ThomasNet and Ariba Partner: A Minor Breakthrough in Network Cooperation (Part 3)

Click here to read Part 1 and Part 2 of this post.

In the final post in this series, we'll share our thoughts on the future of network cooperation and interoperability, focusing first and foremost on the core enabling characteristics and capabilities of supplier network models and technologies that we believe will thrive in the coming decade. The space -- and cyberspace -- that exists between companies is something that truly excites us, and we see it as an increasing focus for organizations across a range of activities from transactional enablement and connectivity to broader supplier, inventory and risk management.

We believe the supplier networks that ultimately thrive will include the following characteristics and capabilities:

  1. Many-to-many -- networks will need to support an environment where a single buyer or supplier can register one time and have their related information shared across the network (when permission is granted) with minimal or no additional involvement, other than highly specific, one-to-one information requests or clarifications. For example, a supplier would be able to upload a range of information (e.g., quality or materials traceability standards, certifications, documentation) and share this information with a range of buying customers or prospective customers. And this same supplier, in a many-to-many context, could also be a buyer on the network, requesting the same information (or related) of its own suppliers, rolling up this information as required. This example could have used transactional fields or data requirement information sharing instead, mind you (e.g., ID numbers, credit card acceptance information, business type, city, company name, aliases, contact person/type, addresses, banking information), for P2P enablement, or even transactional document exchanges of POs, invoices, etc. Aravo Assure is doing some fascinating work in the many-to-many space today on the supplier management side and we expect others to move in this direction too.
  2. Systems and network interoperability -- it's our belief that supplier networks that thrive will be interoperable and will encourage linking and connectivity by publishing APIs, taxonomies, etc. Moreover, interoperability will extend to pricing and revenue models that allow for peer connectivity without penalizing participants for using more than a single intermediary/hub. OB10, among other providers in the connectivity space for e-invoicing, has an embraced an open network model which makes "roaming" -- which is probably the best way to metaphorically describe it -- easier than approaches which have adopted a more closed model.
  3. Platform-centric -- Networks that take a platform-centric approach will more easily enable the consumption of their data and information not only through client systems, but potentially other networks as well -- and even supplier systems where end use configuration or final purchasing is occurs. Platform-enabled models will also separate out functional capability from the user-experience by isolating the UI to the end use device or application (either through the network provider, via another network or through another third party). Truly platform-centric networks (e.g., TradeShift) will also allow for the ability of others to build capabilities (e.g., "apps") on top of their network for use and/or purchase by network participants. Another network platform provider to watch is Rearden (Deem).
  4. Socially integrated and enabled -- supplier networks of the future will increasingly tie in socially aware and socially networked capabilities for members. This might take the form of allowing spontaneous workgroups within a supplier network environment to form an collaborate for a specific mission (e.g., a shared supplier audit) or could involve mining network information from different member participants and third-parties, similar to what SAP has accomplished with Supplier InfoNet, to surface predictive analytics and insights based on the collective intelligence of the network.
  5. Multi-tier enablement -- the network of the future will be multi-tier when it comes to scope and overall enablement. On the most basic level, this will allow participants to be both buyers and suppliers in the same marketplace without having to have different registration profiles. In a multi-tier environment (e.g., high-tech manufacturing) where the sharing of detailed bill of material, warranty, costing and other information across and between entities is essential, supply chain and procurement multi-tier enablement tools like e2open are light years ahead of first generation supplier networks which do not even allow for parties to be both buyers and sellers with the same profile.

So there you have it. What are we missing when it comes to the future of supplier networks? What did we get wrong? What additional areas should we all focus on when it comes to the growth of these models? Chime in or drop a line.

- Jason Busch

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Voices (3)

  1. Ian FOrd:


    I am afraid some of your analysis is incorrect. To us an Open Network is one where a supplier that choses one provider can connect to a customer that uses a different provider at no extra cost, be that cost be document, subscription or a need to produce a different data format.

    From experience this is not the case with OB10, they will connect with any other Network but the supplier must pay (If have one of our customers going through that process right now).

    I believe Tradeshift is open (free) as long as the document is in the approved format and sent via the approved communication protocol (although EDI VAN Costs may be charged I think, but someone may be able to clarify this).

    I tend to agree with Michael Bruning, the model should be based on value-creation or cost reduction and whichever party gains, pays. There is plenty of value for most businesses if they implement the procurement cycle electronically (not just e-invoicing), without needing to impose a toll-charge on suppliers invoices.

    Of course I am not optimistic that it will change, especially in hard economic times, when suppliers tend to be willing to take a hit to maintain turnover.

  2. Christian Lanng (CEO Tradeshift):


    Your analysis is normally spot-on, but OB10 have NOT embraced an open roaming model they are in fact one of the most closed networks pt. they have recently started a marketing effort to prove otherwise, but the reality is that they still refuse to interoperate with most providers out there, for some background see:

    A truly open network supporting the roaming model would be Basware (IMHO the biggest supporter of open), Maventa and of course Tradeshift.


  3. Michael Brüning:

    Jason, I fully share all your above prerequisites to make electronic B2B communication more successful. But, when you asked what is missing for the future of supplier networks then one thing comes to my mind immediately: the business model of the provider.

    Let’s take E-Invoicing as an example. The biggest hurdle for supplier adoption to E-Invoicing is the cost of participation. The advantage for E-Invoicing mostly lies on the buyer side. Why should the supplier pay to create an advantage on the other side? Many suppliers don’t accept that and therefore do not join such programs.

    To generalize this:
    The business model, especially the fee structure, of the future B2B network should be based on the respective benefits. Only value-creating or cost-saving transactions should be charged, and only charged to the party which benefits. Everything else should be for free!

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