Tuesday, May 26, 2015

Big Data Helps Conservation International Proactively Respond to Species Threats in Tropical Forests

Transcript of a BriefingsDirect discussion on how a conservation group, partnering with HP, brings real-time environmental data into the hands of environmental policy makers.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Podcast Series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing sponsored discussion on IT innovation and how it’s making an impact on people's lives.

Gardner
Once again, we're focusing on how companies are adapting to the new style of IT to improve IT performance, gain new insights and deliver better user experiences, as well as better overall business results.

Our next innovation case study interview highlights how Conservation International (CI) in Arlington, Virginia uses new technology to pursue more data about what's going on in tropical forests and other ecosystems around the world.

As a non-profit, they have a goal of a sustainable planet, but we're going to learn how they've learned to measure what was once unmeasurable -- and then to share that data to promote change and improvement.
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To learn how, we're joined by Eric Fegraus, Director of Information Systems at Conservation International. Welcome, Eric.

Eric Fegraus: Thank you, Dana. It’s a pleasure to be here.

Gardner: First, tell us the relationship with technology. Conservation International recently announced HP Earth Insights. What is that all about?

Fegraus: HP Earth Insights is a partnership between Conservation International and HP and it's really about using technology to accelerate the work and impact of some of the programs within Conservation International. What we've been able to do is bring the analytics and a data-driven approach to build indices of wildlife communities in tropical forests and to be able to monitor them in near-real-time.

Fegraus
Gardner: I'm intrigued by this concept of being able to measure what was once unmeasurable. What do you mean by that?

Fegraus: This is really a telling line. We really don’t know what’s happening in tropical forests. We know some general things. We can use satellite imagery and see how forests are increasing or decreasing from year to year and from time period to time period. But we really don't know the finer scale measurements. We don't know what's happening within the forest or what animal species are increasing or are decreasing.

There's some technology that we have out in the field that we call camera traps, which take images or photos of the animals as they pass by. There are also some temperature sensors in them. Through that technology and some of the data analytics, we're able to actually evaluate and monitor those species over time.

Inference points

Gardner: One of the interesting concepts that we've seen is that for a certain quantity of data, let's say 10,000 data points, you can get magnitude of order more inference points. How does that work for you, Eric? Even though you're getting a lot of data, how does that translate into even larger insights?

Fegraus: We have some of the largest datasets in our field in terms of camera trapping data and wildlife communities. But within that, you also have to have a modeling approach to be able to utilize that data, use some of the best statistics, transform that into meaningful data products, and then have the IT infrastructure to be able to handle it and store it. Then, you need the data visualization tools to have those insights pop out at you.

Gardner: So, not only are you involved with HP in terms of the Earth Insights Project, but you're a consumer of HP technology. Tell us a little bit about Vertica and HP Haven, if that also is something you are involved with?

Fegraus: Yes. All of our servers are HP ProLiant servers. We've created an analytical space within our environment using the HP ProLiant servers, as well as HP Vertica. That's really the backbone of our analytical environment. We're also using R and we're now exploring with Distributed R within the Vertica context.

We’re using the HP Cloud for data storage and back up and we’re working on making the cloud a centerpiece for data exchange and analysis for wildlife monitoring. In terms of Haven, we're exploring other parts of Haven, in particular HP Autonomy, and a few other concepts, to help with unstructured data types.
What we want to do is get the best available data at the right spatial and temporal scales, the best science, and the right technology.

Gardner: Eric, let’s talk a little bit about what you get when you do good data analytics and how it changes the game in a lot of industries, not just conservation. I'm thinking about being able to project into people’s understanding of change.

So for someone to absorb an understanding that things need to happen in order for things to improve, there is a sense of convincing. What is big data bringing to the table for you when you go to governments or companies and try to promulgate change in these environments?

Fegraus: From our perspective, what we want to do is get the best available data at the right spatial and temporal scales, the best science, and the right technology. Then, when we package all this together, we can present unbiased information to decision makers, which can lead to hopefully good sustainable development and conservation decisions.

These decision makers can be public officials setting conservation policies or making land use decisions. They can be private companies seeking to value natural capital or assess the impacts of sourcing operations in sensitive ecosystems.

Of course, you never have control over which way legislation and regulations can go, but our goal is to bring that kind of factual information to the people that need it.

Astounding results

Gardner: And one of the interesting things for me is how people are using different data sets from areas that you wouldn't think would have any relationship to one another, but then when you join and analyze those datasets, you can come up with astounding results. Is this the case with you? Are you not only gathering your own datasets but finding the means to jibe that with other data and therefore come up with other levels of empirical analysis?

Fegraus: We are. A lot of the analysis today has been focused on the data that we've collected within our network. Obviously, there are a lot of other kinds of big data sets out there, for example, provided by governments and weather services, that are very relevant to what we're doing. We're looking at trying to utilize those data sets as best we can.
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Of course, you also have to be careful. One of the key things we want to do is look for patterns, but we want to make sure that the patterns we're seeing, and the correlations we detect, all make sense within our scientific domain. You don’t want to create false correlations and improbable correlations.

Gardner: And among those correlations that you have been able to determine so far, about 12 percent of species are declining in the tropical forest. This information is thanks to your Tropical Ecology Assessment and Monitoring (TEAM) and HP Earth Insights. And there are many cases not yet perceived as being endangered. So maybe you could just share some of the findings, some of the outcome from all this activity.

Fegraus: We've actually worked up a paper, and that’s one of the insights. It’s telling, because species are ranked by “whether they are considered endangered or not.” So species that are considered “least concerned” according to the International Union for the Conservation of Nature (IUCN), we assume that they are doing okay.

So you wouldn’t expect to find that those species are actually declining. That can really serve as an early warning, a wake-up call, to protected-area managers and government officials in charge of those areas. There are actually some unexpected things happening here. The things that we thought were safe are not that safe.
Whether we are in the Amazon or whether we're in a forest in Asia or Indonesia, we can have results that are important locally

Gardner: And, for me, another telling indicator was that on an aggregate basis, some species are being measured and there isn’t any sense of danger or problem, but when you go localized, when you look at specific regions and ecosystems, you develop a different story. Was there an ability for your data gathering to give you more a tactical and insights that are specific?

Fegraus: That’s one of the really nice things about the TEAM Network, a partnership between Conservation International, the Wildlife Conservation Society and the Smithsonian Institution. In a lot of the work that TEAM does, we really work across the globe. Even though we're using the same methodologies, the same standards, whether we are in the Amazon or whether we're in a forest in Asia or Indonesia, we can have results that are important locally.

Then, as you aggregate them through sub-national level efforts, national-levels, or even continental levels, that's where we're trying to have the data flow up and down those spatial scales as needed.

For example, even though a particular species may be endangered worldwide we may find that locally, in a particular protected area, that species is stable. This provides important information to the protected area manager that the measures that are in place seem to be working for that species. It can really help in evaluating practices, measuring conservation goals and establishing smart policy.

Sense of confidence

Gardner: I've also spoken to some folks who express a sense of relief that they can go at whatever data they want and have a sense of confidence that they have systems and platforms that can handle the scale and the velocity of that data. It is sort of a freeing attitude that they don’t have to be concerned at the data level. They can go after the results and then determine the means to get the analysis that they need.

Is that something that you also share, that with your partnership with HP and with others, that this is about the determination of the analysis and the science, and you're not limited by some sort of speeds-and-feeds barrier?
The problem has really been bringing the technology, analytics, and tools to the programs that are mission critical, bringing all of this to business driven programs that are really doing the work.

Fegraus: This gets to a larger issue within the conservation community, the non-profits, and the environmental consulting firms. Traditionally, IT and technology has been all about keeping the lights on and making sure everyone has a laptop. There's a saying that people can share data, but the problem has really been bringing the technology, analytics, and tools to the programs that are mission critical, bringing all of this to business driven programs that are really doing the work.

One of the great outcomes of this is that we've pushed that technology to a program like TEAM and we're getting the cutting-edge technology that a program like TEAM needs into their hands, which has really changed the dynamic, compared to the status quo.

Gardner: So scale really isn't the issue any longer. It's now about your priorities and your requirements for the scientific activity?

Fegraus: Yes. It's making sure that technology meets the requirements in scientific and program objectives. And that's going to vary quite a bit depending on the program and the group that we were talking about, but ultimately it’s about enabling and accelerating the mission critical work of organizations like Conservation International.
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Gardner: We've been discussing new data gathering and analysis programs to better determine tropical forest impacts for species and other conservation goals, and we've been learning this from our guest, Eric Fegraus, Director of Information Systems at Conservation International based in Arlington, Virginia. Thanks so much, Eric.

Fegraus: Thank you so much, Dana.

Gardner: And I like to thank our audience as well, for joining us for the special new style of IT discussion.

I'm Dana Gardner; Principal Analyst at Interarbor Solutions, your host for this ongoing series of HP-sponsored discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect discussion on how a conservation group, partnering with HP, brings real-time environmental data into the hands of environmental policy makers. Copyright Interarbor Solutions, LLC, 2005-2015. All rights reserved.

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Friday, May 15, 2015

Winning the B2B Commerce Game: What Sales Organizations Should Do Differently

Transcript of a BriefingsDirect discussion on how the focus of sales in changing from product to person, thanks to technology.

 Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: Ariba, an SAP company.

Dana Gardner: Hello, and welcome to a special BriefingsDirect Podcast series, coming to you from the 2015 Ariba LIVE Conference in Las Vegas.

Gardner
We're here to explore the future of business commerce. We'll learn how innovative companies are tapping into business networks to harness the power of communities, to discover, connect and collaborate with peers and partners across the street or around the world.

Not only are these leaders better managing their spend in buyer/seller interactions, they're also gleaning insights and intelligence to learn from the past, capitalize on the present, and chart an effective course for the future, all in real-time from a single platform.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Ariba-sponsored BriefingsDirect discussions.

Our next thought leadership panel discussion focuses on what winning sales organizations do to separate themselves from the competition and create market advantage.

We'll hear from RAIN Group about a recent study on sales that uncovers what sales leaders do differently to foster loyalty and gain repeat business.

And we'll also hear from National Business Furniture on how they're leveraging business networks to enable more collaborative and innovative processes that enhance their relationships, improve customer satisfaction, and boost sales.

So with that, please join me now in welcoming our guests, Mike Schultz, President of RAIN Group, based in Framingham, Mass. Welcome, Mike.

Mike Schultz: Thanks for having me, Dana. It’s good to be here.

Gardner: We're also here with Brady Seiberlich, IT e-Procurement and Development Manager at National Business Furniture, based in Milwaukee. Welcome, Brady.

Brady Seiberlich: Thanks, Dana. This should be fun.

Competitive pressures

Gardner: Mike, tell me about competitive pressures. What's happening in companies now? What's changing the sales dynamic? What can we do about it?

Schultz: It's really interesting. In the world of sales, if you fell asleep in 1982, having just read a sales book, and woke up 30-something years later and in 2005 went back to work, you didn't miss anything. It didn't really change that much.

Schultz
But there are a couple of things that have been happening in the last 10 years or so that have been making sales a lot different. It has changed more in the last 10 years than it did in the previous 40. So let’s look at two of the things.

The first one is that buyers perceive the offerings that different companies bring to them to be somewhat similar, somewhat interchangeable. What that means is that the sellers are no longer competing on saying, "Hey, here is the product, here is the service, and here's the benefit it’s going to get for you," because the other guy has something that the buyer perceives to be the same.

What they're actually competing on now is how to use and how to apply those services and products so the company actually gets the greatest benefit from them. That’s not actually the power of the offering; that is the power of the ideas, the innovation, and the collaboration that the sellers are bringing to the table. So there's one thing.

The other thing is the asymmetry of information has been changing. It used to be very asymmetrical, because the buyer had all the need and all the desire, but the seller had all the knowledge. Now, buyers can hop online and talk to user groups who have bought from you and see what everyone says about your pricing, and they can find your competitors really quickly. They can get a lot more information.

So there has been a leveling of the playing field, which brings us back to point number one. If the sellers want to compete, they have to be smarter than the average bear, smarter than they used to be. They used to be able to just take orders; they can't do that anymore and still win.

Gardner: Brady, is that what you're facing? What do you do differently about this new sales dynamic?

Seiberlich
Seiberlich: I definitely agree with Mike. In the last couple of years, buyers are getting smarter. They're trying to challenge us more. With the Internet, they have the ability to easily price compare, shop products, look at product reviews. They're so much more knowledgeable now.

Another thing that we found with our buyers is that they want the ordering process to be as easy as possible, whether it's through the Internet or an e-procurement system. You have to work a lot harder to make sure the buyer finds you as the easiest way to order.

We've really had to work hard at that and we've had to be able to adjust, because every buyer has needs and they all have different needs. We want to make sure we can cover as many different needs without doing a user experience customization for everybody.

The experience is important

Gardner: It sounds as if the experience of buying and procuring is as important as what you're buying. Is that what we are getting at?

Schultz: That’s actually what we found from our research. I said that sales has changed in the last 10 years more than it's changed in the last 40. Yet our industry is very sleepy. Most people do the same thing in terms of what they profess to be what's important, to a whole bunch of people saying a whole bunch of different things. It goes all the way up to the Harvard Business Review saying that solution sales is at its end.

They published an article, The End of Solution Sales, and they published an article, Selling Is Not About Relationships. So is this true? What's actually going on?

We did the study where we looked at 700 business-to-business (B2) purchases from buyers who represented $3.1 billion of purchasing power. We wanted to find out what was the buyer's experience like from the seller they awarded the business to, to the seller that came in almost there, but came in second place. When you sell, person in first place gets the trip to Aruba, and the second place person gets the trip back to their office.
Sellers that win don’t just sell differently; they sell radically differently than the sellers that even come in the closest second place.

What we found first of all, is that the sellers that win don’t just sell differently; they sell radically differently than the sellers that come in the closest second place. [Get a free copy of the report, What Sales Winners Do Differently.]

The product and service playing field was perceived to be that the buyer is similar, especially by the time they get to the last two. Maybe they kicked out some lesser providers early, and when they get down to the end, both providers provide the technology, they can both engineer the playing field that we're building, and they can both do the thing that we need them to do.

It actually came down to the buyer experience with the seller and how the seller treated the buyer. What they did with the buyer were the tipping points for why they got awarded the business.

Gardner: Brady, what has changed in terms of your creating a better experience, a simple, direct, maybe even informative process for your customers? How do you accommodate what we have been talking about in terms of improved experience?

Flexible as possible

Seiberlich: We try to be as flexible as possible and we try to provide them with as much information as possible.

Information is huge for us. Back in the days when we first started, we mailed catalogs. For each piece of our furniture that we sell, you probably saw in the catalog seven pieces of information: how big it was, how much it weighed, what colors it came in.

Right now, for every piece of furniture we have, we hold over a 100 pieces of information on it and we display a lot of that on the web. It's an ergonomic chair, it’s leather, it raises up and down, it comes with or without arm, things like that. We try to provide as much information, because the shopper works harder.

In the days of a catalog, where you had a catalog at your desk and you opened it up, there was no competition there. On the web, there's plenty of competition and everybody is trying to compete for that same dollar.
We try to be as flexible as possible and we try to provide them with as much information as possible.

We want to make the customer as informed as possible. The customer doesn’t want to necessarily have to call us and say, "Is this brown; how dark is this brown?" We want to give them as much information as possible and inform them, because they want to make the decision themselves and be done with it. We're trying to get better at that.

Gardner: I believe you are in your 40th year now at National Business Furniture. Tell us a little about your company: your scale, where you do business, and what it is precisely that you are selling?

Seiberlich: That is correct. This year we are celebrating our 40th anniversary, which is pretty exciting for us. We sell in the US and in Canada. We opened our first office in Canada a couple of years ago.

The main reason we mainly sell in the US market is because of what we sell. We sell office furniture: desks, chairs, and bookcases. That stuff is too heavy to ship overseas, and we can't compete with some of the vendors that are over there already selling. So we sell here in the US mostly. The majority of our business obviously comes from there.

We started as 100 percent catalog. In the early '90s we made a website that was just for browsing purposes. You couldn't shop off of it. In the late 1990s we added the ability to buy off of it, and right now we're up to about a 50/50 split in what comes through the catalog and what comes through via e-commerce. And in e-commerce, we include the Internet, the e-procurement system, and stuff like that.

So we've proven that we're still adjusting with it, but the weird thing is that some of our product lines haven’t changed that much. Traditional furniture is still traditional furniture. We are selling some very similar products, just 40 years later.

Different approach

Gardner: Given this change in the environment with the emphasis on experience and data, making good choices with a lot of different possible choices, if you're a buyer, what are you doing differently in order to keep your business healthy?

Is this a matter of having more strategic long-term predictable sales? Do you go about marketing in a different way? Have you changed the actual selling process in some fashion? How are you adjusting?

Seiberlich: Probably all of the above. We're always looking for new markets to sell to. We've just started to move into medical furniture and we're doing some new things there.

The government has different rules in buying. So we're tying to make sure that we can adhere to those and make sure that’s an open market for us. And we continue to just try and find better ways to do things. That's what separates us from our competitors.
The days of establishing a relationship and just hoping that will carry you for years have kind of come and gone.

Everyone who sells office furniture is all selling similar products, around the same price. So we have to do something to differentiate ourselves, and we do that. We try to make the process easy, we try to provide the customer with as much information as possible, and we just want to make it a smooth process.

The days of establishing a relationship and just hoping that will carry you for years, like Mike said, have kind of come and gone. So we've got to work harder to keep our existing customers. We're doing that and also trying to find ways to find new customers, too.

Gardner: We are here at Ariba LIVE. We're hearing a lot about business networks, end-to-end processes, using different partners and different suppliers to create a solution within that end-to-end process. What is it about business networks that helps you attain your goals of a smoother data-driven process for sales?

Seiberlich: When you can prove that you can collaborate over these networks, you have a success that you can show to other buyers. You can say, "We've proven we can do this." It shows that you have established yourselves in these different markets.

I'm sure everybody knows that nobody wants to be the guinea pig and try something new with somebody else. But we've proven that we can work on these different markets and different networks and continue to try to find ways to make it easier. That’s what we're really pushing.

 Unpacking the term

Schultz: Dana, I wanted to add one quick thing on that. "Network" is one of those interesting words that you can unpack. You can unpack it in the technology sense that things are networked, but there's also the concept of a network that says that on the other side of this technology, there are people.

As a seller what it does, when what you do here isn’t just what you do there, it starts to go out through technology to other people and it amplifies whatever you do.

So, if you're doing a pretty bad job, people are going to hear that it’s a pretty bad job a lot faster than they used to. But if you are doing something interesting, if you are doing something worthwhile, if you are doing something like Brady is talking about, saying, "Wow, this process really used to be a pain and now it's a lot better because of the technology," that will get through to more people.

If you're doing the things that I talked about earlier, if you're selling in ways that help buyers get the most use out of what they you're selling, get the most benefit out of what you're selling, it’s no longer just words in a catalog saying, "This is how you're going to benefit."
If you're doing a pretty bad job, people are going to hear that it’s a pretty bad job a lot faster than they used to.

In some ways, you're going to benefit from working with us to get it, not just from the thing itself. The technology amplifies the good sellers, and they end up selling a lot more because it spreads faster.

Gardner: I suppose another part of the technology impact is convenience. When you're already in an environment, an application, a cloud, a network, maybe even a mobile interface, and the seller is in that same environment, if you are a buyer, that has some positive implications. Things can be integrated. Things can be repeatable. The data can be collected, shared, and analyzed.

Tell me a little bit, if you would, Brady, about being in a shared environment technically that also provides grease to the sales gears?

Seiberlich: It definitely does. We have some customers that we transact with here on Ariba, and in the the first one, two, or three transactions, we had to work through some difficulties, but by transaction 10, 15, or 20, it’s just smooth and it goes right through. And that's what we're trying to push with other customers that buy from us and we are trying to get them moved over to the network.

We have a proven track record here. We are the highest rated furniture provider here. We are gold from the Ariba standpoint. So we're trying to push customers to continue to buy from us off of these networks, because we've proven how simple it can be and we want to continue to do that. We want to make the ordering process as simple as possible.

Transaction algorithm

Gardner: Mike, maybe looking a bit forward, if all things become equal in terms of the product and the information that’s available, if we take that to its fullest extent, it really becomes a transactional efficiency, even down to compressing the payment, schedule, and negotiating vis-à-vis actual transactions on a larger and larger scale. Where do we end up? Do sales go well together and it simply becomes a transaction algorithm?

Schultz: There were predictions about 10 years ago with e-commerce when the information symmetry really started to happen, when it shifted toward buyers. They started to know more that there were going to be fewer salespeople in the US, because of government data, the US economy.

US government data said that 1 out of 9 people working in the United States were in sales; that was in 2000. If you fast forward to now, the massive change has been that there are about 1 in 9 people working in sales. So it hasn’t changed; it’s just that they're not order takers anymore.

The other thing is, is that while things look the same, they still aren't always necessarily the same.
So the new challenge for buyers is to figure out what are the differences.

If you think about it, all this becomes price pressure. If this goes directly to microeconomics, and we are just buying commodity pork bellies, it has to be the exact same price because the elasticity works that way. Any shift is going to make it go to a different provider. That’s really not the case, because we're not all buying pork bellies.

I don’t know about you, but I don’t think that Brady is looking really well. Maybe he needs some heart surgery. I have a really cheap surgeon. Would you like to go see him. He's board-certified, and he is a really cheap heart surgeon? It’s like, oh jeez.

There is a lot of decision process and a lot of mental things built up about what cheap-versus-expensive means, especially because if you are not talking about pork bellies, it's not necessarily the same.

So the new challenge for buyers is to figure out what are the differences. This law firm says they have the same capabilities at that law firm, but in fact, one law firm is better. The question is how. It’s contingent on buyers and sellers to figure that out together.

That’s why for law firms, consulting firms, accounting firms, I can't sink my teeth into them, bite them, and tell you which one is thicker or stronger, or which is going to have a 20-year guarantee versus a 10-year guarantee on the chair. I'm just trying to figure out who is actually better, who can serve me better, and who is the right fit. So it's not all commodities.

One other challenge, if you think about it from the buying side, is that it's not a big secret that heading into the purchasing department is not necessarily the absolute positive I am dying to do a career path for the top MBAs that are coming out of the top schools.

Complicated purchases

There are some great people in purchasing, but a lot of the times, when we're talking to sellers, we're talking to sellers that are doing $5 and $10 million on very complicated things with buyers, and the purchasing person they're working with doesn't actually understand the business context of what they're trying to get done. So they're asking, "How do I actually get to interact with them when the rules are they don't let me talk to them?" This is $7 million. They're buying this like they're buying roofing shingles.

It's going to require much more sophistication from the buyers to figure out what they really need and what are really the quality levels as it is on the sellers to make sure that they bring forth the right ideas, craft the right solutions, and treat the buyers well.

Gardner: So clearly we've hit on that reputation being in an open visible network where information can be traded. That gets to that reputation, trust, and a track record. But it also sounds like we're talking about some sort of value-add to the buy.
And that’s one of our  biggest selling points -- our people. That’s an important thing for us. They have the knowledge that they need and they're not just order takers.

If other things are equal -- but the experience of buying, if making a decision in a complex environment is the case -- something else is needed, perhaps consulting, data, or analysis. So, Brady, what is potentially a value-add in your business to increase your likelihood of making the sale and then keeping that relationship with the buyer?

Seiberlich: We have a couple of things, but one of our most important things is that we've been around for 40 years. If you call either inside sales or a customer service, you're going to get somebody, on average, with over 10-plus years of furniture experience with us, and that's a big thing. They understand our products. Our vendors come into our office weekly and explain our products. Our salespeople know the products and they can really help you find a solution that fits you.

And that’s one of our  biggest selling points -- our people. That’s an important thing for us. They have the knowledge that they need and they're not just order takers. They're much more. Everybody on our side who answers the phone are furniture experts. That’s what they do.

Gardner: Do you find that those salespeople with that track record, with that depth of knowledge, are taking advantage of things like the Ariba Network to get more data, more analysis to help them? Have they made that leap yet to being data driven, rather than just experience driven?

Seiberlich: We're getting better and we're consistently improving.

I agree with Mike’s point, one of the hardest things is making sure that we align ourselves with our buyers’ needs, figuring out what’s important to them and then making sure we are addressing those situations. That’s a challenge, and when you figure it out today, it changes tomorrow. That makes it even more challenging.

Gardner: Last word to you, Mike, what advice are you offering people as they think about creating a more attuned sales function in this new environment?

Buying value add

Schultz: First, I'd like to thank Brady for agreeing with me all the time. I really appreciate it. And congratulations on 40 years.

We're celebrating our 13th year at RAIN Group, and you are all invited to the bar mitzvah. Come on down to Framingham. We'd love to see you.

What advice do we have to sellers in this economy? Yes, product and service are important, but what they're buying is you, and you just mentioned value-add. When we surveyed those 700 buyers, we talked to 300 of them afterward. We wanted to get their sense of the experience.

The kinds of things they told us was along the lines of, I was working to buy this particular thing, and this is going to be important. This isn’t just putting paperclips in a drawer. This is about our ability to innovate, because I'm actually buying innovation training from a leadership consulting firm. Or this is about our ability to expand internationally. So we're going to be buying some kind of software.
Product and service are important, but what they're buying is you.

So I looked at those two software companies that we were down to and I had a two-hour discussion with the seller. When I told him that I was really worried about the pitfalls of trying to do this and what I didn’t know, he went out and he surveyed 15 of his own clients and gathered a little research report of one to give me insight.

He created his own little focus group to gather information for me, so I could think about what challenges might await me. The other guy didn’t do that.

This guy’s software costs more, but if I have this guy around, if the company treats me, the delivery teams treat me, and he continues to treat me like he is treating me right now, they're actually going to be more supportive of my success in this important initiative.

So, be better, be stronger, don’t just take orders. Think for the important buyers, how can I have them see that working with us, the whole package. It’s not just that the product and service are superior, because they might be close, but the whole thing that we bring to the table is superior value. I know that sounds like a consulting word, but I talked to this guy and he brought my all of these ideas and he talked to his other clients. I said, can I talk to them? He said, yeah, let me check with a few.

That was worth a lot. I could sign the PO for him, even though it’s a little bit more, because it was important to me to go to bat for him. Live that kind of value add yourself as a person and you can win and win consistently.

Gardner: I'm afraid we will have to leave it there. We've been learning about winning sales organizations and what they're doing to separate themselves from the competition and create market advantage.

So a big thanks to our guests, Mike Schultz, President of RAIN Group based in Framingham, Mass. Thanks, Mike.

Schultz: Thanks for having me, Dana.

Gardner: We're also here with Brady Seiberlich, IT e-Procurement and Development Manager at National Business Furniture based in Milwaukee. Thank you, Brady.

Seiberlich: Thank you, Dana.

Gardner: And thanks to our audience for joining us for this special podcast, coming to you from the recent 2015 Ariba LIVE Conference in Las Vegas.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Ariba-sponsored BriefingsDirect discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: Ariba, an SAP company.

Transcript of a BriefingsDirect discussion on how the focus of sales in changing from product to person, thanks to technology. Copyright Interarbor Solutions, LLC, 2005-2015. All rights reserved.

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Monday, May 04, 2015

Ariba's Product Roadmap for 2015 Leads to Improved Business Cloud Services

Transcript of a BriefingsDirect discussion on what lies in store for Ariba and SAP, as the networked economy continues to expand.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: Ariba, an SAP company.

Dana Gardner: Hello, and welcome to a special BriefingsDirect Podcast series, coming to you from the 2015 Ariba LIVE Conference in Las Vegas.

Gardner
We're here to explore the future of business commerce. We'll learn how innovative companies are tapping into business networks to harness the power of communities, to discover, connect and collaborate with peers and partners across the street or around the world.

Not only are these leaders better managing their spend in buyer/seller interactions, they're also gleaning insights and intelligence to learn from the past, capitalize on the present, and chart an effective course for the future, all in real-time from a single platform.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Ariba-sponsored BriefingsDirect discussions.

Our next interview examines the future of commerce as seen by Ariba and provides a view into the innovations that the company plan for 2015 and beyond. Walking us through the Ariba product roadmap we're joined by Chris Haydon, Senior Vice President of Product Management at Ariba, an SAP company.

Welcome back to BriefingsDirect, Chris.

Chris Haydon: Thanks, Dana, nice to be here.

Gardner: Before we get to the Ariba news, what do you see as having changed, developed, or evolved over the past year or so in the business network market?

Haydon: It’s been a very interesting year with a lot of learning and adoption for sure. There's a growing realization in companies that the networked economy is here to stay. You can no longer remain within the four walls of your business.

It really is about understanding that you are part of multiple business networks, not just a business network. There are business networks for finance, business networks for procurement, and so on. How do you leverage and harness those business networks to make your businesses more effective?

Balancing needs

Gardner: So it’s incumbent upon companies to take advantage of all these different networks and services, the data and analysis that’s driven from them. But at the same time, they need to retain simplicity. They need to make their users comfortable with this technology. They need to move toward a more mobile interface.

Haydon
How do we balance the need for expansion, amid complexity, with simplicity and direct processes?

Haydon: It’s a difficult balance. There are a couple of ways to think about it as well. Just to pick up on the point on how businesses are changing, certainly the end-user expectation is dramatically changing. Whether it’s the millennials coming into the workforce, the nature of apps, mobile apps, in our personal lives driving the need, the requirement, the desire to have that in our business lives is there.

From an Ariba perspective, we believe our job is to manage complexity for our customers. That’s the value prop that people sign into. When we talk from a usability perspective about managing the complexity, it’s also about thinking about the individual persona or how the end-user really needs to interact to get the work done, how they can learn, and how they can use their different devices to work where they want and how they want.

Gardner: It seems to me that among the technology leaps that we are making in order to accommodate this balance is there a greater reliance on the network, network-centric attributes -- intelligence driven into the network. How do you view the role of the network in this balance?

Haydon: I think it’s fundamental, and we're definitely seeing it almost as a tipping point. It’s no longer just about the transactions, but about the trusted relationships. It’s about visibility into the extended value chain, whether that value chain is supply chain, financial payment chain, or logistics chain. It doesn’t matter what that process change or that value change is. It is insight into that trusted community, so you understand that it’s secure, that it’s scalable, and also that reliable and repeatable.
It’s no longer just about the transactions, but about the trusted relationships.

Gardner: It seems like we can put the word "hybrid" in front of so much these days. Tell us a little bit about why SAP HANA is so important to this network services tipping point. Many people think of HANA as a big data platform, but it’s quite a bit more.

Haydon: Yeah, it is. In Ariba we've made strides on leveraging the HANA Technology, first with the Spend Visibility program. The great message about HANA is that it's not HANA for technology sake; it’s how HANA enables different business outcomes. That's the exciting thing. Whether it's on the Ariba Network, whether we start in our analytical platform and have an average of 50X or 80X average improvement in terms of some of the reports, that’s great.

What was really interesting when we put HANA on to our Spend Visibility was that we got more users doing different types of reports because they could do this, they could iterate, they could change, they could experiment in a more interactive and faster way. We saw upticks in the behavior of how customers use their products, and that's the excitement of HANA.

Taking it to the next step, as we looked upon HANA across our network and our other applications in terms of better and different types of reporting in terms of the network and having real-time visibility in insights from our trusted community, it’s just going to provide a differential level of value to any of the end-users, whether they're buyer, seller or any of our partners.

Wider diversity

Gardner: So we have a wider diversity of network participants. We need to connect them. We’re leveraging the network to do that. We're leveraging the ability of a strong platform like HANA to give us analytics and other strong value adds, but we also need to bring that single platform, that single pane of glass value, to the mobile device.

User experience seems to be super important. Tell us a little bit about where you’re heading with that and introduce us to SAP Fiori.

Haydon: It’s a massive focus for us from an innovation perspective.

When we think about our user experience, it's not just about the user interface, albeit a very important part, but it's also the total experience that an end-user or a company has with the Ariba Suite and Business Network.

Fiori is an excellent user-interface design paradigm that SAP has led, and we have adopted, Fiori elements and design paradigms within our applications, mobile applications as well as desktop applications.

You will see a vastly updated user interface, based on Fiori design principles, coming out in the summer, and we'll be announcing that here at Ariba LIVE and taking customers through some really interesting demos. But, as you mentioned earlier, it's not just about the user experience. It's really about end users; we call them personas from a product perspective. You're in accounts payable or you're a purchasing officer. That’s the hat you wear.
It really is about how you link, where you work, work anywhere, embracing modern design principles and learning across the whole user experience.

It really is about how you link, where you work, work anywhere, embracing modern design principles and learning across the whole user experience. We've got some interesting approaches for our mobile device. Let me talk about the crossover there.

We're launching and showing a new mobile app. We launched our mobile app early this year for Ariba’s Procurement suite. I had some great uptick the first week, when 20 percent of our customers activated and rolled it out. Some of their end-users are progressively scaling that. Again, that's the power of a mobile-app delivery. It shows the untapped demand, the untapped potential, of how end-users do, can, and want to interact with business applications today.

At Ariba LIVE 2015, we are also announcing a brand-new application to enable shopping cart, adding, searching for the casual ad hoc end-user, so they can do their requisitioning and their owning of the contract items or ad hoc items wherever they are.

To finish off, just as excitingly, we're really looking to leverage the mobile device and take its abilities to create new user experience design paradigms. Let me give you an example of what that means. Let’s just say you're an accounts payable clerk and you're a very conscientious accounts payable clerk. You're on the bus, on the way to work, and you know you have got a lot of invoices to process. For example, you might want to say you need to process an invoice from ACME Inc. before you do it for my next supplier.

On your mobile device, you can’t process detailed information about an invoice, but you can certainly put it in your queue, and when you get to your desktop, there it is at the top of your to-do queue.

Then, when you finish work, maybe you want to push a report on "How did I do today?" You did x things, you did y things, and you have that on your mobile device on the train on the way home. That's the kind of continuity construct that would bring you in, making the user experience about learning and about working where you are.

Behavioral aspect

Gardner: Before we go into the list of things that you're doing for 2015, let's tie this discussion at the high level about the networked economy, power network, and intelligence driven in the network, the user interface, with this all-important behavioral aspect of users wanting to use these technologies.

One of the things that’s been interesting for me at Ariba LIVE is that I'm learning that user productivity is the go-to market. The pull of users that say they want these apps, they don't want the old-fashioned way, they want to be able to do some work on the train ride home and have notifications that allow them to push a business process forward or send it back.

So how do you see the future of the total technology mix coming to bear on that user productivity in such a way that they're actually going to demand these capabilities from their employers?

Haydon: It's interesting. Let's just use the example of a Chief Procurement Officer. As Chief Procurement Officer, you may have the old classic standard benefits of the total cost of ownership (TCO), cost reduction, and price reductions. But more and more, Chief Procurement Officers also realize that they have internal customers, their end-users.
If the end users can't adopt the systems and comply with the systems, what's the point?

If the end users can't adopt the systems and comply with the systems, what's the point? So, just getting to your point, it was an excellent thing. We're seeing the pull or the push, depending on your point of view, straight from the end user, straight through to the end-of -line outcome.

From an Ariba perspective, how this all comes together really is a couple things. User design interactions are foremost in our design thinking approaches. These different user design interactions make products do different things and work together. It also has some great impact on our platform, and this is where with SAP and HANA Cloud Platform gives us a differential way to address these problems.

One of these aspects here is to keep up with these demands not necessarily out of left field, but out of specific market or industry requirements.

We need to make sure that we can expand our ecosystem from an Ariba perspective to encompass partners and even customers doing their own things with our platform that we don't even know about. For some specific investments with HANA and the HANA Cloud Platform it's to make our network more open and we're also looking at some targeted extensibility scenarios for real applications.

Gardner: Let's go to the road map for 2015 Ariba products. Let's start with Spend Management. What's going on there?

A lot of innovations

Haydon: In 2014, we brought more than 330 odd significant features to market, almost one a day. So we have delivered a lot of innovation.

About 89 percent of those were delivered -- and this is important to our ongoing roadmap because we're cloud -- because we work with our customers in their own on-demand environment. They entrust their business processes to us. We're delivering more and more features in toggle mode -- or configured on or configured off. We're letting our end users and our customers consume our innovation even though it's intrinsic to the product.

That's one big improvement we made in 2014 and we want to carry through in 2015. In terms of spend management, again, we have some great new investment in Ariba. SAP continues to invest in Ariba, and we continue to turn out more innovation.

We have some innovation from enhancing capabilities to support the public sector. We're adding and extending in globalization capabilities. We're adding specific functionality to improve the security, the encryption, of applications.
We have 16-odd years of transactional history on the Ariba Network. We look at that in conjunction with our customers.

Then, there are some more targeted features, whether it's improving demand aggregation for our procurement applications, supporting large line levels and outsourcing and contract management applications, or improving our catalog searching capabilities with type-ahead and improved content and publishing management. It's really end to end.

Gardner: There are sort of four buckets within the spend management, indirect, contingent labor, direct, and supply chain management issues. The new big one was the Concur acquisition, travel and expense. Anything new to offer on understanding better spend management, better spend visibility, across these buckets?

Haydon: Of course. When we work with our customers, we have 16-odd years of transactional history on the Ariba Network. We look at that in conjunction with our customers. We see these big four major spend segments, indirect and MRO, as you mentioned, supply chain indirect, services, contingent labor, travel and expense, and, of course, the distribution of that spend type changes per industry.

But what we're really focused on is making sure that we can get end-to-end outcomes for our customers across the source-to-pay process. I'll touch on all of them in turn.

In indirect MRO we're just continuing to drive deeper. We really want to address specific features in terms of compliance and greater spend categories, specifically with Spot Buy, which is a product we are out there trialing with a number of customers right now.

In contingent labor and services management, we've done some excellent work integrating the Ariba platform with the Fieldglass platform, made some huge strides in linking purchase orders into the Fieldglass platform. Let Fieldglass do what they do great. They're the number one market leader in bringing the invoices back to the network over the common adapter.

In terms of direct and logistics and supply chain, we brought to market, like we mentioned last year, some direct materials supply-chain capability, co-innovating with a number of customers right now. We added subcontracting purchase order (PO) for complex scenarios in the summer and have done some great work in extending the capability to support consumer package and retail supplies.

Interesting strides

We've done some really interesting strides, and again, expanding the spend categories that we can support on there.

And last but not least, Concur. It's number one in travel, and we're excited to have that part of the family. Again, from an SAP perspective, when you look at total spend, there's just an unparalleled capability to manage any spend segment. We're working pretty closely with Concur to ensure we have tied integration and we work at how we can leverage their invoicing capability as a complement to Ariba's.

Gardner: Line-of-business applications is one of the things that's intrigued me here. Hearing your story unfold is this "no middleware, yet expansive integration -- end to end integration across business processes and data."
A resounding message from our customers . . . is that we need seamless, simpler integration between our cloud applications and our current applications.

So in this line-of-business category, explain to me how you can be so inclusive leveraging the technology. How does that work?

Haydon: Let me unpack that a little bit. A resounding message from our customers, particularly since the acquisition, is that we need seamless, simpler integration between our cloud applications and our current applications. Would they be on-premise?

I'll talk about Oracle and other clients in a little bit, but specifically for our SAP ERP systems, we’ve really worked hand in glove with our on-premise business-suite partners to understand how we can move from integrate to activate.

And so what we brought to market pretty significantly with the business suite is the ability for any SAP Business Suite customer to download an add-on that basically gives them an out-of-the-box connectivity to the Ariba Network. We continue to invest in that with S/4HANA upcoming, where we are planning to have native connectivity to the Ariba Network as part of a standard feature of S/4HANA.

For our other customers, the Oracle customers and other major ERP systems out there, we continue to invest in open adapters to enable their procurement and finance processes across the network or with any of our cloud applications.

Gardner: There's something that's always important. We leave it to the end, but we probably shouldn't -- risk management. It seems to me that you're building more inherent risk-management features inside these applications and processes. It's another function of the technology. When you have great network-centric capabilities and a solid single platform to work from, you can start to do this. Tell us a little bit more about that.

Emerging area

Haydon: This is a really exciting and emerging area. More and more leading-practice companies are starting to manage their procurement and their supply chains from a risk basis, the risk, the continuity of supply, security of supply. What happens if x, what happens if y? You eye your supply chain. If there is, heaven forbid, some contamination or whatever traceability issue somewhere in your supply chain, and you're a large company or even a small company, now you're held accountable.

How do we start helping companies understand the risk that exists within their supply chain? We think that the business network is the best way to make sense of the risk that exists in your supply chain. Why?

One, because it's a connected community; and two, because you think about the premise. We already have the transactions, 750 billion plus to spend. We already have a million plus trusted, connected relationships. But that's the first step.

We also think about where we can have differential inputs, third-party inputs, on types of dimensions, and we think it's these risk dimensions or domains of information that matter, whether it's safety, performance, innovation, diversity, environment, or financial risk. It could be any of these domains, whether it's information from Dun and Bradstreet, information from Made In A Free World, which has a global slavery index. Whatever these dimensions of information are, we want to bring them in to our applications in the context of the transaction, in the context of the end-user.
We think that the business network is the best way to make sense of the risk that exists in your supply chain.

Imagine when you do a sourcing event if you could be notified of some disruption or some type of risk in your supply chain before you finally award that sourcing event or before you finally sign the contract. That provides a differential level of outcome that can only really be delivered through a business network in a community.

Gardner: I'm afraid we have to leave it there. We're talking about the news at Ariba LIVE 2015 and also what to expect from both Ariba and SAP in the coming months. And we learned the way SAP and Ariba are working together to help innovate with companies and help them thrive in a networked economy.

So a big thank you to our guest, Chris Haydon, Vice President of Product Management for Ariba, an SAP company. Thank you, Chris.

Haydon: Thank you very much, Dana.

Gardner: And thanks to our audience for joining this special podcast coming to you from the 2015 Ariba LIVE Conference in Las Vegas.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Ariba-sponsored BriefingsDirect discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Download the transcript. Sponsor: Ariba, and SAP company.

Transcript of a BriefingsDirect discussion on what lies in store for Ariba and SAP, as the networked economy continues to expand. Copyright Interarbor Solutions, LLC, 2005-2015. All rights reserved.

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