SAP Ariba LIVE Dispatch: SAP’s Procurement Transformation, Ariba AI, Direct Procurement, FreeMarkets Alumni and More

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Pierre Mitchell, Xavier Olivera and I arrived in Las Vegas Monday for the start of SAP Ariba LIVE. We’ll be bringing you both live and more detailed coverage from the event in the coming days and weeks, including a deeper look of where SAP Ariba is headed on Spend Matters PRO.

After landing yesterday, I rushed into a number of end-of-day activities. The first stop was an interview with Marcell Vollmer, SAP’s former CPO. Marcell shared his history at SAP and the story of his firm’s own procurement transformation. I can’t do it justice in a paragraph or two today, but will preview a few elements of the interview, which I’ll write-up in the coming days in more detail.

Marcell transitioned into to the procurement function within SAP after leading an internal effort to establish a number of global shared services organizations within the firm. When he first started, Marcell had to transition his thinking from employee spend to non-employee spend. From a technology perspective, he inherited archaic systems (e.g., SRM 5.0), but that would prove irrelevant, as he ended up rapidly gaining the keys to the tech kingdom to use and deploy Ariba, Fieldglass and Concur internally. Within short order, SAP moved its procurement systems and processes out of a purchasing mindset to a strategic one.

After the interview with Marcell, I ducked in a bit late to the “Influencer” Strategy Session, in which various Ariba team members overviewed the different areas of investment across the solution portfolio, including some of the building blocks of future product releases. The product and technology leadership team introduced four themes of product investment: persona-based user experiences, richer content, smarter applications and open and extended value.

I’ll share my quick analysis on these in the coming days, but one element that stood out was how the product team is embedding artificial intelligence (AI) at the core of different Ariba solutions. The concept of persona-based user experiences that go beyond modules alone was also rather curious (and well conceived on the surface), although I have a lot more digging to do on that before commenting.

Another theme of that session (and in other conversations with Ariba team members) is a newfound emphasis on direct materials procurement and supplier collaboration. In the sourcing, total cost modeling, contract management and connectivity (network/EDI) areas, there is a lot of activity and investment that is bubbling up to the surface.

We’re excited to dig into these solutions, starting first with the Collaborative Supply Chain (CSC) connectivity and collaboration capabilities that are available today. Stay tuned for our analysis in this area. This is really SAP’s game to lose given the lack of investment of other providers in the area (except highly targeted solutions like Infor/GT Nexus in the retail area).

And finally, to kick things off, SAP Ariba LIVE has become a reunion of sorts for many of the old FreeMarkets team members. I saw roughly 10 old colleagues last night, some who have either stayed (or come back to Ariba after a hiatus), and others who are either Ariba partners or now sitting in the practitioner’s seat, using or considering Ariba solutions.

It was great to see so many old friends aging far better than me. There must be something about procurement that has kept many of these ENTJ types so Zen over the years. Alas, I need to do more of what they’re doing.

Stay tuned as we provide coverage from SAP Ariba LIVE throughout the week.

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First Voice

  1. Digby Barker:

    I have found SAP’s Ariba procurement ‘platform’ to be a Nightmare. It is not at all intuitive and forces one’s business, when setting up a profile, to conform to its assumptions as the the nature of businesses, their areas of interest etc instead of allowing the choice of ‘Other’ in the sets of categories, requiring one of the limited choices to be seleced even when none are suitable ! The only reason we didn’t walk away immediately its unhelpful, time-wasting character became apparent was that a potential client had chosen – been persuaded ? ! – to mandate it for the purposes of communicating with it regarding an upcoming contract opportunity. My advice to procurement departments who want to maximise competition in order to get best Value for Money is not to use Ariba….

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