Over the last couple of months a number of the PIU’s members have asked my team to provide them with some inspiration as to how procurement can get more involved in revenue generation. So when I met with David Brown, CEO and Founder of Oxygen Finance, earlier in the month, I was keen to report back on his thoughts as to how procurement could move from the back office, focused on cost savings, to an income-earning front office function.
Jon Kirby
CPO
AstraZeneca
View bioThe role of a CPO has moved beyond simply delivering cost reductions and supplier rationalisation to being an integral part of how an organisation delivers value to its customers and shareholders. CPOs must ensure that procurement engages strongly with business units to allow a comprehensive understanding of business needs and encourage the development of targets, which are aligned and focused on revenue, cost, cash flow and profitability.
Procurement must be a trusted commercial advisor and be able to provide strategic solutions and input to areas such as outsourcing, emerging market infrastructure and deployment, responsible procurement, effective commercial-sales models, external collaborations and innovation. CPOs must also work in partnership with CFOs to take the lead in providing fiscal understanding across the organisation and ensure that procurement’s contribution to company performance is evident, not only to the board but to analysts and shareholders.
What’s my quick take on The Ariba Cloud strategy? Simply put, the Cloud is a very easy place from which to hang Ariba’s existing solutions and justify a larger market opportunity. Ariba Discovery, one of the centerpieces of the cloud, is completely unoriginal (it’s a modification of the original suppliermarket.com and more recent MFG.com business model), yet making it work requires just the type of liquidity that Ariba has the potential to offer if they can convince the majority of their buying organizations to put down Thomas, Global Spec and others when they’re searching for new suppliers (I’ve never met a large company that uses Alibaba in the West so I don’t consider them Discovery competition).
In wrapping Spend Matters observations on Ariba’s latest quarter, there are a few points from the earnings report and conference call still worth exploring in more detail. The first is centered on Ariba’s “land and expand” revenue growth strategy, especially in the downstream (i.e., P2P) area. On the call, Bob Calderoni remarked that “we continue to add downstream customers at a healthy clip, and this is key because downstream deals are the solutions that ultimately drive future network volume [emphasis added]. This is another reason we’re very excited about the Network Business, and our long-term expectation[s for it].” Reading between the lines of this statement is not difficult. Ariba is likely to be aggressive in P2P pricing in order to win customer business and profit from the high margin network fees — and potentially other revenue streams — associated with transaction and dollar volumes down the road. Sound like a Gillette razor blade or Nespresso strategy (i.e., under price the initial solution to make industry leading margins on the back-end)? You bet.
SUNNYVALE, Calif., May 18, 2010 (BUSINESS WIRE) — Ariba, Inc. /quotes/comstock/15*!arba/quotes/nls/arba (ARBA 14.20, +0.51, +3.73%) , the leading spend management solutions provider, today expanded its offerings to help small and medium enterprises drive better commerce with the launch of Ariba(R) StartContracts(TM). A unique on-demand solution, Ariba StartContracts combines industry-leading technology and best-practice processes to help organizations quickly and cost-effectively manage buy and sell-side agreements, mitigate risk, drive compliance and boost revenue.
“Effective contract management is a critical lever that companies can pull to quickly find contract information, optimize profits and identify risks and opportunities,” said Steve Markle, Senior Director, Solutions Management, Ariba. “Traditionally, only the largest of organizations have been able to afford a contract management solution to effectively record and manage their agreements. But that has changed.”
Enterprise-Class Software Delivered On-Demand Ariba StartContracts makes contract management automation an option for all organizations. With a flexible, user-based pricing model, the solution provides small and medium organizations with the technology and processes needed to improve their contract management and administration functions without investing substantial time or resources.
Key Features Delivered in a completely web-based environment, the SaaS solution allows contracting, sales, and procurement professionals to enter and manage contracts online in a matter of minutes. And optional electronic signature capabilities make contract execution cheaper, faster, and more secure. With Ariba StartContracts, companies have all the tools needed to:
— Create a central, online contract repository
— Specify important fields and terms within agreements to be monitored
— Manage contracts across the organization using robust free-text search and reporting capabilities
— Establish task-driven reminders based on important dates and milestones to drive use and compliance
— Go completely paperless and sign agreements electronically
Ariba StartContracts complements Ariba StartSourcing(TM), an intuitive, web-based RFX management solutions that empowers sourcing professionals within smaller enterprises to create, execute and manage sourcing events from their desktops.
Availability Ariba StartContracts is available and in use today. To learn more about the offering and the value it can deliver for your organization, visit: www.ariba.com/startcontracts
UK bank Standard Chartered is to offer its workers a switch to the iPhone in a move that could strengthen the corporate appeal of the Apple device and see thousands of bankers ditching their BlackBerrys.
The bank has agreed to pay monthly billing for business-related phone and data services for its employees using iPhones, according to a Reuters report.
AdvertisementA Singapore-based spokeswoman for Standard Chartered told the news agency that the move is a “group-wide initiative involving wholesale and consumer banks globally”.
The spokeswoman confirmed that the process of migrating corporate email services to the iPhone began last month, but gave no indication of when the switchover will be complete.
BlackBerrys are currently the standard device issued to workers at financial institutions, and any potential wider industry switch to the iPhone could take time owing to security concerns, especially surrounding data encryption, the report said.
