Ariba Supplier Network Alternatives: SciQuest (Part 1)

This post is part of a fall 2010 series looking at Ariba Supplier Network alternatives, beginning with each provider's basic background in the area. We will then examine their solution approach and Ariba/third party systems integration, and finally, provide our own summary and analysis of the provider's overall capabilities.

SciQuest is a focused P2P provider which, thanks to its recent IPO, is getting much more attention these days. As part of their procurement offering, which is targeted at the life sciences, research, higher education and public sectors, they offer a Supplier Network service that drives content and information exchange between buyers and suppliers. This offering is a combination of organic, homegrown capability and partner (e.g., OB10) capabilities. SciQuest suggested to Spend Matters that their solutions "provide customers with a set of products and services that enables them to optimize existing procurement processes by automating the entire source-to-settle process" and that the SciQuest Supplier Network, specifically, "acts as a communications hub that connects our customers to their suppliers."

Even though SciQuest does not break out revenue by product, they shared with us that they "serve more than 165 customers operating in 16 countries and offer our solution in five languages and 22 currencies." On the connectivity front, SciQuest customers are working with "over 30,000" suppliers using their network, but they did not break out whether these were indirect (partner) or direct connections. From a connectivity and interoperability perspective, SciQuest leverages the cXML integration standard, which enables any supplier that supports it (i.e., all suppliers on the Ariba network) to connect and integrate quickly with SciQuest as well. They also support EDI, fax, e-mail and online portal delivery of information/documents, including POs, invoices, etc.

We asked SciQuest what non-software services they support and they suggested four distinct offerings. These include, for catalog loading, a capability where SciQuest "loads the content and price files for the supplier" via their support group or enables suppliers a self-service capability to load content on their own. In the invoicing area, SciQuest offers a "a portal through which the supplier can log in and 'flip' a Purchase Order to an invoice, or the supplier can load a flat file with multiple invoices in it. For PO delivery specifically, SciQuest enables fax, e-mail and portal delivery capabilities and suppliers can check the status or retrieve a PO through a designated portal. For e-invoicing (and scan/capture), SciQuest has a "partner strategy that extends into "payable solutions."

For ERP integration, SciQuest supports integration into all popular back-end systems. Our own research suggests that SciQuest has a strong relationship with Oracle/Peoplesoft customers, many of whom leverage the eProcurement capabilities of their ERP provider and SciQuest for content management, delivery and supplier enablement, among other areas. It is unlikely that SciQuest would be able to replace many of these well-entrenched providers when it comes to core eProcurement/requisitioning systems so the "surround and partner" strategy makes sense.

In terms of network volume, SciQuest has realized healthy annual growth, although the overall volume is still an order of magnitude less than Ariba in absolute transaction dollars and documents. SciQuest shared with Spend Matters that "the dollar volume of transactions conducted through the SciQuest Supplier Network has grown from less than $2B in 2007 to over $6B in 2009."

From a pricing model perspective, SciQuest does not charge any supplier fees for transaction volume or supplier connectivity (aside from what their partners, like OB10, may charge). Only a handful of vendors that we are aware of, including Oracle and Pagero, do not charge for buyer/supplier connectivity. SciQuest's buy-side customers who use their general solutions "pay an annual subscription fee under multi-year contracts that are generally three to five years in length."

Stay tuned for further analysis of SciQuest's Supplier Network offering and how SciQuest can enable Ariba and other P2P solutions.

Jason Busch

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