In May 2013,
SAP acquired Ariba, a provider of cloud
based supply chain management technology provider. The NY times article by
Ashlee Vance discusses the ups and downs of Ariba’s network. In 1999, the prevalent option for large
companies was the traditional Electronic Data Interchange (EDI) when Ariba pioneered
digital marketplaces. A business to business platform like Ariba eliminated the
process overhead of onboarding of new suppliers one at a time through lengthy
EDI certification processes.
A cloud
environment that offers many-to-many communications where buyers and suppliers can
collaborate on issue resolution at the same time. This speeds the supply
chain’s time to market.
Supply Chain
Managers were initially reluctant to understand the value of a multi-tenant
communications network. Traditionally ERP systems were viewed as a software to
run the entire business. Cloud comes in from the opposite direction with its
focus on collaboration and creating standardization between trading entities. Today,
supply chains are fairly mature in how they interact with cloud platforms to
service hundreds of their partners through a single e-commerce hub.
The next
logical step as the article by Cath Jenning concludes is a platform can combine
the capabilities of a conventional ERP and a reliable cloud based trading hub
such as Ariba, e2Open or GXS. Is this the direction in which ERP giants - SAP and
Oracle (following the corresponding acquisitions of cloud-based BPM companies - Ariba and Vitrue) seem to be headed?
References:
- http://www.nytimes.com/2010/11/21/business/21ping.html
- http://www.computerweekly.com/feature/Cloud-computing-The-answer-to-supply-chain-woes
- http://searchsap.techtarget.com/opinion/SAPs-acquisition-of-Ariba-extends-SCM-cloud-but-roadmap-not-yet-clear
- http://www.gartner.com/newsroom/id/2016915
- http://blogs.wsj.com/deals/2012/05/23/oracle-answers-sap-cloud-acquisition-with-its-own-deal/
- http://www.worldtradewt100.com/articles/print/88036-nextgeneration-cloud-technology-for-the-supply-chain-
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