[Publisher’s Note: Today’s article is an analysis of two similar but separate presentations delivered by Ariba executives at their user conferences this spring. The first was at AribaLIVE in Las Vegas (April 7-9), the second was at AribaLIVE Munich (June 8-10).]
We live in a global world. Ariba is a global platform. We can do better locally. So began the presentation that new Ariba President, Alex Atzberger, delivered to analysts at this year’s AribaLIVE. Operating a business network is a different kind of business than selling traditional software and this is especially true for Ariba, which currently connects 1.7 million businesses worldwide who conduct $650 billion in commerce through its Ariba Network.
As a subsidiary of SAP, and in its own right as well, Ariba’s network has expansive global reach, but Atzberger notes that they need to consider how the company talks about being global in the future — this includes more local relevance in the various geographies where Ariba is available. Atzberger also emphasized a focus on “running simple,” which involves making the entire user experience run smoothly for buyers, suppliers, and the various executives that use the platform.
More than practically anything else, however, Atzberger emphasized a focus on needing to constantly innovate. Ariba has lots of ideas and projects in the pipeline, Atzberger said, which must come to fruition as a way to remain competitive in the marketplace. Atzberger did not eschew using ideas from SAP or from third-party partners, which is a good indication that the company is serious about looking at all corners for innovative product and services ideas.
A Focus on Innovation
It can be argued that innovation is a critical feature of the Ariba corporate DNA. Chris Haydon, SAP/Ariba’s senior vice president of solution management for cloud procurement and business network, expounded on this trait during the AribaLIVE analyst briefing. According to Haydon, Ariba delivered nearly one new feature a day (331) during the whole of 2014, which is more innovation than the company has ever rolled out before. An interesting point that Haydon made was that many of these 2014 features and those to be rolled out now and in the future will have a “toggle on or off” capability which means that customers can decide if and when to “turn on” many of the new features that come within the regular cloud application updates.
This innovation comes with a purpose, Haydon said, which is to create a single solution that, through a series of associated products, can meet all their customers’ requirements throughout the entirety of their end-to-end, source-to-settle process. Part and parcel of this innovation is working toward a unified experience across the SAP business network group, which Haydon says includes the Ariba experience seamlessly shifting into SAP subsidiaries Fieldglass and Concur as well.
This unified experience means that Ariba will soon have native connectivity from its network to both SAP’s SRM solution and SAP’s S4 HANA platform, completely eliminating the need for middleware or any sort of go-between for the two systems to talk. “It’s activate, not integrate,” Haydon told analysts. That is a key stage in crafting a truly unified experience across platforms, which can also lead to a single solution for all the enterprise’s related needs.
Haydon also notes that they have already transitioned some Ariba services procurement customers to Fieldglass, and they are currently working with Concur to link the Ariba Network with some Concur capabilities. All of this put together, Haydon said, is part of the core SAP value proposition— that is, the end-to-end integration of the business process, irrespective of which cloud the user happens to be on.
The Pillars of Ariba’s Innovation
Haydon told attendees that there are three key pillars Ariba is focused on as part of its innovation roadmap—(1) the user experience, (2) application innovation, and (3) the cloud platform. Each of these three “pillars” has different emphases, but put together they create a pathway for the Ariba Network to become a more integral business solution in the lives of its users. What follows below is a discussion of some (but not all) of the highlights of Ariba’s planned roadmap. Where possible, target release dates are included in parentheses and italics.
The User Experience
The user experience pillar is borne out through updates to the user interface, which Haydon said now involves a seamless transition between mobile and the desktop as well as a community of users that can be leveraged to offer other users help support. The solutions also are designed to offer contextual support as well. As Haydon explained, a casual user logs onto the platform and the Ariba Network recognizes that this is the first time that person has used the solution. The available context-enabled help will thus offer assistance accordingly, and the user will be able to even ask more experienced “power” users for aid (instead of a help desk agent) if they choose to. Haydon described this as “users helping users” (the idea is similar to TurboTax’ community support).
Tony Harris, SAP/Ariba’s global vice president, solutions GTM, procurement line of business, gave a more detailed look at the new platform during the briefing. The new color palette and font gave off a modern look and feel, eliminating the 3D graphics of earlier iterations, and showcasing a tile-based dashboard that has new, faster search capabilities built into it (Target availability – July, 2015). The end goal with the search, Harris said, is to guide the user to the best information possible for their task.
Haydon emphasized, however, that while the new platform is live, Ariba does not plan to force anyone to accept it right away. “We want to be respectful of change management for our customers,” Haydon said, “so we’re going to have a toggle on/toggle off approach.” Clients can, at either the global or per-user level, turn the new version of the dashboard on or off; Haydon said, though, that they believe the new approach is cleaner — and told analysts to expect a similar tile approach in the Fieldglass solution as well.
App Innovation
In the app innovation arena, Haydon said that Ariba wants to be the market leader, which includes maintaining their strength in sourcing, procurement, and invoicing as well as moving into associated areas. Basically, Haydon said Ariba wants to take advantage of what it means to understand their customers and what those customers are doing, which involves understanding how to get good coverage in direct and indirect spend, travel and expense, and complex services.
In their sourcing apps, Harris explained that Ariba plans to take the SAP risk database and leverage it as part of the network’s risk management capabilities. This database is scanned constantly, Harris told analysts, and the capability will allow clients to segment suppliers based on a risk scorecard. Tying into this, Haydon noted that supply risk is heavily industry based, which makes the data critical for users to have access to. A strong risk management framework in the app, incidentally, is also how Haydon said Ariba is planning to partner with companies in other industries to bring their risk info into the Ariba ecosystem (Target availability Q1, 2016).
Also in terms of sourcing innovation, Ariba announced in Munich that there is now integration between the Ariba Sourcing solution and the SAP ECC solution. This will enable direct materials needs that are identified in the SAP system to be sent to Ariba where the procurement team can take the appropriate action (i.e., run a sourcing event, make a spot buy, etc.). Harris said that Ariba has worked on the sourcing platform and now has the ability to run “very large” sourcing events, which ties into their emphasis on attacking the direct materials sourcing function. To highlight the system’s scale, the team noted that in Q1, 2015, their customers ran 67,000 sourcing events. Harris also said there are plans to give customers the ability to build their contracts and sourcing events directly through the ERP system, which could also support things such as pricing conditions.
Vasee Rayan, SAP/Ariba’s vice president of solutions management, noted that much of what they have done on the network side has been to create functional parity with Concur and Fieldglass. Rayan said they had already started moving toward the “one network” model, which means harmonizing all of the networks including B-process and Crossgate as well (Ongoing project). The goal is to be able to these other users to the Ariba network more seamlessly. Rayan said that the network now also includes a supplier information portal where suppliers can gain insight into the buyer’s “business rules,” so they can submit information correctly the first time.
For P2P innovation, Vikram Pathak, vice president of product and solution management, explained that demand aggregation was the first thing on the list. This functionality will allow customers to aggregate demand at the plant or even company level for certain commodities (Target availability – Q1, 2016), which will show up for strategic buyers to either execute a new contract, look at an existing contract, or run a sourcing event or make a spot buy.
Pathak also noted that Ariba has included “total landed cost” in its new P2P release so users can include taxes and shipping charges at the item or header level, allowing them to understand the total cost of goods (Target availability – Q1, 2016). This should help users reduce or even eliminate the number of rejected purchase orders due to taxes not being included. Suppliers and buyers will be able to edit the catalog content of their products included in the Ariba Network (Target availability – Q1, 2016), Pathak said, resulting in cleaner and richer catalog content managed by both buyers and suppliers. Moreover, the P2P solution includes a real-time budget check functionality (Target availability – Q1, 2016) that, Pathak said, gives users real-time integration with the ERP system to determine funds availability.
Other aspects of the procurement story include spot buy capabilities that will include integration to eBay for one-off purchases (Target availability – Q3, 2015) and expanded admin control over the user experience.
Pathak also said there are plans to change the invoicing user interface from one that is procurement centric to something that offers value to the accounts payable function (Target availability – Q1, 2016). This includes invoice processing, better reconciliation screens, and even discount management.
Innovation with the Platform
In terms of platform innovation, Haydon emphasized plans to have a “bulletproof, robust, scalable cloud platform” across the proverbial board. He was very adamant about this, noting that customers trust their business operations to SAP/Ariba, and as such, deserve a powerful system that can make those operations run smoothly. Haydon also spoke about plans to leverage the S/4 HANA platform for extensibility, and Ariba’s plans to more closely adopt that system. This does not mean they plan to ignore any other core business software; Haydon said Ariba still plans to maintain their adaptors for Oracle as well as the open generic adaptor and a native connectivity functionality that allows clients to tie directly into the Ariba Network.
Investment in the platform is a core part of the business, Haydon said, and noted that this included a continued focus on globalization. As one example, Haydon told analysts that the European data center which opened in 2014 already has more than 50 customers live; the company also plans to continue to invest in infrastructure where it makes sense to do so.
Haydon said Ariba is working with the SAP globalization team, which has globalized SAP products for years, to further extend the global reach of the Ariba Network. This includes considering how to invoke globalization as a service in different countries around the world, and allows Ariba to focus on their core competencies while other partners look into the globalization methodologies that can work for them.
Final Thoughts
The world of business commerce is one of lightning-quick twists and turns. The challenge for solution providers looking to extend themselves into the global marketplace while still retaining the core competencies that helped them succeed in the first place is a difficult one. But, operating within its SAP parent and now partnered with Concur and Fieldglass, Ariba is one of the few providers positioned to maintain its relevance even as it continues its aggressive global push. In local markets, the challenge for such a large company is often its ability to maintain the pace of innovation and ability to execute needed to fend off smaller competitors – this holds true for Ariba. Another main challenge for the company and business network group that also includes Concur and Fieldglass, will be to maintain its relevance within the SAP company, including executives, engineering, and sales.
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