CFO Magazine has published an insightful article on the power of supplier networks. It highlights how supplier networks like the Ariba Network and the business matchmaking service Ariba Discovery provide more than just matchmaking opportunities for buyers and sellers.
David Rosenbaum, senior editor for technology at CFO and author of the article, points out that by joining a supplier network, companies can also benefit from other functions. For example, they can improve their spend-under-management, lower their expenses associated with purchasing subpar products and services, and improve on-time delivery.
Talking to Ariba customer MarkMaster, a custom marking company that started out as a rubber and stamp manufacturer, the power of suplier networks becomes clear:
“We’ve grown 10% to 20%, compounded, for the last 10 to 11 years since getting on the Ariba system,” [MarkMaster CEO Kevn] Govin notes. “Someone says, ‘We need to order 10,000 name badges,’ and they see us on the Ariba network. Our banner business is booming."
Rosenbaum in his article points out that "the value of a network is proportional to the square of the number of connected users of the system: more users, greater value." That's why Forrester Research in a recent study identified Ariba - with close to 700,000 companies and $200 billion in transactions for the last 12 months - as the network with “the most complete range of functionality and the best user experience.”
With more and more companies shifting key functions like procurement, invoicing and vendor selection online, Rosenbaum makes clear that companies are well advised to join a supplier network rather sooner than later:
"One can foresee a time when being on a network will be a requisite for conducting business anytime, anywhere, with anyone. [...I]f an organization doesn’t belong to a supplier network, it will be increasingly difficult for it to go to the party, let alone find a date."
Also read How MarkMaster Leverages Quick and Easy RFQ Access and download the MarkMaster Case Study.