Success in the Networked Economy

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Paul Melchiorre, Ariba Global Vice President, presentation at the San Francisco Ariba Commerce Summit on Success in the Networked Economy.

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  • Move to this new, inter-enterprise operating system enabled and accelerated by the convergence of 3 mega-trends: Shift to cloud-based delivery models. Blurring of the lines between Enterprise Apps and Social Media Channels and Communities – Enabling the new networked economy requires three things: Cloud-based TECHNOLOGY COMMUNITY CAPABILITIES
  • The networks we use to run our daily lives share these three components of TECHNOLOGY, COMMUNITY AND CAPABILITIES.
  • enterprises see the benefits that the combination of cloud computing, enterprise apps, and community can bring to their business……and they want to take part in the Networked Economy.CFO Magazine study of 200 global finance executives: View using technologies – like the cloud and business networks – to better discover, connect, and collaborate with their customers, suppliers, banks, and other trading partners was a top priority for agility and growth.CIO Magazine study found IT executives prioritizing investments to improve external collaboration.Research series from Harvard Business School points to inter-enterprise collaboration as THE key competitive competence going forward.
  • And for good reasonHaving a Networked Business drives top and bottomline benefits.McKinsey and Co. did a study last year on the impact of the Networked EnterpriseFinding: Networked Businesses outpaced their less Networked peers in nearly every category of business performance…by a wide margin.
  • There’s lots of room to grow in the Networked Economy.Companies have spent billions of dollars in personnel, reengineering, and systems over the past two decades to improve their internal process and information flows.These Islands of Efficiency are disconnected from the outside world and fall down where it matters most – when buying, selling, or exchanging cash with other businesses. >80% of POs, Invoices, and other transactions still take place offline…Lots of paper…lots of people…and lots of inefficiency.All this inefficiency costs business $650 billions per year in missed sales opportunities, higher operating and supply chain costs, and slower cash flow cycles.
  • In the Networked Economy…businesses and their supply chains operate much differently and much more efficiently.Connected to customers, suppliers, and other partners. Efficient by using cloud-based applications.Informed thanks to community intelligence,market insights, and best practices.Benefits of the Networked Economy are available to all members of the community – from the world’s largest multi-nationals…to small suppliers.
  • Success in the Networked Economy

    1. 1. San Francisco October 25, 20111 ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved.
    2. 2. Success in theNetworked EconomyPaul Melchiorre, Ariba Global Vice President
    3. 3. Ariba Acquires b-process, France’slargest electronic invoice network Europe’s leading provider of collaborative E-invoicing solutions World’s Business Commerce Network Grows Even Stronger
    4. 4. Your World is Being Shaped by Macro-TrendsCloud, Communities, Mobile Cloud Computing Social Media/ Communities The Networked Economy Enterprise Apps 4 © 2011 Ariba, Inc. All rights reserved.
    5. 5. You’re Seeing This in Your Personal Lives… Networks Have Changed Your Personal Life Shopping Entertainment Communication & Collaboration Research5 © 2011 Ariba, Inc. All rights reserved.
    6. 6. …And Businesses Want It Too Inter-Enterprise Collaboration is the New Competitive Competency “Tighter collaboration with customers, suppliers, and “Increasingly companies partners, achieved by having a are embracingtech-savvy supply chain is key to collaboration as part of steering through unpredictable their strategy to grow.” economic environment.” “The underlying benefit of cloud computing is improved collaboration, both within the organization and externally… trading partners benefit from being able to collaborate using a common platform.”6 © 2011 Ariba, Inc. All rights reserved.
    7. 7. And For Good ReasonBenefits of the Networked Enterprise 77% increased access to 63% increased 55% knowledge marketing better effectiveness 41% information sharing 43% improved greater collaboration market across silos 24% share increased revenue 8% higher margins “Networked enterprises were 50% more likely than their peers to have increased sales, higher profit margins, gain market share, and be a market leader.” Source: McKinsey & Company, “The rise of the networked enterprise, Web 2.0 finds it’s payday.” Survey of 4,394 executives. December 20107 Ariba, Inc. 2011 All rights reserved.
    8. 8. Our Vision: The Next Wave of Productivity: Efficient Collaboration Between Enterprises Community Technology Capabilities 1980’s 1990’s-2000’s Today Desktop OS Backoffice OS Inter-Enterprise OS“Employee Productivity” “Enterprise Productivity” “Value Chain Productivity”8 © 2011 Ariba, Inc. All rights reserved.
    9. 9. The Impact of Poor Collaboration is Big Wanted: Better Business Commerce9 © 2011 Ariba, Inc. All rights reserved.
    10. 10. Collaborative Business Commerce: There is a better way10 © 2011 Ariba, Inc. All rights reserved.
    11. 11. Benefits of Networked Business Collaborative Business Commerce Added Value for Buyers and Sellers• Buyers • Sellers Reduce operating costs 70% or more Average DSO reduction of 5.6 days 12%-15% savings from sourcing Increase sales by 15% $2M discount savings/$B in spend 98% customer retention rate Cut $9M of contract leakage/$B in spend New biz opps with largest buyer community 11 © 2011 Ariba, Inc. All rights reserved.
    12. 12. Collaborative Commerce Successes -- Buyer Value -- -- Seller Value --  First customer increased their spend total from 10% to a 100% single-sourced relationship  50% of suppliers were already in the Ariba Network  Today, 15% of our total revenues come to us via the Ariba Network.  20% reduction in staffing costs just from PO-Flip™  $3 Million in savings in the first year  65% of new customer relationships  Daily visibility into global MRO Spend are sourced via our participation in  Increased Leverage with Suppliers the Ariba Network  10-15% of our new account revenues are directly a result of Ariba Network membership  100% spend process compliance  25% of total order volume is transacted via the  75% supplier record reduction Ariba Network  2 day effort to connect SAP to Ariba12 © 2011 Ariba, Inc. All rights reserved.
    13. 13. 13 © 2011 Ariba, Inc. All rights reserved.

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