Part 1: What Networks Can Do For You
When it comes to describing today’s supplier networks, nothing says it better than the old ad slogan: they’ve come a long way, baby. So if you’ve been thinking of supplier networks mainly as a way to receive orders, it’s time to take a closer look.
- Over three-quarters of today’s buying organizations use supplier networks to discover and begin doing business with new sellers(1)
- Interest in supplier networks is strong and growing, with 66 percent of buying organizations in North America and 43 percent of those in Europe ranking supplier networkactivity as either a critical or very important priority(2).
- More easily meet the challenge of cutting costs by automating the cycle from purchasing to payments
- Share transaction and non-transaction information and collaborate on documents
- Accelerate and gain visibility into business processes
- Improve real-time access to data and better manage communication and transactions via the social and mobile aspects of the cloud
- Establish stronger, longer relationships, partly because of the better seller performance that networks make possible
- Gain global access to trading partners and business that would otherwise be unavailable
- Free up staff to work more strategically as the result of efficiency gains across a wide range of functions, including:
- Marketing/promotion and trading partner discovery
- Account management
- Strategic sourcing, cash management, and contract management
- Business document archival (3).
Understanding networks: The key to better benefits
The evolution of supplier networks has given rise to a diversity of network types that vary widely in scope and purpose. By clearly understanding the distinctions of each, you’ll be better equipped to maximize your network ROI.
Percentage of Buying Organizations Using Them
|Capabilities Provided by Ariba?|
|Business social network||Relationship-based network to facilitate the exchange of compliance, risk, and performance information as well as to discover new buying and selling opportunities, but not focused on process||9%||Yes—Ariba Discovery™ and Ariba Sourcing™ allow you to give buyers direct access to this type of information about your company, greatly expanding your chances of learningabout and being invited to bid on new business opportunities, while Ariba Exchange enables you to connect with a large community of trading partners and colleagues|
|Proprietary supplier portal||Buyer-sponsored network leveraging third-party technology rebranded by the buyer; expressly for use with preferred suppliers, businesspartners, and vendors in an internal corporate community, with suppliers set up on a point-to-point basis||31%||Yes—The Ariba Network delivers the same or broader functionality, without the limits of|
invitation-only participation and one-off implementation and use
|Vertical-focused consortium||Dominant in a specific industry (e.g., automotive, aerospace, chemicals) that encourages suppliers to participate||15%||Yes—The Ariba Network encompasses all vertical industries in a multiplicity of regions worldwide, and with the acquisition of Quadrem in 2011 has extended this reach and diversity even more—adding, for example, a deep vertical focus in the mining and metals industries|
|Category-focused network||Network with special functionality and extensive|
membership of dominant suppliers in key categories (e.g., commodities, complex spend, industrial MRO
|18%||Yes—The Ariba Network includes buyers and sellers across more than 20,000 categories|
|Global commerce network||Vendor-named network offering wide range of document types and order-to-pay processing; includes solutions used in other upstream and/or downstream processes||16%|
Yes—As the world’s largest business commerce network with participants in 186 countries, the Ariba Network enables you to automate and/or integrate documents, activities, and solutions across the entire order-to-cash cycle as well as upstream and downstream processes, giving you a common collaborative platform and global community in which to conduct and grow your business
|Order-to-pay network||Vendor-named network focused exclusively on automating exchange of purchase orders,invoices, payments, discounts, and AP automation||21%||Yes—By enabling you to automate and/or integrate business commerce documents and processes across the order-to-cash cycle, the Ariba Network helps you and your customers to sell, buy, and manage cash faster and more effectively than ever|
|Payment gateway||Gateway built on existing payment solutions to provide a complete one-stop shop for all payments to suppliers, whether from AP or other sources||11%||Yes—E-invoicing and e-payment capabilities provided through the Ariba Network enable you and|
your customers to automate and expedite the billing, approval, and payment processes all through a single platform
|EDI VAN||Electronic data interchange value-added network, referred to often as a regional post office; essentially connects supplier systems to back-office applications||16%||Yes—The Ariba Network accommodates trading partners who still use EDI VANs by translating cXML documents into EDI documents and transmitting them directly to sellers|