SAP Ariba recently announced it has achieved 100 standard integrations between SAP and Ariba. Sanjay Alemeida, chief product officer at SAP Ariba, discusses why standard integration has been such a high priority.
ISAP: What is your integration strategy, and what is driving that strategy for SAP Ariba?
Sanjay Almeida: We think about it in terms of how to start to simplify integration among all the applications that we have and create a ‘plug and play’ model. It’s not just point-to-point integration; we’re very proud of the 100 points that we have integrated among various business processes, but we think more holistically in terms of how we simplify end-to-end business process. Integration plays a huge role in realising the product benefit as well as faster ROI and simplification. So we want to make sure that we have a plug and play approach, we have a cloud approach, and it needs to be flexible. As you know, there’s no standard ERP implementation – there’s always tweaks and customisations that customers have to do to maximise their opportunity. So all integration has to be flexible to accommodate not only the standard business processes but also the custom business processes that customers have adopted.
We also want to make sure that the investment that our customers are making to this integration is future-proof, so as we add new functionality from both sides, it’s more a matter of turning on a few switches, versus reimplementing the integration. So these are core tenets that we operate under.
ISAP: Why is integration so important in the procurement space, and what benefits does full integration yield for companies around procurement activities?
SA: Procurement has a two-sided model – we have a buyer and a supplier. With the Ariba Business Network, we have 2 million suppliers connected to the network, and just last year, we had over US$1 trillion going through the network. When you think about the integration, it has to work for both sides – for suppliers and the way they manage their systems, as well as for the buyers and how they manage their systems. So this is supercritical; it’s truly bidirectional integration for two sets of parties – buyers and suppliers – to integrate with ERP. So it’s more multipoint integration than traditional integration.
ISAP: A lot of other players are relying on open API structures at this stage. Why have you decided to go a different way with your integration approach?
SA: We have two modes at play – for SAP, we have a huge on-premise install base, and then we have S/4HANA, which is our cloud-based solution. Our integration is flexible – we have integration to both on-premise as well as cloud, and the infrastructure that we are building is on the cloud. So we have created what we call the Cloud Integration Gateway (CIG), which is a cloud-based product that can integrate with SAP and for that matter, other ERPs through the cloud, as well as through the on-premise side as well. So we wanted to have a very flexible approach in terms of where the investment exists today from the customer perspective, and where the investment is going to be in the future, and how that seamlessly transitions from on-premise to cloud. We wanted to make sure that customers don’t have to reinvent the wheel as they make that move. That’s why we have this hybrid strategy, and created the CIG that fulfils the promise of seamless integration.
ISAP: What do you see as the key challenges businesses are facing in terms of bringing together a host of cloud solutions as many are now, and making them all work together for the business?
SA: When we started talking to customers, what came up all the time at the top of the list is “We have made investments today, we are continuing to invest for tomorrow, we have all these different protocols and different systems; we don’t want to keep investing into integration every year or every time we want to avail ourselves of new functionality”.
The other thing is that especially on the cloud side, the innovation curve is much faster. We release software every month, every quarter; we add new functionality, and customers are very excited to avail themselves of this functionality. But the real problem in the past was that integration doesn’t catch up with the innovation. So what we have done is we have synchronised our release cycles with SAP, S/4HANA and Ariba, both from an application and network perspective, so that when new innovation is available, it’s automatically added to our integration. So there is no waiting for customers to absorb that innovation.
That’s the beauty of having early access to SAP products: we have the ability to synchronise releases across various products because we own a whole lot of those. So the absorption of innovation from the customer point of view is much sooner than it had been in the past with other vendors.
ISAP: That’s helpful for customers who are pretty much wall-to-wall SAP, but what about other customers – how does the integration work for them?
SA: We have over 100 integration points and we have over 5000 feeds that we integrate. With the Cloud Integration Gateway, that integration is available for other ERPs as well – for Oracle, for Peoplesoft and for Quickbooks, because we know there are some customers, especially on the SME side, and some suppliers with smaller supply base, that use lower-end ERPs. Having a cloud-based integration gateway means it’s not file-based. We go with the industry standard that Ariba actually pioneered 20 years ago, called CXML, which is a commerce standard which is adopted in the industry. That common standard helps us in exposing those integration points, in the procurement products as well as some of the newer innovations that we’ve done in supply chain, payments, supply chain financing – all those business processes are available as part of that integration story.
ISAP: What’s ahead from here for SAP Ariba?
SA: There will definitely be more business processes that we want to integrate more tightly. I think supply chain is a huge opportunity for us. Managing that whole supply chain end-to-end all the way from demand and forecasting to building the products, delivery and quality is a big opportunity for us, and we have invested quite a bit and we’ll continue to do that.
We have a fantastic B2B payment system that’s been adopted across SAP. This is making sure that wherever the payment is initiated, we have an end-to-end process covered in this payment process. We also want to extend it into the financing side, so today we have multisource financing companies that finance our suppliers and buyers – we want to have integration for those and will continue to take that global. Asia, Europe and South America have different requirements in terms of how to handle taxes and legalisation, so we want to accommodate business processes which are local to specific regions.
We also want to continue to expose our Cloud Integration Gateway as a platform for all kinds of integration, whether it’s the Internet of Things, blockchain, logistics, supply chain payments, finance – that’s where you will see a lot of innovation coming out, both from the product side as well as the integration side.
We want to make sure that both buyers and suppliers are realising the value by having this seamless integration. We want to connect various networks – whether they are pharma networks or healthcare or banking – seamlessly through our integration gateway as well. So the strategy and vision around integration is not just limited to ERP integration, it’s going beyond connecting the world and commerce across the globe for various trading partners in the industry.
SAP Ariba’s Cloud Integration Gateway, powered by SAP HANA Cloud Integration, is now available for all customers.