Tuesday 29th April, 2014

Increasingly we live in a complex world where sometimes, some of the things meant to make life easier, only end up making it more confusing. Often, when faced with too much choice, we simply stick with doing things the way they’ve always been done – not necessarily because it’s better, but because we know it works, and more importantly - from a ease of understanding perspective - we probably have a good understanding of how it works too.

But in AP that approach often means that the department has to accommodate several different ways of capturing invoices according to your own, and a particular supplier’s preference, technical ability or compliance requirements, creating a headache of complexity for the processing organisation. And of course, an organisation may feel that this flexibility is in the best interests of their suppliers. However, if that means a loss of efficiency, an increase in cost and an inability of creat workable cashflow solutions, that's unlikely to be the case. So I spoke to Ariba’s Director of Solutions Marketing, Drew Hofler earlier this month at AribaLive in Rome, and asked him what the company was doing to alleviate some of these pressures.

He pointed out that the best place to start was to take it right back to the point of pain and start from there, explaining that Ariba had invested heavily in creating an open ICS solution. Of course supplier onboarding is a notorious barrier for many organisations looking to implement a more encompassing P2P solution, something which the recent APN survey has highlighted as one of the top three challenges facing AP teams. And whether that’s a perceived or actual difficulty – it’s obviously something which the software vendors have to address.

"And that’s one of the benefits of the Networked Economy," pointed out Hofler. The value of the network is driven by its size – in other words – how many suppliers (and their buyers) are on it. "It’s beauty," he went on to explain, "is the power that lies in the visibility it creases across the whole process, a process which has the ability to move accounts payable from being a purely transactional process to something more strategic. If this is fractured, the many and varied systems don’t talk to each other, resulting in a systemic value loss." Hofler explained that the Networked P2P process offered all the benefits associated with closed loop feedback system.

As a self-confessed “paperholic”, I asked Hofler how he squared this when it came to invoicing. “Ah yes,” he laughed “Well I believe there are many benefits to having paper when it comes to books, newspapers, libraries etc – but when it comes to invoices – that’s a habit you’ve just got to kick if you want to maximise cost savings – and more than that actually – if you want to capture the key business benefits and reporting capabilities that e-invoicing can produce.” “On top of that,” he went on “there’s a reason why it’s called P2P, and if you de-couple those links, you lose value. And to maximise that value, you need to be aligned on the same platform.”

And in separate news, announced today, SAP has announced that the Ariba Network is moving to SAP HANA, which the company says will enable companies to gain even better insight into their operations and act on them more quickly than ever, to drive unprecedented business outcomes. With 1.5 million companies in over 190 countries conducting over half a trillion USD in commerce on an annual basis, the company says that the Ariba Network is the largest, most global business-to-business trading platform in the world. And with the move to HANA, it also aims to become the fastest and most powerful.