By Dave Hannon
Somehow it hadn't quite sunk in that SAP actually bought Ariba until I saw Tim Minahan standing next to Jim Hagemann Snabe on the SAPPHIRE NOW keynote stage (on the replay this morning). Sure I'd read the news but for those of us with a procurement bent the "who will buy Ariba" question was the stuff of legends. I had heard rumors over the years involving literally every enterprise software vendor at one point or another. And now, not only is that question answered, but there's Ariba's CMO Tim Minahan getting prime time on the big stage at SAPPHIRE NOW/TechEd.
For folks steeped in other areas of SAP, the Ariba name might not have grabbed the attention it did for us procurement junkies. In fact, it almost sounded as if Snabe was getting SAPPHIRE NOW attendees up to speed about the Ariba buy, when he invoked a metaphor from the insurance industry to explain the deal: A large insurance company can either outsource its claims management process to a "best in breed" company or bring the talent in-house. "Ariba was a best in breed procurement company and a fierce competitor to SAP," Snabe said, by way of communicating the value to SAP folks.
For folks shrieking about the cultural concerns, let it be known that Ariba's no stranger to the post-acquisition integration game. It has bought (and sold) its share of sourcing and procurement functiona
lity over the years from companies like Free Markets (e-Auctions, sourcing services) and Procuri (supply management) and Accenture, to whom Ariba sold its sourcing and BPO services group a couple years back. And through all of that (and a major economic downturn when SAP probably could have got Ariba for a fraction of what it paid this year), Ariba persevered, a testatment to its ability to handle change (and integration).
The Ariba portion of the keynote did a nice job of setting things up for SAPPHIRE NOW attendees. Minahan used Caterpillar, a joint SAP-Ariba customer (they have eight ECC instances??) as an example of company that has used SAP for internal efficiencies and Ariba for external efficiencies in areas of e-invoicing. The result? A 70% reduction in accounts payable costs. A great example for SAP customers to benchmark against.
And of course, Minahan addressed what are likely to be hot topics--integration and roadmap--by saying the SAP-Ariba teams are developing out of the box integration points for the Ariba Network with SAP NetWeaver for common application points in SAP ECC, MM, FICO, SRM and BusinessOne. And integration with SAP APO, PLM, SCM, CRM are being considered.
Once the keynote was over there were/are many many Ariba-related sessions for attendees to take in. Frankly, more than I expected to see. Minahan mentioned the release of some Rapid Deployment Solutions (there were sessions that provided more detail and we'll surely be hearing more about those).
Overall, it was good to see procurement on the mainstage at SAPPHIRE NOW and even better to see the functional benefits of Ariba being highlighted instead of just the delivery model (cloud). When you read articles like this about the deal, you'
d have no idea what Ariba did but you sure knew what their delivery model was. While Ariba has a strong cloud "story" to tell (it was not "born" in the cloud like SuccessFactors--when Ariba was "born" clouds were still mostly meteorological), it's really the functionality that SAP users will benefit from and want to hear more about. Some folks still argue that major portions of Ariba's functionality -- spend analysis, e-RFx, etc. -- have not gotten enough attention in the deal, but it's a complicated combination and the ink's barely dry.
Lastly, another positive point for Ariba and SAP customers alike was the naming of Ariba CEO Bob Calderoni to the SAP managing board. Calderoni has guided Ariba through good times and some lean times, and while he doesn't have the "cloud DNA" of a Lars Dalgaard, he's got the experience of migrating (or maybe there's another word) a major enterprise software provider into the cloud. And clearly SAP values that kind of experience.
I'll be doing my best to get a few outside perspectives on this combination in the coming weeks here on the Insider Learning Network. So you procurement geeks, stay tuned! And for the rest of you, welcome to the family.