Have you read Ariba’s recent white paper titled "Increase productivity, not paper: The power of EIPP to enhance Accounts Payable Savings and Costs"? If not, it is well worth a read. It proves the points we are making, which are well known by CFOs for 3 decades, yet little progress has been achieved.
There was a clue in my last article about the the key difference, and in the white paper. Have you guessed it? Let me explain.
Ariba, OB10 and many others speak about supplier networks and accounts payables more and very little about the suppliers and accounts receivable functions. The reason is that both of these players are set up to serve large corporates which have the largest budgets. There is nothing wrong with that as Ariba’s revenues speak success (OB10, I will leave that for another day!). But these companies are missing a vital point, i.e. you cannot deliver maximum benefit without giving your smaller supplier the same benefit, or at least trying it. In fact, the first error is made, when you start treating companies either as suppliers or buyers. As we all know, each company buys goods and services and sell refined or newly produced goods and services to both small and large companies, alike. In ebdex’s view, you are all our most treasured customers, whether you are small or large, whether you are a supplier or buyer.
Ariba is a large company, therefore, in my opinion, it is unable to cater for both ends of the markets. Revenue per customer ratio will not allow larger players to serve the smaller companies. Sad, but true! If so, why is both Oracle and SAP trying to serve the smaller guys? Perhaps there is now recognition within the industry that you can make revenues out of smaller customers (Dennis, worth picking up from here!)
Ask any academics or anyone with a MBA (I have one from Manchester Business School, which I am proud of), and they will most likely disagree with me saying it is foolish to target both ends of the market. I believe it is possible and can be done, but to achieve any degree of success, you must set-up the structure of the organisation with both ends of the market in mind, at the outset. But we all know, that largest customer demand the most of your time (e.g. Marrakech with Tesco – great PR, but many headaches!). So how do you manage this delicate balance of providing a superior customer service whilst being a volume player. The trick is to establish partnerships. We call them Trusted Partners (more to come!).
John, you questioned our ability to use direct and reseller networks effectively (will cover your points in a separate blog) as we are a Software-as-a-Service (SaaS) player. This is the only way (in my opinion) that we can cover the complete market, from one man company which uses word or Excel to produce an invoice to a large company which spends £ millions servicing SAP and Oracle implementations.
Jason, I look forward to your coverage of EIPP from Ariba’s perspective. Fancy, a partnership! How about we provide commercial innovation whilst you provide the $$$ and £££?
Whilst I am at it, let’s drive couple of more points home: ebdex is about commercial innovation, its about understanding the market better than anyone else, and its about giving a superior customer satisfaction (and getting customer loyalty). Mr. VC and Mr. Angel (if you are listening), we need bit of your £££ and $$$ to achieve these three vital points! My door is always open!