Making Sense of Ariba’s Network Price Increase — The Argument in Favor of the Move (Part 1)

We're just starting to publish the responses and our analysis from a number of Ariba Supplier Network alternative providers (OB10, Basware, Perfect and Hubwoo are the first ones up, starting this week), including how these alternative vendors/connectivity providers can complement existing Ariba deployments with a lower-cost fee structure for buyers and suppliers. But making the switch from Ariba's network, even just for high-dollar value suppliers, should never be a simple decision. Even though Ariba is raising prices -- significantly raising supplier-paid network in both percentage and dollar terms for many suppliers -- the network does provide value outside of simply streamlining the exchange of information.

If you're curious to learn more about the network increase (including the magnitude and specifics of the increase) you can read our free downloadable paper on the subject: Ariba Network Price Hike: Plan for Increased Supplier Fees in September 2010). But this is not just a story of price increase. If you're curious about the benefit the network can bring to suppliers, read on. In a discussion with Spend Matters, Ariba strongly defended the September price increases based on the value suppliers receive from the network.

From a supplier solution perspective, Ariba believes that the following areas are creating new opportunities for suppliers:

  • New business opportunities through Ariba Discovery and related sales and marketing opportunities

  • Faster payment through increased visibility and instant cash through Ariba Receivables Financing

  • Lower costs through reduced paper and increased B2B automation

  • Community and knowledge sharing in Ariba Exchange

  • Expanded document types, payment and VAT support

In our discussion with Ariba, they shared their own research data based on a survey of over 500 suppliers (50% Ariba suppliers, 50% non-Ariba suppliers) that found "suppliers value top line benefits over [network]" costs and "55% recognize the value of process visibility" that the network provides. What other benefits does the Ariba Network offer? Stay tuned for Part 2 of our analysis.

Jason Busch

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