It’s been said that networks, those of organizations and individuals, are transforming business and society as dramatically as assembly lines transformed manufacturing 100 years ago. Networks extend the reach and impact of network participants by defining new types of relationships, increasing interdependence and unleashing multiplier effects like “network intelligence.”
Drew Hofler, Director of Solutions Marketing for Ariba, an SAP Company, shares his perspectives on the power of networks.
As the economy becomes more global, supply chains become more complex. How can companies manage this growing network of suppliers and partners?
Critical to managing this complexity is removing barriers of information flow between silos within an organization as well as with partners and vendors outside of a company’s own walls. Real-time visibility into who is paying how much to whom and for what will be critical as networks of suppliers grow to maintain cost control and manage capture of negotiated savings. Business networks achieve this by tying together all the various transactional stages of the P2P process and linking the data together to get the right information to the right people at the right time to help them make the right decisions and drive business results.
Will the increasing inter-connectedness of people around the world push companies and governments to become more open and transparent?
Yes, to a degree. Clearly there is a growing expectation that information should be available at all times at our fingertips. But of course, business (and personal) information can be rather sensitive and not all of it should be completely transparent and available to all people at all times. But there is definitely room for and value in giving visibility into critical information to all concerned stakeholders. This is what business networks do so well–they enable what I like to call controlled transparency; the ability to get the right information to the right people, while ensuring sensitive information stay out of the hands of the wrong people.
What are the implications of having a truly networked supply chain where everyone is connected in real time?
The implications are huge! Real time visibility by key stakeholders into the entire source to settle process can yield insights and savings that are enormous. For example, without this kind of connectivity, sourcing and procurement negotiate prices but do not know if those negotiated prices/savings are complied with in the invoice process. And accounts payable does not know what was negotiated and so often pays more than they should (the entire post-audit recovery industry is built on this systemic savings loss). With networked connectivity, procurement can see who is being paid what and AP can automatically ensure the invoice price complies to contracted savings. And that is just one example…there are many other implications with regard to logistics, early payment discounts, cash flow, etc.
Drew Hofler is Director, Solutions Marketing for Ariba, an SAP Company. In this role, he is responsible for Ariba’s Network and Financial suite of solutions. Mr. Hofler brings almost 20 years of banking and financial services and software industry experience to Ariba. Prior to joining the company, he served as Vice President, Treasury Product Management for PNC Bank and Director, Payment Systems at Tier Technologies. Mr. Hofler began his career at Thrivent Financial. Read more of Drew’s blogs on The Networked Economy and follow him on Twitter @dhofler.