This week, SAP Ariba is conducting its annual SAP Ariba Live customer conference One of this conference’s key messaging themes of this year’s session is a perspective of how this technology provider views the future of procurement, and how B2B Business Network capability can be affordably offered to up and coming mid-market companies.
New Mid-Market Offering
SAP Ariba is announcing a new packaged offering, SAP Ariba Snap, that is being billed as providing fast-growing enterprises the ability to quickly enable a path toward supply chain digitization in managing spend and source-to-pay processes.
The announcement makes emphasis on simple, affordable, and scalable implementation options but this analyst has not had the opportunity to view the overall capability and pricing models. The principal delivery mechanism will come from a network of SAP Ariba certified partners and a sampling are cited in this week’s announcement.
Viewing the Future of Procurement
Under the theme of a report titled Procurement 2025, this B2B Network platform provider addresses the question of whether there will be a procurement function, per-se, in 2025. The obvious response is yes. But like all other aspects of supply chain digital transformation, specific jobs and responsibilities will evolve rather quickly over the coming years.
The belief expressed by SAP Ariba is that: “technology will make business more personal, contextual, intelligent and efficient in the years ahead. And in the process, procurement will become less tactical and more strategic.”
Supply Chain Matters certainly shares in that viewpoint. We would add however, that this has been a directional concept that has been forth for the last five or more years. Some organizations and their respective procurement and sourcing teams are well on their way towards becoming more strategic to the business. Some are not, particularly those that are frequently called upon for executing added tactical, near-term cost savings across direct and indirect procured materials. Becoming more strategic implies the ability to manage both indirect, and especially direct product value-chain material requirements in a far more efficient and responsive manner.
Further, the notions of procurement’s strategic focus have more to do with senior management’s perceptions of the supply chain. That often ranges from being the “piggy bank” of needed cost savings, a key leadership voice in the mitigation of product value-chain risk, or a collaborator for required line-of business transformation and desired business value outcomes. Keep that in-mind when contemplating what future procurement leaders will be and when.
The SAP Ariba Procurement 2025 document describes technologies used to enable future capabilities. One of the listings is Super Networks, described as follows:
“To create value, networks need to network. Hyperconnected ecosystems will become the standard for procurement, enabling a unified process from source to settle that delivers speed and business agility.”
Included in Prediction Five of our Ferrari Consulting and Research Group: 2018 Predictions for Industry and Global Supply Chains is a belief that digital transformation timetables will accelerate because of more compelling business forces requiring such changes. Supply chain digital transformation from a B2B Networks perspective, by our view, will take on two dimensions. One is customer-facing, namely all digital processes supporting multi-channel customer fulfillment and services needs. The other is supplier-facing, the digital linking of many business network processes not just related to procurement transactions and documents, but broader aspects of sales and operations planning and decision-making.
The implication is that the B2B Business Network platform should not be viewed as solely one of supporting indirect and direct procurement process support, but far broader. It implies the need for procurement professionals to be actively collaborating with supply chain and line-of-business sales and operations planning teams in creating a unified process that extends beyond source-to-settle, and eventually source to customer fulfillment when supplier and customer facing networks become hyperconnected over the next decade.
Hyperconnected networks, by our lens, include a technology availability timetable that is advantageous to the individual line-of-business or enterprise as opposed to a technology vendor. It is not so much about the tech vendor’s roadmap but demonstrated vision, commitment, customer references and record of accomplishment of delivery on commitment.
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