SAP Innovations Infusing the Ariba Network

One of the major announcement sets at the recently held joint SAPPHIRE NOW and SAP TechEd event in Madrid, Spain, November 13-16, 2012, was about SAP’s plans to infuse SAP innovations into the world's most powerful business network, Ariba Network. Through the recent combination of SAP and Ariba, close to 1 million companies are now connected to the Ariba Network—more than any other trading network. The introduction of SAP innovations in social, mobile, and cloud and the in-memory technology of the SAP HANA platform should logically drive global business-to-business (B2B) collaboration and achieve even higher levels of efficiency in sales, procurement, invoice, and payment processes as well as insights through the business network.

Quick SAP Bridges to Ariba Network

For one, SAP announced several prepackaged rapid deployment solutions to make it faster and simpler for customers running SAP Business Suite software to rapidly integrate with the Ariba Network and reap the potential benefits that the network provides. These solutions are as follows:

  • Product catalog integration between SAP Business Suite, including logistics materials management and supplier relationship management (SRM), and the Ariba Network, based on SAP NetWeaver Process Orchestration software

  • Purchase order and invoice automation for automated exchange of documents in the procure-to-pay (P2P) and order-to-cash processes

Via the Ariba Network, enterprises can now work in a fully networked environment to more efficiently discover, connect, and collaborate with their customers, suppliers, and other partners. Online social networking tools have transformed our relationships by connecting us to people and information in new ways, and B2B social networks are similarly offering new processes and community-based insights. Using the Ariba Network, companies can do the following:

  • Receive active leads from a global community of qualified buyers rather than simply tracking them

  • Manage orders and status in real time rather than chasing paper

  • Accelerate payments for goods and services and optimize cash by making early payments

  • Gain new community-based intelligence and insights to make more informed decisions

On the buyer side, potential benefits come from finding the right-fit suppliers faster by using Ariba Discovery, the premier service for matching buyers and sellers globally delivered via the Ariba Network. Companies are able to quickly expand their pool of sellers beyond local boundaries, gain qualifying information from network-based transactional history and member-generated performance ratings, and increase competition in their sourcing events worldwide. Ariba Discovery more efficiently manages the new seller identification process on a global basis because of its extensive reach. It can save buyers significant time finding new sellers.

Suppliers can benefit from faster time to cash, higher productivity (process efficiency), and transparency, in addition to getting access to new business opportunities with the world's largest community of Global 2000 buying organizations. Ariba Network users have reported 50 percent faster transaction processing cycles, 60 percent improvements in order accuracy, double-digit increases in revenues with existing and new customers on the network, and 20 percent faster payment.

The Ariba Network also offers new types of collaboration and insights only available in a networked model. For example, using the dynamic discounting tools delivered on the network, buyers can accelerate payments for approved invoices to key suppliers in return for discounts, earning an immediate return on their cash. Sellers can gain increased visibility into future cash flows, certainty in payment timing, and the ability to use cash sooner.

Roadmap (Hint: SAP HANA Analytics)

With the planned infusion of analytics from SAP BusinessObjects and SAP HANA for the Ariba Network, SAP and Ariba intend to enable companies to harness the power of the more than 15 years of transactional, relationship, and member-contributed content on the Ariba Network to make better informed buying, sales, and financial decisions. SAP plans to enable companies to, for instance, access market data, supplier information, transaction history, and contract terms in real time, and analyze this information through a single slick interface from anywhere, at any time, using any device.

The connectivity of the Internet is fueling a new kind of hyper-connected company—connecting with its employees, customers, partners, and suppliers, and leveraging those connections to solve important business problems. But SAP will have to tread lightly in this arena, as SAP HANA may come across as overkill. I’m sure that SAP and Ariba will have some poster child examples with big returns on investment, but I don’t think that most businesses need the level of control or data that SAP HANA offers. Once companies go through optimizing a few large spend items, further consolidation of suppliers will not necessarily result in big cost savings. Smaller companies might rather opt for lighter cloud-based spend analysis solutions such as Rosslyn Analytics or Spend Radar (now part of SciQuest).

It will also be interesting to watch how SAP will do with the SAP Jam and SAP Social OnDemand tools to get social reviews into the network, and get even more big data on supplier ratings that are public and should benefit the network members. Some companies simply might not be interested in vendor rating or feedback—if you have great vendors, you generally try to hide them from your competitors (as your secret weapon).

TEC blog post (June 2012): AribaLIVE 2012: What Was Jolly Good (and What Could Improve) – Part 2

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