SAP News: What will be new about the Ariba Network

September 2nd, 2014

What the Ariba Network Can do for You

Two years after acquiring Ariba, SAP integrated functions of SAP HANA into Ariba Spend Visibility, a spend analysis tool. Now, for the first time, Rolf Weiland, vice president of solution strategy at SAP, reveals just what the synergy between the Ariba Network and SAP can achieve.

Four months ago, SAP began running the Ariba spend analysis tool on the SAP HANA database. SAP HANA hasn’t just made query processing faster and boosted overall performance. Rolf Weiland, specialist for purchasing solutions, says that it’s the simulations themselves that give customers crucial added value. Ariba Spend Visibility’s “what if” analysis allows customers to forecast how, for example, a drop in demand will affect the supplier network or related articles. This analytic method wouldn’t have been possible without using SAP HANA as the software’s database. SAP also intends to offer new functionalities for the Ariba Network before the year is over.

“For the first time ever, customers will be able to analyze transactional data,” says Rolf Weiland, vice president of solution strategy at SAP. Image: SAP

SAP News: What will be new about the Ariba Network?

Weiland: For the first time ever, customers will be able to analyze transactional data. It also lets them compare their own reports with those of their competitors in the network. By doing so, they will also see which products are currently in high demand, and which ones aren’t.  In addition, customers can identify potential flaws in the supply chain.

The network currently comprises 1.5 million trading partners with a collective revenue of €500 billion. This must create considerable momentum…

That’s right. We will, however, also be providing access to other data sources. Customers will, for example, be able to integrate supplier ratings from Dun & Bradstreet as an additional neutral, external source. This allows supplemental information for risk assessment to be incorporated into the decision-making process of whether to do business with a new potential supplier or not. This service is particularly important for major customers.

Large companies are increasingly concerned about sustainability issues, such as their ecological footprint, but also with social engagement. You demand similarly high standards from your customers. Can you check that they actually meet them?

Yes, we can. We know that the chemical group AkzoNobel, for example, is extremely committed to achieving its sustainability goals. If a supplier makes the headlines because it dumped toxic waste into rivers, this will also damage the customer’s image. Incidentally, we have implemented a warning system for this type of situation: A so-called “listener” monitors global media, as well as tweets and posts on the Internet, and informs the company as soon as anything relevant to its supply chain crops up. If, for example, the facility of a high-volume supplier is affected by a natural disaster, less time is lost than would have been the case previously. Those valuable hours or days lost can be used to find an alternative supplier.

If the supply chain contains an element of risk, a “listener” will provide information on any potential risk factors. Image: SAP

This is another context in which external sources can help determine whether a company Web site’s proud sustainability proclamations actually reflect reality…

Yes, we would like to offer customers the option to tie in external sources such as Achilles or EcoVadis.

The special advantage that the Ariba Network will provide in the future lies in its ability to create benchmarks by drawing comparisons between competitors. Could you give a few examples?

Of course. Consider personnel services. A furniture company is looking for packers in the local area for a major upcoming order. Using the network, it can ascertain the current typical hourly rate in this market, and also how long it will presumably take to fill all required positions. We can do this even for highly-specialized and qualified SAP experts.

A company has 12 suppliers. What kind of information can the Ariba Network provide?

As the company, I would receive data on all suppliers, such as delivery times, the proportion of orders actually delivered, and a KPI for reliability and customer satisfactionI could then compare this information with my own, but also with other suppliers in the network. We are planning to visualize various KPIs using SAP Lumira graphic representations and show them in bubbles, pie charts etc.

SAP Lumira enables the creation of eye-catching visualizations, for days’ sales outstanding for instance. Image: SAP

One idea that has been floated is to reveal the payment practices of all partners in the network. What exactly would this look like in practice?

In general terms, days’ sales outstanding can be represented graphically by displaying the number of days that usually pass before bills are paid. When I compare days’ sales outstanding across all businesses in the network, I can see where I need to take a closer look. I could, for example, trace payment delays to the country, supplier, and time period they originated from. Right now, our visualizations are still mockups from current development, but they will become reality very soon.

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