Success in the Networked Economy
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The document discusses how networked collaboration between businesses through cloud computing, social media, mobile technologies is becoming a key competitive advantage. It notes that these technologies have transformed personal lives and businesses now want to use them to better collaborate with customers, suppliers, and partners. The benefits of this "networked enterprise" include increased sales, profits, market share and competitive leadership. Specific benefits highlighted for buyers include cost reductions while sellers see increased revenues and customer retention from collaborative business commerce platforms.
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Success in the Networked Economy
- 1. New York October 12, 2011 ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 1
- 2. ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved. 2
- 3. Success in the Networked Economy Paul Melchiorre, Ariba Global Vice President
- 4. Your World is Being Shaped by Macro-TrendsCloud, Communities, Mobile CloudComputing Social Media/Communities The Networked Economy Enterprise Apps 4 © 2011 Ariba, Inc. All rights reserved.
- 5. You’re Seeing This in Your Personal Lives…Networks Have Changed Your Personal Life Shopping Entertainment Communication & Collaboration Research 5 © 2011 Ariba, Inc. All rights reserved.
- 6. …And Businesses Want It TooInter-Enterprise Collaboration is the New Competitive Competency “Increasingly companies are embracing collaboration as part of their strategy to grow.” “Tighter collaboration with customers, suppliers, and partners, achieved by having a tech-savvy supply chain is key to steering through unpredictable 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. And For Good ReasonBenefits of the Networked Enterprise Ariba, Inc. 2011 All rights reserved. 7 77% increased access to knowledge 63% increased marketing effectiveness 55% better information sharing 43% greater market share 41% improved collaboration across silos 24% 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 2010
- 8. Community Technology Capabilities 1990’s-2000’sBackoffice OS“Enterprise Productivity” 1980’sDesktop OS“Employee Productivity” TodayInter-Enterprise OS“Value Chain Productivity” Our Vision: The Next Wave of Productivity:Efficient Collaboration Between Enterprises 8 © 2011 Ariba, Inc. All rights reserved.
- 9. The Impact of Poor Collaboration is Big Wanted: Better Business Commerce 9 © 2011 Ariba, Inc. All rights reserved.
- 10. Collaborative Business Commerce:There is a better way 10 © 2011 Ariba, Inc. All rights reserved.
- 12. Average DSO reduction of 5.6 days
- 13. Increase sales by 15%
- 14. 98% customer retention rate
- 15. New biz opps with largestbuyer community
- 16. Buyers
- 17. Reduce operating costs 70% or more
- 18. 12%-15% savings from sourcing
- 19. $2M discount savings/$B in spend
- 20. Cut $9M of contract leakage/$B in spend 11 © 2011 Ariba, Inc. All rights reserved.
- 22. Today, 15% of our total revenues come to us via the Ariba Network.
- 23. 50% of suppliers were already in the Ariba Network
- 24. 20% reduction in staffing costs just from PO-Flip™
- 25. $3 Million in savings in the first year
- 26. Daily visibility into global MRO Spend
- 27. Increased Leverage with Suppliers
- 28. 65% of new customer relationships are sourced via our participation in the Ariba Network
- 29. 10-15% of our new account revenues are directly a result of Ariba Network membership
- 30. 25% of total order volume is transacted via the Ariba Network
- 31. 100% spend process compliance
- 32. 75% supplier record reduction
- 33. 2 day effort to connect SAP to Ariba 12 © 2011 Ariba, Inc. All rights reserved.
- 34. 13 © 2011 Ariba, Inc. All rights reserved.
Editor's Notes
- 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.