This document summarizes a presentation given by Drew Hofler from Ariba and Andrew Bartolini from Ardent Partners on business networks. They discuss how business networks can facilitate inter-enterprise collaboration and reduce costs. Bartolini then outlines how business networks have impacted transactions and supplier communication positively for many companies. He recommends that companies take a comprehensive approach to selecting a business network that considers total cost of ownership, including both value and cost factors.

1. The Power In Business Networks:
A Total Cost of Ownership Approach

2. Drew Hofler, Ariba
Director, Network & Financial Solutions Marketing
Director, Solutions Marketing for
Ariba, an SAP Company.
Recognized expert in business
networks, AP automation, dynamic
discounting, and working capital
management.
Published a number of articles on
around these topics and is regular
contributor to various industry blogs.
Named a “Pro to Know” by Supply
and Demand Chain Executive – 2013
Almost 20 years of banking, financial
services and software industry
experience.
© 2013 Ariba - an SAP company. All rights reserved.
Public
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3. Andrew Bartolini, Ardent Partners
Managing Partner & Chief Research Officer
Chief Research Officer, Ardent
Partners
Publisher, CPO Rising –
www.cporising.com
Recognized expert in sourcing,
procurement, AP, and supply
management
Named a “Pro to Know” by Supply
and Demand Chain Executive three
times
Former VP of Global Supply Mgmt.
research at Aberdeen Group;
Benchmarked thousands of
enterprises across all facets of their
supply management operations
© 2013 Ariba - an SAP company. All rights reserved.
Public
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4. Agenda
Drew Hofler, Ariba
• About Ariba
• What are Business Networks?
Andrew Bartolini, Ardent Partners
• Business Networks: Today & Tomorrow
• Understanding the Network Marketplace
• Using Total Cost of Ownership to Select the Right Network
• Recommendations
• Q&A
© 2013 Ariba - an SAP company. All rights reserved.
Public
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5. Who is Ariba?
The World’s Business Commerce Network
5 million users from
1M+ companies …
… use the
Ariba Network …
… for better
business commerce
In next 24 hours,
Ariba customers will:
•
•
Trading Partners
5
Global 2000
© 2013 Ariba - an SAP company. All rights reserved.
Annual Invoices
40+ million
Annual Purchase Orders
finance $500,000 in
receivables
•
65+ million
manage >4 million
contracts
•
>60%
conduct >100,000 purchase,
sales, and financial
transactions
•
1+ million
Manage >$1.4 Billion B2B
transactions
save their companies >$65
million
190
Countries
$60B
In Annual Commerce
Public
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6. Personal Networks Make Our Lives Run Better…
RESEARCH
© 2013 Ariba - an SAP company. All rights reserved.
BUYING & SELLING
COMMUNITY &
CONTENT
COMMUNICATION
& COLLABORATION
Public
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7. • Access to Opportunity
• Tap into others’ data
•
•
•
(reviews)
Collaborate with Seller
Link to Payment
Track and Trace
Networked Economy…a Love Story
© 2013 SAP AG. All rights reserved.
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8. Procurement
© 2013 SAP AG. All rights reserved.
8

9. Businesses Struggle with Inter-Enterprise Collaboration
Buyers
Manual Paper-based
Collaboration
Point to Point EDI, Portals &
Single Process Solutions
Suppliers
Higher Operating and Supply
Chain Costs
Missed Sales Opportunities
Wasted Time and
Resources
Delayed Payments,
Overpayments, and Missed
Discounts, Slow Cash Flow
Limited Visibility and Elevated
Risk
9
© 2013 Ariba - an SAP company. All rights reserved.
Public
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10. The Solution: The Business Network
Business Networks facilitate inter-enterprise
collaboration between trading partners
Buyers
Suppliers
“ Networked enterprises are 50% more likely to
have increased sales, higher profit margins, gain
market share, and be a market leader. ”
Source: McKinsey & Company, “The rise of the networked enterprise,
Web 2.0 finds it’s payday.” Survey of 4,394 executives. December 2010
© 2013 Ariba - an SAP company. All rights reserved.
Public
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11. The Power In Business Networks: A Total
Cost of Ownership Approach
Andrew Bartolini
Chief Research Officer
Ardent Partners
November 7, 2013
11
Copyright © 2013 - Ardent Partners Ltd.

12. ANDREW BARTOLINI


Chief Research Officer, Ardent Partners
Publisher, CPO Rising – www.cporising.com
Summary
 Recognized expert in sourcing, procurement, AP, and supply management
 Named a “Pro to Know” by Supply and Demand Chain Executive three times
 Former VP of Global Supply Mgmt. research at Aberdeen Group; Benchmarked
thousands of enterprises across all facets of their supply management operations
Experience
Leadership roles in sales, marketing, and services at Ariba and Commerce One. Rich
experience in strategic sourcing, business process transformation, and software
implementation. Background also includes consulting and investment banking.
Education
 MBA – Indiana University
 BA – College of the Holy Cross
12
Copyright © 2013 - Ardent Partners Ltd.

13. ARDENT PARTNERS
Ardent Partners is a research and advisory firm
focused on defining, advancing, and promoting the
supply management strategies, processes, and
technologies that drive business value and
accelerate organizational transformation within the
enterprise.
13
Copyright © 2013 - Ardent Partners Ltd.

14. CPO RISING: THE FIRST INDEPENDENT SITE FOR
CPOS
www.cporising.com
14
Copyright © 2013 - Ardent Partners Ltd.

15. Business Networks: Today & Tomorrow
15
Copyright © 2013 - Ardent Partners Ltd.

16. BUSINESS NETWORKS – TODAY

Organizing Principle: “Business process collaboration
AND value”

BROAD business process focus

Value extended to ALL participants

Paradigm shift in the way trading partners
communicate, interact, transact, & create, find, share, &
use information
16
Copyright © 2013 - Ardent Partners Ltd.

17. THE OVERALL IMPACT OF BUSINESS NETWORKS ON
OUR BUSINESS IS:
42%
17
Copyright © 2013 - Ardent Partners Ltd.

18. THE OVERALL IMPACT OF BUSINESS NETWORKS ON
OUR BUSINESS IS:
75%
18
Copyright © 2013 - Ardent Partners Ltd.

19. BUSINESS NETWORKS’ IMPACT ON TRANSACTIONS
19
Copyright © 2013 - Ardent Partners Ltd.

20. BUSINESS NETWORKS’ IMPACT ON SUPPLIER
COMMUNICATION / COLLABORATION
20
Copyright © 2013 - Ardent Partners Ltd.

21. THE VIEW OF BUSINESS NETWORKS TODAY
21
Copyright © 2013 - Ardent Partners Ltd.

22. BUSINESS NETWORKS – TOMORROW

Organizing Principle: “True Network Effect”

Complementary and new business processes

Deeper , more robust analytics including
predictive

Ecosystem of third-party services

More social networking capabilities
22
Copyright © 2013 - Ardent Partners Ltd.

23. Understanding the Network Marketplace
23
Copyright © 2013 - Ardent Partners Ltd.

24. ALL NETWORKS ARE NOT LIKE THE OTHER (PART
I)
Network Types
Global Business (or B2B) Network
Payment Network
Data Standards Network
Industry Network
Category Network
Country/Regional Network
24
Copyright © 2013 - Ardent Partners Ltd.

25. ALL NETWORKS ARE NOT LIKE THE OTHER (PART
II)
Network Characteristics
Number of existing and active suppliers
Geographic reach
Vertical focus
Capabilities and information availability
Business processes and documents
25
Copyright © 2013 - Ardent Partners Ltd.

26. ALL NETWORKS ARE NOT LIKE THE OTHER (PART
III)
Network Characteristics
Business model
Associated services
Related technologies/solutions
System integration capabilities
Network vision and roadmap
26
Copyright © 2013 - Ardent Partners Ltd.

27. Using Total Cost of Ownership to
Select the Right Network
27
Copyright © 2013 - Ardent Partners Ltd.

28. NETWORK STAKEHOLDERS
AR
Procurement
Account
s
Payable
Others
Buy-Side
Sell-Side
Finance
&
Treasury
IT
Supply
Chain
Finance
Order
Mgmt
IT
Sales
Sales
28
Copyright © 2013 - Ardent Partners Ltd.

29. ARDENT PARTNERS’ TOTAL COST AND VALUE
FRAMEWORK FOR NETWORK SELECTION
Network Value Factors
Efficiency and effectiveness gains
Network characteristics
Internal stakeholder value
Trading partner (supplier) value
© Ardent Partners - 2013
Network Cost Factors
Network access (buy side)
Network ongoing usage (buy side)
Network access and ongoing usage (supplier's direct
costs)
Network access and ongoing usage (supplier's indirect
costs)
Opportunity costs
29
Copyright © 2013 - Ardent Partners Ltd.

30. Recommendations
30
Copyright © 2013 - Ardent Partners Ltd.

31. RECOMMENDATIONS

Invest time researching and tracking the network
marketplace

Engage potential stakeholders early and often

Identify near-term and long-term opportunities with
business networks

Take a comprehensive and holistic approach to network
selection and usage

Utilize a TCO Approach for business network selelction
31
Copyright © 2013 - Ardent Partners Ltd.

32. An SAP Company
Q&A
Andrew Bartolini
Managing Partner &
Chief Research Officer
Email: abartolini@ardentpartners.com
Web: www.ardentpartners.com
Twitter: @andrewbartolini
Drew Hofler
Director, Solutions Marketing
Email: dhofler@ariba.com
Blog: TheNetworkedEconomy.com
Twitter: @dhofler