As many readers know, my relationship with SAP and Ariba began 18+ years ago when I worked for the then SAP partner and primary Ariba rival, Commerce One. I later joined Ariba in 2002 and stayed there until becoming an analyst a few years later. Despite being one of the biggest players in the space from the start, SAP Ariba has, nevertheless, come a long way in that time and evolved pretty dramatically. The same can also be said when looking at the company’s recent history since it was acquired by SAP in 2012. Here are some of my thoughts about this year’s conference.
SAP Ariba Live 2018
I attended my 14th SAP Ariba Live this week (this includes the virtual event held during the peak of the great recession). The event has always been a significant one for the procurement industry, but this year, for the first time, our hosts stated that it was now, technically, the largest procurement conference in the world, with roughly 3,200 in attendance. Ardent Partners contributed three to that number – myself, Matt York, and Bob Cohen – and we each will be contributing our views on the event.
Analyst Session Q&A
SAP Ariba typically hosts an analyst session with multiple presenters designed to cover the conference’s main highlights and themes as well as future the direction of the company and its solutions. Instead of a series of presentations, this year, a trio of SAP Ariba executives – new President Barry Padgett, Chief Product Officer Sudhir Bhojwani and SVP, Customer Value, Chris Haydon, participated in a Q&A session that swung back and forth through a broad range of topics.
Most notable for this session is that it was introduced by newly-appointed President, Barry Padgett who comes into the role after serving as the President of SAP’s SMB and Network Group. Before that, Barry had been with Concur, most recently as its Chief Product Officer, since 1997. Barry’s tenure at Concur has instilled a clear confidence in both the value and untapped opportunity of networks. He discussed the similar trajectories that Concur and Ariba had followed, from start-up and IPO, to the shift to offer a true cloud solution and ultimate destination within SAP.
Making the Network Awesome
For Barry, it is less about making procurement awesome and much more about creating a platform that is ‘future-proofed’ for the buyers and sellers on the network. This means that accessibility and usability will both be extremely critical factors going forward for SAP Ariba, particularly if the $1.6 to $1.7 Trillion that is transacted on the network annually is expected to keep growing (Barry noted that the current network transaction number is a value that is twice as large as the combined annual transactions on Amazon, eBay, and Alibaba).
When it comes to accessibility, Barry mentioned the launch of SAP Ariba SNAP, a down-market solution packaged for mid-market customers. Barry says this offering is designed for mid-market customers who need simpler solutions, faster deployments, and quicker speed-to-value. Beyond potentially opening the network up to a large part of the market that is not currently using it, Barry believes that the strong push down-market will also ultimately force SAP Ariba to become a better cloud and solutions company – to succeed in the mid-market, SAP Ariba will be forced to resolve many of the complex technical challenges that keep smaller users from adopting enterprise software solutions.
Barry also discussed the opportunity that exists to truly open the network to users on non-SAP systems. At various points over the years, Ariba has bounced back and forth between positioning itself as an operator of a standalone, more proprietary network and the operator of a network that welcomes users and participants from any and all systems. The SAP Ariba Open APIs were developed to help improve and facilitate connections to, into, and across the Ariba Network. We’ll have to see if they have an impact in expanding the network user footprint.
If the Ariba Network is to become a competitive marketplace that pulls users from other non-SAP systems that could also include Amazon, there must be compelling reasons to do so. Obviously the size and scale of the network and what it can offer new participants will be one big reason. But users must also uniformly find the experience of using the network easy and rewarding. For Chief Product Officer, Sudhir Bhojwani, the keys to improving the network and other solutions (and thus his focus) are (1) user experience (2) supplier engagement and (3) data.
When it comes to user experience, SAP Ariba has focused on its Guided Buying offering for users and Sudhir said that there are now more than 1MM active users in the solution (with many more in the process of being deployed). SAP Ariba’s Guided Buying solution was designed as an add-on to the core SAP Ariba solutions to enable a more intuitive and usable self-service platform that supported users as they navigated and completed their sourcing, contract, and procurement processes. As Sudhir explained, by matching a simpler user interface with big data intelligence (including new capabilities supported by SAP’s Leonardo offering and IBM Watson), users are guided through their activities in a streamlined way that presents users with preferred choices and decisions (we may hit upon some of the usability and smart capabilities in another article).
From this session, it seems pretty clear that the SAP Ariba Network is back to being the core strategy to drive growth for the company and value for its customers. Since the network is the company’s biggest differentiator and its the largest area of future value for its customers, this is a positive shift.
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