To redefine how organizations work together
The digital Business is transforming services and the usage of technologies, which has a huge impact on products itself. The disruption in pandemic times is another trigger for companies to transform and digitize their business.
In this faster moving world, where the whole business is happening in multiple places and everything needs to be connected, it is vital to have transparency throughout your whole intercompany processes. Also the collaboration with external partners and the integration to their business has to be considered, in order to optimize and automate the relevant procurement and logistics processes End2end.
In the succeeding blog we explain and highlight the benefits of the connected business world and advocate the right Solution. With this Solution – also known as the Ariba Network, companies communicate, collaborate fully in a digitized way and redefine how work gets done. We summarize the purposes and benefits of the Ariba Network and report how it fits into the big picture of the SAP strategy, for companies to become an Intelligent Enterprise.
Ariba Network in a nutshell
Ariba Network is a business to business (B2B) marketplace, where businesses (buyers & suppliers) connect, communicate and collaborate to redefine how work gets done. The solution provides the users with functionalities for supplier collaboration and digital transactions, enabling spend visibility, supplier relationship management, materials sourcing, and risk management. When you plug into Ariba Network, you get instant access to millions of potential customers, suppliers and solutions - a global network that’s growing and expanding every day. You get an easy way to work together with the ecosystem of trading partners and innovators that keep your business moving forward - a single, centralized place to identify opportunities, find innovative solutions, securely share information and close deals. Especially in times of crisis and worldwide uncertainties, the Ariba network provides its users with a confident and standardized marketplace to define how work gets done.
As one customer has put it: “The biggest benefits have been standardizing our transactions on one platform and the resulting new business opportunities.”
To put the Ariba Network into perspective, if we look at the latest approach of SAP to help companies to become an Intelligent Enterprise, the concept and idea of a “Business network” will play a central role in the future, especially, as business is taking place more and more in a digitized way and all the stakeholders involved want agility and transparency to better react on quick changes. At the latest the Pandemic showed how important and essential an interconnected and responsive supply chain is. With that said, SAP will provide its customers going forward a simplified and holistic Business network, not just any business network, but the largest in the world. To be more precise, it includes the largest procurement network ($3.3T+ in commerce with Ariba), logistics network (38M exchanged documents) and Asset Intelligence network (20M equipment updates).
Before we analyze and highlight the benefits of a connected world, the prerequisite and scope need to be illustrated. It should be clear, that the companies deploying the Ariba Network experience a range of benefits across a number of different areas which are largely dependent on the following aspects: the size and complexity of their organization, the size and number of their customers, the volume and complexity of their transactions, the number of functionalities used and the rate of technology adoption. In Reality, most of the customers having legacy on-premises deployments and using processes based on Microsoft Excel spreadsheets. Needless to mention, those two attributes stand for a high level of manual processes, as well as significant maintenance costs or service fees.
In the following we elaborate more on what it means to “be in a connected world”. Furthermore, we will outline the primary, what customers typically experience when deploying the Ariba Network - and secondary findings, which are not experienced by all customers and typically make up fewer than 20 percent´s of the overall annual benefits.
Benefits of a connected World
In a digital economy, moving from paper to electronic processing can expedite delivery of compliant purchase orders (POs), help eliminate invoice errors, speed invoice approvals, and improve on-time payment performance. Top performers are also extending e-commerce capabilities to enforce compliance for all spending, increase cash earnings, and optimize their working capital.
That’s why more organizations are turning to commerce automation over Ariba Network to connect with suppliers and manage POs, invoices, and payments. As the world’s largest business network, Ariba Network connects buyers with all their suppliers regardless of size, location, or technical sophistication. It has made cloud-based commerce as easy for businesses as it is for consumers.
With the Ariba Network, buyers and suppliers can transact at Internet speed to process invoices for all spending: indirect, direct, and services, as well as PO and non-PO invoices. Buyers can consolidate the processing of paper and electronic invoices and achieve “perfect payables” through their suppliers’ use of the PO-Flip feature. With the PDF invoice feature, suppliers can submit digital PDF invoices to the network, which are then converted to legal e-invoices to submit to buyers. Ariba Network supports more complex invoice processing scenarios. For example, suppliers can generate invoices from service entry sheets to simplify the processing of invoices for complex services. Buyers can trigger self-billing using an evaluated receipt settlement (ERS) from a goods receipt. Buyers can time payments to optimize their cash and working capital, while suppliers gain real-time views into payment status and early-payment options to improve their cash flow. This leads to a better management of cash and working capital for buyers and supplier.
Ariba Network also lets you manage other core transaction documents that are outside the scope of niche business networks. These include quotes, catalogs, contracts, advance shipping notices, freight, and payment remittance, for example. Linking all key transaction documents to invoices helps you manage spending better and enforce procurement policies. The experience of customers has shown that you can cut supply costs by as much as 10% and lower processing costs by 25% to 60%.
A self-service portal for suppliers extends e-commerce capabilities to all their customers connected through Ariba Network – a vast improvement over the one-to-one connections of EDI and other legacy networks and an easy way to onboard your low-volume suppliers so they can collaborate with you.
Suppliers can deliver e-catalogs to their customers over Ariba Network; generate invoices from purchase orders, contracts, and service entry sheets; and view invoice and payment status. They can use the network to reconcile payments, forecast cash flow, and generate new business. SAP Ariba solutions also support suppliers that want to manage transactions from their mobile applications. Self-service over Ariba Network allows suppliers to update their contact and banking information and access current invoice status and payment scheduling. That means they don’t need to call you. And with our standard account for suppliers, your low-volume, nonstrategic suppliers can connect and transact electronically with you at no cost to them. You speed contract cycles by up to 50% and reduce administrative and legal costs by up to 30%.
Buyers and suppliers can easily and fast integrate Ariba Network with their core back-office systems to automate transaction processing. For buyers, this includes native integration of Ariba Network with the SAP Ariba Buying and Invoicing solution, the SAP ERP application, and SAP S/4HANA, Ariba Network also integrates readily with software from Oracle Corporation, PeopleSoft, and JD Edwards, and with other popular ERP software.
The vision of future SAP Business Networks
With commerce automation over Ariba Network, you can turn transaction processing with suppliers into a competitive advantage. You can expedite the processing of valid invoices, enable consistent on-time delivery and payment performance, strengthen supplier relationships, and lay the foundation to a compliant and fully automated supplier collaboration to manage your cash better and optimize the working capital.
To conclude, the vision of the future of automation is to connect the Ariba Network to the overall SAP Business Network, as an umbrella for all kind of business networks, the network of networks. Delivering collective intelligence through an open and interoperable business network enables sustainable and resilient supply chains, transforms business models and provides the agility to safeguard against global disruptions.
Members of such an overall business Network could then, via the SAP Logistics Business Network, access actual shipment location, status changes and estimated time of arrival during transportation by road and ocean carriers. The connectivity to ocean carriers and ports, as well as satellite systems, allows visibility across all global ocean freight in real-time. And with SAP Fieldglass you find, engage, and manage all types of flexible resources - contingent workers like independent contractors, freelancers, and temporary staff as well as service providers like consulting firms, IT outsourcers, or marketing agencies.
The future of automation exists already with the SAP Business Networks to transform your digital business. We invite you to participate.
I'd like to thank Philip Brossette for his support as coauthor, for further questions please don't hesitate to contact me or philipbrossette.
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