Ariba

ARIBA services are of potential interest to all participants of the market of electronic procurement: both for customers, and for suppliers. First, it is the world's largest specialized global network integrating customers and suppliers on all planet. The customer gets access to global base of suppliers, their directories and price lists and also possibilities of comparison of suppliers and carrying out their preliminary qualification. Suppliers, in turn, receive free of charge the ARIBA services allowing to trace and take part in real time in tenders worldwide and also to receive invitations from Customers, new to itself. Secondly, ARIBA allows to automate a number of important internal processes of customer company with the minimum costs: the organization and preparation of procurement procedures, including internal procedures of approval and also the repeating procurement processes of the same goods according to directories of suppliers (for example, purchases of stationery, fuel and lubricants, supplies), and other services offered by suppliers for satisfaction of different customer needs that gives significant economy for the geographically distributed companies. Thirdly, ARIBA allows to transfer all document flow between the customer and suppliers to an electronic form that not only leads to considerable acceleration of processes of signing of the contract and its subsequent execution, but also allows to make relationship of the customer and the supplier more transparent and managed.

Performance Indicators

2011

Ariba revenue in 2011 made $444 million. The staff of the company makes 2600 people. In trading network Ariba 730 thousand companies work, the total amount of transactions already exceeded $319 billion.

2013

According to fall of 2013 Ariba integrates already more than 1 million companies in 186 countries of the world. In business network there are also Russian participants – first of all, it representative offices of the western companies in which Ariba is already the corporate standard for processes of purchases, vendor relationship management, development of a partner network.

For the Russian companies the issue of optimization of supply chains is very relevant. According to ANO Academy of Management the low discipline of suppliers and insufficient automation of process of purchases lead to the fact that the prevailing part of working time of purchasers leaves on attempts to minimize losses from failure to meet time constraints and other misconduct of deliveries, and only 1/8 part – on generation of profit. Automation of work with suppliers through Ariba business network can be solution. Experience of the western companies demonstrates to it: for example, British Airways, having connected to Ariba, laid off number of the suppliers by 7 times - from 14,000 to 2,000, and inventory quantity — on more, than 200 million pounds sterling. Every day more than 250 thousand transactions are carried out to Ariba. And Staples company, the largest distributor of office supplies, having passed to Ariba, could reduce quantity of calls of clients to a support service by 40%, to reduce release of printing directories by 10%, to reduce costs for each purchase by 4 times (from 8 to 2 dollars).

2014

The cloud business network Ariba integrates near 1:55 a.m. million companies from 140 countries. In a year the monetary volume of transactions in Ariba network averages more than $540 billion and if Ariba would be the country, then in the world ranking which is based on the GDP level, she would hold the 25th place. The main purpose of the solution – simple and effective search of suppliers and partners worldwide. And it, without exaggerations, the unique tool for the Russian fast-growing companies – with its help in several clicks it is possible to bring the business to new level, having become, for example, the supplier of one of such companies as British Airways, Staples, GlaxoSmithKline and many others.

History of the company

2010: The division of outsourcing is sold to Accenture

In October, 2010 Accenture announced acquisition of outsourcing business of Ariba company, including assets in the field of processes of supply and a strategic choice of supply sources. The cost of the transaction was $51 million from which $12 million are subject to approval on the basis of assessment of performance of the purchased assets.

The Ariba company provided software and consulting services in the field of the organization of supply chains and also solutions for collaborative commerce. The sold business, according to the reporting of the company, brought about $40 million income in 2010 financial year.

"Ariba is the leading player in the field of cost management, and this acquisition will expand Accenture range of services in the field of deliveries and supply due to deep examination, high-scalable global transactions and proprietary databases in the field of deliveries, technologies and benchmarking", - Mike Salvino says, the head of the BPO group in^[1].

The deal is going to be closed till December 31, 2010. Terms of the contract provide, in particular, transition about 160 employees of Ariba for work in Accenture and the conclusion of the four-year agreement on not competition.

2012: SAP buys Ariba

At the end of May, 2012 it became known that SAP is in process of purchase of vendor of solutions of e-commerce Ariba, transaction amount is $4.3 billion. Announced the corresponding plans of the party jointly.

The Ariba platform is intended for the sector of B2B and belongs to the class e-commerce. The conclusion of the transaction already got approval of Board of Directors of Ariba. It is supposed that the transaction will be closed finally in the third quarter 2012 calendar year.

It is expected that the solutions Ariba will allow SAP to strengthen own portfolio of cloud services as already resulted from the previous large deal on purchase delivery of HRM SuccessFactors for $3.4 billion

After entry into structure SAP Ariba will remain independent division, and its current CEO Bob Calderoni will become one of top managers of SAP.

The cochairman of SAP Bill McDermott said that the Ariba network in 2012 can already increase to 1 million companies. "Opportunities for growth on this "arena" are simply huge", - he noted.

At this SAP is going to leave open the Ariba system for interaction with other platforms that means that in it all clients who are not using SAP will be able to work.

On the one hand, the transaction of SAP is a little unexpected as last year the German vendor already purchased Crossgate company whose solution has opportunities even the exceeding Ariba. However the expediency of the new transaction can speak need of access to big base of corporate users. In particular, according to Kalderoni, clients of Ariba is a half of the list of Fortune 500. In the market of e-commerce it is not the first large deal lately: it is enough to remember purchase of IBM of Emptoris company at the end of 2011.

Ariba in Russia

2014: SAP localized Ariba business social network for Russia

SAP completed the Russian localization of the cloud platform for interaction of suppliers and customers of Ariba which developer the company purchased for $4.3 billion. About it in March, 2014 TAdviser was told by the CEO of SAP Sngvyacheslav Orekhov.

The Ariba network integrates within one platform of suppliers of different products and buyers from the different countries of the world. Its functionality covers all purchasing process - from the choice of goods or service from directories, viewing data on suppliers and communication with them before carrying out tenders, exchange of electronic documents and drawing of accounts.

Be registered in a system and suppliers can use its basic functionality free of charge. On reaching a certain volume of business within Ariba they will need to issue the paid agreement. In October, 2013 the president of Ariba Kevin Costello told TAdviser that from about 1 million users of a system about 90% use it free of charge.

As of fall of 2013 the Ariba network totaled about 1 million users

According to Vyacheslav Orekhov, in localization for Russia, in addition, the Russian requirements to legally significant document flow were considered. Earlier the former head of SAP CIS Vitaly Postolaty told TAdviser that in Ariba localization process his company communicated with a number of the large companies and state structures in Russia regarding functionality which is required to such organizations.

According to the CEO of SAP CIS, as of the beginning of 2014 the Russian users in Ariba are already registered: generally it is the representatives of the foreign companies working in Russia. In order that the number of the Russian users increased, it is necessary that the most noticeable local suppliers were provided to Ariba, he notes. Vyacheslav Orekhov adds that within about two months the number of the Russian companies registered on the platform as suppliers should reach about 10 thousand. After that in SAP CIS expect to begin to advance more actively Ariba in Russia and, as a result, expect higher growth of the companies clients registered in it.

Earlier in SAP CIS expressed opinion that the release of the local version of Ariba will become an incentive for development of medium and small business in Russia as the companies of this segment will get "fair chance" to sell to the large companies. The large organizations will be benefited from the fact that they will be able to buy products directly, passing intermediaries. As envisioned by SAP, also the Russian state structures will be able to use Ariba.

The company also told TAdviser that Ariba will be able to be seamlessly integrated with a full range of ERP-SAP products. According to Vitaly Postolatiya, integration will be possible also with any other systems installed at users, partners of SAP in Russia will be able to perform these works: in the fall of 2013 of SAP for this beginning authorization of partners in Ariba.

Partners and clients in Russia

In October, 2014 Ariba in Russia had the first partner -the NORBIT company entering into the Lanit group. Within the agreement the company will be the official dealer of network authorized to sell and implement solutions of Ariba. SAP told TAdviser that are going to develop and expand a partner network for work with Ariba in Russia.

Representatives of the company explained that to start work in Ariba it is enough to customer to be registered that can be made independently and free of charge. In case the customer wants to use full-function service Ariba, for example, for contract management with the suppliers then it should purchase Ariba service. It is possible to make it as through the partner, and directly in Ariba. Services of the partner can be required for setup of functionality under individual requirements of the customer, speak in SAP.

As of fall of 2014 at Ariba there are thousands of Russian suppliers. In network the Russian representative offices of the large foreign companies, such as – PepsiCo, Auchan, Pfizer and also the Russian companies - the Renaissance Credit Bank, GAZ Group work. Data of the Russian clients of Ariba will be stored in the territory of Russia.

Notes