Wednesday, August 26, 2009

Ariba or SAP for EDI, B2B and e-Invoicing

I spent a few minutes this morning reviewing Ariba's website. It shows that the services they offer are the following:
  • Spend Management
  • Sourcing
  • Contract Management
  • Procurement
  • Invoicing and payment
  • Supplier Management
  • Working Capital Management
  • Supplier Network
  • Order Collaboration

I was very intrigued by this list. The services offered are quite similar to many offered by SAP. Here are a few of SAP's offerings:

  • Procurement
  • Supplier Network Collaboration
  • Sales Order Management
  • Invoice Management
  • Financial Supply Chain
  • e-Invoicing
  • Orders to Cash
  • Procure to Pay

SAP recently became a co-owner of an EDI, e-Invoicing and B2B exchange that is SAP-centric and utilizes SAP technologies such as NetWeaver PI to make the integration with SAP users simple and efficient. Ariba also promotes itself as an e-Invoicing and EDI/B2B hub. It appears that SAP and Ariba are on a collision course. It will be interesting to see the results.

When SAP invested in their own EDI, B2B and e-Invoicing exchange, it clearly demonstrated a desire to help SAP users with EDI, B2B and e-Invoicing services and remove the need for external third party hubs like Ariba.

Friends of mine that work at SAP have shared that they are increasingly competing with Ariba. This is an interesting dilemma for companies that are wanting to reduce the number of third party applications used, in favor of a simplified and consolidated environment. To that end SAP is including many of the same features and functionality that Ariba offers, but within an SAP environment.

I wrote an article recently that posed the question, "What is your core system?" Is it a third party EDI or e-Invoicing solution, or is it your internal SAP ERP? This is an important question as software vendors continue to expand their offerings so there is more and more overlap. Your IT strategist must determine what is the core system and expand from there.

In the case of Ariba, companies must quickly determine if Ariba is going to be their core system or is SAP since both parties are offering many of the same features and functionality. It is highly likely that both SAP and Ariba will continue to extend and expand features for years, so the choices companies make today about where to invest will have significant long term impacts on their business.

This article discusses what is meant by an SAP-centric approach to EDI/B2B and e-Invoicing, and provides a good contrast to an Ariba strategy.

If you would like to discuss in more detail email me.


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