April 12, 2019
TABLE OF CONTENTS
This week, Levvel Research attended SAP Ariba Live 2019 in Austin, Texas. The following includes conference highlights and a Levvel Research analyst’s key takeaways.
There’s no denying that SAP Ariba is a big name in the procurement and Source-to-Pay (S2P) technology space, and many of the announcements, themes, and discussions of the last few days indicate the company plans to grow its presence even larger.
One of the main themes of the week was the idea of “Intelligent Spend”. SAP Ariba extensively outlined their mission to bring all areas of spend activity and data (including across procurement, supply chain, and supplier management) together in one system to lend an organization complete visibility and control. A prime example of how it’s accomplishing this is in its Fieldglass integration, which is almost completely integrated from a user, technical, and data management perspective. Not only will organizations be able to easily move between managing goods and procuring contingent workforce services, they will have a central platform for controlling the data across both processes.
An interesting message that SAP Ariba is sharing with its Fieldglass integration is the importance of viewing contingent workforce management as a core function of the business. It brought attention to the rising amount of outsourced labor organizations are leveraging in an increasingly global supply chain, particularly around IT projects. To enable both cost efficiency and innovation, SAP Ariba and Fieldglass are helping organizations extend procurement strategies and best practices to manage the spend and data of the “invisible workforce”.
A central part of this integration approach depends on strong supply chain and supplier data. Many of the sessions at SAP Ariba Live centered on how to maintain visibility into that data — not only for the direct supplier, but also for the supplier’s supplier. Some of this control will be provided through partnering software tools, while also coming from enhanced SAP Ariba functionality around validating suppliers’ information and certification, including diversity status.
SAP Ariba’s focus on supplier validation was not only to push the importance of data control, but also sustainability — another big theme of the conference. In some interesting ways, SAP Ariba is bringing attention to how international enterprises can lend environmental, economical, and ethical sustainability to their supply chains through educated supplier selection and buying decisions. Theoretically, the extensive SAP Ariba network will enable this sustainable supply chain management for its customers, and SAP Ariba’s messaging seems to say that focusing on these sustainability goals is a strategic advantage for multi-billion dollar companies. One SAP Ariba customer, Las Vegas Sands, a large entertainment and gaming business, spoke to their own success story in this area during Tuesday’s General Session. With SAP Ariba’s help, Sands’ ability to address environmental and ethical considerations across its enormous procurement operations was far-reaching and impressive. Levvel Research hasn’t yet seen such a strong eco-friendly agenda from other S2P providers, and if SAP Ariba continues to push these initiatives, it could potentially become the go-to provider for eco-conscious enterprises, or the “hybrid car” of procurement software.
One way SAP Ariba enables sustainable supply chain management is in its partnerships, which was another large focus of the event. SAP Ariba is partnering with many software tools that offer supplementary capabilities within the spend management and supply chain space (e.g., AppZen, Celonis). One new deep partnership, announced during the conference on Wednesday, is with American Express. The credit card provider will leverage SAP Ariba Network APIs to enable its virtual card capabilities within the SAP Ariba platform. It will provide more secure payments and easy reconciliation between businesses on a single platform, and will be available to SAP Ariba customers later this year.
SAP Ariba is leveraging many of its partnerships through its application ecosystem. This app ecosystem is similar to the one offered by their sister company, Concur, whose product was a great innovation in the travel and expense management technology market when it was first released. The SAP APP ecosystem will offer tools tailored to S2P processes and requirements.
According to Drew Hofler, VP of Portfolio Marketing, SAP Ariba sees these partnerships and the app ecosystem as not only a great value proposition to its existing customer base, but as a way to potentially enter new markets (e.g., niche industries, middle market enterprises). The ecosystem will bring additional spend management capabilities to its customers, enabling organizations to build upon SAP Ariba’s existing tools with complimentary, value-add features and services.
Despite SAP Ariba’s stronghold in the procurement and S2P space, some competitive software providers believe they can disrupt SAP Ariba’s position in the market. This is in part because of complications that come with SAP’s many acquisitions, which could affect SAP Ariba’s mission to create a holistic S2P technology environment, especially considering it is building this environment with both native and non-native systems. However, mergers and acquisitions are increasing in the business technology space, and SAP Ariba is not alone in its situation or potential growth challenges. The number of S2P providers that have not leveraged other platforms to complete their own is decreasing.
The rich spend management ecosystem that could potentially emerge when the integration dust settles could be to SAP Ariba’s advantage. With its tight integrations offered with Fieldglass, Qualtrics, Concur, and SAP, and with the many partnerships it has with supplementary spend management providers, SAP Ariba’s supply chain, procurement, and spend management product offerings are impressive in breadth. If the company accomplishes a truly seamless technical environment, the end result could be quite remarkable.
SAP Ariba’s moves toward developing more emerging technology, offering more holistic hold over spend via stronger internal integration and external partnerships, and giving procurement teams access to the advantages of an app ecosystem are all strong examples of how they are embracing innovative strategies – even if they aren’t the first to do so. Some of their other moves, such as their approach to contingent workforce management and building sustainability into the supply chain, feel refreshingly proactive and innovative. While SAP Ariba’s size and history might be setting its slightly slower pace through the S2P space, the tortoise sometimes wins the race in the end.
Research Senior Manager, Levvel
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Research Senior Manager, Levvel
Anna Barnett is a Research Senior Manager for Levvel Research. She manages Levvel's team of analysts and all research content delivery, and helps lead research development strategy for the firm's many technology focus areas. Anna joined Levvel through the acquisition of PayStream Advisors, and for the past several years has served as an expert in several facets of business process automation software. She also covers digital transformation trends and technology, including around DevOps strategy, design systems, application development, and cloud migration. Anna has extensive experience in research-based analytical writing and editing, as well as sales and marketing content creation.
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