The document summarizes a presentation about business networks from the perspectives of an analyst and a supplier. It discusses how business networks have evolved from EDI networks for document exchange to platforms for collaboration between buyers and suppliers. It notes that while EDI networks still handle most POs and invoices, other networks have strengths in specific industries or functions. Finally, it emphasizes that the future of business networks lies in facilitating broader collaboration between partners on issues like forecasting, logistics, and payments.

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@ariba
Future of Business Networks
Andrew H. Bartels; Forrester Research
Barry Eisenberg; B&H Photo
Moderator: Jeanne Trinh; Ariba, an SAP Company
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Today’s Expert Presenters
• Andrew Bartels
 Vice President, Principal Analyst, Forrester Research
• Barry Eisenberg
 B2B Contracts & eProcurement Manager, B&H Photo
© 2015 Ariba – an SAP company. All rights reserved.2

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FORRESTER RESEARCH
Andrew H. Bartels, Vice President & Principal Analyst
3
AN ANALYST PERSPECTIVE…
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What are Business Networks?
• Business networks are the evolution of supplier networks and EDI networks
• They will still play a role in the delivery of business documents and data
between buyers and suppliers
• But increasingly they will be the venue for collaboration between buyers and
suppliers on issues of supply chain coordination, purchasing value maximization,
and finance
• As a result, business networks will be more and more important to suppliers
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Business Networks Are Where Buy-side
Meets Sell-side
Company
A
buy-side
process
Company
B
sell-side
process
B2B buyers have many points of interaction with B2B sellers
Invoice receipt
Order receipt
Procurement
Contracting
Sourcing
Supplier assessment
Spend analysis
Invoicing
Order fulfillment
Order management
Contracting
Bid/proposal
Prospect qualification
Market analysis
5 © 2015 Ariba – an SAP company. All rights reserved.
Advance payment
notice
Supplier scorecards
RFx/tender
Bid/proposal
Draft contract
Purchase order
Response, ASN
Receipt
Invoice

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The Logic of Business Networks – Avoid the
Spaghetti of Multiple One-to-one Connections
vs.
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Buyer #1
Office
Furniture
Manufacturing
Manufacturing
Office
Furniture
Buyer #N
Office
Furniture
Manufacturing
Manufacturing
Office
Furniture
Buyer #2
Office
Furniture
Manufacturing
Manufacturing
Office
Furniture
Office
Furniture
Manufacturing
Office
Furniture
Buyer #2
Buyer #1
Buyer #N
Manufacturing

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Three Tiers of Business Networks
Type Examples Characteristics
EDI-based OpenText GXS, IBM
Sterling
EDI and XML standards, direct between buyers and
suppliers, high reliability, high security, any documents
through pipe, starting to gain visibility into messages and
offering data transformation and error-checking; focus on
direct materials
PO and/or
invoice based
Ariba XML standards, standard security and reliability, POs
and/or invoices and related documents, have visibility into
documents and routinely do data transformation and error-
checking; focus on indirect materials
Industry-based E2open,
Elemica,SupplyOn
XML standards, handle POs and invoices, but concentrate
on supply-chain documents, data synchronization, and
collaboration for specific industries; focus on both indirect
and direct materials
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EDI Networks Still Carry Most POs and
Invoices, but Other Networks Have their
Own Areas of Strength
Business
network metrics,
2014
Total
number of buyer
organizations
Average
number of
active suppliers
Total
transactions
in millions
Total
POs
in millions
Total
invoices
in millions
EDI-based
networks
269,139 35,992 24,878 8,707 6,220
General PO and
invoice
networks
6,022 116,046 296 99 186
Vertical industry
networks
13,890 19,683 655 86 53
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Buyer Adoption of Supplier Networks Is
Starting to Match eProcurement Usage
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015* 2016* 2017*
Numberofclientsin
thousands
© 2015 Ariba – an SAP company. All rights reserved.9
* Forrester forecast
Supplier network buyer clients
eProcurement clients

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Ariba Has About One-third of PO/Invoice
Supplier and Vertical Industry Network Services
$223
$347 $399 $444
$613
$744
$903
$351
$315
$353
$379
$427
$479
$533
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2010 2011 2012 2013 2014 2015* 2016*
PO and invoice networks
Vertical industry networks
Network Revenues, US$ millions
* Forrester forecast
9%
22% 26% 26% 31% 30% 31%
28%
28% 25% 26%
26% 29% 30%
63%
50% 49% 48% 43% 41% 39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015* 2016*
Vertical industry networks
Other horizontal networks
SAP/Ariba
Percent of total
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Buyers Have Driven B2B E-Commerce;
Now It’s Suppliers’ Turn
• Buyers have had more incentive to automate buying processes
• Buyers have had clear goal of cutting costs
• In a low-inflation, slow-growth environment, buyers have had more leverage to
negotiate prices and set terms of commerce
• So buy-side technologies have gained more adoption than sell-side technologies
• However, sellers are becoming more active in trying to influence the terms
of trade
 Sell-side technologies like e-commerce servers and sell-side CLM are starting to
gain ground
• So, suppliers are asking more from business networks
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New Project Spending Is Tilting More
Toward Sell-side Projects over Buy-side
Percentage of new project budget devoted
to buy-side projects
Percentage of new project budget devoted
to sell-side projects
14.3
%
15.0
%
2013
2014
Source: Forrester’s Business Technographics® 2014 Global Budget
Survey, and Forrsights Budgets And Priorities Survey, Q4 2013
10.9
%
10.3
%
2013
2014
N = 1,979 for 2013, 2,917 for 2014
15.0%
14.3%
10.3%
10.9%
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Catalog
enablement and
management
Discovery of
customers
Master data
management
coordination
Payables
factoring and
dynamic
discounting
Business Networks Are Becoming More
Supplier Focused
Some vendors in all types of business networks are offering:
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Business Networks Are for Collaboration,
Not Just Document Exchanges
The future of business networks lies in collaboration
Aligning supply and demand forecasts
Coordinating shipping and logistics schedules
Arranging payables factoring and dynamic discounting
Facilitating timing and tracking of payments
Managing inventory levels and replenishment
Updating catalog content and product master data
Advance payment
notice
Supplier scorecards
RFx/tender
Bid/proposal
Draft contract
Purchase order
Response, ASN
Receipt
Invoice
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Three Archetypes of Business Network
Collaboration
Source: April 24, 2012, “The Changing Cloud Agenda” Forrester report
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Summary and Wrap up
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Business networks are still
evolving – what they will offer
tomorrow will be different from
what is available today
PO and invoice still remain
core values of business
networks to both suppliers
and buyers
Suppliers have some unique
challenges (such as having to
interface with multiple networks)
But suppliers are
increasingly benefiting
from business networks

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http://www.forrester.com
Email: abartels@forrester.com
Phone: +1 516.869.0128

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B&H PHOTO
Barry Eisenberg, B2B Contracts & eProcurement Manager
18
A SELLER PERSPECTIVE…
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Business Networks Are to the
Seller’s Benefit
• Better service to the customer
• Accurate ordering
• Faster payment
• Cost savings
• Customer retention
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What Suppliers Should Look for in a
Business Network Solution
• A large existing community of your current and potential customers who can send electronic
POs and process electronic invoices
• Tools and processes for you to get onto this network easily and inexpensively
• Fast and easy connections with new customers
• Ability to support the XML standards you use
• Support for punch-out to your catalog and order management systems, and delivery
of your electronic catalog content updates for those clients who maintain their own
purchasing catalogs
• Offerings or plans to offer payables factoring and dynamic discounting
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Growing Your Business
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Ability to
find large one
off opportunities
Ability to
help you find
new clients

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THANK YOU!
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