How we connect has changed so quickly in our personal lives over the last 30 years – we are a connected, global community. But how we communicate in the Supply Chain did not evolve at that same pace.
SAP acquired Ariba in 2012 with a simple idea to help solve that problem – to connect ERPs to a business network so they could automate and extend their business processes to their trading partner community. Since then, SAP has continued to invest in their business network which has grown to be the largest and most trusted business network in the world today with $3T in annual spend and 4m suppliers across 180+ countries. SAP also has expanded the scope to include more sophisticated supply chain documents and some of the largest high-tech companies in the world to run their entire supply chain digitally on this network. (for companies of any size)
2020 has been a strange year that has many companies rethinking business priorities – let us recommend a project to you. Because if you do not do it now, you will be doing it soon. Every company will have their ERP connected to a business network by the end of this decade. So why not now!?
Here are the top 5 reasons why connecting your ERP to a business network is an ideal project for companies of all sizes.
1. Supports the CEO Digital Agenda
Per McKinsey(1), “a digital future lies ahead. By acting early and being bold and decisive, CEOs can accelerate their digital transformation and reach the next normal sooner.” In its native state, ERPs are great for internal transformation but they don’t address the #1 stakeholder in 100% of procurement and supply chain actions – the supplier. Extending real-time supplier and transactional intelligence into your ERP enables significant operational efficiencies and working capital optimization. This is foundational and core business process.
2. Data & Insights enable Competitive Advantage
This is not about Purchase Orders and Invoices – it is about the power of data. The big issue with a manual process is that you will lose data as you go – both in terms of quantity & quality. This impacts how effectively you can run your entire business – you inadvertently end up with fewer insights, fewer early warnings, less intelligence, less automation and more bad surprises.
3. Financial Ecosystem is connected
There is an ecosystem of banks embedded into the business network to help you and your suppliers across all countries. You can make global payments, leverage virtual cards, execute working capital strategies such as supply chain financing, receivables financing, and discount management is also available. And many of these banks are willing to pay you a rebate to do business with them.
4. Suppliers get Intelligence too!
Suppliers struggle to have visibility and access to all of the data that they need. No more phone calls asking, did you get the goods? Did you get my invoices? When am I going to get paid? All of that stops because they will now have access and visibility through the S/4 Supplier Portal.
5. Low-risk, fast ROI project
Looking for a low-risk project to keep the IT team busy. One that can be delivered 100% remote. One that won`t take 6 months to complete. Connecting your ERP to a business network can take as little as 3 weeks. You can start simple with simple order automation and expand to invoices, payments, supply chain over time. It also minimizes any supply chain disruption if you ever do plan on changing your ERP landscape. A business network can connect to any ERP or relevant software.
…. And what about the VALUE! Well, this is a project will pay for itself. For every $500m in spend thru ERP, will equate to around $1m in savings annually for your business. And don’t forget about the rebates from the banks which will be cash back to your company that could pay your subscription to a business network.
(1) https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-digital-led-recovery-from-covid-19-five-questions-for-ceos – April 20, 2020