Through a scheduling blunder (not my only of the season), I was a virtual attendee of this year’s SAPPHIRE NOW & ASUG 2013 conference held last week in Orlando. With roughly 15,000 attendees each year, SAPPHIRE is SAP’s opportunity to provide updates, share its vision, and introduce customer successes. This year SAPHHIRE was held the week after Ariba LIVE which itself, was infused with a nice mix of SAP resources and content [Sidebar: you can read our coverage of two keynotes at LIVE from Rio Tinto and Commonwealth Bank and over on PayablesPlace, there are two articles covering AribaPay and a few ePayables and Network-themed announcements].

Due to the proximity of the two events in 2013 (and, it appears, in 2014), some have wondered if SAP will keep Ariba LIVE as a standalone event or wrap it into SAPPHIRE. It is our view that SAP would be making a terrible mistake if it combined the events and would risk losing or severely diminishing the huge asset that Ariba LIVE has become – more on that in a future article. Now, here are two procurement slices from SAPPHIRE 2013

Ariba Network Shines @ SAPPHIRE

Over recent years, SAP’s procurement portfolio team has done a very good job of delivering increasingly more content for a procurement audience at SAPPHIRE. With the SAP acquisition of Ariba just a few quarters ago, it was no surprise that procurement content would get onto the Main Stage this year.

In that regard, Ariba CEO Bob Calderoni delivered a calm and confident keynote presentation that formally introduced Ariba to the SAP customer base. In hindsight, Bob began, the acquisition of Ariba by SAP made great sense, since Ariba had spent the past 15 years focused on delivering solutions that complemented SAP’s solutions. SAP was focused on optimizing business processes within the enterprise, Ariba could extend that value by going beyond the four walls to help business partners connect and collaborate.

Ariba’s one goal, Bob said is to “help businesses unlock new levels of productivity.” Bob defined productivity for the audience as ‘a measure of efficiency calculated as the ratio of what is produced to what is required to produce it.’ He then presented a recent history of workplace productivity, beginning with the 1980’s and the introduction of desktop operating systems (Windows & Office) that drove “employee productivity.” Next came the the 1990s-2000s with the introduction of back office operating systems (ERPs and by implication, supply management solutions) that drove “enterprise productivity.” Today, however Bob believes that it will be the inter-enterprise systems (Ariba Network or business networks) that will drive the next level of productivity or what he called “value chain productivity”

Companies have invested billions to reengineer processes, business flows and collaboration and the enterprise applications have done a tremendous job enabling collaboration and communication and driving productivity “In fact, the reason you’re here today is because you have optimized your business processes and functions on the SAP platform. But when it comes to connecting and collaborating with customers and suppliers and bankers and all the other people your company interacts with, the sad truth is that the business world is still a mess.” Despite these advances, 80% of business to business transactions interactions happen offline which Bob says others have estimated to cost businesses$650 Billion. The biggest opportunity to drive improvements today is to leverage business networks and drive value beyond the four walls of the enterprise.

Enter the Ariba Network – with that set-up, Bob introduced the Ariba Network stating that the network connects companies no matter what system they are using with a single standard connection to enable process automation across the supply chain and enable sharing and collaboration of all different kinds of business documents using all different kinds of business systems.

Ariba Network Stats: Before concluding, Bob introduced some usage and value stats: there are 5 million users using Ariba’s cloud-based source-to-settle suite, 1 million plus networked companies, $460B+ in commerce across 190 countries. Bob said that Ariba has new customers who find that between 40% and 60% of their current suppliers are active on the Ariba network. Bob closed by saying that by leveraging the network, buyers can save between 1% and 8% of spend and that sellers can increase their revenue by between 5% and 32%. Then, he welcomed Disney’s CPO to the stage.

Disney in the Networked Economy

Steve Miller, SVP, Sourcing & Procurement and Facility Services & Support at The Walt Disney Company (and friend of the site) came to the stage to discuss his company’s experience working with both Ariba and SAP solutions [Disney is a big “SAP shop”]. First Steve shared some interesting background information on Disney like

• Its three operating goals: great content, innovation, new market expansion
• Its four brands – Disney, ABC, ESPN, and Marvel (they also have Pixar and LucasFilm) – which are distinct and designed to serve a distinct market and purpose. “Brand Clarity” is the strategy Disney uses to manage its brands
• Its six business segments – Walt Disney Studios, Disney Consumer Products, Parks & Resorts, Media Networks, Disney Interactive, Disney Corporate (with global functions including Sourcing & Procurement)

Steve then shared some numbers to help the audience understand the Disney Sourcing & Procurement operation

• 20,500 casual buyers (requisitioners)
• process 6 million invoices annually
• maintain 1,100 company codes
• transact $1.7 Billion in purchase orders from 935,000 business documents

Steve said his team’s mission is to “passionately enable maximum supply chain value for our business stakeholders” by (1) delivering value through operational excellence initiatives (2) delivering hard savings (3) enabling strategic initiatives and (4) becoming a model of world-class source-to-pay process.

Steve sees great value in the SAP and Ariba solutions that Disney uses. For example, he cites the single instance SAP system as a major driver of efficiency and visibility. Steve then shared Disney’s “technology journey” or deployment history which in a bullet format looks something like this:

• 2001 – Single SAP instance
• 2003 – Ariba Category Management
• 2006 – Ariba Network
• 2010 – Ariba Procurement Content
• 2010 – Big Push to improve use of Sourcing, Category Management, and Contracts
• 2012 – SAP SRM 7.0

Steve summarized Disney’s sourcing & procurement activity by highlighting the following:

• Disney runs 160 sourcing projects per month
• More than 25K contracts stored in Ariba
• eProcurement (SRM 7.0) works for more than 20,000 requisitioners
• 155 eCatalogs
• Invoice & settlement leverages the Ariba network
• Dynamic discounting which Steve says will generate savings in excess of $1 million by end of 2013
• Use SAP to issue payments

According to Steve, Disney’s had huge success with the combination of SAP and Ariba solutions including:

• Hundreds of millions in annual savings
• Over 415,000 catalog orders
• Processing cost per order and invoice at world-class levels
• 93% first pass yield on invoices
• Seamless integration between applications

Tagged in: Chief Procurement Officer, CPO, CPO Shop Talk, Networks, Solution Providers, Technology