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Business networks are evolving to connect the supply chain and give procurement the edge it needs. In addition to increasing the speed of business, these networks contain transactional data that can be leveraged to make better decisions and predict future trends proactively, which in turn reduces risk.
We should be getting started any second now, as soon as our guests arrive. First, though, there are two housekeeping notes:
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This will be a fun, fast, and friendly conversation, so please do not hold back with your comments or questions. There are no dumb questions and we value everyone's point of view.
Rachel Spasser, is senior vice president and chief marketing officer at Ariba. Rachel, would you like to tell us a little bit about Ariba's model and how electronics purchasers can benefit.
Andrew Bartolini is chief research officer of research firm Ardent Partners, a research and advisory firm focused on defining, advancing, and promoting the supply management strategies, processes, and technologies
@rspasser, what do you see as the key differences between a business network and a procurment portal? Is there a difference? Is the audience different?
Great question – let me start by saying I never learned how to type the word “the” – it always shows up as “teh” – apologies in advance 🙂
To your question: A paradigm shift in the way trading partners communicate, transact, and collaborate has begun and we see business networks are at the core of this shift.
there is a difference. a business network is a many to many model where buyers and suppliers connect once and have access to an entire community. Networks also provide a level of visibility, data and insights that 1:1 connections do not provide
Electronics suppliy chain is a fast-moving and highly-competitive global marketplace that finds its participants increasingly interconnected and under greater pressure to exploit any and all opportunities that arise. Today agility and collaboration are what will determine who wins and who loses. Companies must rely on their trading partners to win and business networks can facilitate the collaboration.
I agree with Andrew. We have moved beyond transactional relationships between buyers and sellers, especially in the electronics space where the need for speed necessitates a closer relationship. Networks facilitate those relationships by providing a shared platform.
A shared platform that incorporates key third party information, transactional history and community intelligence so that buyers and suppliers can make more informed decisions.
@rspasser, what visibility, data and insights do you see as being particuarly strategic and how should electronics organizations leverage them to improve supply chain performance, logistics and procurement?
@Andrew, can you talk a little about the industry and its awareness or adoption of this type of approach? What's holding them back or getting them to jump into the fray?
Howdy folks. I am hoping for some examples of the type of business network being described. For example, is the iTunes Store a type of business network?
How much of the connection and subsequent relationship between buyer and supplier is done electronically vs how much still has to be done the old fashioned way (people meeting in person or doing personal networking)?
Visibility into supplier risk, for example, can help electronics companies avoid interruptions in production because a supplier is in financial trouble and cannot fulfill order for example
Visibility into where in the process orders are…for example, P.O.s, advance ship notices, invoices, okay to pay notification, etc. Companies can greatly reduce safety stock and the opportunity cost of safety stock if they have that visibility
There are many different types of networks that can focus a a specific business process like payments or a specific industry or region. Then there are business networks that focus on larger trading partner relationships, supporting transactions, communication, and collaboration between them.
@Tech4People you are correct. Visibility and insights must be managed appropriately to protect data privacy and security. But used appropriately, they can help you run your business much more effectively
@Hailey – Industry awareness is at an all-time high and our market research suggests that a majority of enterorises have waded into the network waters. What we expect now is for the companies to begin using networks more agrressively.
I'm curious about the risk analysis angle. Does that draw input from just public sources? Or does it tap into something like the behavior of the supplier with you the customer?
@Jim, it taps into the 15 years of transactional data that exists from the Ariba Network (aggregated and anonymized) as well as third party public sources and information provided by the community
@JimC – Technology does not displace the need for personal relationships and connections but as supply chains continue to expand, driving competition and innovation. Industry leadership changes much faster so it's not likely that all of your suppliers are local. Networks can facilitate finding and initiating discussions with new and current suppliers.
Sahhring IP requires care and caution but most companies have standard contracts in place that can protect IP, but companies have to understand that if they fail to share and communicate key information to strategic suppliers, they may lose out on innovation and savings that the supplier can identify.
Agree with Andrew's point. Technology can actually enhance the personal relationships between buyers and suppliers. MSC Industrial Supply, a big supplier who uses the Ariba Network, spoke about this topic at Ariba LIVE. His point was “you can't fix what you can't see” and so visibility provides the ability to see what you can jointly do better.
So wait, this is like social media for buyers and sellers? I was thinking it was more like an IT network. Are these more like portals that have expanded into the offline world, or more like updated versions of old-school buyers' clubs?
@Kim, I wouldn't say the less personal. I would say the more tools can help enhance the relationships. You can't meet in person per se but business networks provide vehicles for greater electronic collaboration
@rspasser and @andrew, what do you think that the top goals that organizations have when adopting this kind of approach? Is it around cost savings? Adherence to contract? other items?
RE: Savings – With cloud solutions, the “time-to-value” has been greatly collapsed – our research has shown that with a reasonable level of adoption in year 1, companies can get a return on their investment in networks based simply on transactional efficiencies alone.
the mobile piece of it is becoming very important… In talking to OEMs its just becoming a part of the way procurement poeple and supply chain managers work.
Initially top goals are always around savings. That is usually where people start. However, they quickly realize that networks are very powerful. They impact risk mitigation, they facilitate collaboration which leads to innovation and top line revenue growth
Bringing Jim's question to the top: I'm curious about the risk analysis angle. Does that draw input from just public sources? Or does it tap into something like the behavior of the supplier with you the customer?
@Hailey, it is a combination of public sourcing and transaction history (both between a specific buyer and supplier but also aggregated transaction history that lives on the network.)
@ Hailey – One of the stumbling blocks of technology investments in teh supply management or P2P (procure to pay) world has been the inability to enable suppliers onto their transaction platforms. An invesment in a business network can extend the value of a P2P investment by enabling a high number of suppliers very quickly. The more suppliers and supplier content that a company is connected to, the greater benefit – Savings is a big part, next step is better communication and visibility into supply chain, then it gets interesting with network enabling better collaboration and more innovation .
Network users have total control over any data that can be attributed to them. They have incentive to allow use of their data in aggregate because it comes back to them packaged as insights and intelligence such as general trends in the market, etc.
When a company is connected electronically to its trading partners and has visibility into its transactional relationships and supplier performance, it can better determine if it in fact is working with the highest value partners – risk is an element, cost is an element, quality, etc. It starts with understanding who your partners are today.
@rspasser, when an OEM starts to look at this sort of initiative, who should be involved in the conversation? are there questions they should ask themselves? It sounds like a company coudl get up and running pretty quickly..
When you look at innovation in the electronics industry, it often happens by one company collaborating with its supply chain. Networks facilitate this type of interaction, collaboration and innovation
@Hailey-I have a feeling that Buyers today have a lot more Information in their hands.Question is do they benefit? Also was wondering if Time to make Decisions has actually gotten worse now thanks to all this Information Overload?
@Hailey – Networks don't change the bargaining power or relative position of a buyer or supplier. Visibility makes each side smarter and better aware of what is happening in the market.
Companies can get up and running quickly. I'd say one of the most important factors is truly understanding and defining your goals. Business networks like any platform only work if you understand what you are trying to achieve and have defined processes to do so.
@tech4people, we all have access to much more information than ever before. The trick is to have a way to turn information into insights. Technology helps with that for sure. But also knowing the questions you want answered is critical. Otherwise, we get into analysis paralysis
@rspasser, i'm glad to hear it about collaboration. I was speakign to several people yesterday at EE Live who said that they thought procurement remained all about price and lead time…but i'm hoping that the best organizations at least are making it more strategic as a function.
@tech4people – There is no doubt the buyers have a much more challenging job tracking specific supply markets and understanding trends. The last thing they need to do is spend time worring about POs and invoice approvals – they need more time to focusing on the strategic aspects of their job. Technology, including networks, is one clear way to drive this.
For some companies, the goals are ensuring they aren't too reliant on a supplier. So, they can use the network to help discover additional sources of supply to use as secondary suppliers or back-ups. For others, goals could include forming deeper relationships with a smaller number of strategic suppliers. In those cases, they want to have complete visibility into their operations so that they can collaborate more closely. And still others want to gain efficiencies so they can redeploy resources to higher order tasks (vs. manual, data entry). Networks play a role in all of these scenarios.
@Kim Davis – The existence of more data is a good thing – most procurement departments struggle to understand and view some very basic things like historical spend. But to avoid info overload, CPOs have to be smart and identify what information has the most value, how to capture it and how to use it.
@Kim, I believe that the world we live in today creates the risk of too much data. The challenge for us as business professionals is to be disciplined in how we use data. And for technology companies in the “big data” space it is to enable people to turn data into insights. Otherwise, it is information overload.
Folks, we are coming up on the 45 minute mark and i want to be respectful of time. Any last questions for our guests? Rachel, Andrew, any thoughts that you wanted to share but we didn't ask about?
@Hailey, great poll. The one thing we didn't talk about was the need for companies to remain agile enough to actually act on the information they can now access. The worst scenario is knowing you need to do something but cannot change course because you aren't flexible enough to do so
@All — In closing, I'd just note that not all networks are created equal. While many offer compelling benefits, the focus, features, and models of different networks can and do vary greatly making the selection of a network significantly more complex, but also, significantly more important. Do your diligence and if you haven't been tracking the market, tit's time to start.
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Find the IoT board you’ve been searching for using this interactive solution space to help you visualize the product selection process and showcase important trade-off decisions.
Transform your product pages with embeddable schematic, simulation, and 3D content modules while providing interactive user experiences for your customers.
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Hi Folks! should be agood one to look forwards to!
So Does this mean that one needs a Strong Business Network to influence which Products one Buys? I am not so sure.
@Tech4People, this is more about identifying and vetting sources rather than products.
@Hailey-Thanks for the clarification.Will look forward to it.
Very Interesting way of putting things-
Business networks are evolving to connect the supply chain and give procurement the edge it needs. In addition to increasing the speed of business, these networks contain transactional data that can be leveraged to make better decisions and predict future trends proactively, which in turn reduces risk.
Beyond FascinatinG!
Are we ready to go Live?
Hello all!
We should be getting started any second now, as soon as our guests arrive. First, though, there are two housekeeping notes:
First, please make a copy of your post before hitting the “post” button – just in case. If the system “eats” one of your carefully crafted thoughts, please hit “Ctrl-Z” to recover it
Second, if you have problems posting, we suggest trying a different browser. IE9 is a popular choice, but sometimes find Firefox, Chrome, or Safari work better.
This will be a fun, fast, and friendly conversation, so please do not hold back with your comments or questions. There are no dumb questions and we value everyone's point of view.
Questions, theories, ideas, real world experiences and even friendly rants are welcome here.
Hi Hailey. Andrew and I are looking forward to participating in today's live chat.
And always, please announce your arrival so we can give you a warm EBN welcome and offer you some virtual guacamole. 🙂
Welcome Rachel! We are glad to have you with us.
Hi Hailey and everyone, thanks for having me today.
Rachel Spasser, is senior vice president and chief marketing officer at Ariba. Rachel, would you like to tell us a little bit about Ariba's model and how electronics purchasers can benefit.
Hi Andrew, glad you were able to make it!
Andrew Bartolini is chief research officer of research firm Ardent Partners, a research and advisory firm focused on defining, advancing, and promoting the supply management strategies, processes, and technologies
Absolutely! It's a great topic to cover and an area that is top of mind in teh world of procurement, finance, and supply chain.
Andrew, could you weigh in on why this idea of business networks is particularly important to the electronics supply chain?
Absolutely. The Ariba Network is the World's Business Network meaning that we facilitate collaboration between companies, buyers and suppliers.
Ariba helps companies buy more efficiently and effectively, decreasing risk and increasing innovation with their supply chains
@rspasser, what do you see as the key differences between a business network and a procurment portal? Is there a difference? Is the audience different?
Great question – let me start by saying I never learned how to type the word “the” – it always shows up as “teh” – apologies in advance 🙂
To your question: A paradigm shift in the way trading partners communicate, transact, and collaborate has begun and we see business networks are at the core of this shift.
We help connect companies to suppliers who best fit their needs so that both buyers and suppliers get more value out of their relationships
there is a difference. a business network is a many to many model where buyers and suppliers connect once and have access to an entire community. Networks also provide a level of visibility, data and insights that 1:1 connections do not provide
Electronics suppliy chain is a fast-moving and highly-competitive global marketplace that finds its participants increasingly interconnected and under greater pressure to exploit any and all opportunities that arise. Today agility and collaboration are what will determine who wins and who loses. Companies must rely on their trading partners to win and business networks can facilitate the collaboration.
@Andrew, it happens to teh best of us. 🙂
I agree with Andrew. We have moved beyond transactional relationships between buyers and sellers, especially in the electronics space where the need for speed necessitates a closer relationship. Networks facilitate those relationships by providing a shared platform.
Good afternoon
Welcome Jim…glad you could be with us.
A shared platform that incorporates key third party information, transactional history and community intelligence so that buyers and suppliers can make more informed decisions.
@rspasser, what visibility, data and insights do you see as being particuarly strategic and how should electronics organizations leverage them to improve supply chain performance, logistics and procurement?
I'd like to ask a question about sharing enigneering documents and collaborating on product design.
When you engage others in the process, how can you best protect your IP?
@Andrew, can you talk a little about the industry and its awareness or adoption of this type of approach? What's holding them back or getting them to jump into the fray?
Howdy folks. I am hoping for some examples of the type of business network being described. For example, is the iTunes Store a type of business network?
How much of the connection and subsequent relationship between buyer and supplier is done electronically vs how much still has to be done the old fashioned way (people meeting in person or doing personal networking)?
Glad you could be here, Mary! Great question…
@Hailey-You need to be careful about the Amount of Data you share in the Name of Visibility.Too much Visibility is a recipe for Disaster.
@Rodney, welcome! Pull up a chair and grab some guacamole.
@Tech4People…and too little is also disastrous! I guess its a thin line. 🙂
Visibility into supplier risk, for example, can help electronics companies avoid interruptions in production because a supplier is in financial trouble and cannot fulfill order for example
Hi there.
@Hailey-That can be the case as well.
Thanks, Hailey, I think I will.
Surely the important thing is being able to move seamlessly between personal, telecom, online etc channels?
There are now supplier predictive analyics risk solutions on the cloud that help with managing supplier risk
Hello, Kim. thanks for stopping by.
Visibility into where in the process orders are…for example, P.O.s, advance ship notices, invoices, okay to pay notification, etc. Companies can greatly reduce safety stock and the opportunity cost of safety stock if they have that visibility
There are many different types of networks that can focus a a specific business process like payments or a specific industry or region. Then there are business networks that focus on larger trading partner relationships, supporting transactions, communication, and collaboration between them.
@Tech4People you are correct. Visibility and insights must be managed appropriately to protect data privacy and security. But used appropriately, they can help you run your business much more effectively
@Rspasser, have you developed or seen quoted any savings figures on teh benefits of this over more traditional procurement methods.
It doesn't seem like this class of data raises security concerns re visibility
@Hailey – Industry awareness is at an all-time high and our market research suggests that a majority of enterorises have waded into the network waters. What we expect now is for the companies to begin using networks more agrressively.
Bringin Mary's question to the top: When you engage others in the process, how can you best protect your IP?
I'm curious about the risk analysis angle. Does that draw input from just public sources? Or does it tap into something like the behavior of the supplier with you the customer?
@Kim, customer information, pricing information, lead times, product designs…when put all in one place can be quite valuable.
We have. @Andrew has actually just published a new report that outlines some of those benefits. We see cost savings of up to 10% of spend as a result
@Jim, it taps into the 15 years of transactional data that exists from the Ariba Network (aggregated and anonymized) as well as third party public sources and information provided by the community
@rpasser-Can u share the link for Andrew's report?
@JimC – Technology does not displace the need for personal relationships and connections but as supply chains continue to expand, driving competition and innovation. Industry leadership changes much faster so it's not likely that all of your suppliers are local. Networks can facilitate finding and initiating discussions with new and current suppliers.
http://www.ariba.com/resources/library/cpo-rising-convergence
@Andrew, do you want to weigh in on teh savings issue?
Thanks for the link!
That's an impressive data resource
Sahhring IP requires care and caution but most companies have standard contracts in place that can protect IP, but companies have to understand that if they fail to share and communicate key information to strategic suppliers, they may lose out on innovation and savings that the supplier can identify.
Agree with Andrew's point. Technology can actually enhance the personal relationships between buyers and suppliers. MSC Industrial Supply, a big supplier who uses the Ariba Network, spoke about this topic at Ariba LIVE. His point was “you can't fix what you can't see” and so visibility provides the ability to see what you can jointly do better.
The more global the supply chain the less personal the relationships, right?
So wait, this is like social media for buyers and sellers? I was thinking it was more like an IT network. Are these more like portals that have expanded into the offline world, or more like updated versions of old-school buyers' clubs?
@Kim, I wouldn't say the less personal. I would say the more tools can help enhance the relationships. You can't meet in person per se but business networks provide vehicles for greater electronic collaboration
@Kim-That makes a lot of Sense.
@Rodney, exactly.
@rspasser and @andrew, what do you think that the top goals that organizations have when adopting this kind of approach? Is it around cost savings? Adherence to contract? other items?
RE: Savings – With cloud solutions, the “time-to-value” has been greatly collapsed – our research has shown that with a reasonable level of adoption in year 1, companies can get a return on their investment in networks based simply on transactional efficiencies alone.
We like to say that the Ariba Network makes commerce more social, mobile and global
the mobile piece of it is becoming very important… In talking to OEMs its just becoming a part of the way procurement poeple and supply chain managers work.
Initially top goals are always around savings. That is usually where people start. However, they quickly realize that networks are very powerful. They impact risk mitigation, they facilitate collaboration which leads to innovation and top line revenue growth
Bringing Jim's question to the top: I'm curious about the risk analysis angle. Does that draw input from just public sources? Or does it tap into something like the behavior of the supplier with you the customer?
Mobile is emerging very important, agreed. Again, I think a lot of that is due to the need for speed.
At Ariba, how much control does a network user have over the data that other users get to see? Is it all abstracted into analytics results?
@Hailey, it is a combination of public sourcing and transaction history (both between a specific buyer and supplier but also aggregated transaction history that lives on the network.)
@ Hailey – One of the stumbling blocks of technology investments in teh supply management or P2P (procure to pay) world has been the inability to enable suppliers onto their transaction platforms. An invesment in a business network can extend the value of a P2P investment by enabling a high number of suppliers very quickly. The more suppliers and supplier content that a company is connected to, the greater benefit – Savings is a big part, next step is better communication and visibility into supply chain, then it gets interesting with network enabling better collaboration and more innovation .
Network users have total control over any data that can be attributed to them. They have incentive to allow use of their data in aggregate because it comes back to them packaged as insights and intelligence such as general trends in the market, etc.
When a company is connected electronically to its trading partners and has visibility into its transactional relationships and supplier performance, it can better determine if it in fact is working with the highest value partners – risk is an element, cost is an element, quality, etc. It starts with understanding who your partners are today.
@Andrew, how does this new type of interaction shift the the buyer/supplier relationship Do buyers have more leverage?
@rspasser, when an OEM starts to look at this sort of initiative, who should be involved in the conversation? are there questions they should ask themselves? It sounds like a company coudl get up and running pretty quickly..
When you look at innovation in the electronics industry, it often happens by one company collaborating with its supply chain. Networks facilitate this type of interaction, collaboration and innovation
@Hailey-I have a feeling that Buyers today have a lot more Information in their hands.Question is do they benefit? Also was wondering if Time to make Decisions has actually gotten worse now thanks to all this Information Overload?
@Hailey – Networks don't change the bargaining power or relative position of a buyer or supplier. Visibility makes each side smarter and better aware of what is happening in the market.
Companies can get up and running quickly. I'd say one of the most important factors is truly understanding and defining your goals. Business networks like any platform only work if you understand what you are trying to achieve and have defined processes to do so.
@Tech4People… information is power, but overload is real… I supsect it is as much about using the data as it is about having it.
I'd be interested to hear what our guests have to say!
What might be some examples of reasonable goals?
@tech4people, we all have access to much more information than ever before. The trick is to have a way to turn information into insights. Technology helps with that for sure. But also knowing the questions you want answered is critical. Otherwise, we get into analysis paralysis
@rspasser, i'm glad to hear it about collaboration. I was speakign to several people yesterday at EE Live who said that they thought procurement remained all about price and lead time…but i'm hoping that the best organizations at least are making it more strategic as a function.
@tech4people – There is no doubt the buyers have a much more challenging job tracking specific supply markets and understanding trends. The last thing they need to do is spend time worring about POs and invoice approvals – they need more time to focusing on the strategic aspects of their job. Technology, including networks, is one clear way to drive this.
@Rachel, that's tweetable: Avoid analysis paralysis: Work to turn information into insights. 🙂
Is there a danger that enhanced networks will generate more data than is really needed? Isn't paralysis a real danger?
For some companies, the goals are ensuring they aren't too reliant on a supplier. So, they can use the network to help discover additional sources of supply to use as secondary suppliers or back-ups. For others, goals could include forming deeper relationships with a smaller number of strategic suppliers. In those cases, they want to have complete visibility into their operations so that they can collaborate more closely. And still others want to gain efficiencies so they can redeploy resources to higher order tasks (vs. manual, data entry). Networks play a role in all of these scenarios.
@Rachel, thanks, that helps alot. Those are all very real concerns in the electronics supply chain.
@Kim Davis – The existence of more data is a good thing – most procurement departments struggle to understand and view some very basic things like historical spend. But to avoid info overload, CPOs have to be smart and identify what information has the most value, how to capture it and how to use it.
Quick note: Take a sec to weigh in on our supply chain agility poll to your right… it speaks this topic.
@Kim, I believe that the world we live in today creates the risk of too much data. The challenge for us as business professionals is to be disciplined in how we use data. And for technology companies in the “big data” space it is to enable people to turn data into insights. Otherwise, it is information overload.
Are CPOs prepared to deal with the analytics? Does it require new skill-sets from them?
Folks, we are coming up on the 45 minute mark and i want to be respectful of time. Any last questions for our guests? Rachel, Andrew, any thoughts that you wanted to share but we didn't ask about?
@Kim-Analytics is crucial for Supply-Chains to work.
@Hailey, great poll. The one thing we didn't talk about was the need for companies to remain agile enough to actually act on the information they can now access. The worst scenario is knowing you need to do something but cannot change course because you aren't flexible enough to do so
Thanks for your time, guys.
I appreciate the opportunity to participate. This was a really lively discussion. Thank you
@All — In closing, I'd just note that not all networks are created equal. While many offer compelling benefits, the focus, features, and models of different networks can and do vary greatly making the selection of a network significantly more complex, but also, significantly more important. Do your diligence and if you haven't been tracking the market, tit's time to start.
@rspasser-Agility? Very crucial to have but tough to maintain on Supply-Chains.
@tech4people, I hear you. Something we should all continue to strive for
@Rspasser, we may have to have another chat on the topic of agility!
Thanks to EBN, Hailey and Rachel and to everyone who joined – sorry about the typos, but it was fun!
@Andrew, thanks for the reminder of “caveat emptor”. This conversation goes a long way to helping folks be smart in the choices they make.
Thank you both for being here! I hope you'll drop by again sometime.
Look forward to it.
As a reminder, this transcript will remain here, so feel free to share the link with colleagues who missed the conversation.
Thanks Andrew and rspasser!