Ariba Product Roadmap Points to New Value From Cloud Data Analytics, Mobile Support, and Managed Services Procurement
Ariba Product Roadmap Points to New Value From CloudData Analytics, Mobile Support, and Managed ServicesProcurementTranscript of a BrieﬁngsDirect podcast in whats ahead for Ariba in helping companiescollaborate on procurement, sales, and improving productivity.Listen to the podcast. Find it on iTunes. Sponsor: Ariba, an SAP CompanyDana Gardner: Hello, and welcome to a special BrieﬁngsDirect podcast series coming to youfrom the 2013 Ariba LIVE Conference in Washington, D.C.Were here in the week of May 6 to explore the latest in collaborativecommerce and to learn how innovative companies are tapping into thenetworked economy. Well see how they are improving their businessproductivity and sales, along with building far-reaching relationships with newpartners and customers.Im Dana Gardner, Principal Analyst at Interarbor Solutions, and Ill be your host throughout theseries of Ariba-sponsored BrieﬁngsDirect discussions. [Disclosure: Ariba, an SAP company, is asponsor of BrieﬁngsDirect podcasts.]Our next interview focuses on the product and services roadmap and improved strategy insightsunveiled by Ariba, an SAP company, here at the Ariba LIVE Conference.Here to explain the latest news and offer some forthcoming innovation insights for how Aribawill be addressing its customers’ needs as well as its partners and ecosystem requirements isChris Haydon. He is Vice President of Solutions Management for Procurement, Finance, andNetwork at Ariba. Welcome, Chris.Chris Haydon: Thank you, Dana. Nice to be with you.Gardner: Before we look to the future roadmap, maybe we should deﬁne the milestones of thecurrent roadmap. Could you characterize where we are now with Ariba in terms of some of thebig news here at LIVE?Haydon: Im happy to share that. We have some really exciting innovation coming in the nearterm to Ariba, as you said, in a couple of areas. First, lets talk about Network RFQ or the SpotBuy. We think this is part of the undiscovered country, where, according to The Hackett Group,40-plus percent of spend is not sourced.By linking this non-sourced spend to the Ariba Network, we think were going to be able toaddress a large pain point for our buyers and our sellers. Network RFQ or Spot Buy is a near-
term solution that we announced here at LIVE here, and were bringing that forward the next sixmonths.The next exciting innovation is at the other end of theprocess. That’s a solution we call AribaPay. AribaPay iswhat we think is a game-changing solution that delivers richremittance and invoice information that’s only available from the Ariba Network throughsolution secure, global payment infrastructure.And Ill talk a little bit later about some of the more exciting things were doing in servicesprocurement.Down marketGardner: It seems to me, Chris, that, in a sense, youre going down market. Youre creatingsome services with Spot Buy that help people in their ad-hoc, low-volume purchasing.Youre providing more services types of purchasing capabilities, maybe for those mid-marketorganizations or different kinds of companies like services-oriented companies. And, youre alsoconnecting via Dell Boomi to QuickBooks, which is an important asset for how people run smallbusinesses. Am I reading this right? Are we expanding the addressable market here?Haydon: We are, and that’s an excellent point. We look at it two ways. Were looking to addressall commerce. Things like the Spot Buy, AribaPay, services, procurement, andestimate-based services are really addressing the breadth of spend, and thatapplies at the upper end and the lower end.There are important pieces that you touched on, especially with our Dell Boomipartnership and the announcement here for QuickBooks. We want to make itaccessible to grow the ecosystem and to make the collaboration across thenetwork as frictionless as possible.With Dell Boomi announcing QuickBooks, it enables suppliers speciﬁcally with that backendsystem to be able to comply with all the collaboration of business processes on the AribaNetwork, and were really only just getting started.There is a massive ecosystem out there with QuickBooks, but when we have a look around, thereare more than 120 prominent backend systems. So its not just the SAPs, the Oracles, the JDEdwards, and Lawsons. Its the QuickBooks and the Intuits. Its the Great Plains of the world.Gardner: So for those who may have thought that procurement vis-à-vis the cloud, procurementvis-à-vis on-premises backend business application system, was just for the larger enterprises, itsnot so.
Haydon: Not so at all. That’s what we really want to think about. Think about at it as backendagnostic. We want our customers on both the buy-side and the sell-side of their partners to maketheir own choices. Its really their own choice of deployment.If they want to take an integrated business-to-business (B2B) channel, they can. If they want tocome to a portal, they can. If they want to have an extract that goes into their own customizedsystem, they can do that as well, or all of the above at the same time, and really just taking thatprocess forward.Gardner: Weve seen a larger market. Were also seeing the notion of one-stop shopping withAriba, because with AribaPay people can now begin to execute payments through the samecloud, through which they would organize and manage procurement and spend. Tell me how thatworks? Is this a credit card, a debit card? Is this a transactional banking interface? What doesAribaPay really mean?Brand newHaydon: Number one, its brand-new. First, lets talk about the problems that we had, and howwe think we are going to address it. More than 40 percent of payments in corporate America arestill check based. Check-based payments present their own problems, not just for the buyers, butalso from the sellers. They don’t know when theyre going to get paid. And when they are gettingpaid, how do they reconcile what theyre actually getting paid for?AribaPay is a new service. Its not a P-Card. Its leveraging a new type of electronic paymentthrough an ACH-styled channel. It enables buyers to take 100 percent of their payments throughthe Ariba Network. It lets the suppliers opt in to be able to match and move from our paper-basedpayment channel check, to an electronic channel that is married. This is the interesting valueprop for the network. That is married with their rich information.So that’s the value. We think its very differentiated. Were going to be leveraging a largeﬁnancial institution provider who has great breadth and penetration, not just here in the UnitedStates, but globally as well.Gardner: And that would be the Discover Financial Services?Haydon: Thats correct -- Discover Financial Services. We announced that at LIVE today, and Iknow theyre as excited as we are,. They have the wherewithal to bring the credibility and thescale to the payments channel, while Ariba has the credibility in the scale of the supply base andthe commercial B2B trafﬁc. We think that that one plus one equals three and is a game changerin electronic payments.Gardner: Moving on to the future or vision that youre painting for the attendees here at LIVE,youve been talking about three buckets: network enhancements -- the Ariba Network --
application enhancements, and infrastructure enhancement. So lets start with network. Whatshould we expect in the roadmap of the next two or three years for the Ariba Network?Haydon: Were really excited about the Ariba Network and what we are going to do there. Whenwe think about the network, weve got four or ﬁve themes. One piece of big news is that weregetting into and supporting supply chain and logistics processes, and adding that level ofcollaboration. Today, we have 10 or 11 types of collaborations that you can do on the AribaNetwork, like an order, an invoice, and so on.Over the next several releases, were going to be more than doubling that amount ofcollaboration that you can do between trading partners on the network. That’s exciting, and thereare things like forecasting and goods receipt notices.I won’t go into the speciﬁcs of every single transaction, but think about of doubling the amountof collaboration that you can do and the visibility in that. The ability to apply your own businessrules and logic to those collaborations is massive.The second thing were doing on the network is adding a new spend category, which we callservices invoicing. This is estimate-based spend and this is another up market, down market,broad approach, in which there are a whole heap of services.This is more of an estimate-based style spend where you don’t necessarily know the full cost ofan item until you ﬁnish it. Whether youre drilling an oil well or constructing a building, there arevariations there. So were adding that capability into the network.User interfaceAnother area is what we call Network 2.0, and this is extending and changing not just the userinterface, but extending and adding more intrinsic core capabilities to the network. Ariba has anumber of network assets and we think its important to have a single network platform globally.Its the commerce internet, the network.So our Network 2.0 program is a phase delivery of extending the core capabilities of the Aribanetwork over the next couple of years in terms of order status, results, requests in terms of goodsreceipt notices, advanced shipping notices, more invoice capability, and just growing that outglobally.Last but not least is just more and more supply collaboration, focusing on the ability for suppliersto more easily respond, comply, and manage their proﬁles on the Ariba network.Gardner: So its more visibility across these processes across organizational boundaries, moreability to leverage each others data and to hook up processes, which of course, all means muchmore efﬁcient business, lower cost, and agility. That services procurement possibility, where you
dont have to actually know the end price, but you can start the process, nonetheless, brings inthat agility very well. Applications themselves, what should we expect there?Haydon: Weve got a whole raft of capability coming across that whole application suite. We canbreak that into two or three areas. In our sourcing, contract management, supplier informationmanagement, and supply performance management suite, were doing functionalityenhancements on one of the exciting pieces.In the spend visibility area, were going to be leveraging the SAP In-Memory technology HANA.What we are doing there is early for us, but there are some very exciting, encouraging results interms of the speed and the performance weve heard about from SAP. Running our owntechnology on that and seeing the results is exciting for us and will be exciting for our customers.Thats one interesting speciﬁc area in Spend Vis that were starting on progressing. And there isgood core enhancing in our contract management and our sourcing areas, core-functional richrequirements, and user interface, better integration layers, and just making that whole processmore seamless.As we move more into our procurement suite, were introducing a new look and feel, a consumerlike look and feel, to our catalog and our search engine. The more Amazon-style search touchesmore users than anyone else. As you can imagine, that’s how they need to requisition tools. Somaking that a friendly UI and taking that UI or user experience through to the other products isfantastic.One of the other most exciting areas for us is services procurement, a very large investment forus. Services procurement is our application to be able to support temporary or contingent labor,statement of work or consulting labor, print, marketing and also light industrial. This really is oneof the underpinning differences for Ariba, and this is where were bringing it together.Were not just building applications any more. Were building network-centric applications ornetwork-aware applications. It means that when were launching our new services procurementsolution, not only are we are going to have a brand-new, refreshed, modern user interface, whichis very important.Differential insightsWere going to be able to leverage the power of the Ariba Network to provide differentialinsights, into standard day-to-day services procurement on-boarding. That will be looking ataverage labor rates in the area for the type of service that youre buying and using the networkintelligence to give you advice, to give you instruction, to help you manage exceptions on thenetwork.For example, you want to put in $70 an hour for a rate for a web developer, based on the networkintelligence on what like-minded peers are doing. Of course, this is all anonymized and
aggregated in the appropriate way, but were able to say, "Youre out of market. Its $75 in thismarket." So if you put $70, youre not going to be able to do that. Thats just one example of theintelligence in the network for services procurement.Gardner: What’s really interesting to me is all of your vision so tightly aligns with the megatrends of today. Theres cloud computing. You talked about the collaboration, the network, andthe beneﬁts of that. Theres big data. Youve talked about the analytics, the ability to bring moredata into these processes, across the processes, even across organizational boundaries, rather thanto be siloed not only within their own silos, but in each individual companys silos.Furthermore, the big data trend to me is manifested here by the fact that youre recognizing thatdata as a deﬁnition is shifted. Data used to be an output of an app. The primary data wassecondary. Weve seen that ﬂip, where the data is the app, and were able to take the data, use it,and apply it across more processes, and it becomes the app itself. So theres kind of a mungegoing on and youre certainly on top of that.Lastly, theres mobility, and we havent talked about that too much, but it seems that your appinterfaces, your software-as-a-service (SaaS) and cloud delivery models are taking theseprocesses right down to the individual at the mobile moment, where they are in business, whenthey need to either spot buy, engage in a service, and then even buy and execute with pay.Whats the last mega trend of the day? Social? Youre into that too, because we are seeing morecollaboration in the network.One last mega trend is being able to take this one step further, which is to be proactive and seemore insight into processes in business environments. So, analytics, but at a higher level. Whatshould we expect when we look at the resources of SAP, the In-Memory technologyimprovements with HANA and your being more comprehensive and then expanding addressablemarket. Youre able to bring together tremendous amount of data, and exercising the properprivacy and access controls, start to deliver strategic insights back to your customers. Tell melittle bit about the potential.Haydon: Absolutely. I don’t think we touched on that. When we think about the networkedeconomy, the networked apps, the network-centric apps, the network itself, one should be able toconnect any demand generating or receiving system. We touched on that with Dell Boomi, butits seamless integration across the piece. We want to be comprehensive, which is adding morecollaboration.Critical massThe interesting thing about this collaboration, is it starts driving at some levels a critical massof data. The trend is that the network is intelligent. Its actually able to piece together not just thetransaction itself, but who you are. Were quite excited, because this is the massive differentiator
of the network. You talked about apps. We have not just the transactional data, but we have themaster data, and we can also take other sources of information.Gardner: Say weather or location?Haydon: Weather, location, stock reports, SEC ﬁlings, Dun & Bradstreet writings, whateveryou like, to intersect.So this data plus knowledge gives you information. With SAP, its a very exciting technology.SAP InfoNet, Supplier InfoNet, is able to leverage network data. Today, it has over 160 feeds. Itssmart, meaning its smart intelligence. It can automatically take those feeds and contextualize.And thats the real thing were trying to do -- knowing who the user is, knowing the businessprocess they are trying to execute, and also knowing what they are trying to achieve. And itsbringing that information to the point of demand to help them make actionable, intelligent, andsometimes predictive decisions.Where we would like to go is, heaven forbid there is another tsunami, but lets just work throughthat use case. You get a news alert there is tsunami in Japan again, terrible event. What if youknew that, and what if 80 percent of your core, raw material inputs came from there? Just thatalert of that to notify you to saying youve got to know that you might well have a supplyproblem. What are you going to do?And by the way, here are three or four other suppliers who can supply this material to you, andtheyre available on the network. What is that worth? Immeasurable.Gardner: I think thats very interesting roadmap for a few more years. Im interested in comingback next year to Ariba LIVE to learn how were executing on that.Clearly, a lot of the trends, as I say, are aligned well with where you are and put some wind inyour sails. I also think that Ariba and SAP together are in a catbird seat of being in the right placeto extend these values, up and down the supply chain, into new markets, across different aspectsof business, like business continuity, and even project and portfolio management, getting towhere people are, where they are working through their mobile devices. So congratulations onthat.Im afraid well have to leave it there. Weve been learning more about the product and servicesroadmap and improved strategy from Ariba, an SAP company, here at the Ariba LIVEConference.So please join me in thanking our guest, Chris Haydon, the Vice President of SolutionsManagement for Procurement, Finance & Network at Ariba. Thanks, Chris.Haydon: Thank you.
Gardner: And thanks to our audience for joining this special podcast coming to you from the2013 Ariba LIVE Conference in Washington D.C.Im Dana Gardner; Principal Analyst at Interarbor Solutions, your host throughout this series ofAriba sponsored BrieﬁngsDirect discussions. Thanks again for joining, and come back next time.Listen to the podcast. Find it on iTunes. Sponsor: Ariba, an SAP CompanyTranscript of a BrieﬁngsDirect podcast in whats ahead for Ariba in helping companiescollaborate on procurement, sales, and improving productivity. Copyright Interarbor Solutions,LLC, 2005-2013. All rights reserved.You may also be interested in:• The Networked Economy Newly Forges Innovation Forces for Collaboration in Businessand Commerce, Says Author Zach Tumin• Collboration-Enhanced Procurement and AP Automation Maximize Productivity andProﬁt Gains in Networked Economy, Says Aribas Drew Hoﬂer• Ariba Network Helps Cox Enterprises Manage Procurement Across Six Different ERPSystems• Ariba CMO Tim Minahan on how networked economy beneﬁts spring from improvedbusiness commerce and cloud processes• Ariba Dynamic Discounting Gives Companies New Visibility into Cash Flow to Improvethe Buying Process• Ariba, IBM Deal Shows Emerging Prominence of Cloud Ecosystem-Based Collaborationand Commerce