The opportunity of the Ariba Network + Social
SAP acquires Ariba
Recently SAP finished its acquisition of Ariba – the leader in cloud SRM solutions.
Following analysts and bloggers it seems clear that one of the biggest asset of this acquisition is the Ariba Network.
The Ariba Network is basically a hub for all of Ariba’s customers to exchange purchasing documents with more than 700,000 suppliers and an annual transaction volume of 300 billion USD!
In 2000 something like this was called a marketplace, but at that time the world wasn’t really ready for it yet. These networks were not adopted accordingly and most of them were shut down because of it.
The ByDesign Portal/Network
Nevertheless when we started with the planning and development of Business ByDesign we knew that this was going to change.
We drafted the plans for a Supplier Portal for ByDesign as well as for a Customer Portal. It was always clear that this wouldn’t work as two separate tools. So we planned for a single hub similar to the Ariba Network that would connect all ByDesign users – whether they were on the buying or the selling side.
We also knew though that this was only going to work if there were lots and lots of ByDesign customers. Addressing mainly small and midsized companies the combined purchasing power would only be reached to make such a network successful if we had ten thousands of customers.
So the ByDesign portal was never realized.
In parallel SAP built the new Supplier InfoNet targeting especially large corporations. This Supplier InfoNet provides companies with a supplier risk management solution tracking their complete supplier network and all related threats and risks. It also provides benchmarking of the performance of your suppliers – very similar to the Ariba Network.
Roadmap for the Ariba Network
With the acquisition of Ariba SAP now got a successful and proven business network with thousands of companies using it every day.
And so it’s not surprising that SAP seems to start immediately to connect all of their existing solutions to the Ariba Network, according to this article.
The knowledge within SAP and its additional solution capabilities such as Vendor Managed Inventories will even enhance the network with new functionality pretty fast, in my opinion.
Now what’s the “social” in this blog post’s title about?
Well, I haven’t seen the Ariba Network solution myself yet, but I didn’t see a “social” part being mentioned for it yet. And that’s the last missing piece for me:
Supplier evaluation will change a lot in the future in my opinion. Yes, there will always be a fact-driven evaluation score calculated to measure the performance of a supplier, but I saw too many different calculation schemas for this to believe in a single, comparable truth between different supplier evaluation scores.
Therefore I believe that future supplier evaluation – or at least one part of it – will be much collaborative, but also much easier at the same time. The simplest evaluation could be a “like” button of a supplier.
Social features are there to support and engage people to collaborate with each other. With an existing business network across company boundaries such as the Ariba Network and a social platform such as SuccessFactors Jam the combination of both can provide huge value in regards to supplier collaboration. Jam provides features for document collaboration and knowledge sharing. Bringing this into the business context of scenarios such as an RFP, RFQ or auctioning process will make them more efficient, better understandable, better auditable and in the end more personal and fun.
I wonder if we will maybe already hear about this at SAPPHIRE NOW in Madrid in November.
My life currently revolves around connecting our SAP system to the Ariba Network, we have a limited go live in the next few weeks.
I jumped for joy when SAP finally completed the takeover I am expecting huge leaps forward in the integration between SAP and Ariba, or indeed Ariba and any other system.
At the moment such integration is clunky to say the least, some of our larger suppliers were not best impressed with Aribas' suggestion they manually enter all their invoices into the Ariba portal, so, last week, Ariba said they would BUILD a means of suppliers uploading invoices via CSV files, as if that was a breakthrough innovation.
Also the way the PI connection between SAP and Ariba works is horribly over-complicated. However I understand it now, and if anyone out there is in the same boat I have been in recently I am more than willing to share what I have learned.
thanks for your comment.
I am not involved in the integration but I expect that this will work a lot better in the future. There's an interesting discussion thread about how integration in general should work between our different SAP solutions (and also non-SAP solutions).
It seems like NetWeaver Cloud Integration will play a major role in this.
Why don't you write a blog post about your experience with the PI connection? I am sure lots of people will be interested in reading it. At least I am 🙂
I don't know much about the Customer > Ariba side of things, but I used to work large supplier who seamlessly integrated channel with Ariba for major national and international clients.
Additionally, the supplier changed from a legacy system to ECC 6 and the connection to Ariba remained steady.
So, respectfully, I would have to disagree with you on the 'clunky integration' part. In my opinion, I think Ariba provides a nice platform to transact documents smoothly, providing the customer/vendor has the capabilities to connect with Ariba. If not, the fall back option would be to manually uploading CSV files.
PS - I agree with Christian, I would definitely would like to read about your experience with PI connections.
good one Christian!
Thank you, Nithya!