Arlington Computer Products Simplifies and Speeds Billing and Payments with AribaPay
Arlington Computer Products Simpliﬁes and Speeds Billing
and Payments with AribaPay
Transcript of a BrieﬁngsDirect podcast on how AribaPay is changing the face on online billing
and payments, beneﬁtting both buyers and sellers.
Listen to the podcast. Find it on iTunes. Sponsor: Ariba, an SAP company
Dana Gardner: Hello, and welcome to a special BrieﬁngsDirect podcast series coming to you
from the 2014 Ariba LIVE Conference in Las Vegas. We’re here the week of
March 17 to explore the latest in collaborative commerce and to learn how
innovative companies are tapping into the networked economy.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host
throughout this series of Ariba-sponsored BrieﬁngsDirect discussions.
Our next innovator case study focuses on Arlington Computer Products and how
they’ve been improving their ﬁnancial processes and operations using the new AribaPay cloud-
based B2B payment service. We’ll learn how an integrated and on-demand approach to ordering,
billing, and settlement processes between buyers and sellers beneﬁted Arlington Computer
To learn more about how agile business services are entering into a new era, please join me in
welcoming our guest. We’re here with Arly Guenther, he is the Chief Executive Ofﬁcer at
Arlington Computer Products in Buffalo Grove, Illinois. Welcome, Arly.
Guenther: Good morning, Dana.
Gardner: We’re also here with Drew Hoﬂer, Manage Cash Solution Marketing Director at
Ariba, an SAP company. Welcome, Drew.
Drew Hoﬂer: Thank you, Dana. I’m glad to be here.
Gardner: Drew, let’s start with you. From a high level, why are companies seeking to do things
differently when it comes to paying and getting more digital and electronic in how they’re
settling out their accounts? Why do this?
Hoﬂer: Dana, fundamentally, B2B payment is broken, in the sense that it’s very different from
consumer payments. With consumer payments, you have the item that is being bought, and the
information around the payment happens at the same time, at the point of payment, with the
settlement of funds.
With a B2B payment, however, the goods that are delivered or the service that is performed is
done so 45, 60, or 90 days ahead of when the payment is settled. This disconnect in time between
the information around the payment and the actual settlement of the payment
causes companies to have a very difﬁcult time reconciling payments that they
receive. There’s a lack of remittance information around the payment, particularly
when there are multiple invoices involved to settle that payment.
You have organizations that would like to pay with electronic payment because
it’s more secure, cheaper, and faster. But the people being paid, suppliers, are
struggling with that, because it often doesn't contain the information that they
need to settle those funds.
So suppliers would like to get paid faster and electronically, but they need that information along
with it. There has never been a payment in the B2B world that tied together net-term payment
with all of the information that's necessary to manage and reconcile that payment. That’s where
AribaPay comes in to try to solve that problem.
Gardner: Just for our audience, AribaPay was unveiled last year at Ariba LIVE and it’s a
partnership with Discover the ﬁnancial services organization. Tell us about the rollout. What’s
going on here this week at LIVE, and why is this is a big bash, a big coming out for AribaPay?
First live transactions
Hoﬂer: Last year, we announced our partnership with Discover and began our development
process and design phase of building out the product. This year, we’re happy to announce that
we've had our ﬁrst live transactions between Discover and Arlington Computer Products.
So, the ﬁrst live payments have gone through the system, and the product is ready to bring out
and it will be fully available to the general public in the second quarter of this year.
Gardner: Let’s go to Arly. Tell us a bit about Arlington Computer Products, about what you do,
the size of your organization, and why AribaPay was interesting to you.
Guenther: Arlington Computer Products has been in business for 30 years. We’re an IT solution
provider, servicing a broad spectrum of large enterprise customers. Last year, we
did about $130 million in revenue and we’re providing best-in-class IT solutions
for our customers. So when we see a best-in-class solution like AribaPay, we
really want to embrace it and use it ourselves.
We’re always looking at our business trying to get more efﬁcient and drive cost
out of our model. Customer satisfaction is our top priority, but at the same time,
we need to be price competitive. So we’re always looking for innovative
solutions, trying to get more efﬁcient and more productive as an organization.
The space that we've been in historically has been very manual for us, very high touch. With
AribaPay, we’ve been able to re-architect our accounting system to use a cloud solution, as
opposed to a manual process.
As far as Discover, we've done business with Discover for over a decade.
They’re an outstanding organization, using best-in-class technology to drive
their business. If you combine that with Ariba, which is a top-notch
software ﬁrm, you’re really combining two great organizations. So we were
really comfortable going with the pilot.
Gardner: As Drew pointed out, there are numerous beneﬁts that come with moving to an
electronic-settlement process and using an integrated approach across the partnership or
ecosystem like Discover and Ariba. For you, Arly, what were the top problems or top issues that
you wanted to resolve by going into this new model?
Guenther: It was really a very manual process for us. We would generate an invoice. We had to
put it in an envelope. We had postage expense and envelope expense. We’d mail the invoice out,
sit and wait for a payment, a check, to come into a lockbox. We’d wait for the check to clear so
the funds are available.
If we followed up after 45-50 days, we occasionally might ﬁnd that the customer didn't even
receive the invoice. So we’d have to resend an invoice. It was a high-touch, manual process.
Now it’s an automated process. So there are some big productivity savings for us.
Gardner: Arly, while expanding this across more of your accounts, do you see any ancillary
beneﬁts in terms of process reﬁnement, analysis, or insights? Is there going to be perhaps an
additional payback when you scale this up.
Guenther: Absolutely. We were in the pilot. As I mentioned, we’ve done business with Discover
for over a decade. They’re a fabulous customer of ours. We’ve used Ariba with Discover for a
number of years, just not AribaPay. Now, we really want to take it and use it across the board in
our accounting system for our customer base.
Gardner: Drew, tell us a bit more about AribaPay for those who are intrigued and want to learn
more. What does it actually do? What are some of the details, and how would you go about
bringing this into your organization?
Hoﬂer: As I said, the fundamental problem with B2B payment is that disconnect between the
information and settlement of funds. That’s what AribaPay corrects and bridges that gap. On the
Ariba Network, our core strength is everything from sourcing all the way through to the invoice
being approved and ready to pay. That’s all of the information that goes along with the payment.
The invoice, the line items, the purchase order (PO) behind it, even the contract behind is all
there and backing up that payment.
AribaPay then takes it the ﬁnal step and, in that settlement process, connects a unique payment
identiﬁer with that and connects with the Discover network to leverage their core strength, which
is secure trusted settlement of funds and the infrastructure to do that.
Then, Discover settles the fund in electronic manner, but that settlement of funds is now tied
together with the information that came behind that payment. So a supplier receiving a payment
through AribaPay can get an automatic feed into their backend system or they can come on to the
Ariba network and see every line item that in the invoice that came behind that payment.
Hoﬂer: More importantly, it will highlight if there’s a discrepancy between what they invoiced
and what they were paid. Say they invoiced $100 and they were paid $90 because the buyer
disputed an item or they thought the price should be lower, AribaPay will highlight that with the
Icard and tell you exactly where that discrepancy is, so that suppliers no longer have to search
through and ﬁnd where the issue is.
Finally, AribaPay has a very cool feature, we call it track-and-trace for payment. It’s very much
like when you order something online and you get a packaged shipped to you. You get a tracking
number and you can see where that package is geographically as it comes to your house.
With AribaPay, the supplier can see where the actual payment is every step along the process,
from the time the payment is approved, to the time that it gives its execution and the ﬁle is sent,
to when Discover debits the buyers bank account, to when they credit the supplier’s bank
account. All the way along the line, they can see every step.
That’s what it does. It bridges that gap of information, which gives suppliers the ability now to
embrace electronic payments, get paid faster, and have visibility into it, because they now have
all that information that they need.
Gardner: We’re really creating these data rich transactions, where the data follows a
transaction and it allows for a much greater transparency. How does that translate into lining up
with other services? I'm thinking perhaps the Dynamic Discounting at Ariba. Is there a synergy
of any sort between some of these other services that Ariba is providing now that you can
accomplish so much with AribaPay?
Hoﬂer: There is a synergy. AribaPay is really that last step in the true P2P process. It is the
second P in P2P and it closes that loop and it does so in a way that gives the suppliers a certainty
With Dynamic Discounting, it's a great next step. Dynamic Discounting simply gives the supplier
the ability to choose a different date for payment and offer a discount in order to accelerate that
In a normal dynamic discounting platform, that choice of the supplier will be sent to the buyers
backend payment system, which will tell them that the supplier wants to be paid early. That’s the
last visibility that the supplier sees and they just trust that the process will work and the buyer
will then actually pay them at that time and for the amount that they are expecting.
With AribaPay, the discount choice can be tied directly to the execution of the payment. They
can see with certainty that, yes, the buyer has accepted that; yes, the buyer has now executed on
that. They can see when it's coming. It adds that extra layer of visibility and certainty to the
choice that they have to get paid. That’s very synergistic with Dynamic Discounting.
Gardner: Arly, as you’re hearing Drew describe these services and capabilities, do you think it
might alter the way that you relate to your accounts, to your customers? Is there a value add with
having this visibility, tracking, and data with the transactions that might allow you to increase
your services. Is this something you can extend back into your market.
Guenther: Absolutely. From a process stand point, it's a game changer for us in terms of driving
productivity and improving cash ﬂow. Just like anything else, as you drive down your selling,
general, and administrative expenses (SG and A) and your own expenses and you get more
efﬁcient, you pass those savings on to the customer. But we’re really a technology company, and
so when we get a best-in-class solution like this, we really want to maximize the beneﬁts.
Gardner: I know it's quite early in the game. We've just begun doing transactions but can you
see any metrics of success, any measurement of how this would work? We are anticipating, as
you mentioned, cost savings, but have we put any numbers to that yet, Arly, or is it too soon?
Guenther: We’re anticipating a six-ﬁgure savings just between handling expenses, postal
expense, and supply expense, but the real wild card is cash ﬂow. When you improve your cash
ﬂow, the opportunity cost on that cash can be pretty high. So from that standpoint alone, we
know it's going to be in the six ﬁgures, but as we free up cash to do other things, that’s going to
make a big difference for us.
Gardner: Drew, for those interested in learning more, how would they begin? What's a good
way of starting a process where they could begin to understand and even execute on something
Lots of information
Hoﬂer: A great place to go to learn more about AribaPay is simply AribaPay.com. There is a
lot of information out there, some data sheets and a form that they can ﬁll out to learn more
information and hear from us.
We have some value engineering models that can help customers, both buyers and suppliers,
understand how AribaPay can help their business. That would be great for a start. One other
point I neglected to make about AribaPay is that we've talked a lot about the beneﬁts of
suppliers, which is great.
It's a wonderful beneﬁt for suppliers, but we shouldn’t understate the beneﬁt there is to buyers of
not having to manage bank-account information any more. One of the beneﬁts of AribaPay in
leveraging Discover is Discover’s infrastructure and network of merchant acquirers and the
process of bringing suppliers on. They’re capturing our bank information managing it, bumping
it up against all the asset control checks, all of the know your customer (KYC), and things that
have to happen to verify that bank information and then keeping that bank information up to
No longer do buying organizations, as they do today, have to hold on to supplier bank account
information, if they are going to pay electronically. That is a very big beneﬁt, particularly in light
of what we’ve see in the news lately about certain companies having had their data briefs and
payment information, bank information stolen. So this eliminates that risk by ofﬂoading the
management of that bank information into a trusted third party like Discover whose business is
managing that information.
Gardner: Drew, looking to the future of maybe 12 months from now, the next Ariba LIVE or
conference of note, what can we expect? Are there some added services or more analysis and
analytical beneﬁts that you can draw? Where do you expect this to go next?
Hoﬂer: Right now, AribaPay is going to be launched in the second quarter of this year to general
availability. It’s just the beginning. It’s ﬁrst being launched to the U.S. alone. The very next thing
for us is expanding that into other jurisdictions. So I would look for that, ﬁrst and foremost in the
Gardner: Well, great. I'm afraid we’ll have to leave it there. We've been talking about how
Arlington Computer Products has improved their ﬁnancial processes and operations using the
new AribaPay cloud service. By examining an early users experience like an ACP, we've seen
how an integrated and on-demand approach to ordering, billing, and settlement processes
beneﬁts both the buyers and the sellers. A big thank you to our guest, Arly Guenther, Chief
Executive Ofﬁcer at Arlington Computer Products. Thank you so much, Arly.
Guenther: Thanks, Dana. Thanks, Drew.
Gardner: And we've also been joined by Drew Hoﬂer, Manage Cash Solution Marketing
Director at Ariba, an SAP company. Thank you, Drew.
Hoﬂer: Thank you, Dana. It's my pleasure.
Gardner: And also, a thanks to our audience for joining this special Podcast coming to you from
the 2014 Ariba LIVE Conference in Las Vegas.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of
Ariba-sponsored BrieﬁngsDirect discussions. Thanks again, for listening and come back next
Listen to the podcast. Find it on iTunes. Sponsor: Ariba, an SAP company
Transcript of a BrieﬁngsDirect podcast on how AribaPay is changing the face on online billing
and payments, beneﬁtting both buyers and sellers. Copyright Interarbor Solutions, LLC,
2005-2014. All rights reserved.
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