbers

Ariba -- and other vendors -- like to throw around numbers with eight, nine, ten or more digits when it comes to the amount of savings and spend they're managing for customers. For example, Ariba claimed during Virtual LIVE that in a typical 24 hour period, 5 million individuals will use an Ariba solution to buy $450 million in goods and services spread out across 100,000 "purchase and financial transactions", managing some 4 million contracts and saving $65 million. But the only numbers that really count are those that impact shareholders. On the mainstage at Ariba Live Chicago a few minutes ago, Ariba's President, Kevin Costello, highlighted how in 2008, profits were down 84.7% in the Fortune 500. This follows a 13% drop the night before. But the top 20 most profitable companies in the Fortune 500 actually increased profits by 17.3% in 2008. And "17 of these 20" organizations are Ariba customers, Kevin claimed.

Now, granted, I'm sure some of the worst performing Fortune 500 companies are Ariba customers as well (Ariba claims over half of the Fortune 500 use their solutions). But still, this number certainly provides some indication of the types of hard dollar earnings impact that properly executed procurement and operations strategies can have on the bottom line. To me, the best news in these numbers is that since many Ariba customers tend to be early adopters, that others in the market -- who will soon be working more closely with Ariba or Ariba's competitors as they adopt solutions -- will stand to benefit through similar potential earnings improvement as well. Even though you can't save your way out of a recession, it's certainly possible to take some of the pain away and limit the impact of the downturn on shareholders, customers and employees alike.

Jason Busch

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