Ariba Supplier Network Alternatives: OB10 (Analysis and Summary — Part 3)

For the first and second installments of this series, which provide a general overview examining OB10, please click here and here.

OB10 has material experience integrating its solution into Ariba Buyer/P2P environments. OB10 told Spend Matters that they share "several common clients" who use Ariba Buyer or Ariba P2P in concert with the OB10 e-Invoicing network. Spend Matters' discussion with OB10 users (on both the buyer and supplier side) confirmed that there is no technical barrier preventing the exchange of data between Ariba Buyer or Ariba P2P. OB10 suggests that their invoicing network "exchanges data with Ariba P2P or Ariba Buyer via flat files that are formatted and specified using native export functionality support by relevant Ariba systems."

Further, "OB10 is 100% focused on the exchange of data between trading partners" as a hosted service, rather than as a software application which processes P2P data. To this end, "OB10 can deliver purchase orders generated by Ariba to suppliers or can upload the purchase orders to enable PO Flip and PO validation." In addition, OB10 can also deliver files of purchase order acknowledgements to Ariba and support SAP and Oracle environments along with other eProcurement/SRM/P2P systems in a similar manner, allowing PO Flip and PO validation. Further, "OB10 can receive invoice status information and remittance advices from the client's P2P environment."

It is important to note, however, that just because a buying organization may use OB10 for invoicing with Ariba, they will not necessarily avoid Ariba network fees. We learned in our discussions with an OB10 buyer customer that unless a supplier receives a PO via another means than the Ariba Supplier Network, Ariba will still charge them even if the invoice is transmitted via OB10. Hence, it is possible that a supplier may be charged twice, by both Ariba and OB10, if the PO transmittal is sent via the Ariba Supplier Network and the invoice is sent via OB10. For this reason, Spend Matters recommends that Ariba customers standardizing on OB10 for all or a subset of their suppliers to enable a lower-cost and potentially more robust and expansive invoicing solution -- given the ease of supplier on-boarding relative to Ariba -- should ensure that POs, at least for those suppliers surpassing Ariba's charging thresholds, are dispatched and managed via the OB10 hosted service.

Spend Matters past discussions and recent reference checks with both buying and supplying organizations leveraging the OB10 network suggest a satisfied user base. Suppliers particularly like the "quick set-up process" and "fair" pricing structure. However, one supplier suggested that Ariba delivers more capabilities to suppliers, although they also mentioned "OB10 is moving in this direction as well." For example, if an invoice is rejected with Ariba, a supplier can simply resubmit; with OB10, they need to recreate the invoice again. A supplier we spoke with also found OB10 less rigid than Ariba from a "fall-out" perspective, owing to the way Ariba structures its on-boarding and connectivity approaches . However, in regards to "getting rid of the paper process," and the chance of "lost invoices," the same supplier suggested that Ariba and OB10 provided a similar basic enabling capability. However, from a purchasing and A/P angle, one organization we spoke with suggested in their deployment that, "OB10 does not have an effective dispatch solution if you need POs to be dispatched more frequently than once a day."

Buying organizations that use both Ariba and OB10 are cautious about not wanting their names shared publically (most likely for fear of reprisal from Ariba). But we know of a number of companies using OB10 and Ariba in the same environment, and we also learned it is possible to avoid Ariba Supplier Network fees by leveraging OB10, provided buying organizations adhere to the above-mentioned constraints in not transmitting POs via the Ariba network (it is possible to create them within an Ariba application and use other means for transport/connectivity). In addition, one buying organization we spoke to found that their overall enablement rate was much higher with OB10 than Ariba, owing to simpler on-boarding process with "less marketing" and greater supplier support. In contrast, "on the ASN, there is a lengthy back and forth -- e.g., marketing campaign to suppliers, vendors signing terms and conditions, etc."

In summary, based on Spend Matters analysis of OB10's capabilities and recent reference checks, we believe that current Ariba customers looking for ASN alternatives for a sub-set or all of their suppliers based on concerns over rising prices -- or simply wanting to bring more suppliers onboard at a faster clip -- should consider OB10 as a potential complement to their existing Ariba investments. It's not a like-for-like replacement, but it is a substitute (and in some cases, one buyers and suppliers prefer to Ariba's network capabilities). Most important, if implemented properly alongside Ariba, OB10 can provide significant cost savings for higher-dollar/higher volume transaction suppliers on the network. In certain cases, a supplier submitting invoices via the OB10 network (and not receiving POs via the ASN) may find themselves saving 95% or more the cost of processing a similar PO / invoice via Ariba.

Jason Busch

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