SAP’s Ariba Live online: ‘The Network Effect for Buyers and Suppliers’

virtual supplier room

Like my Spend Matters colleagues, I congratulate SAP Ariba on its decision to move the canceled Ariba Live event in Las Vegas to online. Its folks deserve a round of applause for their ability to pull it off in such a short time and for offering it on-demand.

The Spend Matters analyst team has given ourselves the task of commenting on the videoconferences that posted Wednesday. In my case I’ll comment on the videoconference "The Network Effect for Buyers and Suppliers" that was given by Sean Thompson, executive vice president and general manager, Network & Ecosystem, SAP Procurement Solutions.

As many will agree, one of Ariba’s greatest differentiators has been its Supplier Network. Since our last Ariba Live coverage in 2019, its volume was $3 trillion, up from the approximately $1.6 trillion the last time SAP Ariba reported this number at Live in 2018.

Volume growth appears to be coming from three key areas — free supplier enablement options (for lower volume suppliers), general network/transaction growth for existing and new customers, and direct materials/EDI growth.

However, from a network-value effect perspective, it is true that many of the benefits that we normally see in supplier portals and supplier networks are more oriented to the communication and exchange of documents between buyers and suppliers (rather than deeper and more complex collaboration) — with benefits generally being of greater value for the buyers than for suppliers.

In Sean's videoconference he mentioned that they have been working closely with its Supplier Advisory Board to understand what the most important supplier needs and wants are from an ecosystem perspective, and not surprisingly what suppliers want is more sales to drive more revenue and an easier way to use the Ariba Supplier Network (changing the way buyers & suppliers interact, better ways to manage the information, and more network-centric applications). It’s interesting that they didn't mention a free network, at least for certain services and transactions; but that's another story we've repeatedly addressed in Spend Matters’ coverage.

Because of the coronavirus outbreak, Thompson did say that the Ariba Discovery Network will be open to the public through June to help businesses find alternate suppliers and mitigate supply risk. Although Ariba will also benefit from the increased adoption of Ariba Discovery (which represents only a tiny fraction of the “steady state” business transacted on the network), it’s a nice move to help companies during these difficult times — especially for suppliers.

In order to improve buyer adoption and supplier satisfaction with the network, SAP Ariba is introducing a new Trading Partner Directory that will help buyers by infusing supplier data directly into the buyers’ business processes (e.g., clicking a link within an S/4HANA sourcing process to access the directory that will have a public and a private view). With the applications (S/4HANA) connected to the new Supplier Directory profiles, SAP Ariba is looking to improve supplier's awareness at moments that matter to the buyers.

This directory will be enriched with additional information that will be provided by SAP Ariba business partners ecosystem (third-party solutions); enrichment could also happen with third parties that are not within the partner ecosystem or is information storage within the internal systems of the company. This is shown below.

(Click image to enlarge)

The enriched trading directory supplier profiles will have your typical profile information, but also:

  • basic community intelligence such as supplier network rating, risk exposure rating, number of other buyers being transacted with, etc.
  • drill-downs into the supplier's risk exposure (regulatory and legal, environmental and social, financial, operational) score
  • supplier CSR performance (environmental, labor and human rights, ethics, and sustainability procurement) from a partner such as EcoVadis
  • additional insights that will be added as other third-party partners get added

In other new releases, and to comply with suppliers’ demand for an improved UX and better interaction with buyers (via portal and mobile), SAP Ariba is also launching a new Supplier Portal. Right now it has limited availability, but by Q3 this should be fully available. The main supplier view is shown below, and the mobile version is basically a scrollable set of these tiles.

We’re trying to find out more information about the portal, both commercially and technically (e.g., is this just a new supplier view into the network or will it be able to directly access data directly extracted via APIs from SAP Ariba, SAP Fieldglass and other SAP applications?).

In conclusion, we see that SAP Ariba is focusing on simplifying and guiding the purchasing process more intelligently, adding relevant information from suppliers at the time of purchase — information directly related to the purchase objective and business goals. On the other hand, we will still have to know more about this new supplier portal and see if the value that is expected to be offered is well-received by suppliers. We understand that SAP Ariba has incorporated a type of survey or procedure for buyers and suppliers to give feedback on their experience with it and interaction with their stakeholders — courtesy of new capabilities acquired from SAP’s $8B acquisition of Qualtrics.

Nothing new was given about Supplier Network statistics or if its business model will continue to be the same. It will be interesting to see how the network will be used for not just to bring intelligence to the "Intelligent Spend Management" objective, but also as a technical platform of sorts that can be used by Ariba to develop “network-centric” applications. It is doing that with some of its newer applications, such as SAP Ariba Supply Chain Collaboration, but also hopefully how customers themselves will be able to add capabilities via microservices, partner apps/services, and even supplier-developed apps/services. We’re hoping SAP Ariba will continue to make its network more open, flexible and valuable. Today’s presentation showed some movement in that direction, so we’re cautiously optimistic but more remains to be seen and proven.

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