The Power In Business Networks: A Total Cost of Ownership Approach

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The Power In Business Networks: A Total Cost of Ownership Approach

  1. 1. The Power In Business Networks: A Total Cost of Ownership Approach
  2. 2. Drew Hofler, Ariba Director, Network & Financial Solutions Marketing Director, Solutions Marketing for Ariba, an SAP Company. Recognized expert in business networks, AP automation, dynamic discounting, and working capital management. Published a number of articles on around these topics and is regular contributor to various industry blogs. Named a “Pro to Know” by Supply and Demand Chain Executive – 2013 Almost 20 years of banking, financial services and software industry experience. © 2013 Ariba - an SAP company. All rights reserved. Public 2
  3. 3. Andrew Bartolini, Ardent Partners Managing Partner & Chief Research Officer Chief Research Officer, Ardent Partners Publisher, CPO Rising – www.cporising.com Recognized expert in sourcing, procurement, AP, and supply management Named a “Pro to Know” by Supply and Demand Chain Executive three times Former VP of Global Supply Mgmt. research at Aberdeen Group; Benchmarked thousands of enterprises across all facets of their supply management operations © 2013 Ariba - an SAP company. All rights reserved. Public 3
  4. 4. Agenda Drew Hofler, Ariba • About Ariba • What are Business Networks? Andrew Bartolini, Ardent Partners • Business Networks: Today & Tomorrow • Understanding the Network Marketplace • Using Total Cost of Ownership to Select the Right Network • Recommendations • Q&A © 2013 Ariba - an SAP company. All rights reserved. Public 4
  5. 5. Who is Ariba? The World’s Business Commerce Network 5 million users from 1M+ companies … … use the Ariba Network … … for better business commerce In next 24 hours, Ariba customers will: • • Trading Partners 5 Global 2000 © 2013 Ariba - an SAP company. All rights reserved. Annual Invoices 40+ million Annual Purchase Orders finance $500,000 in receivables • 65+ million manage >4 million contracts • >60% conduct >100,000 purchase, sales, and financial transactions • 1+ million Manage >$1.4 Billion B2B transactions save their companies >$65 million 190 Countries $60B In Annual Commerce Public 5
  6. 6. Personal Networks Make Our Lives Run Better… RESEARCH © 2013 Ariba - an SAP company. All rights reserved. BUYING & SELLING COMMUNITY & CONTENT COMMUNICATION & COLLABORATION Public 6
  7. 7. • Access to Opportunity • Tap into others’ data • • • (reviews) Collaborate with Seller Link to Payment Track and Trace Networked Economy…a Love Story © 2013 SAP AG. All rights reserved. 7
  8. 8. Procurement © 2013 SAP AG. All rights reserved. 8
  9. 9. Businesses Struggle with Inter-Enterprise Collaboration Buyers Manual Paper-based Collaboration Point to Point EDI, Portals & Single Process Solutions Suppliers Higher Operating and Supply Chain Costs Missed Sales Opportunities Wasted Time and Resources Delayed Payments, Overpayments, and Missed Discounts, Slow Cash Flow Limited Visibility and Elevated Risk 9 © 2013 Ariba - an SAP company. All rights reserved. Public 9
  10. 10. The Solution: The Business Network Business Networks facilitate inter-enterprise collaboration between trading partners Buyers Suppliers “ Networked enterprises are 50% more likely 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 2010 © 2013 Ariba - an SAP company. All rights reserved. Public 10
  11. 11. The Power In Business Networks: A Total Cost of Ownership Approach Andrew Bartolini Chief Research Officer Ardent Partners November 7, 2013 11 Copyright © 2013 - Ardent Partners Ltd.
  12. 12. ANDREW BARTOLINI   Chief Research Officer, Ardent Partners Publisher, CPO Rising – www.cporising.com Summary  Recognized expert in sourcing, procurement, AP, and supply management  Named a “Pro to Know” by Supply and Demand Chain Executive three times  Former VP of Global Supply Mgmt. research at Aberdeen Group; Benchmarked thousands of enterprises across all facets of their supply management operations Experience Leadership roles in sales, marketing, and services at Ariba and Commerce One. Rich experience in strategic sourcing, business process transformation, and software implementation. Background also includes consulting and investment banking. Education  MBA – Indiana University  BA – College of the Holy Cross 12 Copyright © 2013 - Ardent Partners Ltd.
  13. 13. ARDENT PARTNERS Ardent Partners is a research and advisory firm focused on defining, advancing, and promoting the supply management strategies, processes, and technologies that drive business value and accelerate organizational transformation within the enterprise. 13 Copyright © 2013 - Ardent Partners Ltd.
  14. 14. CPO RISING: THE FIRST INDEPENDENT SITE FOR CPOS www.cporising.com 14 Copyright © 2013 - Ardent Partners Ltd.
  15. 15. Business Networks: Today & Tomorrow 15 Copyright © 2013 - Ardent Partners Ltd.
  16. 16. BUSINESS NETWORKS – TODAY  Organizing Principle: “Business process collaboration AND value”  BROAD business process focus  Value extended to ALL participants  Paradigm shift in the way trading partners communicate, interact, transact, & create, find, share, & use information 16 Copyright © 2013 - Ardent Partners Ltd.
  17. 17. THE OVERALL IMPACT OF BUSINESS NETWORKS ON OUR BUSINESS IS: 42% 17 Copyright © 2013 - Ardent Partners Ltd.
  18. 18. THE OVERALL IMPACT OF BUSINESS NETWORKS ON OUR BUSINESS IS: 75% 18 Copyright © 2013 - Ardent Partners Ltd.
  19. 19. BUSINESS NETWORKS’ IMPACT ON TRANSACTIONS 19 Copyright © 2013 - Ardent Partners Ltd.
  20. 20. BUSINESS NETWORKS’ IMPACT ON SUPPLIER COMMUNICATION / COLLABORATION 20 Copyright © 2013 - Ardent Partners Ltd.
  21. 21. THE VIEW OF BUSINESS NETWORKS TODAY 21 Copyright © 2013 - Ardent Partners Ltd.
  22. 22. BUSINESS NETWORKS – TOMORROW  Organizing Principle: “True Network Effect”  Complementary and new business processes  Deeper , more robust analytics including predictive  Ecosystem of third-party services  More social networking capabilities 22 Copyright © 2013 - Ardent Partners Ltd.
  23. 23. Understanding the Network Marketplace 23 Copyright © 2013 - Ardent Partners Ltd.
  24. 24. ALL NETWORKS ARE NOT LIKE THE OTHER (PART I) Network Types Global Business (or B2B) Network Payment Network Data Standards Network Industry Network Category Network Country/Regional Network 24 Copyright © 2013 - Ardent Partners Ltd.
  25. 25. ALL NETWORKS ARE NOT LIKE THE OTHER (PART II) Network Characteristics Number of existing and active suppliers Geographic reach Vertical focus Capabilities and information availability Business processes and documents 25 Copyright © 2013 - Ardent Partners Ltd.
  26. 26. ALL NETWORKS ARE NOT LIKE THE OTHER (PART III) Network Characteristics Business model Associated services Related technologies/solutions System integration capabilities Network vision and roadmap 26 Copyright © 2013 - Ardent Partners Ltd.
  27. 27. Using Total Cost of Ownership to Select the Right Network 27 Copyright © 2013 - Ardent Partners Ltd.
  28. 28. NETWORK STAKEHOLDERS AR Procurement Account s Payable Others Buy-Side Sell-Side Finance & Treasury IT Supply Chain Finance Order Mgmt IT Sales Sales 28 Copyright © 2013 - Ardent Partners Ltd.
  29. 29. ARDENT PARTNERS’ TOTAL COST AND VALUE FRAMEWORK FOR NETWORK SELECTION Network Value Factors Efficiency and effectiveness gains Network characteristics Internal stakeholder value Trading partner (supplier) value © Ardent Partners - 2013 Network Cost Factors Network access (buy side) Network ongoing usage (buy side) Network access and ongoing usage (supplier's direct costs) Network access and ongoing usage (supplier's indirect costs) Opportunity costs 29 Copyright © 2013 - Ardent Partners Ltd.
  30. 30. Recommendations 30 Copyright © 2013 - Ardent Partners Ltd.
  31. 31. RECOMMENDATIONS  Invest time researching and tracking the network marketplace  Engage potential stakeholders early and often  Identify near-term and long-term opportunities with business networks  Take a comprehensive and holistic approach to network selection and usage  Utilize a TCO Approach for business network selelction 31 Copyright © 2013 - Ardent Partners Ltd.
  32. 32. An SAP Company Q&A Andrew Bartolini Managing Partner & Chief Research Officer Email: abartolini@ardentpartners.com Web: www.ardentpartners.com Twitter: @andrewbartolini Drew Hofler Director, Solutions Marketing Email: dhofler@ariba.com Blog: TheNetworkedEconomy.com Twitter: @dhofler

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