Kevin: Tell us about SAP Ariba. What is it? What’s the business value that it provides?
Etosha: SAP Ariba is a brand under the SAP umbrella that’s all about intelligent spend management. The Ariba network is a platform that facilitates commerce for both buyers and sellers.
On the one hand, we work on helping buyers source contracts and operationalize procurement intelligently and efficiently. On the other hand, we also work with suppliers to help them sell better and to effectively and transparently collaborate with customers.
The Ariba Network, on which I focus, is the platform in the middle. Our mandate is to facilitate commerce in every way possible, from helping trading partners connect with each other to providing insights so they can work better together
Kevin: I have experience in B2B e-commerce and supply chain management; we did Electronic Data Interchange (EDI), just-in-time manufacturing and delivery, but it was always a one-to-many environment. We were a small team that had to onboard each of our trading partners, negotiate with them to use particular messages for EDI and so much more; it was a massive amount of work. How would using SAP Ariba have made my life easier?
Etosha: If we look at EDI portals, it’s always one-to-many. As a buyer, this is great for me because I have all my trading partners and suppliers support my needs and expectations. However, from a seller’s perspective, this makes things quite complicated; if I have 100 buyers, each with their own different platforms and EDI standards, I now have to staff teams to handle 100 platforms and 100 processes. This translates into low operational efficiency, poor customer service and higher prices for my customers.
SAP Ariba gets around this by enabling a many-to-many approach, which allows for transparency and efficiency in collaboration not just for buyers, but for sellers as well. Once I’m on the Ariba network, I can leverage it for many of my customers, thereby introducing the same level of transparency, collaboration and efficiency in my e-commerce processes. What’s more, Ariba is flexible enough that we can manage the nuances of different industries as needed to support businesses.
This is how we achieve our goal of bringing value to both sides in B2B e-commerce, the buyers and the sellers. Today. we have 4 million users on the Ariba network, and that’s a testament to the value we deliver.
Kevin: Each year, there’s about $3 trillion making its way through the SAP Ariba system; it’s absolutely massive. All those transactions must be spinning off a lot of data. How do you utilize that data to help customers spend more intelligently?
Etosha: You’re right; there are many, many ways we use that data to help customers spend intelligently. For instance, we can help buyers understand the categories in which they’re either over- or under-penetrated in terms of number of suppliers for their dollar spend. We can help them attain the optimal mix. There must be enough supply in order to get a competitive rate, but at the same time, there shouldn’t be too much.
There’s also intelligence in terms of risk. In the way a buyer spends in specific categories, where suppliers are located or how they operate may introduce risks that the buyer is unaware of. We can uncover such risks, allowing the buyer to re-evaluate his or her processes. We can also identify areas of exposure that could have financial implications.
On the supplier side, we can help them understand who their great customers and poor customers are. We provide insight into how efficient their operating relationships are, which can then help them optimize how they manage each customer.
Kevin: What do you see happening in the future of the procurement/sourcing space?
Etosha: Over the coming five years, I think we’re going to see continued increases in operational efficiency. Machine Learning (ML) and Artificial Intelligence (AI) will drive repetitive processes on behalf of procurement and provide smart recommendations on how to operate for maximum efficiency.
Strategic sourcing is going to become more intelligent. Data will allow the strategic sourcing community to be more purposeful in how they source; they’ll be able to look for sources of supply based not just on price or availability, but also on whether the suppliers are making a positive impact on our world at large. For example, are they environmentally responsible? Do they give back to the community? This ability to introduce such intelligence in the process is going to change the dynamics of sourcing as well as how companies view their responsibilities in the sourcing process.
There are unlimited possibilities that intelligence will unlock. It will be instrumental in shaping how sellers represent themselves, how they segment their customers, how to set prices for the various segments and much more.
In the big picture, ML and AI will drive efficiency and alter the very way we look at intelligent commerce.
Watch the full video interview here: https://www.regalix.tv/asset/making-commerce-easier-on-the-worlds-largest-b2b-network-etosha-thurman-head-global-business-network-sap-ariba
SVP Strategy, Regalix Inc.
Online TV Channel RegalixTV
Website Regalix Inc.
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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I work with and have worked with many of the companies mentioned in my articles.