SAP Ariba Live 2019 Conference Summary, Day 119 min read

SAP Ariba is holding their yearly conference in Austin, Texas this year where they will be update customers, prospects, network suppliers and partners alike on the current state of their application portfolio and their strategic focus for the next year. I unfortunately couldn’t attend the event in person this year but did take the time to tune in to the online broadcasts on day 1. Here are my key takeaways from the keynote:

The Network is Still Front and Center

Last year, the theme of the conference was Procurement with Purpose. The main tenant of this theme was that by leveraging the increased visibility Ariba spend management solutions provide (enabled by the Ariba Network), organizations can be more purposeful about who they are spending with, allowing them to influence global supply chain issues such as lack of diversity, forced labor, etc.

This year, this idea was reinforced from the opening of the conference with the 3 Trillion Reasons to spend better heme (#3TrillionReasons). Tifenn Dano Kwan (@Twitter, @LinkedIn), SAP Ariba’s Chief Marketing Officer and host of the session, opened by highlighting the fact that in the last twelve months, 3 trillion dollars’ worth of spend has flowed through the Ariba Network. By SAP Ariba’s estimates, this represents around 10% of all e-commerce transactions worldwide. This is a massive amount of purchasing power that, if redirected, can have consequential impacts on shaping supply chains. The key message was that if a majority of the members of the 4 million supplier Ariba Network change their purchasing behaviors, they can shape the future of supply chains.

My Thoughts

It’s no surprise that SAP Ariba continues to put the Ariba Network front and center at this event as in industries where there is a Network Effect at play, it usually ends with “winner take all” (Amazon for B2C e-commerce, Uber for Ridesharing, Google for Search, etc.). In the B2B e-commerce space, although SAP Ariba is leading the network race, the war is still raging between the main players (Coupa, Ivalua, Basware, Jaggaer, etc.). That’s why I was a bit disappointed that other than to quickly highlight the fact that they were still in the lead by highlighting key numbers, this segment of the session did not elaborate further on the value proposition this affords Ariba Network buyers and suppliers (or how the value proposition is sweetened in 2018-19 vs. previous years).

Artificial Intelligence and Procurement Transformation Implications

Next up, Tamara McCleary (@Twitter), CEO of Thulium, a Social Media Marketing Agency & Kathy Hinton (@LinkedIn), Founder and President of Agilitology LLC, a boutique supply chain consultancy, came to the stage to discuss what is needed to take advantage of current supply chain technology trends while trying to cut through the esoteric buzz word of the year (AI – Artificial Intelligence).

They highlighted that most organizations first need to transform how their procurement function currently operates to get to the maturity level required to take advantage of AI. They also made the point that iteration, or continuous improvement, probably won’t cut it to get there. Most notably, in Kathy’s view, organizations need to develop a culture around:

• Normalizing data models and data governance processes. Kathy highlighted this can be hard when you are acquiring companies as their systems will inevitably have a completely different data set.
• Within the business, employees need to feel safe proposing and executing on transformation projects. These projects are inherently risky as you are “changing the tires while running the car” as Tamara put it. So employees need to feel like failure won’t result in irreparable reprimand. Similarly, as you develop supplier relationships, innovation needs to become part of the criteria you rate them on.
• Managing change internally and externally. Transformation implies that you will be changing people’s roles, responsibilities, habits and outlook. This is the hardest part to get right. Correctly accompanying your employees through change therefore needs to be top of mind. Also, implementing business network technology implies that you are breaking down the barriers between you and your suppliers. They become a big stakeholder in the change and also need to be carefully managed. You can’t simply notify them of the Go-Live date and expect results.

My Thoughts

To be honest, I was impressed to see this segment as the second up on the docket. Typically, at conferences like this one, software vendors are highlighting how quick and easy it is to implement their product. In this case, we got a true glimpse of the implications of going down the procurement transformation path (with any product by the way). That’s not to say it isn’t worth doing… Nothing worth doing is easy. But it’s always better to go in eyes wide open and to prepare for the challenges ahead. Another big-ticket item you can work on to prepare for a procurement transformation is business process standardization and simplification across business units. The simpler things are when starting a transformation, the easier it is to move to the desired state.

Highlighting the SAP Ariba & SAP Fieldglass Divisional Merger

Following the transformation lessons learned discussion, Arun Srinivasan (@LinkedIn), SVP of Strategy & Customer Operations at SAP Fieldglass, came out to talk about the behaviors of “Innovation Pace Setters” as he called them. He categorized this group as:

• Laser-focused on business outcomes. Features do not matter, what is the impact the change will have on the business?
• Obsessed with simplicity. Whether it be in architecture, process, user experience, etc., innovators are driving towards solutions that are simpler, not more complex.
• Landscape thinkers instead of application portfolio thinkers. Pace Setters are connecting disparate systems to one another to come up with something that is greater than the sum of their parts.

With this definition in hand, he reiterated and justified an announcement that was made earlier this year: that the Fieldglass organization and product suites are now formally on a path to integration into Ariba. He also mentioned that with SAP’s acquisition of Qualtrics the new combined organization would be looking at how to leverage user (supplier, buyer, etc) experience data to drive new insights in the product suite (A topic for next year’s Ariba Live perhaps?).

My Thoughts

Overall, I think its great news for SAP customers. It will help simplify implementation and operation of the solutions and put product development on a single roadmap going forward. The “one-stop-shop” value proposition of Guided Buying will continue to increase as this integration occurs. I’m certain there will be some growing pains as the new model is put in place, but it is absolutely the right direction to be heading in in my opinion.

Based on this announcement, I fully expect the Fieldglass products to be renamed under the SAP Ariba brand shortly. I’ll put my bets on SAP Ariba Contigent Workforce Management and SAP Ariba Services Procurement and time will tell… Now we wait for the same announcement only with SAP Concur. If SAP is to achieve its Total Spend Management vision outlined a few years ago, it is the next logical step after this integration is completed.

Product Development Philosophy Changes

After touching on the Ariba and Fieldglass merger, it was only natural to bring out Darren Koch (@Twitter, @LinkedIn), Chief Product Officer for SAP Ariba, to dive a little deeper into the changes around product development. Having been in the role only 10 months, this was his chance to make his agenda clear: “In god we trust, all others bring data”, he stated right out of the gate. His priority when integrating the role was analyzing and understanding the Ariba platform usage data to gain insights on where things were going well and where they weren’t. From there, he drove adjustments with his team to capitalize on strengths and tackle weaknesses.

In short, he feels Ariba has the right strategy of putting together an end-to-end Source-to-Pay platform to deliver intelligent spend management. He also supports the vision of getting to autonomous (AI-supported) spend as the Big Hairy Audacious Goal (BHAG). However, he listed a few changes that differ from what I’ve heard from Ariba in the past:

• The need to continue making the Ariba applications more open to partners, app developers. Opening the platform up to partners will enrich it. He gave the example of his time at Concur where they tried to make the expense report obsolete by enabling receipt integration directly with partners which made the experience more seamless for end users.
• The need to quickly adopt new technologies already the SAP portfolio to bring more value to customers. The example of using SAP Leonardo’s pattern matching & recognition technology for image-based search of catalog items was used and demoed for the purchase of a Statement of Work (SoW) based service with seamless integration to Fieldglass. We also saw some UI updates in the demo that leverage the “Tiling” philosophy behind Fiori. This was pretty slick, and I see many use cases especially in the MRO category.
• The need to iterate and ship high quality, integrated features quickly. Employees of Ariba customers have been trained to have a certain set of expectations with regards to applications in the B2C space (Amazon, Apple, Google, etc.) and bring those expectations to work when using B2B applications. Also, they don’t want to spend inordinate amounts of time in training. The application should be intuitive. Enterprise software companies need to become as good as B2C companies at shipping features and they need to consider the whole portfolio of SAP procurement products (S4/HANA, Ariba, Fieldglass, Concur).

My Thoughts

It was refreshing to hear Darren bring these points up. They seem trivial, but they address a few pain points I’ve had implementing Ariba with customers over the past years.

• Opening up the Platform. I don’t know why partners have been kept out of the platform for so long, but I feel that opening it up for add-on creation will elevate the platform’s value, not diminish it. I can’t count the number of times a functionality was not available on Ariba or “on the roadmap” and there was no way for customers to build it out themselves as a stop-gap measure until Ariba delivered the functionality as part of the standard suite. Heck, they could even get inspired by what partners build and take it (like the old ABAP development policy…). Also, I’m hoping this eventually drifts into configuration but I may be too hopeful here.
• Adopt existing SAP Portfolio technologies. SAP is a huge company. However, to customers they are one entity and every product should be taking to the others in the portfolio. Let’s be honest, this is almost impossible considering SAP’s acquisition rate but at least they are pushing in the right direction. For example, it was great to hear that the Fieldglass integration would be built out on Ariba Cloud Integration Gateway and that we will start seeing SAP Leonardo integrations with Ariba shortly.
• The need to iterate and ship high quality, integrated features quickly. I added “high quality” and “integrated” for a reason here. SAP Ariba changed their releases from monthly to quarterly this year to, in my opinion, focus on quality by fixing those areas Darren mentioned as “working not so well”. Yes, they need to ship quickly but they also need to ship only once… They cannot afford to subscribe to the old Facebook “move fast and break things” motto. To add, I think it was the first time I heard S4/HANA mentioned in a keynote during Ariba Live which tells me SAP Ariba leadership is finally thinking in an integrated fashion across the SAP procurement application portfolio. I might be reading too much into this but, for me, that means a feature needs to make sense and work across the whole portfolio to be developed. I’ve run into a few “staircases to nowhere” over the years so I’m excited to see how this principle materializes in future releases.

In all cases, I see these points made by Darren as positive developments for the future of Ariba.

Fieldglass Integration Roadmap

To show us he was not making empty promises on points number two and three, Darren invited Vish Baliga (@Twitter, @LinkedIn), Chief Technology Officer at SAP Fieldglass, on stage to present the Fieldglass integration roadmap.

At a high level, this involves rationalization of product suite to eliminate duplication (i.e. sunsetting the separate Fieldglass supplier portal and integrating everything into the Ariba Network, aligning on data models and data objects across the modules) and technical integration of the modules onto a single platform. You can also see the high level feature development milestones on the chart presented (apologies, I caught the slide in transition!):

My Thoughts

It was refreshing to see a roadmap picture on the main stage, day 1. Last year I found the day 1 content to be a bit esoteric so kudos to SAP Ariba for changing the format up a bit this year. It was a bonus that I thought the direction was also spot on! Excited to see the release notes as we progress through 2019.

It’s always difficult to set the detail level for these keynotes as the audience’s knowledge of Ariba is so varied. I’m sure some folks will come back with feedback that things got too technical too fast this year… The customer is always right…

Don’t Forget “Opening Up the Platform”

Darren also invited Ken Male (@LinkedIn), CEO at CXO Nexus, a spend management dashboard technology company and SAP Ariba partner, to demonstrate their dashboard technology built on what I can only imagine is the SAP Ariba Spend Analysis data. They weren’t too detailed when it came to specifics of how CXO Nexus was accessing or leveraging the SAP Ariba data, but I can’t imagine we received a pitch for CXO Nexus at Ariba Live if it didn’t have anything to do with Ariba.

My Thoughts

This segment led by Darren was really a home run. Not only did he address many of the pain points I’ve lived and heard about from SAP Ariba clients over the years, but he also showed concrete examples of these principles in action. The only thing that could have been better is if we had gotten a bit more details around how CXO Nexus is plugging into Ariba data and how other partners can reproduce this for themselves. Perhaps on day 2…

Customer Case Study – Las Vegas Sands

Before wrapping up for the morning, there was a pretty glowing customer case study presented by Norbet Rieztler (@LinkedIn), Senior Vice-President, Chief Procurement & Sustainability Officer at Las Vegas Sands Corp. Again, such as in the procurement transformation segment, transparency was present in Norbert’s message: “Launching a system is hard. Every executive should launch a system in their lifetime but once in a lifetime is enough…”. The crowd chuckled. With his team and Ariba’s support, they implemented and deployed the full Ariba suite in 6 properties across the globe in 30 months. He posits they could not have done it without a strong internal team supported by skilled external consultants. He mentioned that he had SAP Ariba executive support around improving system infrastructure & release management procedures to get over hurdles they had in their deployment. Now they are running 100% of their procurement processes (except taxes) on Ariba technology with zero changes (customization) to the system (barring changes made for regulatory purposes).

My thoughts

This was a glowing testimonial for the Ariba suite which is superb. However, you should still do your homework based on your company profile when choosing your Ariba solution modules. My thought is that Las Vegas Sands’ spend is probably most indirect meaning they are using the tried and tested Ariba modules that have been around the longest. As Barry Padgett suggested at the end of the session, go talk to customers and find out how your spend profile matches up to theirs to see how relevant their story is for you.

Closing the Day

In closing, Barry Padgett (@Twitter, @LinkedIn), President at SAP Ariba, came out to recap and highlighted that they had incorporated last year’s feedback to the general session. Most notably, that there were demos on day 1 this year and that they talked less about innovation from a product perspective and more about the impact of innovation on strategic business initiatives.

He re-stated 3 points from previous presenters which tell me they are a key focus for him:

• Reference back to Procurement with Purpose (and focus on the Ariba Network). Collectively, the Ariba user base has all the tools needed to spend wisely. Let’s make better decisions about how to spend that money and we can change supply chains.
• Integration of Qualtrics functionalities into product suite. Ariba is working on determining how you take experiential information (user knowledge captured in tools such as surveys) and marry it up to operational data to generate key insights you would not otherwise have.
• Employee expectations of B2B vs. B2C applications are now the same. If you are not modernizing your enterprise systems, it will eventually have an impact on employee retention rates.

He finished by saying that SAP Ariba wants to demonstrate they are “transparent, humble and hungry” and that he hoped everyone would seek out others to answer their questions about how to make Ariba work for them.

My Thoughts

In my dealings with SAP Ariba in the last year, I’ve personally felt a shift in the organization’s culture. Where in the past I interacted with a “closed” Ariba that didn’t know or want to know anything about what was happening in the rest of the SAP landscape, I now truly feel they are committed to the Total Spend Management vision at all levels of the organization. I’ve also felt the organization more transparent about what the product can and can’t do up front during the sales cycle. They’ve been increasingly present in conversations with partners, customers in really wanting to gather, understand and act on feedback to foster long term relationships instead of focusing on the immediate sale/project/issue at hand.

Therefore, I think the three words Barry used to describe the organization today are fitting. It’s an exciting year for the evolution of the Ariba product suite and organization. Although they are still a few years out before they achieve the Total Spend Management vision that’s been laid out, I think there’s a valuable, relevant roadmap for all customers looking to transform procurement with SAP Ariba solutions right now.

I am hoping tomorrow’s session answers a few questions so I can state this definitively, notably:

• How are the direct material solution developments progressing?
• How is the platform being opened up to partners?
• How is the user interface and experience vision progressing?

This is the first part of a two-part summary of Ariba Live 2019. See SAP Ariba Live 2019 Conference Summary, Day 2 for the second part. You can read last year’s summary to see the changes in focus since last year’s conference.

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What did you think about Ariba Live 2019? Is there an announcement that stood out in your mind? What are the features you would like to see in the roadmap? Let me know in the comments.

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Last Updated on January 7, 2021 by Joël Collin-Demers