Business Networks Usher in Increased Productivity for Enterprises
Business Networks Usher in Increased Productivity forEnterprisesTranscript of a sponsored podcast on the upcoming Ariba LIVE Conference and how thenetworked economy is enabling business success.Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor:AribaDana Gardner: Hi. This is Dana Gardner, Principal Analyst at Interarbor Solutions, and yourelistening to BrieﬁngsDirect.Today, we present a sponsored podcast discussion in conjunction with the upcoming Ariba LIVE Conference in Las Vegas, which kicks off April 10, 2012. Were here with Ariba’s Chief Marketing Ofﬁcer to discuss the networked economy and some of the major developments that Ariba will unveil at LIVE to help companies plug into it. As we consider not only the major business and IT trends of the day -- those being cloud computing, mobile, social, and big data -- we also need to examine the conﬂuence of these developments and how together they impactbusinesses and business ecosystems.We need to consider the impacts at a higher abstraction, at the business-process level, but not justinside of companies. We must factor how previously internal processes are now becomingexternalized and that we need to do that in a safe and managed way across many enterprises andeven service provider partners.Cloud computing, the force behind a lot of this thinking, has let loose the imagination ofbusinesses to consider anew how to outsource at this business-process level. Mobility advancesthe thinking of bringing processes to anyone, anywhere, with rich two-way interaction.Social media is driving more participation by more people into more aspects of commerce,providing in many cases, an explosive viral value to formerly linear or closed workﬂows. Theresult is a large-scale rearrangement of the constituent parts of business processes and extendedenterprise functions.The good news is that shaking up the status quo is enabling massive efﬁciencies with more activemarket beneﬁts, shared by more participants, as they cooperate and collaborate in entirely newways.A large part of this intermingling of shared business processes is enabled by data-drivendecisions across advanced business networks, imbuing business decisions with ongoing, real-
time visibility and analytics, and making mastery of relationships between buyers and sellers lessan art and more of a science.It may not be as romantic as hatching a business plan on a cocktail napkin, but in order to manage the scale, complexity, and required automation of these expansive new business processes, mastery of network processes with control and governance is critical Fly by the seat of your pants, manual, and paper-basedprocesses simply cant keep up. As a leader in cloud-based collaborative commerce, Ariba has aunique observation of where this is going, calling it the networked economy.Networked enterpriseLets get a better idea of what it means to be a “networked enterprise” and how businessnetworks will drive the future of commerce over the next few years. Lets welcome our guest,Tim Minahan, the Chief Marketing Ofﬁcer at Ariba. Welcome back to BrieﬁngsDirect, Tim.Tim Minahan: Hi, Dana. Thanks for having me.Gardner: Tim, it’s no longer a stretch to say that business is changing more rapidly than ever.Change is not just an exception It’s the norm, and you need to master it. Ive been surprised byhow dramatically this cloud-computing wave has taken off and has seemingly captured theimagination of business leaders. How did we get here? What’s the lead up to this interestingposition that youre ﬁnding yourself with your big conference?Minahan: Absolutely, Dana. You did a great job of summarizing it at the beginning of this podcast. If you look throughout history, step-change advances in productivity and business productivity have been driven by previous changes and enhancements in IT infrastructure, such as in the 80s, where you had the advent of client/server technology, desktop applications. That drove employee productivity some limited degree and allowed them to collaborate with other peers within the company. And then in the 90s and in the 2000s, the World Wide Web spawned a slew of applications. That automated functional-speciﬁc information ﬂows andstreamlined processes for speciﬁc functions, whether it be human capital management (HCM),ﬁnance, and even purchasing, into some limited degree allowed collaboration within theenterprise.The forces that you mentioned are conspiring this combination of cloud computing, mobility, andcollaboration through communities or social networks. Were experiencing another major shift inIT-generated productivity.
Today, the next wave of productivity is going to allow companies to begin to extend thoseprocesses, extend that information, and extend alignment of their processes with their externalpartners, whether they be customers that they want to collaborate with more closely, or suppliersthat they want to align with better and drive efﬁciencies with, or other partners, ﬁnancialpartners, logistics partners, etc., that take part in a process that the company needs to collaboratearound.We think this convergence of companies collaborating more efﬁciently over extendedinformation networks is one thats going to drive this next wave of productivity.Gardner: It seems that were at the culmination of 30 years of IT development and advancementand maybe 100 years of business activities and advancements and theyre coming together in thisnetworked economy sense. How lofty a goal is this? Is this something that you think is years out?Is this something that we are going to always see on the horizon, but never attain, or on the cuspof actually doing a networked economy type of marketplace?Minahan: Think about it. It’s here today. We still may be in our infancy, but youve got to thinkabout what’s happening today. Think about it in your personal lives. That’s probably the bestexample. The magic of Facebook is not in its clean interface or in its news feed feature. Themagic of Facebook is that it has created the world’s largest network of personal connections.Similarly, the beauty of Amazon.com is not that it offers the best prices on books. It’s that itoffers the world’s largest and most convenient network for personal shopping.Enterprise phenomenonThis is not just a consumer phenomenon. It’s an enterprise one. More and more businesses arelooking beyond the four walls of the enterprise to extend their processes and systems, to connectand collaborate more efﬁciently with their customers, with their suppliers, and other tradingpartners, whether theyre across the street or around the world.Gardner: Whats fascinating to me about that, Tim, is we had Metcalfe’s Law, where the moreparticipants on a network, the more valuable it becomes. We certainly see that with Facebook.But what’s happening in addition is that the amount of activity that these folks do, the commerce,their actions, their priorities, is all data that could be captured and analyzed, not just dataindividually, but collectively.So were not just getting value from the network on participation. Were getting insights thatﬁlters back to how we can conduct business. How important is this notion of captured analyticsalong the way in this networked environment?Minahan: It’s absolutely critical. Well go back to those models. If you look at any of thepersonal networks that we rely on everyday, whether it’s Facebook, Twitter, Google, Netﬂix, orAmazon, they have three things in common.
Number one, as you stated earlier, theyre in the cloud. These are cloud-based applications. Youdon’t need to install hardware or custom-conﬁgure it. You don’t need to install or manage ormaintain software. It is all accessible through a web browser, whether you are in Peoria or Paris.The second component, as we just stated, is that all of these are ultimately networks. They arelarge communities of individuals, and oftentimes companies, that are digitally connected.Think about Amazon. You don’t think about connecting to each individual merchant. Whetheryou want to buy a book or a blender, the merchants are all connected for you. You don’t thinkabout settling out with Visa or MasterCard and how to integrate to them. Theyre all connected inthere for you.And to your last part, you have cloud-based technology, communities, and then capabilities.Thats where the intelligence in the community comes in.Again, think about Amazon. You want to buy something and you get expert opinions on "folkswho have bought this product have also bought this product." Thats community intelligence thathelps you make a more informed decision.Secondly, you get peer opinions, other participants in the community that rate the product thatyou are considering buying. That gives you an additional level of trust in the purchase decisionyoure about to make.These are the types of things that are only available in a network-based model. These are thetypes of things that are also available to businesses in a business network-type model.Behavioral shiftGardner: Well, weve certainly seen a behavioral shift in people’s adoption, and evenenthusiasm for these sorts of activities. Were seeing it in their personal lives. When we nowapply this to enterprises, to B2B activities, to commerce, we can ﬁnd that the processes areuniquely actionable and automated in the cloud, even more so than in a system of record, whichcould be fairly brittle.But were also seeing -- I think its fairly unique -- is the ability to adjust on the ﬂy. So we haveautomation and governance, but we also have what the geeks would call exception management.We have a nice conﬂuence of actionable automation thats governed and managed with insight,but we also can adjust these things on the go. I think thats something also thats fairly new to thisnetwork environment.Minahan: Absolutely. The power of a network using Metcalfes Law is that each new memberdelivers incremental value to every existing member. Part of that is it does allow you as abusiness to be far more responsive. It allows you to make more informed decisions, as we talkedabout. Youre not just making decisions based on your own input, but youre making decisions
based on relationship and transaction history, as well as community opinion of a particulartrading partner.In a networked environment, you can quickly ﬁnd new peers or partners that can help youexecute a process. You can get informed community decision on how that partner or peer hasperformed in the past, so you can make a educated decision as to when and how to ﬁndalternative sources of supply, for example, or ﬁnd new employees or potential employees thatyou could be matched with through this network.Those are the types of things that a network model allows you to do, to make more informeddecisions, to be much more responsive, and ultimately, have far greater transparency andvisibility into the process.Gardner: So we have gone into at least the business level, beyond this notion of individualnetworks to systems of record and core business functions being networked, being looselycoupled, and therefore part of a larger business process.Ariba has, I think, some of the critical business functions in its sights to extend further into thisnetworked value. Tell me a little bit about some of the core themes at Ariba LIVE and whynetworking, taking advantage of some of these larger trends that we have talked about, applies tobusiness processes and some of the core business functions that all companies share?Minahan: At the end of the day, Ariba is facilitating collaborative business commerce, allowingbuyers, sellers, and other parties involved in the commerce process to reach outside their fourwalls, to connect their systems and their processes to get greater transparency into that. Thats atheme thats carrying through to Ariba LIVE.Ariba LIVE’s theme will be around this networked enterprise, and how you enable a networkedenterprise and what it means for you as a buyer, as a seller, or as a chief ﬁnancial ofﬁcer.Industry leadingWhen you look across the agenda for Ariba LIVE, its ﬁlled with industry-leading companiesthat have already embraced this network approach. Whether its Anglo American, one of thelargest mining companies, talking about how they are leveraging a networked model to identify,develop, and collaborate with sources of supply and new suppliers in the most remote regions ofthe world, driving a sustainable supply chain.Whether its Sodexo, one of the largest food-service companies thats creating some innovativeways in which they are using the network to support their highly perishable, fast-churn supplychain, and gain insight, both for them and for their trading partners. Procurement and IT haveworked together to develop a networked model that allows them to be highly responsive in avery perishable supply-chain type environment.
Or whether its GlaxoSmithKline thats leveraging a network-based environment to not onlyautomate its invoicing process, but to help optimize cash ﬂow, both for them and their partners.In addition, you have a host of other companies, that are driving this network supply chainmodel.We have a spotlight keynote that has driven some innovation into the federal sector. The ﬁrstCIO of the United States, Vivek Kundra, is going to talk about how he developed the Cloud FirstPolicy within the Federal Government.That means, not just lowering the TCO of deploying technology to automate existing processes,but creating a new community, a new interface, a new way for the Federal Government toconnect and share information, and big data with their constituents. And thats the type of thingthats going on in the public sector, as well as in the private sector.Gardner: Thats interesting. So we are not going to just talk at the abstraction, weve got peoplewho are putting this into practice, who have metrics of success, that can show how its done, howthis is aiding their businesses, and also supporting their supply chain and sales, marketing, andother ecosystem leveled activity. Thats terriﬁc.Are you going to be on stage again this year, Tim. Are you the MC?Minahan: I have the honor of being the MC this year, and it is an honor when you look outacross the keynotes that we have and see what theyve been able to accomplish by adopting thisnetworked model and how it has allowed them to drive not just their supply chain strategy, buttheir business strategy. We think its going to be a phenomenal show.High-proﬁle innovationsIn addition to that content, obviously because it is Ariba LIVE, well be launching some veryinteresting and high-proﬁle innovations, as well as partnerships that will help buyers and sellerssimplify their commerce process and get more easily connected to their trading partners.Gardner: So we will see some leading-edge adopters tell the story of whats working for themand how they got there, and some major news and announcements, as well as alliances with morenetwork partners, right? You have to network in order to allow the network to be valuable to yourclients?Minahan: Exactly. And because its in Las Vegas, there will be a little fun along the way as well.So we are very excited about Ariba LIVE. We encourage any of your audience members thatwant to attend to register at aribalive.com.Gardner: You have been listening to a sponsored podcast discussion in conjunction with theupcoming Ariba LIVE Conference in Las Vegas, the week of April 9. Now, this starts April 10right, Tim?
Minahan: Yes, its April 10-12 at Caesars Palace in Las Vegas.Gardner: Great. We also took some time today, and I enjoyed it, exploring these conceptsaround the networked economy and we had a preview of some of the major developments.So thank you to our guest, Tim Minahan, the Chief Marketing Ofﬁcer at Ariba. Thanks, Tim.Minahan: Thank you, Dana.Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks to you also,our audience, for joining, and come back next time.Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor:Sponsor: AribaTranscript of a sponsored podcast on the upcoming Ariba LIVE Conference and how thenetworked economy is enabling business success. Copyright Interarbor Solutions, LLC,2005-2012. All rights reserved.You may also be interested in: • Ariba Dynamic Discounting Gives Companies New Visibility into Cash Flow to Improve the Buying Process • Ariba, IBM Deal Shows Emerging Prominence of Cloud Ecosystem-Based Collaboration and Commerce • Ariba Steps Up Cloud Efforts with StartContracts, On-Demand Contract Management for SMBs • Ariba Live Discussion: How Cloud Alters Landscape for eCommerce, Procurement, and Supply Chain Management • Cloud-Based Commerce Network Helps Florida Manufacturer MarkMaster Reach New Markets, Streamline Transactions • Aribas Jason Kurtz on How IT Financial Trends are Maturing Technology Procurement and Management Needs