Transcript of a BriefingsDirect podcast on what to expect in the near future from Ariba and from the Ariba/SAP synergy.

1. Ariba's Product Roadmap for 2014 Points to Instant,
Integrated and Data-Rich Business Cloud Services
Transcript of a BriefingsDirect podcast on what to expect in the near future from Ariba and from
the Ariba/SAP synergy.
Listen to the podcast. Find it on iTunes. Sponsor: Ariba, an SAP company
Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series coming to you
from the 2014 Ariba LIVE Conference in Las Vegas. We’re here the week of March 17 to
explore the latest in collaborative commerce and to learn how innovative
companies are tapping into the networked economy.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host
throughout this series of Ariba-sponsored BriefingsDirect discussions.
Our next interview examines the Ariba product roadmap for 2014 and beyond.
We’ll now learn more about the news here at Ariba LIVE and also what to
expect from both Ariba and SAP Cloud in the coming months.
To learn more about Ariba’s product and services roadmap, please join me now in welcoming
Chris Haydon, Senior Vice President of Solutions Management for Procurement, Finance and
Network at Ariba, an SAP Company. Welcome, Chris.
Chris Haydon: Thanks, Dana. Good to be here.
Gardner: Before we get into the news, what’s changed in this business-network market and the
community around it the past year? What are you hearing from customers? What’s shifted since
we spoke last?
Haydon: At the baseline, there’s a lot more interest. People are just starting to really understand
what business networks really mean.
In some of the conversations coming through, large corporate enterprise buyers
are really looking for a single hole through the firewall, if you like. They’ve
done some great work in optimizing their internal business processes, but they
really understand that the next undiscovered country is in collaborating with
their suppliers.
But it’s not just their suppliers. It’s payment providers, logistics providers, and a
whole heap of supply-chain stakeholders. We’re seeing that larger conversation
over not just a single business process, but a holistic business-process view.
Gardner
Haydon

2. I think the other really interesting thing isn’t a trend. It's probably a confirmation of what we
already knew, particularly in the southern hemisphere. Mobile is on the increase and is now
bypassing of the laptop, specifically in some emerging markets.
They’re the two macro trends that we are seeing that are manifesting themselves in our new
business acquisitions.
Mingling with others
Gardner: So “mobile first” is really important, as is this notion of a boundaryless organization.
You don’t just exist as an island. If you’re going to be really adept and productive and develop
some of the great insights you can through data, you need to allow your borders to mingle with
others.
Haydon: That’s right. And it’s a network effect as well. People don’t want to do all the heavy
lifting themselves. They’re really starting to understand that there is the
network here. I can adapt, not adopt, so to speak, and really accelerate the
business by leveraging the existing community.
Gardner: What about technology? Have there been any technology shifts
that we’ve had in the past year that have enabled some new and interesting
things at the business networks and applications level?
Haydon: We’re in the early stages of redoing parts of our technology to take advantage of where
the growing trend is going to come. We spoke about mobile, but it’s not just mobile. It's more
about user experience and how we focus specific use cases on where an improved screen, an
improved device, or both makes sense in the user context. That’s a really big change for us as
well.
We’ve spent the last 12 months, and we will spend a good part of the next 12 months, rebuilding
the platform to really be able to take advantage of these larger trends around real-time analytics,
big data, and all that, but translating that into actual actionable use cases.
Gardner: What are the highlights for you here at Ariba LIVE 2014?
Haydon: There are so many. First, there’s another record turnout. We have some amazing
customers, and the adoption of our customers is just superb for us. We want to drive more value
into both the buyers and the sellers.
There are some pretty interesting announcements that we’re doing. We announced AribaPay last
year, and we are happy to announce this year that that’s well on track. We’re going to be doing
more on AribaPay, but this is really transforming the B2B payment space and leveraging that. We
want to bring the payment process within the visibility and the view of the network. We think
that’s pretty huge.

3. Second, you’re going to hear about us doing more innovation than ever before. We have some
significant investment from SAP, which will translate itself into globalization -- moving into
Russia, moving into China -- and into new business processes, like supply chain and payment, as
well as leveraging the great infrastructure and platform that SAP has in mobile. You’ll see three
to five mobile-centric use cases delivered in Ariba within the next 12 months.
Gardner: What about the Ariba-SAP synergy? How has that changed Ariba. It’s been a while
now since the merger and acquisition. What can you tell me about the relationship and the
character of the company?
Embracing the cloud
Haydon: SAP has really embraced the cloud. And it has worked so well in terms of a lot of the
cloud DNA that Ariba brings to the table. SAP has truly embraced that.
And for us within Ariba, there are three or four dimensions. One is certainly global, and SAP is
everywhere. A global sales force and, more importantly, global know-how is very important.
Number two is industries. Historically, Ariba was not very industry focused. Now, with SAP,
with their vast industry expertise, it really will enable us to drive great solutions into specific
industries globally.
And last, but not least, it’s getting access, from a product-management perspective, to lots of new
things to play with and great platform tools. We have HANA, and we have released some
products on HANA starting this weekend.
We’re going to continue to do that. We’re going to put the network on HANA, accelerate that
investment in mobile, other aspects on reporting, and deep integration with the business suite.
We’ve seen some really great synergies in the first 12 months and we expect more next year.
Gardner: Let’s look at this whole spectrum of data and analysis. Data scientists and business
intelligence (BI) professionals have been creating reports and developing the fruits of a data
infrastructure for years, but what we are starting to see now is the use of analytics and visualizing
the analytics.
We’re giving it to folks down on the line of business, not just at the very tip of the organization,
but throughout the organization. How has this need and demand for greater data and greater
analysis capabilities translated into what you’re doing at Ariba and SAP?
Haydon: This is actually part of why people understand the business network and why the
business network is starting to take off. If you think about what’s so great about SAP/Ariba and
our great capability, we have this great business network, more than 600 billion in spend, and
more than a million suppliers.

4. I’ll go into technology for a second. It's the promise of what an in-memory database can give us.
Imagine when we can put all of those transactions in real-time that are flowing today, imagine
when we double it over the next three years or something like that.
Power of HANA
And we put that in real time because of the power of HANA, real-time analytics, whether it's
lead time or a moving price average. We won’t just dish it up in quarterly reports that an
executive sees. What if a supplier is responding to an order confirmation and they can see that
the average lead time has changed? They can take an action and do something about it to fill their
customer’s needs.
What if you’re a procurement officer and you’re going to do a sourcing event? You can see that
five extra suppliers come on or there is some problem with your core supplier because they are
out of stock. If there’s a natural disaster hitting, what if you can see that real-time?
That’s the promise that big data and analytics delivers in something like the business network,
which gives us a holistic view that is unparalleled, particularly when we are able to marry that
with the master data that exists in the applications or in the enterprise resource planning (ERP)
systems.
Gardner: What strikes me, Chris, about this era is that for so long, companies relied on their
own data and their own analysis. There was really a wall around the activity with BI.
But now, with things like third-party networks, like the Ariba Network, they can start to get data
that might be anonymized. Privacy issues have been worked out and people are allowing data to
be shared. That’s where these real insights are coming. It’s the volume, velocity, and variability
of the type of information.
So what comes in terms of a business application benefit? Where are you driving these
visualizations and this data? What can we expect in the next 12-18 months in terms of analytics
meeting business applications?
Haydon: The first one, which we have already announced, is Supplier InfoNet, which is our
HANA-based alerting and supplier information system, which can also feed in. We’re releasing
that and we’ll be building that integration into our solution set. That’s the first thing.
We’re kind of feeling our way here, and you brought up an excellent point. None of this happens
without the appropriate privacy, anonymization, aggregation, and all of that. That’s the given that
you have got to work out first.
But once you have that, we want to look at point areas to road test what it looks like. Maybe we
just show to a supplier and say, “When you’re responding to an event, your lead time is x percent

5. slower than all your other competitors.” There’s some peer pressure, and we’re not sharing
anything else, but it actually helps the salesperson understand where they are.
It’s the same thing on the buy side. If you confirm that the moving average price of this
commodity in the United States moved by 5 percent, you might want to consider having a
sourcing event. Those are the type of point things.
Most meaningful
The holistic dashboarding and automated alerts will come. We just want to work out those
flows and what’s most meaningful. That’s where we go back to the point about the user
experience. How do we do that? Do we need to expose that in a mobile app with an alert, or is
that just an icon that pops up on your screen, or both. That’s how we want to intersect the two.
Gardner: Let’s move into mobile. You mentioned "mobile first." That’s really an interesting
concept, but it seems to me that it's more than just a screen definition. You really need to rethink
processes when you start to go to that mobile tier and recognize that people are 24x7, regardless
of location, intersecting and interacting with business processes. So what should we expect from
mobile innovation?
Haydon: I wouldn’t even couch it as “mobile first,” but “mobile as required.” First and foremost,
what we are focusing on for our mobile strategy is, notwithstanding putting in place, just the core
platform to enable it. When we’re looking to our features that we build in our products, we want
to focus, which, as you were alluding to, is how does the end user need to consume this
information?
If it does make sense that a mobile device is able to present that, then we’ll do it. We are not
doing it for the sake of having a mobile solution, just to have it out there. We don’t need to do
that.
Obviously, some things bubble to the top, approval apps or flipping a purchase order or a new
event, and we will do those. But we want to be quite systematic in what we’re going to do.
Also, from a product development sense, we want to take a focused approach. We want to embed
the mobile development paradigm within our current development product teams.
What does that mean? It means we’re not going to have a mobile team out on the left, running
and building 500-600 apps that they think they should build, and then our core feature team
doing it. We’re going to have our engineers, our product managers, our QA people thinking
about mobile in parallel with the screen and how that enhances the customers or the user
experience to deliver the business outcome.
While we might be somewhat slow compared to others, some competitors are saying they have
20 mobile apps. We think our way is going to deliver better business outcomes by taking the user

6. experience construct and making that, whether that’s mobile, analytics, or screen, all in the same
context.
Gardner: I like the idea that it's process first, regardless of the screen, but this seems to give you
an opportunity to move and scale into new regions in some markets. In China, for example, the
smartphone is the primary device and screen.
It also allows you to scale down smaller businesses. You can run a business on a smartphone.
Why not have cloud business services to accomplish that? What about that global reach? What
do you expect for the next 12-18 months in terms of expansion vis-à-vis any number of services,
but mobile being part of that?
New data centers
Haydon: A couple of things. Number one, since we first spoke, we announced our first
European data center, and that was commissioned in December. We already have a number of
customers live already. We’re in the process of dealing with that.
We have also announced data centers in China and Russia for our applications. So in terms of
just global deployment, we’re investing in data centers which will deal with a lot of the data
privacy and encryption table stakes to even get started.
And then, just being on the back of SAP is one of the really great synergies that we get, in that
they have in-country local product managers who are born and bred and live in the jurisdiction to
be our proxy customers, the voice of the customer actually in-country as we look to embed in
there.
Gardner: Into our next subject. What about governance, risk, and compliance (GRC) topics and
issues. It seems that we can’t really divorce concerns about privacy and security and risk
amelioration from business activities, especially as we consider that boundaryless organization.
We want to expand into new markets and allow enterprises to do more business and supplier
activities across these boundaries.
So how do we think about embedding GRC both as a process and as a technology in the Ariba
roadmap?
Haydon: Ariba had a pretty good legacy of being at the forefront on a lot of that. Maybe we
didn’t give ourselves credit, but for the longest time, we have had security, privacy, availability,
and confidentiality processes and certifications. Some competitors have one, some competitors
have two or three, but we had five.
We are also payment card industry (PCI) compliant. That’s a pretty high threshold. I know other
companies have PCI compliance, but I mention those points because that’s part of our DNA. You

7. have to start thinking about that, you have to understand enterprise problems and build your
operations, your infrastructure, and your technology around that. We’re in a pretty good state.
Obviously, these GRC compliance processes are growing. Risk management is like a new
mantra. It's the forefront of anything else. All decisions -- procurement, supply chain or others --
are made with a risk-management focus.
I mentioned our data centers. One aspect of dealing with in-country data privacy, obviously, is
having a data center in a jurisdiction. As I said, we commissioned our European data center. One
in Germany is primary, and there is a failover elsewhere. That should deal with a lot of EU data-
privacy concerns. Then, Russia, China, and so on.
The second piece that we do have, being as part of SAP, is that SAP has a very comprehensive
GRC process themselves to make sure that they don’t do business with customers that are on
particular restrictions or watch lists internationally. It's not just the US or the EU, as I understand.
SAP reviews 13 or 14 data sources, not just one or two.
Trading partners
So we’re bringing those processes into the Ariba Network to make sure that we don’t do that,
but we also notify our trading partners as well, and that’s part of the value-added service. You
may well be doing transactions or trying to do an event with someone not appropriate from a risk
perspective.
The last piece, a little bit related to this from the roadmap, is that, in the course of this year,
we’re looking to build out on the Ariba Network support for US public sector. Once you start
into the public sector for business process transactions, you get a whole heap of compliance
issues on encryption, accessibility, and a couple of other dimensions. Those requirements will be
built into the network and also to our applications over the next 12 and 24 months.
Gardner: Now, back to products and services. Often, at these Ariba events, and I’ve been at
quite a few, we hear about services that people are familiar with, but there are layers of new
functionality and features. Are there any that pop out in your mind from 2014 that we should go
over and s reflect on as maybe changing the way people think about doing business vis-à-vis
cloud and vis-à-vis the networked economy?
Haydon: Yeah, there are a couple. One is something released in Quarter 4, at least for our SAP
clients. We have native connectivity between the SAP Business Suite and the Ariba Network.
You don’t need middleware. It's a downloaded extension pack.
It's pretty game-changing, when you can download something and an order can go out of the
Business Suite straight to the network natively. Let’s just remind people of that. That’s pretty
nice.

8. Number two, we have a lot of new features and products coming out, as we said. We said we’re
going to do a lot of innovation. We’re going to deliver on that innovation. I’d like to quickly talk
about four.
AribaPay, which we touched on, is changing the role of B2B payments on the payment side.
At the top end of the funnel, we are also launching Spot Quote. This is pretty interesting. Forty
percent of procurement activity is on contract or on catalog. In some industries, it's greater. This
Spot Quote process enables us to take these tactical three bids in a buy from a buyer
programmatically and put that out into the business network to be bid upon, and we can also
identify new suppliers.
What's exciting about that is lot of process efficiency for buyers, but also for a seller. Think about
this. It's almost like the budgets are already largely being committed, and they have a close date.
It almost drops to the bottom of the pipeline. That’s pretty nice. It might not be the biggest deal,
but I’ll take it.
Supply chain
We’re also releasing our first version of the supply chain, focusing primarily on retail use-case
scenarios, working very hard with SAP to have end-to-end connectivity, and we are very excited
about that.
Last, but not least, services on the network as well, extending a whole new type of collaborative
services for estimate-based services, are going live.
So we have more innovation. It's supporting both buyers and suppliers, and going globally, in
terms of Russia and China, and we’ll be adding Brazil and Mexico invoicing as well. So there
are a lot of exciting things on the business network for customers, not only in the USA, but
globally.
Gardner: Well, great. I’m afraid we will have to leave it there. We’ve been talking about the
news here at Ariba LIVE and also what to expect from both Ariba and SAP in the coming
months.
And we have learned the latest in the way Ariba and SAP are working together helps innovative
companies thrive in the networked economy as they look to be more data-driven, exploit mobile
tier processes, and of course keep their data and business safe.
So a big thanks to our guest, Chris Haydon, Vice President of Solutions Management for
Procurement, Finance, and Network at Ariba, an SAP company. Thanks, sir.
Haydon: Thank you.

9. Gardner: And thanks to our audience for joining this special podcast coming to you from the
2014 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. Sponsor: Ariba, an SAP company
Transcript of a BriefingsDirect podcast on what to expect in the near future from Ariba and from
the Ariba/SAP synergy. Copyright Interarbor Solutions, LLC, 2005-2014. All rights reserved.
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