Transcript
of a discussion on the emergence of business networks and how
that requires new models of competition and cooperation.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: SAP Ariba.
Dana Gardner: Hi, this is
Dana Gardner, Principal Analyst at
Interarbor Solutions, and you’re listening to
BriefingsDirect.
Our next innovation thought leadership discussion focuses on the rise of
business networks and how that requires new models of doing business and new ways of relating to customers and partners.
Quite
rapidly, we've entered a business world where
unprecedented connectedness leads to instant analysis. These insights across entire
industries provide powerful new ways for businesses to innovate and to
adapt to markets, supply chains, and customer demands.
All
things being equal, the companies that best leverage this data-driven
innovation and these
business network effects will surely win in their
markets. We’re here today with two experts to discuss the future of
enterprise software and the role that business networks will play in
creating new models for sustained success.
To learn more about doing business best in our digital and connected world, please join me in welcoming
Alex Atzberger, President of
SAP Ariba. Welcome, Alex.
Alex Atzberger: Thank you, Dana. Thank you for having me.
Gardner: And we are also here with
Christian Lanng, CEO and Co-Founder of
Tradeshift. Welcome, Christian.
Christian Lanng: Welcome, Dana, it’s great to be here, and also with Alex.
Gardner: We've had this ongoing confluence of
cloud,
mobile,
big data
and we’re seeing streamlined business processes happen as a result of
these -- and it seems to be accelerating and empowering business-network
effects. So, my first question to you, Christian, is how is this
disrupting businesses and how do they turn that disruption into a
benefit and business agility?
Lanng:
As you mentioned initially, the confluence of cloud, mobile -- all of
these things -- is happening and it’s a massive disruption for the
Fortune 500. We’ve never really seen anything on this scale, but I
want to point out two key areas. If you go back 10 or 15 years, what you
were doing with your supply chain was very batch-driven. It was very
large-scale business, and was all about reducing the cost of
transactions. We saw the rise of business
BPOs where you did a lot of outsourcing of your processes, a lot of outsourcing of transactions.
And
it was all about a cost-steady supply chain. If you look at today, the
main paradigm has switched completely. What you will see is that it’s
all about
agility. It’s all about the speed of data. We find that a lot
of the solutions we implemented in the '90s and the early 2000s tended
to focus on reducing cost, and that very often came with the flip side
of increasing the cost of change, because we put everything into very
rigid process and very rigid structures.
Full supply chain
One
of the things that
business networks are transforming right now -- both
on Alex’s side of the table and our side of the table -- is that we're
now wiring the full
supply chain.
We're connecting all of the processes and bringing in all of the data
in real time. That’s an extremely fundamental switch from a world where
everything used to be faxed via paper, up until, actually, quite
recently.
It’s a tremendous disruption, probably the
biggest we’ve see in business software in the last 30 years, and it’s
very exciting to be here, because we're just at the very tip of the
iceberg for this whole revolution.
Gardner:
Alex, disruption can be a negative, but disruption could also be
something that creates opportunity. How are you seeing the current market as an
opportunity rather than destruction?
Atzberger:
All customers are realizing that digitization, the confluence of the
different trends that were spoken about, present absolute opportunities
to change the business model of companies. And that if they don’t do it,
they will die.
If you look at the Fortune 500, versus what it was 20
years ago, you see such an enormous change. It doesn’t matter which of the industries you're in -- retail, financial services, consumer
products. You need to adopt a strategy of thinking about how can you use
digital technologies for your benefit, because if you don’t, you will
fall behind.
But the other fundamental thing that has
changed, and it’s actually an opportunity for companies, is that the
user has moved to the
center of the conversation. So the aspects of the
consumer technology that we are bringing into the business context have
fundamentally changed people’s requirements on technology.
But
it's also people’s adoption rates of technology. The reason why
companies like SAP Ariba or Tradeshift are growing and seeing a lot
of demand for our solutions is because we see that companies are embracing
the change. They know embracing is the only way forward.
Gardner: And of course, we've seen the disruption on the
business-to-consumer (B2C) side of things with eBay years ago,
Uber now, and
Airbnb changing industries rapidly. How does this affect the
business-to-business (B2B) interactions of commerce? Is it the same, or do we just extend what
we've seen in B2C, to B2B? Why would B2B commerce be different or more
challenging?
Lanng: It’s
absolutely impacting. I'll start with a point that Alex made that the
consumer, the user, has moved to the center of the conversation. It’s
about usability, ease of use. If you take something like Tradeshift, we
focused very early on making everything mobile first because we realized
that the future of B2B processes were all mobile.
If
you take a country like China, there’s 97 percent smartphone penetration
and 60 percent PC penetration. If you want to run your supply chain
there, you want to be mobile-enabled, you want to be mobile-centric, and
you want to create whole new user experiences. The other area where the
consumerization of B2B is happening and increasing is what I call apps.
Easy to add apps
In
the past, big enterprise systems used the concept of modules. You could
load new functionality, but it was very hard to do. It required your IT
department. It was very complex and challenging. Today (and
Salesforce
was really the pioneer), we have platforms like Tradeshift that make
it very easy to add a new app to get a new set of functionality going
really, really quickly. And it’s easy for the customers to change very
quickly and adapt to the business environment.
The last area of active consumerization
hitting the enterprise is on insights. When I use Twitter or Airbnb, I
get real-time feedback. If I send a tweet, I will immediately know the
reach, how many users saw the tweet. I can go in and see that limits of
the tweet, and I can make a decision, as a consumer, based on that
feedback loop.
In the enterprise, in the past, a lot
of the business intelligence and analytics we built, were more like
centralized reports going to the top and not benefiting the people who
were sitting in the front line doing the work of the business.
Where
we're going today is rebuilding using network data, using the real-time
data, and going to a real-time level with these people. That’s the last
huge disruption you'll see in the enterprise: real-time insights, the
use of the apps as a driver and a method for delivering new folks. Now,
you'll see another whole new paradigm for user experience and user
friendliness.
Gardner: And, Alex, for companies
that have a hard time adapting rapidly -- that are still using
legacy software, that prefer on-premises deployments, that are just now moving past paper-based processes -- how do we encourage
them to recognize the change and adapt?
Atzberger: One expression I tend to use with companies is to say that
solutions need to be consumer-simple, as well as strong. What I mean by
that is that when you're in the B2B space, you need to obviously
recognize that the requirements for security, the requirements for
integration, the requirements between data and other pieces have a
different level of complexity than when you use eBay or Twitter.
The
role of technology companies today is to remove friction as much as
possible for companies so that they can enjoy the same benefits as a
user in the consumer would. At the same time, providers have to
obviously ensure that there is a business strength to the solutions that
gives companies the comfort to move to a cloud environment.
The role of technology companies today is to remove
friction as much as possible for companies so that they can enjoy the
same benefits as a user in the consumer would.
So
if you're a financial services institution and you've worked on
on-premise software all the time, you obviously had full control of
making changes to the software. You knew the way it was running, etc. As you're moving this to the cloud, you're gaining the benefits of
fast innovation, but you can’t give up on the necessity for security,
for instance, and for sound information.
That’s often
where we see customers choosing companies like SAP to go with because of
the experience we have managing data, ensuring the integrity of the
information, and ensuring that security. But a lot of conversations that
we have with companies are about how you, on one hand, deliver that
wonderful consumer simplicity, but at the same time deliver on the
business strength.
This is especially relevant in
procurement, because you can make it so easy, through an app, to order
products. But if you're in procurement, you don’t want your employees to
just buy things randomly -- just because it’s now easy to do it. You want
to have the controls and compliance in place to manage your spend, have
visibility on the spend, and manage your company.
That’s where the crux of the matter is, and if we solve this, I think customers are ready to move to the cloud.
The right balance
Gardner:
Christian, it sounds as if Alex is calling for a balance between the
governance and benefits of traditional software and business
applications, while also exploiting the newer agility from mobile, from
feedback loops, from the consumer-centricity. It’s almost as if we have two
companies within one now. How are you seeing that balance and how do you
help companies achieve the right balance?
Lanng:
It’s quite natural, and Alex and I also can probably recognize that we
come from both sides of the equation here. Alex is trying to transform
what traditionally has been an on-premise company and going toward the
cloud. I come from a cloud-first company, and I'm trying to break into
some of these complex use cases. Alex is spot on; security is still a
massive issue especially with the data we deal with here.
So,
it's about finding that balance. It’s also why we can’t use the
consumer apps, since consumer apps need to have security models, and we
need to have a lot of things. But this stuff is also getting very
robust. You saw some recent breaches last year. There was the
Sony story
with all of the emails that were leaked. That was an on-premise system
that was penetrated. I'm quite sure if that has been a cloud-based
provider like
Google or
Microsoft, that penetration would have never happened.
We
have to question ourselves that, in a trade environment like today, can
each individual enterprise actually uphold the security that’s
required? Are we seeing that cloud companies like mine or Alex’s, in a
way, become specialists in securing all domains and securing the data
within that domain?
Alex is trying to transform what traditionally has been an on-premise
company and going towards the cloud. I come from a cloud-first company
and I'm trying to break into some of these complex use cases.
Also,
when we talk about this balance, when we talk about compliance for
instance, there are two paradigms. You can have control and compliance
upfront, but obviously you limit adoption and thereby limit impact on
the business-case side.
Another thing, as Alex says,
is that we can’t just have people going in and randomly buying
everything. Can we guide them better? Can we give them real-time data to
show them the consequences of what they could do instead, rather than
put up a wall as the first step? That’s where there’s a lot of
innovation happening right now, and a lot of thinking.
Gardner:
Let’s revisit this notion of business networks. It seems to me also
that, as we move toward cloud models, as we look to systems of record
as services, the data becomes more transferable, shareable, and
manageable, not siloed or isolated.
It seems to me
that the more data and access to process information you have, the more
of an advantage we have by being able to actually analyze these things
in context and in total, rather than isolated as in the past.
So,
how do we as suppliers to enterprises help them recognize the benefit
of combined network efficiencies -- of looking to a provider to actually
help them integrate and understand all of the data that’s at their
disposal? Let’s start with Alex. How do we help make business networks
palatable to organizations and trust the vendor to
do more when it comes to bringing these sources of information
together?
Exciting topics
Atzberger:
This is an exciting topic, because if you look at it, obviously
networks have a network effect. This means that, as more people are
connected to a network, the more valuable the network overall becomes to
its participants That’s something that we see very much in the Ariba
business model.
Today, we have 2 million companies
connected to the
Ariba Network. When I go into certain markets, and we talk to
certain customers about their supplier base, it makes a difference when
50 percent, 70 percent, 80 percent of those suppliers are already
connected to the platform.
If you step back and think about point-to-point connections like
EDI
that existed in the past to create connections between companies, now
you suddenly have a network where you have the baseline to add
additional services to a network to actually enrich the experience for
everyone who actually participates in the network.
At the same time, the data needs to be secure and companies need to feel they actually do business with other trusted entities.
It’s
very, very important to understand that from our perspective. When we
talk about procurement, I also look at the supplier as a customer. So
there’s value on both sides. When we talk, for instance, about
mobile apps,
the mobile apps don’t just exist on the buyer side; they also exist
on the supplier side -- and that’s a very, very important part of this.
As
you bring in new services, payments, supply chain information, and
forecast information into the network, these are some of the most
rapidly adopted solutions that we see, because people already have the
network in place and can now do more with it. It’s very similar to
social networks that started pretty much with the status update, and
today, you can share more and more of your lives and do more and more
things on a network. That’s the power of it.
At the
same time, the data needs to be secure and companies need to feel they
actually do business with other trusted entities. This brings in the
whole topic of supplier risk, of having transparency, into who the
suppliers actually are that you do business with, but also identifying
new sources of supply. That becomes very powerful, and then underneath,
everything is the actual data that sits there. Opening up that
information in the platform for companies to analyze and benchmark
themselves is extremely powerful.
I often talk about
the application, the network, and then the data-play as the three
dimensions that company should be thinking about as they embrace business networks
strategy.
Gardner: A whole greater than the sum of the parts. How do you see organizations take advantage of it?
Multi-Enterprise Grid
Lanng: First off, this is one of the areas where Alex and I wholeheartedly agree. When
Gartner came out with the new hot topic for
Procure-to-Payment, one area that they pointed out was a whole new category called
Multi-Enterprise Grid,
and that’s of course, a mouthful to swallow, but what they really said
was that the future for enterprise connectivity is something brand new.
It’s
not the business networks in the sense that we know them today, it’s
not the EDI networks, but it’s something where information can flow in
all directions. It’s a full stack of information, not just transactional
data, but also, as Alex talked about, real-time insights, analytics
data, logistics data, collaboration, and so on.
There
were only two providers mentioned in that category, which is rated by
Gartner to be one of the most impactful over the next five to 10 years. And
the two providers were Tradeshift and SAP Ariba. As a company a third
of the age of Ariba, we were proud to be in that category. But I think
it shows the focus that both of these companies have in this area.
The long tail of the supply chain will become increasingly important for networks as we move forward.
One
thing we did well, and I also think it points to the future of this, is
that we started out as a
supplier network. Before we built any buyer
functionality, we actually designed a completely functional supplier
network, and we helped suppliers join for free, get access, and run all
of these services. Then, we slowly built out
our enterprise portfolio.
And that meant that from the beginning, Tradeshift has always been
network-first.
Every single feature we built on the
enterprise, every single aspect of our platform, we designed with this
idea of how we would utilize the network, how we would bring
collaboration into it, how our partners and app partners would use these
things. To the point of the openness, Tradeshift was born with a
completely open set of
APIs so that anybody can develop on the platform and put out applications.
The
long tail of the supply chain will become increasingly important for
networks as we move forward, because as we're moving into much more
complex transactions and move into much more complex data, we will need
to connect every single supplier. If you take something like risk – as
one of the examples that Alex mentioned – you are as exposed to the
tiny, tiny supplier as you are to the big North American supplier you’ve
been doing business with for 10 years, maybe even more.
If
you ask me what the
future of networks, I think it will be three
things. It will be connect everyone, rather than to connect the top 10
percent. It will be a Multi-Enterprise Grid, which means it’s moving in
all directions and data are connected in all directions both from the
supplier side and from the buyer side. Finally, it will be open, but to
echo Alex, open but secure. People will be able to build and innovate on
top of these platforms, but within a secured framework and secured
context.
Gardner: Alex, SAP has
been around for quite some time, and conventional wisdom nowadays is
that if you're a legacy provider you're somehow at a disadvantage in
the cloud environment. Yet
SAP recently reported very strong growth, and
I think this validates a somewhat different approach or a different
perception of a legacy vendor. Tell us why you think SAP is growing
while other vendors are
struggling?
Technology cycles
Atzberger:
Dana, if you look at it as a company that has been in business for 42
years, we know one or two things about going through different
technology cycles. Each technology cycle requires you to transform your
company. What SAP did right in this transformation is that it acquired
businesses to move the business forward, and a significant investment in
outside R and D basically by bringing in capabilities into SAP.
But
then, when the companies got acquired, each company is actually managed
as an entrepreneurial entity inside the business. For me, that’s a very
important. I belong to a family where my father had his own business. I
believe that it’s really important that companies focus on innovation
and actually have a capability to have an entrepreneurial mindset, and a
commerce mindset inside a business.
I respect
companies like Tradeshift and other companies that are emerging very
much because of that commerce mindset of those businesses. The power is
the scale at which you can impact change at a company like SAP, and
that’s where actually so much of the transformational capabilities are
coming from.
With 250,000 customers on the SAP side
touching 70 percent of the world’s transactions, imagine what type of
base this gives to Ariba, which today now facilities $1 trillion worth
of commerce, to expand and build on it, and all the technical
capabilities that come with it.
As a company that has been in business for 42 years, we know one or two
things about going through different technology cycles. Each technology
cycle requires you to transform your company.
I
always like to say that I want SAP Ariba to be the fastest growing
startup inside a large company. And how do we do this? It’s by both
focusing on that innovative mindset of a startup company and combining
it with all the assets that come from a larger company. That’s a very
valuable proposition both for the customer as well as for having
passionate employees to actually deliver the best results.
Gardner: Christian, there’s also conventional wisdom that says if you're an
agile newcomer that you can run circles around the incumbent companies. How does
that work for you, and how do you see that playing out?
Lanng:
I want to start by saying that we're the challenger to SAP Ariba in
this market. It obviously has its advantages. But I also want to say
that Ariba is obviously one of the competitors that we respect the most.
Alex has been doing an excellent job also of really integrating a
company like Ariba, which is 20 years old.
You have to remember, moving from a whole new stack and a whole new sort of
solution also has its advantages. Sure, we're a challenger, but we're
not that new anymore. We actually have 500,000 companies on our network.
We have total global coverage. We have some of the largest companies in
the world also on our customer list, but obviously not as big as SAP.
But
it’s true that we can probably move a little faster and innovate a
little faster, and maybe also sometimes tease Alex and friends on social
media a little faster. But I think we’ve done it with a lot of respect,
and I definitely see that’s the place for us as a competitor and challenger
in this market. It’s a very healthy competition, because we're both
striving to really do better for our customers.
Attracting innovators
One
thing as a challenger is that we've also been attracting a lot of
innovators within this industry. Other players have focused much more on
companies where Ariba was today and not really innovating. I think
that’s the wrong way to think about what you want to do.
We
always came with being-first principles. We wanted to build something
different. We've done that within procurement. We've done that within
our risk offering, within our network. It’s very, very different. Also,
there is a choice in the market and that’s actually really healthy.
We're also tracking customers that like that innovation, and are
thinking of new ways for supply chains.
At the end of the
day, my biggest integration partner is still SAP. I don’t know if you
want to talk about friendly competition here, but it’s certainly a
market that has multiple angles.
Atzberger: If I
can make one more comment on that, it’s also important to understand
that often times for customers, it’s important to see that a trend, a
movement gets validated by multiple companies. When the cloud came about
some of the innovators, Salesforce for instance, had become absolutely
mainstream. All companies have different sorts of cloud offerings, and
that's good to hear.
It’s also important to understand that often times for customers, it’s
important to see that a trend, a movement gets validated by multiple
companies.
That’s actually important because
companies know that when they invest in something, it’s actually a
concept. That’s why you're talking to two innovators in this space and
that gives more companies confidence to invest in something new and to
say, "We want to go on this journey. I think this is good that you're
taking this topic on this call today, because I do think it’s a massive
trend of going forward."
Gardner: I am a big fan
of showing and not just telling and doing that
through a use-case or a customer example. So, Christian, I wonder if you could relate to us,
maybe by name or maybe just by generic description, a customer scenario that demonstrates Tradeshift’s approach and
value?
Lanng: I absolutely can, and I'll take a very recent example. We
just announced, about a month ago, a big international customer,
Zurich Insurance Group. It's a huge global company, very
conservative industry. It's been around for 150 years and, of course,
has very sensitive customer data. They were having a lot of struggles
with this whole process, and they got the people inside the company
engaged around actually driving impact and value in these processes.
We
showed them at the time our brand new procurement platform called
Tradeshift Buy combined with
the Tradeshift network. There were three
things that stood out for them. The first thing we addressed were rogue
buyers; people who are going outside procurement rules, and we said,
“Hey, these are actually people who are passionate about their company,
who are trying to drive value and even willing to take enough risk that
they are not always following the rules. Let’s try to give them some
tools so they at least participate, and we can get the spend under
control.”
The second thing we did was we showed
collaboration aspects with the supply chain and showed how, in real
time, you can collaborate with your suppliers around categories and also
the procurement department, because in a lot of companies procurement
departments get a little alienated; they become the enemy. If I'm trying
to do something, they're the bottleneck. One person said, "We are the
Department of Cheap."
Strategic part
I
don’t think that’s the case. They are actually a strategic part of
driving value in your business. So we really try to build a procurement
platform where suppliers become equal citizens and became helpers, so
that if you are trying to buy something to try to solve the problem, you
can engage with them in the solution phase, not just when it’s the last
step and you got us in the purchase order (PO).
The last step was the
ability to roll out locally for their supply chain. They are a huge
global company and needed confidence they could get the onboarding
rates. They looked at a lot of solutions and what it comes to down to
today is that there is only reach through two network solutions in the
world. Those are Ariba and Tradeshift. The rest don't have all of these
platform capabilities and this broad scope.
Gardner:
Alex, the same question to you. Do you have a use case example, by name
or generically, that illustrates the power of the composition of SAP Ariba?
Atzberger: Absolutely. I'll give you couple of different examples. If you take a company like
AIG,
the insurance company, I urge you to look at
the YouTube video
talking about how they saved about $300 million through the Ariba
platform. That was driven through -- taking all categories of spend
actually on to the Ariba platform including, by the way, legal services,
which is something where a lot of companies say, you can’t actually
bring this into an e-sourcing environment. So that’s an exciting case.
In the last quarter alone, we enabled another 80,000-plus suppliers on
the network. That’s where a lot of the power of the community and the
network comes from.
Another one, for instance is,
Auchan
the French Company that actually went to suppliers and said, if there's no Ariba,
there's no business. Basically,
you need to be on Ariba in order to do business
with them. It's a strong business-driven case of what actually it means
if you have a strong procurement department to lead the change and do
this not just in France, but across Russia, China, and markets where
they operate.
Take companies like
BHP Billiton
in Australia and Singapore. They drive more than 90 percent of their
spend over the SAP Ariba platform and connect their suppliers to it.
It's one of the best-in-class examples of a sourcing and procurement
organization. Also, they're going into China to identify new sources of
supply and that’s something where we're working with them and really
extending their reach, which is becoming so important to global sourcing
strategies.
Then, I'd point out new customers that we're excited to have as part of the SAP Ariba community, like
First Data.
First Data has the
largest IPO last year in the US. It’s a payment
company, but really a technology company as well. If I look at what
they want to do with the platform and also what we are doing in partnership with them around B2B payments, it's a very exciting uses case as well.
When
you look at the some of the names I just gave you, at the size of those
companies and the suppliers, we're talking about tens of thousands of
suppliers that those companies have. In the last quarter alone, we
enabled another 80,000-plus suppliers on the network. That’s where a lot
of the power of the community and the network comes from.
Lanng:
I just wanted to add one thing to what Alex said, because I think what
he's also showing with his cases is the breadth of industries and global
reach of this customer base and who can use networks. We see exactly
the same within airlines, such as
Air France,
and companies in retail, fashion, manufacturing. I don’t think there is
a single industry we don’t have on the platform, also new companies
like
LinkedIn within services and so on.
I
just want to echo what Alex said. It's a really broad set of industries
and customers who are trying to use live business networks. I don’t think
there's anyone who won’t use this or, in the future, won’t have this. It
will be a default, as having an
ERP system as today.
Data feedback
Gardner:
I think we've only begun to explore the depths
of the data feedback and analysis capabilities within digital commerce, and
within retail, for example, of the user experience and real-time
interactions and customization impacts.
So before we close out,
let's think about companies that might be resisting this notion of taking
advantage of the network, and of starting to do the groundwork in order to
be able to realize those feedback loops and analysis benefits.
Starting
with you, Christian, what would you say to a company that is still
somehow not interested in taking advantage of business
networks, and what potentially could they miss out on if they don't
start doing the groundwork now in order to be able to be a digital
business with deep data-driven analysis capabilities becoming pervasive?
Lanng:
We have to go all the way back to the beginning of this discussion,
which is what also Alex pointed out, that companies that don’t change
and innovate will be gone. We've seen more companies disappear out of
the Fortune 500 in the last 20 years than we have in the history of
business, and it’s accelerating.
If your supply chain is in such a way that you cannot react to that kind
of disruption quickly, and if you can't acquire new suppliers that can
help you find all of these threats, you are done.
There
are three key things you miss out on if you don’t invest in networks.
First is the ability to know and know fast. Today, knowing is way more
important than just the cost of things or the cost of transactions. We
see huge Fortune 500 companies shocking us with reporting their most basic
numbers to their shareholders. You see the shareholders being more and
more aggressive on having insights on how these companies are run.
The
second thing is agility. Agility is probably the single most important
strategic capability in 2016 and onward. And I think if you look at
companies we are taking about they have new competitors coming up. You
can take a company like
P&G who recently got disrupted by the
Dollar Shave Club, a company that spent less than a million dollars on marketing to take a shot at $13 billion market.
If
your supply chain is in such a way that you cannot react to that kind
of disruption quickly, and if you can't acquire new suppliers that can
help you find all of these threats, you are done. Lastly is, if you
don’t have a connected supply chain, you miss out on the advantage of
getting new processes rolled out.
Social networks
typically have a status feed. In our case, once you're connected on
Tradeshift, once you have a supplier up and running, if you want to roll
out any new business process, any kind of new connectivity, it is as
easy as pushing a new app. Whereas somebody who doesn't have this
technology and is rolling out a new business process, we're talking
about a three- to five-year lifespan to get to the old supply chain. So
agility, speed, and just not being disrupted are the three key reasons I
will point to.
Gardner: Alex, Christian paints
the picture of business networks as existential. You really don’t have a
choice, but a lot of companies are still struggling with how to go
about this. Is there an order to it? How should I begin rationally
without getting caught up in complexity and losing control of my
company? What advice, Alex, would you give companies on how to start the
process of becoming a digital business, and to retain governance, but
still get the agility benefits?
Back to basics
Atzberger:
If your company is conservative or wondering about how best to take
advantage of this, you know, you would have to go back to some of the
basics. Of course there has to be a business case. Start with a business
case around the benefits and the cost. What does the infrastructure
currently cost you, the paper based processes cost you, to do business
with your suppliers? What are the benefits that you would have, as
Christian pointed out, if you could actually extend more and more
capabilities over the network, and that itself is very good.
Then
the second piece is to engage some things like
Design Thinking, about
envisioning what the future could be like. Bring together different
people out of your companies cross-functionally to think about how you
could envision doing more with the assets you have in actually creating
new capabilities.
And that’s where things get really
exciting, when you think about maybe we shouldn’t be thinking about the
network just as something where we have a buying from, but maybe it is
something that we become a supplier into. We have many customers, by the
way, who do both, who are both buyers and suppliers on the network, and
they are valuing that as well.
Anything that you digitize doesn’t mean that your business becomes
somehow less involved, somehow detached from your suppliers. It’s
actually the opposite.
Finally, it’s about
understanding. Anything that you digitize doesn’t mean that your
business becomes somehow less involved, somehow detached from your
suppliers. It’s actually the opposite. You become more relevant. You, as
a buyer, become a customer of choice to your supplier.
That’s
very powerful, because at the end of the day, you can argue that, as a
consumer, you start to prefer those companies that have a digital
relationship with you. That’s what networks have built and allow you to
do -- build a digital relationship between your suppliers and the buyers.
As far as conservative companies, I'm happy to talk
to them, Dana. If you have any names, send them my way. We love
to engage and we love to have that conversation, but it comes back to
the fact that there is a real value in this, and it gives all the things
that Christian talks about with the agility and other benefits as well.
It both makes sense strategically, as well as from the business case,
and if those things come together, companies have a great future.
Gardner:
I’m afraid we will have to leave it there. You have been listening to a
BriefingsDirect discussion focused on the emergence of business
networks and how that now requires new buy and sell models. We have
heard how companies that best leverage this data-driven innovation and
these business network effects will gain significant advantages in their
markets.
And lastly we have learned that the use of
business networks creates new models to sustain success. So please join
me now in thanking Alex Atzberger, President of SAP Ariba. Thank you,
Alex.
Atzberger: Thank you so much, Dana, I enjoyed this thoroughly and thank you, Christian.
Gardner: Yes, and thank you Christian Lanng, CEO and Co-Founder of Tradeshift.
Lanng: Thank you so much, Dana, and thank you, Alex.
Atzberger: Absolutely.
Gardner:
And also a big thank you to our audience for joining us for this SAP
Ariba-sponsored business innovation thought leadership discussion. I’m
Dana Gardner, Principal Analyst at Interarbor Solutions, your host and
moderator. Thanks again for listening, and do come back next time.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: SAP Ariba.
Transcript
of a discussion on the emergence of business networks and how
that requires new models of competition and cooperation. Copyright Interarbor
Solutions, LLC, 2005-2016. All rights reserved.
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