Pei Ling Hoo - Fotolia

Future of Ariba Network on display at SAP Ariba Live

SAP Ariba Live shows enhancements to procurement software and looks at the future of the SAP Ariba Network, including machine learning, AI, bots and blockchain.

SAP Ariba Live 2017 focused on current improvements to the SAP network, but also included a good look at the procurement...

platform's future. The presence of SAP CEO Bill McDermott indicated that the vendor plans to invest heavily in integrating Ariba further into the SAP HANA technology core and introduce new digital transformation technologies.

The annual gathering of SAP Ariba Network users and partners drew just over 3,000 attendees to The Cosmopolitan of Las Vegas.

The future of SAP Business Network is all about the intelligent enterprise, McDermott said in a conference general session Wednesday morning.

"If you think about machine learning, artificial intelligence, the SAP Cloud Platform, the openness of an API hub where we can write new applications in rapid cycles, and if you think about IoT [internet of things] and the $259 billion market opportunity in IoT just in the next couple of years, we're talking about an entirely new paradigm," he said.

To illustrate the opportunity that SAP can take advantage of in this new paradigm, McDermott talked about a company in Italy that plans to invest $4.7 billion into IoT, blockchain, machine learning and AI, while using SAP as the core foundational layer that integrates all the new technology.

SAP Ariba CTO Dinesh Shahane demonstrated some of the new technology that will be a part of the Ariba platform, saying these technologies can "future-proof" applications to derive maximum business value. A critical component of this is the way SAP Ariba opened the platform for partners to develop innovative applications.

One of these, co-developed with Thomson Reuters on the open Ariba platform called Onesource, calculates the variety of taxes that occur on transactions processed in the Ariba Network. This is a complex and daunting challenge for businesses that deal with huge volumes of transactions in multiple countries, all of which have their own tax regulations. In Brazil, for example, tax regulations are very complex and can change daily, said Chris Carlstead, Thomson Reuters' managing director of Onesource.

Taming the tax beast

Onesource brings Thomson Reuters' tax intelligence into the Ariba Network, Carlstead said, delivering tangible ROI to users. This is important because every transaction on the Ariba Network -- large or small -- results in a tax event. It's difficult to always get them right, and it can be very expensive if they're done wrong. Not only that, but many transactions are tax-exempt and require knowledge of the rules and correct documentation on invoices to get the exemption.

Keeping up with the shifting tax rules and volume of transactions is next to impossible to do manually, so Onesource automates the process, while Thomson Reuters maintains the content -- all done in the back, with no visibility for Ariba Network users.  The partnership between SAP Ariba and Thomson Reuters is proof of the value of the open Ariba platform strategy, Shahane said.

SAP Ariba will begin to introduce smart micro apps into the Ariba Network this year, Shahane said. These are live apps with intelligence built in that can be embedded with context where a user needs them. An example of this is an assistant app, or bot, that sits inside a procurement application that understands the context from a user's experience and gives information on the conditions of a transaction based on live information, such as weather conditions that may delay a shipment.

Machine learning can determine which suppliers have the best records of on-time deliveries. The assistant app uses natural language processing to interact with the user. "This is like Siri for procurement," Shahane said. "The smart apps have a brain, they have user experience, and they can teleport themselves into the context of the user's application."

On the blockchain

Blockchain is another emerging technology area that SAP Ariba is jumping on, as the company announced it was integrating blockchain in the SAP Ariba Network. Blockchain will allow network users to record transactions in a secure and trusted manner, Shahane explained, which has the potential to extend the Ariba Network beyond the current procurement boundaries.

It wasn't all futurism, however, as SAP Ariba Live also focused on the state of the current network. Sanjay Almeida, SAP Ariba's senior vice president and chief product officer, displayed numbers touting the growth of the SAP Ariba Network during the Wednesday general session, including:

  • 2.5 million companies registered, representing 76% of the Fortune 2000;
  • 13 million users;
  • $1.25 trillion annually in spend processed;
  • 195 million catalog items managed;
  • 250 million documents annually exchanged;
  • $50 billion in payments annually processed;
  • A new company onboarded every minute; and
  • 34 million leads provided annually to sellers. 

To grow the network further this year, SAP Ariba intends to simplify and enhance the user experience, Almeida said. SAP Ariba introduced Light Enablement last year to streamline the onboarding process for suppliers; however, Almeida noted the process was "good, but not great."

To improve it, SAP Ariba enhanced Light Enablement with a new application, Light Account, that Almeida said would "revolutionize" the way suppliers are connected on the market. Light Account enables suppliers to join the network for free via an email notification and form with prefilled information.

The future is now?

The future focus was interesting, but it remains to be seen how it will actually be integrated into the SAP Ariba Network and applications, said Chris Kanaracus, principal analyst at Constellation Research Inc.

"You didn't hear a lot about roadmaps on that stuff. But I think, this year, it seems every vendor had to get on the map and wave their hand to say, 'I've got a machine learning or AI story, we've got chatbots, we've got IoT,'" Kanaracus said. "In terms of actually delivering it, that's probably the next couple years. But it's an important direction, and I think it has a lot of potential. I think I need to hear more about exactly how IoT aligns with SAP Ariba -- I'm not feeling that so much. But, certainly, with machine learning and analytics, there's so much data going through the system that, of course, it's natural to try to really advance things in that area."

The wait-and-see attitude was also expressed by P.J. Jakovljevic, principal analyst at Technology Evaluation Centers, an independent enterprise applications research firm based in Montreal.

"My understanding about all these new upcoming things like blockchain, artificial intelligence, machine learning and all that, is that it's a no-brainer and everyone else is doing that," Jakovljevic said. "You need to make supply chains, applications and so on intelligent. So, instead of you chasing the information, it's giving you prescriptive things. But I'm not sure that it's anything they are delivering now; this is going to happen maybe next year, with blockchain maybe not even next year -- that might take two years or something to get there."

Some of the enhancements that SAP Ariba showcased like Light Account make sense and should help with user adoption of the network, Jakovljevic said. Light Account means you don't need to go through several forms to get on the network.

"It means that you have a profile of a supplier that you can engage in sourcing with some minimally important data," Jakovljevic said. "It simplifies it, but it's also about user engagement where they get more suppliers to join, buyers to join and users to use the system. This is instead of dreading it, because purchasing and procurement is not an exciting thing, but it's very useful for the company and people have to do it. So, if you can maybe remove the chore out of that as much as possible -- that's what I'm seeing that SAP Ariba is doing, and that's commendable."

Next Steps

SAP Ariba President Alex Atzberger talks about how SAP and Ariba work together on the integration of the Ariba Network with the SAP Business Network.

What do you need to consider if you want to integrate SAP Ariba cloud software with ECC?

Organizations can improve efficiency and lower costs with cloud-based SAP Ariba procurement software.

Dig Deeper on SAP Ariba