Using Social Media to Put SAP/Ariba Down: Shameless, Smart or Both?

I recently had the chance to catch up with Pete Loughlin, P2P expert, e-invoicing geek and no lover of value-based network fees, at Tradeshift’s analyst day in New York. We even did a video together, and I’m looking forward to getting the footage from him soon (and sharing it here).

Pete has been covering the event on his site as well, but what caught my eye earlier this week on Purchasing Insight was not his usually deft observations and pen, but rather a comment to a post from Tradeshift’s Christian Lanng in regards to Ariba/SAP that was almost entirely tangential to the post at hand (Pete talking about the death of the US Postal service and paper in general).

Here’s the incendiary comment for what it’s worth. Christian notes that,

“At last year’s Shared Service Link in Brussels there was an Ariba supplier who shared how his net business-case of sending paper invoices was greater than electronic due to the high supplier fees charged by OB10 and Ariba, in fact he gave one example where he paid 9000 USD for sending one invoice to a customer using Ariba’s network, to which he argued it would have been cheaper to send a guy on an airplane to the customer and type it into his ERP system, on business class… So I really think the real failure here is we accept that there are technology vendors out there, arguing with a straight face that it cost more to send an electronic invoice than to use the post office (which have all that crumbling brick and mortar infrastructure you talk about), but I agree they seem to have a very hard time facing the new, both the companies using the post office and Ariba.”

My question for the audience is whether Christian’s  competitive ravel rousing using social media and other methods is shameless, smart or both. My opinion is that it's effective while also crossing the line (which line, I'm not sure).

Regardless of where you sit, I suspect we’ll see greater and greater use of social media in this type of competitive capacity in the future. However, readers should always question the motives of the source, and the fact that certain claims have not been fact-checked, especially in the case of comments.

So bring it on. But readers should beware of motivations and the accuracy of claims when it comes to blog/article, comments, Twitter and other sources.

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Voices (9)

  1. Patrick Chabannes:

    On a side note, I disagree on comparing paper & e-invoicing pricing if we do not compare a TCO (AP, mistakes….)
    On an other side, I agree that pricing models like SAP/Ariba must disqualify them from any tender.
    And finally I think that SAP $4.5B is creating like a speculative market with anyone trying to create a network model based on fee OR a network without fees today locking suppliers for tomorrow fees.
    We have to look deeply business model of all the Software companies

  2. Pete Loughlin:

    Christian, generally, and I’ve looked into this in detail, the Ariba model works and delivers value compared to a paper process. In my view, the problem with a model based on value is the anomalies it produces like the ones you quote as an example. But look out for some more detail on this in Purchasing Insight soon.

  3. Brad:

    I don’t think I am alone in enjoying the benefits of the discussions taking place on social media. They propel the conversation forward and introduce us to new technologies. Also, theyvdemonstrate competition is alive and well. I personally give equal airtime to the various technologies. Companies like Tradshift and Taulia will push the larger players & industry forward with the ultimate benefit of innovation. For the record I work for a Fortune 500.

  4. einvoicing luddite:

    Whats the big deal about invoice e-transmission? It takes 5 minutes for an accounts clerk to enter an emailed invoice into an accounts system. Surely the saving is in the What Happens Next?

    1. W. Hugh Chatfield:

      yep – 5 minutes per invoice seems like a trivial amount. However, lets say you are a govt trying to process 9 Million Invoices/per year, and you can find “keyboarding talent @ $10/hr. Hmmm – 45M minutes (750,000 hours) @ $10/hr = $7.5M. Now – factor in typing errors and quality control, and error correcting cycles – and for some it can be a really big deal.

      1. einvoicingluddite:

        But e-invoice solutions aren’t free.
        For a 9 million invoice organisation, 7.5m is loose change.
        Surely the real saving is:
        1 the purchasing discipline necessary to accept electronic invoices pays off in other ways
        2 effectively handling received invoices

        Cutting out AP clerks – who basically grow on trees – is a triviality

  5. Christian Lanng:

    I agree completely on attribution, but first step is to engage publicly in the discussion, how often do you see Ariba or OB10 do that. Maybe if they had a stronger case…

  6. Jason Busch:


    Amen to the “conversation” line and blogs … could not agree more, although sometimes I feel like blogs in this sector are far too one way. I wish we had more participants not just contributing to conversations, but shaping them! I look forward to your continued passion, missives and citations, but the more footnotes with attribution you can provide, the more effective they’ll be.

  7. Christian Lanng:

    Hi Jason,

    I thought I would reply (through social media), since my comment was the topic of your post. First I don’t think it’s tangential to mention that Ariba is many times more expensive than the post office in a post that argues companies are stupid for still using the post office when services like Ariba is cheaper, the exact quote from Pete’s post:

    “…even Ariba whose charging model is based on a percentage of the value of an invoice – they are all cheaper than sending invoices on paper.”

    Now you are right to warn your readers about the dangers of social media, but we have a very clear policy on Tradeshift to always post under our own n ame, so anyone can see who we are and what we stand for. If somebody want to verify my actual claim that there is a net negative businesscase for most suppliers in using Ariba vs paper, this interview with PerkinElmer, highligts that:

    “Some service providers have acceptable fee structures but there are others that for example charge a percentage of the amount of the invoice, so the exchange of a large invoice could cost us 1.500 Euro or more, even though it is exactly the same process whether you exchange a 100 Euro or a 1 million Euro invoice. This simply does not make sense economically. In such case we will contact the customer and revert back to a 100% manual process for a large invoice. This obviously defeats the whole purpose of automation for both customer and supplier but it allows us to save a significant amount of money.”

    I thought blogs were for conversations, a shame that our competitors still don’t want to engage in those conversations.

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