Ariba Supplier Network Alternatives: Hubwoo (Part 1)

This post is part of a fall 2010 series looking at Ariba Supplier Network alternatives. We will cover each Ariba supplier network alternative in a series of three-part posts starting with each provider's basic background in the area. Following this initial installment, we will then examine their solution approach and Ariba/third party systems integration. And finally, we will provide our own summary and analysis of the provider's overall capabilities.

Hubwoo delivers an alternative capability to the Ariba Supplier Network through what it describes as its Collaboration Hub offering (the name should come as no surprise). This part of Hubwoo's business continues to realize significant growth and has doubled in size for each of the past two years, owing to greater penetration of existing buyer organizations, new buying organization customers and a focus on supplier engagement.

The offering represents what Hubwoo describes as "a driving force behind future growth" that will enable the delivery of a new set of services to push "value to both buyer and supplier business." Today, Hubwoo's Collaboration Hub revenues represent approximately one-third of the provider's total revenue numbers. This places Hubwoo in the same class as many network operators and targeted invoice automation competitors.

150 buy-side customers currently leverage Hubwoo and its Collaboration Hub offering and Hubwoo told Spend Matters that "390 system-to-system integrated suppliers have conducted a transaction in the past 90 days" of the over 110,000 suppliers that are directly connected into the network. In addition to direct connectivity through a real-time system-to-system approach, suppliers can also connect to the Collaboration Hub through a portal model. Suppliers can also integrate via other networks and Hubwoo has tested third-party networks for "both transactional syndication and sourcing guide sharing." Moreover, "Hubwoo is exploring partnerships in this realm on interoperability and revenue sharing to scale the business value."

In 2010, Hubwoo users will send approximately 6.9 million transactional documents (based on the current run rate) through the Collaboration Hub, up from 6.2 million in 2009. For transactional standards, Hubwoo supports the Unified Integration Language (UIL) as the common document transaction standard for the Collaboration Hub. Hubwoo told Spend Matters that UIL is "a subset of the xCBL Industry Standard"; UIL defines unified code lists and standardized fixed values (e.g. global Units of Measure). Buyers and suppliers integrate with the Hubwoo Collaboration Hub through a web-service connectivity environment and Hubwoo provides connectors into a rane of systems (e.g., SAP IDOC, XML, CSV). The service includes SAP certified connectors for XI/PI and configurable Webmethods adapters for other systems.

XML business documents that Hubwoo supports include both transactional documents (e.g., purchase order, purchase order change, purchase order acknowledgement, advanced ship notice, goods receipt notice, service entry, service entry response, invoice, invoice response, credit advice, remittance advice, RFx, award-PO, award-contract, award response, and contract) and master data information (e.g., organizational structures, suppliers, users & HR master data, financial master data, contract master data, material master data, service master data, and BOM master data).

From a non-software perspective, Hubwoo provides a range of capabilities and enablement services on top of its Collaboration Hub. These include supplier onboarding program management, services and support, content enablement services and support, OCI punchout and integration services and support, 24/7 phone and e-mail support for buyers and suppliers, "fully managed services for network participants including enhanced content services, supplier training, proxy bidding for RFX's and transaction monitoring and a network of partners for functions like OCR scanning which interoperate with the Hub based on published specifications."

From a pricing perspective, Hubwoo has both buyer-paid and supplier-paid pricing models to enable suppliers to participate in the network. Hubwoo told Spend Matters that this dual approach "allows for flexibility in how our customers want to engage with Hubwoo and also supports faster mass-scale supplier enablement in the buyer-paid model." Under the supplier-paid model, suppliers pay a flat fee based on tiers of spend and a "typical buyer account has supplier fees of less than 0.1% overall." Caps on supplier spend top out at $2 million, $8 million less than similar caps from Ariba. Hubwoo's own TCO model "for Ariba replacements has shown significant savings, with even greater savings available in the buyer-paid model." We call this out because in our own research, Ariba suggested that Hubwoo's fees were significantly higher than their own.

Stay tuned for further analysis of Hubwoo's Collaboration Hub offering.

Jason Busch

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